Law of Torts
Vicarious Liability in the Other Relationships, the Employer's Own Negligence, and How It Differs from Strict Liability
Master and servant is the paradigm, but it is not the only relationship that attracts the principle. Wherever one person acts for another within a defined authority, the law attributes the wrong to the person for whom he acts: principal and agent, partners among themselves, a company and those who act for it, a hospital and its staff, and the State and its servants. Alongside all of these runs a different claim, which is frequently the stronger one: the employer's own negligence in hiring, supervising or retaining the person who did the harm. That claim needs no course of employment at all, and survives where vicarious liability fails.
Principal and agent, partners, companies, hospitals and the State; and the employer's own negligence
1. Principal and Agent
- A principal is liable for a tort committed by his agent within the scope of the agent's authority, whether that authority is actual or ostensible.
- Ostensible authority is enough, because the third party dealt with the agent on the footing the principal held out, and the principal cannot afterwards disown the appearance he created.
- Ratification makes the principal liable from the beginning. A principal who adopts an unauthorised act done on his behalf takes it with its consequences, and the ratification relates back to the date of the act.
- The relationship need not be one of employment. A person may be an agent for a single transaction and for no wage at all, and the owner of a car who lends it to a friend to run an errand on the owner's behalf may be liable for the friend's negligence on the way.
2. Partners
Sections 25 to 27, Indian Partnership Act, 1932 Section 25: every partner is liable, jointly with all the other partners and also severally, for all acts of the firm done while he is a partner. Section 26: where, by the wrongful act or omission of a partner acting in the ordinary course of the business of the firm, or with the authority of his partners, loss or injury is caused to any third party, or any penalty is incurred, the firm is liable therefor to the same extent as the partner. Section 27: where a partner acting within his apparent authority receives money or property from a third party and misapplies it, or where a firm in the course of its business receives money or property from a third party and it is misapplied by any of the partners while it is in the custody of the firm, the firm is liable to make good the loss. |
- Each partner is at once a principal and an agent of the firm, which is why the liability is mutual and why it is both joint and several.
- The test is the ordinary course of the business of the firm, which performs the same function here as the course of employment does for a servant.
- Section 27 covers misapplication, and makes the firm answer for a partner's dishonesty in dealing with money received within his apparent authority, on the same principle as Lloyd v. Grace, Smith and Co.
3. Companies
- A company acts only through natural persons, and answers for its directors, officers, employees and agents on the ordinary principles.
- A director is not personally liable merely because he is a director, but he is liable for a tort he himself commits, directs or procures, and being a director is no shield against that.
- The corporate veil is not a defence to the company's own liability, which is what vicarious liability fixes on it.
- A company may be liable for torts requiring a mental element, the state of mind of those who direct it being attributed to it for that purpose.
4. Hospitals and Doctors
- A hospital is liable vicariously for the negligence of the doctors, nurses and technicians it employs, committed in the course of their employment.
- The difficulty arises with the consultant who is not an employee but has admitting privileges or was engaged by the patient directly. Vicarious liability may not arise, and the claim must then be put against him personally or against the hospital on its own organisational footing.
- A hospital that holds itself out as providing the treatment will find it hard to disclaim responsibility for those who provide it, and the duty to see that reasonable care is used may be treated as non delegable.
- The subject is examined fully in TORT 042, together with the corporate liability of hospitals and the consumer route.
5. The State and Public Servants
- The State answers for its servants on the ordinary principles, subject to the narrow residue of sovereign immunity that survives after N. Nagendra Rao and Co. v. State of Andhra Pradesh, (1994) 6 SCC 205.
- Article 300 of the Constitution preserves the liability the Dominion of India and the corresponding Provinces had, and does not create any special immunity of its own.
- And immunity is no answer at all where a fundamental right is violated, following Nilabati Behera v. State of Orissa, (1993) 2 SCC 746.
- The subject is examined fully in TORT 051 and TORT 052.
6. The Employer's Own Negligence
The claim | What the failure is | What must be proved |
Negligent hiring | Engaging a person the employer knew or ought to have known was unfit for the post | That reasonable care in selection would have revealed the unfitness: references, qualifications, a known history, a required licence |
Negligent supervision | Failing to supervise a person whose work required supervision | That an adequate system of checking, reporting and escalation would have prevented or detected the harm |
Negligent retention | Keeping a person on after his unfitness became known | That a complaint was made or an incident recorded, and nothing was done about it |
- The claim is in the employer's own negligence, so the ordinary ingredients must be made out: a duty, a breach, causation and damage.
- Its great advantage is that it needs no course of employment. It therefore survives where the servant was on a frolic of his own, or committed a wrong so far outside the employment that no close connection can be shown.
- Its disadvantage is that it requires proof of fault in the employer, which vicarious liability does not.
- So a well drawn plaint pleads both, in the alternative, and the plaintiff succeeds if either is made out.
7. Vicarious Liability and Strict Liability
Vicarious liability | Strict liability | |
Is fault required | Yes, but it is the servant's fault, not the defendant's | No. Fault is required of nobody |
Why the defendant answers | Because of his relationship to the wrongdoer | Because of the activity he carried on |
Is there always a wrongdoer | Yes. Without a tort by the servant there is nothing to attribute | No. Liability may arise though every person concerned took care |
Does a defence available to the actor help the defendant | Yes. If the servant has a complete defence, so has the master | The question does not arise in the same form, and the defences are those attaching to the rule itself |
The classic instance | A master and his servant | The rule in Rylands v. Fletcher |
⚠ The three ideas most often confused Vicarious liability, a non delegable duty and strict liability are regularly treated as a single family, and they are not. In vicarious liability somebody was at fault, namely the servant, and the law moves that fault onto the master because of the relationship between them. In a non delegable duty somebody was at fault, namely whoever did the work, but the employer is liable for his own breach of a duty to see that care was taken, not for the other person's wrong. In strict liability nobody need have been at fault at all: liability attaches to the activity, and the defendant answers though he and everybody he engaged took every precaution. Three quite different routes, and they have three quite different consequences for what a plaintiff must plead and prove. |
8. The Position Stated Shortly
1. A principal is liable for the tort of his agent within the scope of the agent's actual or ostensible authority, and ratification relates back.
2. Section 26 of the Indian Partnership Act, 1932 makes the firm liable for a partner's wrongful act in the ordinary course of the business or with the authority of the others.
3. Section 27 makes the firm liable for the misapplication of money or property received within a partner's apparent authority.
4. A company answers for its officers and employees on the ordinary principles, and a director is personally liable for a tort he commits, directs or procures.
5. A hospital answers vicariously for those it employs, and on its own organisational footing where the clinician is not an employee.
6. The State answers for its servants subject to the narrow residue of immunity left by Nagendra Rao, and immunity is no answer where a fundamental right is violated.
7. Negligent hiring, supervision and retention are claims in the employer's own negligence, and need no course of employment.
8. They require proof of fault in the employer, which vicarious liability does not, so a well drawn plaint pleads both.
9. Vicarious liability requires fault in the servant; strict liability requires fault in nobody.
10. A non delegable duty is a third thing again: it is the employer's own duty, broken by him though performed through another.