Vicarious Liability
After completing an internal audit, the company accountant concludes that the operational expenses have substantially increased within a short period of time. Investigations into the substantial increase reveal that the company driver has been inflating fuel costs and pocketing the money. But here’s the problem, the driver is not on your payroll. He works for you, but through an agency. Is it possible to sue the agency for the actions of the driver? This is where the principle of vicarious liability is invoked.
What is Vicarious Liability?
Black’s Law dictionary defines vicarious liability as liability that a supervisory party (such an employer) incurs for the actionable conduct of a subordinate or associate (such as an employee). In simple terms, vicarious liability is the principle that if someone works for you and causes harm while doing their job, you’re responsible, even if you didn’t personally do anything wrong. It’s an exception to the rule that liability belongs to the wrongdoer.
In Ghana, this principle is not just borrowed from common law decisions. It is enshrined into our Civil Liability Act, 1963 (Act 176), ensuring victims can seek adequate compensation from the party who is capable of paying, and is most likely to pay.
The principle of vicarious liability is clear and practical. If you employ staff, you take the risks associated with it. Employers are expected to train and supervise their employees adequately, to avoid wrongdoings in the course of their employment that may lead to harm or loss to others. As an employer, if you are profiting from the work of your employees, you also take the liability when things go wrong.
As the victim, going after the company is usually safer and surer for compensation than the individual employee.The principle is summed up in the Latin phrase “respondeat superior”, which simply means an employer or principal is liable for torts committed by their employees or agents within the scope of their employment.
When Is the Employer Liable?
In Lister & Ors v. Hesley, the court stated that: “when determining whether an employer is vicariously liable for an employee’s wrongful act, concentration should be on the relative closeness of the connection between the nature of the employment and the particular tort.” The question of liability only arises once it is clear that the wrongdoer is in fact an employee. How do the courts make this determination