DOCTRINE OF VICARIOUS LIABILITY

Module- III
 Questioning the concept
• What is vicarious liability?
• What is the liability of principal for the act of his/her agent?
• Who is a servant and what are the liabilities of master for the
act of servant?
• What is the rule of course of employment and control test?
• Is the master liable when he lends servant to another?
• Cases where master is liable for the acts of independent
contractor.
• What is constitutional tort?
• Is the state vicarious liable for the acts of his employees?
• What is the doctrine of sovereign immunity?
 Introduction
• Normally no person is held responsible for the wrongs done
by someone else.
• There are few instances wherein a person can be held liable
for the conduct of another person. This liability is known as
Vicarious Liability.
• Vicarious liability arises by virtue of the relationship between the
actual tortfeasor and the person who is made vicariously liable.

• The following relationships are the best examples of Vicarious

Liability:
• Liability of the Principal for the act of his Agent
• Liability of the Partners
• Liability of the Master for the act of his Servant
Vicarious liability is a kind of strict liability

• Primary (i.e., personal) liability is, in the law of tort,

largely based on some notion of fault on the part
of the actor; vicarious liability is strict liability, i.e. it
does not rest on the proof of any fault on the part
of the person who is found vicariously liable.
• In VL, liability arises out of relationship between
the principle and the Wrongdoer while in case of
strict liability the liability arises out of the wrong
itself.
 Liability of the Principal for the act of his Agent

• When a principal expressly or impliedly authorises his agent to

perform any act, he becomes liable for the act of such agent
provided the agent has conducted it in the course of
performance of duties.
• The principle generally does not expressly ask his agent to do the
wrongful act but when the agent acts in the ordinary course of
the performance of his duties as an agent, the principle becomes
liable for the same.
• Llyod v Grace Smith & co. (1912) A.C. 716
• State Bank of India v Shyama Devi AIR 1978 SC 1263
 Llyod v Grace Smith & co.
(1912) A.C. 716
• Held-
• The master is liable for his servant's fraud perpetrated in
the course of master's business, whether the fraud was
for the master's benefit or not, if it was committed by the
servant in the course of his employment.
• There is no difference in the liability of a master for
wrong whether for fraud or any other wrong committed
by a servant in the course of his employment, and it is a
question of fact in each case whether it was committed in
the course of the employment.
 State Bank of India v. Shyama Devi
AIR 1978 SC
• Held-
• That there was no proof of deposit by the
customers with the bank and a fake entry was made
in the customers passbook by the bank employee.
The customer had handed over the cheque to the
employee of the bank and not to the bank and
the bank employee had misappropriated the money.
In view of this fact, the Apex Court held that
the bank was not vicariously liable for the act of the
employee.
 Ormrod v. Crossville Motor Service Ltd.
(1953 ) 2 All ER
A car should be transported to Monte Carlo by an
agent. The driver's negligence caused an accident.
The principal was responsible for this accident in
the course of a principal-agent-relationship. Even if
it was partly for the agent's benefit.
Lord Denning observed that the law puts a
responsibility on the owner of a vehicle who allows
it to go on the road in charge of someone else, no
matter whether it is his servant, his friend or anyone
else.
• It is being used wholly or partly on the owners purpose, the
owner is liable for any negligence on the part of the driver.
The owner only escapes liability when he lends it or hires it to
a third person to be used for the purposes in which the owner
has no interest or concern.

• Tirlok Singh v Kailash Bharti (1986) ACJ 75

• While the owner of the

motor cycle was outside the country, his younger brother took
the motor cycle without his knowledge or permission and
caused the accident. It was held that the younger brother could
not be deemed to be the agent of the owner of the motor
cycle and the latter could not be vicariously liable for the
accident.
 Liability of the Partners
• For the tort committed by a partner of a firm, in the normal
course of business of that partnership, other partners are
responsible to the same extent as that of the partner who is in
fault. The liability thus arising will be joint and several. [
Section 25 & 26 of IPAct, 1936]
• Hamlyn v Houstan & co. (1903) 1 KB
• One of the two partners of the defendants firm, acting within
the general scope of his authority as a partner, bribed the
plaintiff ’s clerk and induced him to make a breach of contract
with his employer (pliantiff) by divulging secrets relating to his
employers business. It was held that both the partners of the
firm were liable for this wrongful act (inducing breach of
contract) committed by only one of them.
 Liability of the Master for the act of his Servant

• The liability of the master for the act of his servant is based on
the principle of ‘respondeat superior’, which means ‘a principal
must answer for the acts of his subordinates’
• This principle originates from the maxim ‘, Qui Facit per
Alium Facit per se’ which means ‘he who does an act through
another is deemed in law to do it himself ’.
• In tort, the wrongful act of the servant is thus deemed to be the
act of the master. However, such wrongful act should be within
the course of his master’s business and any act, which is not in
the course of such business, will not make the master liable.
Liability is joint and several ( joint tortfeasors).
• The liability arises even though the servant acted against
the express instructions and for no benefit of his master.

• Limpus v London General Omnibus Co. (1862)

• A bus driver racing to a stop to collect passengers deliberately

obstructed the driver of a bus of a rival company, overturning the
latter's vehicle. The bus driver had been given instructions against
obstructing other buses.
• The defendants were liable.
• The driver was acting within the course of his employment at the
time; it was immaterial whether his act was forbidden.
Profit for the company when the bus is first (more passengers).
Otherwise, companies could exculpate themselves simply by
prohibiting their servants from committing any torts during their
service.
 Rationale for the liability
• Deep Pocket theory
• Ability to pass burden of liability through
insurance
• Public policy, social convenience and rough
justice is the underlying idea.
• As Lord Pearce explained in ICI v Shatwell (1965)
AC 656, The doctrine of vicarious liability has grown
out of social convenience and rough justice rather than
from the application of clear and logical principle.
 Who is servant/employee?
• Servant/employee: is a person employed by another to do work
under the directions and control of his employer.
• Employers are liable for torts committed by their employees/ servant,
but not for those committed by independent contractors.
• Example : Driver of Personal Car (s) and Taxi (IC)

• Independent contractors include, for example, plumbers or

electricians hired by a householder, and they are usually responsible for
their own torts.
• An independent contractor is one who undertakes to do certain work
and regarding the manner in which the work is to be done he is his
own master and exercises his own directions.
 Tests for employment status
• In terms of vicarious liability, it is therefore essential to
establish exactly who is classed as an ‘employee’. While
this may appear straightforward at first, it has proven to
be surprisingly tricky in some cases, and the courts have
developed several tests to determine the status of a
person’s employment.

• The courts do not use a single test but instead look at

all the factors and circumstances before reaching a
decision on employment status.
 Control Test
• The courts look at who has control over the way that the work is
carried out.
• If the employer sets out how the work is to be done and when it is to
be done by, the courts are more likely to consider the person carrying
out the work to be an employee.
• If, on the other hand, it was up to the person carrying out the work to
determine how and when it should be done, that person would be
more likely to be classed as an independent contractor.
• But in Cassidy v Ministry of Health (1951) 2 KB, Somervell LJ pointed
out that this test is not universally correct. There are many contracts of
service where the master cannot control the manner in which the work
is to be done, as in the case of a captain of a ship.
 Dharangadhara chemical Works Ltd v State of Saurashtra,
AIR 1957 SC264

• The Supreme Court laid down that the existence of the

right in the master to supervise and control the execution
of the work done by the servant is a prima facie test,
• that the nature of control may vary from business to
business and is by its nature incapable of any precise
definition,
• that it is not necessary that the employer should be
proved to have exercised control over the work of the
employee, that the test of control is not of universal
application and that there are many contracts in which the
master could not control the manner in which the
work was done.
 Integration Test
• This test asks whether the person’s work is an
integral part of the business.
• A person employed to work on the till in a
shop would usually be an employee; however,
if the till was broken, the person called in to
fix it would probably be an independent
contractor, as his or her work would be
incidental to the business of running the shop.
• The Organisation or Integration Test has also been
used, particularly for professional people where
there is no right of control over the method of
performance. It is based upon the concept that an
employee is an integral part of the organisation,
whereas a contractor performs work for the
organisation but remains outside it.
• E.g. in the case of Cassidy v Ministry of Health
(1951), a resident surgeon in a hospital was held
to be an employee, so that the hospital was liable
for his negligence.
 Economic reality test
• The courts may also look at any contract
between the two parties, as these terms may
indicate the status of the relationship.
• It may be a contract of service, in which case
the person is more likely to be an employee,
or it may be a contract for services, which
would indicate an independent contractor. It
would be for the court to decide, taking into
account several factors.
• Another test is to determine the employer is the
4 indicia of contract of service. It was broughtout by
Lord Thankerton in Short V.J. & W. Henderson Ltd.
• (i)Master’s power to select servant
• (ii)Payment of wages or other remuneration
• (iii)Master’s right to control method of doing work
• (iv)Master’s right of suspension or dismissal
• The latest test to determine whether a worker is an
employee is called the ‘hire and fire’ test.The person
who retains the power of dismissal is usually the
employer for the purposes of vicarious liability. One
cannot always use any one test exclusively. In practice,
it is difficult to predict which tests the court will apply
and almost impossible to assess in advance the
outcomeof individual cases
• Recent Trend is to include even those persons
as servants who are not subject to control
• Hospital staff
• Part time employees
• Borrowed servants
Savita Garg v. Director National Heart Institute,
(2004) 8 SCC 56,
• The Supreme Court with approval the following
proposition form Denning L.J.·s Judgment in Cassidy·s
case observed:
• The hospital authority is liable for the negligence of
professional men employed by the authority under
contract for service as well as under contract of service.
• The authority owes a duty to give proper treatment-
medical, surgical, nursing and the like-and thought it may
delegate the performance of that duty to those who are
not its servants, it remains liable if the duty be improperly
or inadequately performed by its delegates.
 Liability of employer for the acts of an
Independent Contractor
• Morgan v Incorporated Central Council [(1936) 1 All ER
404]the plaintiffwhile he was on lawful visit to the defendant
premises fell down from an open lift shaft and got injured…..
• Liability of vehicle owners- Accidents caused by
mechanics, repairers or owners of workshop during test
drive of the vehicles entrusted to them by owners of the
vehicles for repairs.
• B. Govindarajulu v M.L.A.Govindraja Mudaliar [AIR 1966
Mad. 32]
• Devinder Singh v Mangal Singh [AIR 1981 P&H 53]
• Ramu Tularam v Amichand [1968 ACJ 54]
Exceptions to Independent contractor rule

• An Employer can be made liable for the acts of

independent contractor-
• Strict liability [Rylands v Fletcher]
• Authorises the doing of an illegal act or tort , or
subsequently ratified by him [Maganbhai v Ishwarbhai
AIR 1984 Guj.]
• For negligence of independent contractor where
the employer carelessly appoints IC and risk is
forseeable, unless precaution are taken, he is liable.
 Patel Maganbhai Bapujibhai v. Patel Ishwarbhai Motibhai,
AIR 1984 Guj69

• The trustees of a temple employed a contractor to

get electric connection for use of lighting and mike
arrangements in the temple from the well of an
agriculturist without informing and obtaining the
permission of the Electricity Board. A person was
injured as the wires used by the contractor snapped.
• The trustees were held liable as the act of diverting
electricity without permission of the Board was in
itself an illegal act.
• The liability of the employer also arises for the
dangers caused on or near the highway.
• Tarry v Ashton (1876) 1 QBD 314
• The occupier of a house employed an independent
contractor to repair a rotten bracket which
projected over the pavement from his wall.
A passerby was injured by the falling of a lamp
from the bracket.
• He was held liable.
• Where an especially high duty of care is imposed
upon a person by law he cannot escape liability for
the breach of that duty by employing an
independent contractor
• Where the legal or statutory duty is imposed on the
employer he is liable for any injury that arises to
others in consequence of its having been
negligently performed by the contractor.

• Gray v.Pullen, (1864) 5 B & S 970

• A was empowered under an Act to make a drain
from his premises to a sewer, by cutting a trench
across a highway, and filling it up after the drain
should be completed. For this purpose he employed
a contractor, by whose negligence it was filled up
improperly, in consequence of which damage
ensued to B.
• It was held that A was responsible in an action by B.
Where master lends the services of his servants
to another person?
• Where master lends the services of his servants
to another person and then servant commits a
tort.
• Whether permanent master is liable or the
person making a temporary use of the servants
services?
• That one of the two who has the power to
control the manner in which the act of the
servant is to be done.
 Mersey Docks & Harbour Board v. Coggins & Griffiths
(Liverpool) Ltd. [1947]
• Master/servant relationship – persons who must be protected. Direct
control, only if control over what work and how it is done
• Facts - Coggins and Griffiths hired a crane and driver from the
Mersey Docks and Harbour Board.
• the driver, Mr Newall, drove the crane negligently and trapped Mr
Mcfarlane injuring him.
• The contract between the Board and the hirers stated that the driver
was to become their employee for the duration of the hire.
• The question was whether the Board were liable to Mr Mcfarlane as
Mr Newalls principal employers or whether the hirers now bore
responsibility.
• It was held as a fact that the hirers had power to control what Mr
Newall lifted with the crane but not how he lifted it.
• Held:
• Control over Mr Newall's work had not passed
to the hirers. It is not to be held that control had
readily passed. Only if there is control over what
work the person does and how he does it, will
control be held to pass.
• Board is laible.
 Smt. Kundan Kaur v S. Shankar Singh
AIR 1966 SC
• The partners of a firm temporarily gave their
truck along with driver on hire to a transport
company for transporting certain goods.
• Driver negligently caused accident.
• Only transfer of service and not of control of
driver from the general employer to hirer and as
such the partners firm where liable.
 RSRTC v K N Kothari
AIR 1997 SC 3444
• The RSRTC hired a bus and a driver for running a bus on
specified route. The corporation also engaged a
conductor, who managed the bus, collected fare from
passengers and also exercised control over the driver.
• Held for an accident caused by the driver, the hirer
(RSRTC) was vicariously liable, notwithstanding the fact
that the driver continued to be on the pay roll of the
original owner.
• The apex court held that the transfer of effective control
over a servant would make the transferee of the vehicle
liable for vicarious liability.
 The course of employment
• For an employer to be held liable, the wrong must be committed
“within the course of employment.” An employer cannot avoid
liability if an employee acts in a way that could be described as
“incidental” to his employment and the duties to which he is
entrusted with.
• An act falls within the course of employment when either the
master has authorised the same or it is a wrongful mode of
doing some authorised act.
• Example: Authorizing a servant to drive and he drives
negligently. Authorising a servant to deal with clients and he
deals fraudulently. Authorising a servant to help the railway
passengers but he mistakenly causes harm to them.
• In all these cases it may be said that the master
has not authorised the act, but he has put the
agent in his place to do that class of acts and he
must be answerable for the manner in which the
agent has conducted himself in doing the
business which it was the act of the master to
place him in.
• Barwick v. English joint Stock Bank (1867) L. R.
Vol. II
• An employer will only avoid liability in this
situation if it can be shown that an employee acted
“on a frolic of his own,” or in other words, if the
employee acted in a way that was unconnected with
his employment.
• Example: Servant send to market to purchase some
goods but also made defamatory remarks to
shopkeeper.
Lloyd v. Grace, Smith and Co. 1912
• The plaintiff wished to sell some cottages and
went to the solicitors.
Their managing clerk induced the plaintiff to
transfer the cottages to him and misappropriated
certain mortgage money.
The plaintiff sued the employers.
• The solicitors were liable to the client for the
fraud of the managing clerk though it was
committed solely for his benefit.
 State Bank of India v Shyama Devi
AIR (1978) SC
• If a customer of the bank gives some amount / cheque to the
bank employee ( in his capacity as friend) for being deposited
in the account without obtaining any receipt for the same
• The bank employee is not deemed to be acting within the
scope of his employment and if he misappropriated the
amount the bank will not be liable.
• For an employer to be liable, however, it is not enough that
the employment merely afforded the servant or agent an
opportunity of committing the crime. It must be shown that
the damage complained of was caused by any wrongful act of
his servant or agent done within the scope or course of the
servant's or agent's employment, even if the wrongful act
amounted to a crime.
 Century Insurance v. Northern Ireland Road Transport
Board 1942 House of Lords

• A patrol lorry driver smoked a cigarette while

transferring petrol from the lorry to an
underground tank, which caused an explosion
and damaged B’s property.

Is the smoking of a cigarette in the course of

employment or not?
• It was not too far from the employment, the
driver did act as an employee.
• It was observed that although the act of lighting
a cigarette was done by the driver for his
comfort and was an act both innocent and
harmless by itself, the careless act was done in
the course of the drivers employment and was a
negligent mode of conducting his work.
 Limpus v. London General Omnibus Co. 1862

• A bus driver racing to a stop to collect passengers

deliberately obstructed the driver of a bus of a rival
company, overturning the latter's vehicle. The bus driver
had been given instructions against obstructing other
buses. The defendants were liable.
• The driver was acting within the course of his
employment at the time; it was immaterial whether his act
was forbidden. Profit for the company when the bus is
first (more passengers). Otherwise, companies could
exculpate themselves simply by prohibiting their servants
from committing any torts during their service.
BEARD v LONDON GENERAL OMNIBUS COMPANY
[1900] 2 QB 530
• FACTS- At the end of a journey the conductor of an
omnibus belonging to the defendants, in the absence of the
driver, and apparently for the purpose of turning the omnibus
in the right direction for the next journey, drove it through
some by-streets at a considerable pace, and while so doing
negligently ran into and injured the plaintiff.
Held: In this case it was … proved that the de facto driver was
not the person authorised to drive, but a person authorised
and employed to act as conductor. In such a case the onus of
showing some special authority given to the conductor to do
the act which he did lies upon the plaintiff. No such authority
was shown. Master was held not liable.
• If the driver himself in the above case authorises the
conductor to drive, master i.e. the def. is held liable.
Outside the course of employment
• Doing an act which is altogether different from
the purpose for which the servant has been
engaged is outside the course of employment
and if the same is also prohibited the master
will not be liable.
• Where the driver takes his own family in the
master’s vehicle for picnic it is outside the course
of employment.
State of Maharashtra v.Kanchanmala Vijaysing Shirke,
AIR 1995 SC2499

• It was held by the court that if the unauthorised

and wrongful act of the servant is not
so connected with the authorised act as to be a
mode of doing it, but is an independent act, the
master is not responsible; for in such a case the
servant is not acting in the course of the
employment but has gone outside of it.
• Illustration:
• A, master, allows, B, servant to take his vehicle
so that he can come early and join duties. B
while at home allows his son C to drive. C
negligently injures D, a passer-by. In this case, A
can not be held liable as he only
authorised taking of the vehicle so that he
returns early to work.
General Engineering Services Ltd. V .Kingston and Saint Andrew
Corporation,
(1988) 3 All ER 867
• The appellants owned certain premises at Kingston, Jamaica. A fire
broke out in the said premises on which the premises the appellants
promptly informed the local fire brigade.
• The fire brigade took 17 minutes in reaching the appellants· premises
which was at a distance of 1½ miles.
• The normal time for covering this distance was 3½ minutes. By the
time the fire brigade reached, the premises were completely destroyed
by fire.
• The reason why the firemen took 17 minutes instead of 3½
minutes in covering the distance was that they were operating a
go slow· policy as part of industrial action.
• They had driven to the premises by moving slowly forward, stopping,
then moving slowly forward again, then stopping and so on until they
reached the premise.
• Questions were whether the respondent, as employers of
the firemen, were vicariously liable to the appellants or
whether the firemen acted in the course of employment.
• The Privy Council observed: ´Their (the fire men·s)
unauthorised and wrongful act was to prolong the time
taken by the journey to the scene of the fire, as to ensure
that they did not arrive in time to extinguish it, before the
building and its contents were destroyed.
• Their mode and manner of driving, the slow
progression of stopping and starting, was not so
connected with the authorised act, that is driving to the
scene of the fire as expeditiously as reasonably
possible, as to be a mode of performing that act.
 Sitaram Motilal Kalal v. Santanuprasad Jaishankar Bhatt,
(1966) ACJ 89(SC)

• The owner had entrusted his car to a drive for plying it as a taxi. The
driver lent the taxi to the cleaner for taking it to the R.
T.O.·s Office for driving test. The accident happened when the cleaner
was driving while giving the driving test.
• The driver was then not in the vehicle. It is clear from the fact that at
the time the accident happened, the car was not being used as a taxi for
the owner·s business.
• The car was then engaged in the work of the cleaner which had no
connection whatsoever with the owner·s business.
• The driver in lending the car to the cleaner for taking a driving test did
an act which he was not employed to perform and thus clearly acted
beyond the scope of his employment which was to drive the car as a
taxi.
• The owner was, therefore, held not liable.
 Pushpabai Purshottam Udeshi v.Ranjit ginning & Pressing Co. Pt. Ltd.
AIR 1977 SC 1735

• The manager of the defendant company was driving a car

of the company on its journey from Nagpur to
Pandhurna on the Company·s business.
• The manager took one Purshottam as a passenger in the
car. The car met with an accident because of the
negligence of the manager in driving the car and
Purshottam died.

• The High Court negatived the claim of the dependants

of the deceased against the Company on the reasoning
that the manager in taking the deceased as a passenger
was not acting in the course of employment
• The Supreme Court reversed the High Court·s
Judgment and observed:
• ´In the present case a responsible officer of the
Company, the manager, had permitted Purshottam to
have a ride in the car.
• Taking into account the high position of the driver
who was the manager of the Company, it is
reasonable to presume, in the absence of any evidence
to the contrary that the manager had authority to
carry Purshottam and was acting in the course of
employment.
 Effect of Prohibition
• It is now the law that whenever a servant does an
act which his employer has prohibited him from
doing, the act so done falls outside the course of
employment.
• Prohibition falls under two categories: -
• those which limit the scope or sphere of
employment; and
• those which merely affect or restrict the mode
of doing the act for which the servant is employed.
• If a servant violates a prohibition of the first
category, his act will be outside the course
of employment and the master will not
be vicariously liable.
• But if the violation by the servant is only of a
prohibition of the second category, the
servant·s act will still be in the course of
employment making the master liable.
 Twine v. Bean·s Express Ltd.
(1946) 62 TLR 458
• The defendants provided for the use of a bank
a commercial van and a driver on the terms that the
driver remained the servant of the defendants and that
the defendants accepted no responsibility for injury
suffered by persons riding in the van who were not
employed by them.
• There were two notices in the van, one stating that no
unauthorised person was allowed on the vehicle, and the
other, that the driver had instructions not to allow
unauthorised travellers on the van, and that in no event
would the defendants be responsible for damage
happening to them.
• One person who was not authorised to ride in
the van got a lift in the van with the consent of
the driver. Owing to the negligence of the
driver, there was an accident and that person was
killed.
• Lord Green, M.R. observed that his act
of driving was no doubt in the course
of employment but ´the other thing he was
doing simultaneously was something totally
outside the scope of his employment, namely,
giving a lift to a person who had no right
whatsoever to be there.