Understanding Vicarious Liability in Tort – The value of a comparative perspective

In this blog, I will discuss two recent publications which address comparatively the doctrine of vicarious liability in tort and demonstrate the value of a comparative perspective in this field.  Vicarious liability is a rule of responsibility which is found across the common law of tort and typically renders an employer strictly liable for the torts of its employees provided that the tort takes place in the course of employment.  The idea of holding an employer liable to pay compensation to victims of its employees’ torts, regardless of the absence of personal fault, is not, however, unique to the common law.  Ideas of strict liability for the torts of others may also be found in civil law systems, although in some systems it is subject to a rebuttable presumption of fault (see, generally, Giliker, Vicarious Liability in Tort (CUP, 2010) and J Spier (ed), Unification of Tort Law: Liability for Damage Caused by Others (Kluwer Law International, 2003)).  In all systems, it has proven controversial with some commentators arguing that the imposition of no-fault liability on employers conflicts with notions of corrective justice and notably, in a number of systems, it has been questioned to what extent liability can be said to be founded on economic justifications based on enterprise risk and loss distribution via social or private insurance.

In his recently published text, Vicarious Liability: Critique and Reform (Hart Publishing, 2018), Anthony Gray, Professor of Law at the University of Southern Queensland, engages in a critique of common law vicarious liability based on a study of UK, Canadian, US and Australian case-law.  The highest courts of the UK and Australia in 2016 and 2017 delivered no less than four leading judgments determining the scope of the doctrine: see Cox v Ministry of Justice [2016] UKSC 10, Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11, Armes v Nottinghamshire CC [2017] UKSC 60, Prince Alfred College Inc v ADC [2016] HCA 37). A fifth decision (the appeal from Frederick v Positive Solutions (Financial Services) Ltd [2018] EWCA Civ 431) is due this year.  For Gray, comparative analysis of the relevant case-law leads to the conclusion that the common law of vicarious liability has lost its way and is unduly influenced by notions of enterprise risk emanating from the United States.  He notes, in his chapter on US law, that ironically the US courts nevertheless continue to adopt a restrictive approach to vicarious liability for sexual assaults when such cases have been a primary instigator of expansion in Canada (Bazley v Curry [1999] 2 SCR 534) and the UK (Lister v Hesley Hall Ltd [2002] 1 AC 215).  Enterprise risk as a justification for vicarious liability is subjected to a detailed critique, dissecting the relevant literature across the common law world.  Gray’s recommendation for reform is to base vicarious liability on ideas of agency:

… individuals should only be civilly liable for acts that are morally blameworthy and deserving of punishment.  It is sound to make an employer liable for what an employee did for their purposes and benefit because the actions were authorised, expressly or implicitly, by the employer. The law either sees that the employee’s actions are those of the employer, or … the law says that the employer is liable for the actions of the employer as if they were the employer’s actions.  This is because the employer has authorised that type of action (p. 186).

On this basis, current law which is willing to render an employer strictly liable for the intentional/criminal wrongdoing of its employees is incorrect – only exceptionally could such actions objectively be said to benefit or be for the purposes of the employer.  Further, employers would no longer be liable for things they specifically forbade the employee from doing.

Whether or not one agrees with this alternative theory – which, in my view, struggles to explain recent case-law (which Gray largely condemns as incorrect) and the complexity of judicial reasoning which is rarely premised on one single justification for vicarious liability – Gray is using comparative law to understand the law, critique it and as a springboard for suggesting reform.  As such, he makes an interesting and useful contribution to our understanding of the relevant law.  Reading this text, we can identify some of the benefits of the comparative law enterprise.   Examination of the operation of legal rules across legal systems enables the reader to gain a clearer and deeper understanding of principle and its underlying theoretical basis, and enables the author to make suggestions for reform inspired by studying case-law and academic writings across different legal systems.

m_cjcl_6_2coverIn my recently published article in the Chinese Journal of Comparative law (Paula Giliker, ‘Comparative Law and Legal Culture: Placing Vicarious Liability in Comparative Perspective’ (2018) 6(2) The Chinese Journal of Comparative Law 265-293), I have tried to take this process a step further.  Again my focus in on vicarious liability, but to gain a true comparative insight, I have gone beyond the common law (England and Wales, Australia, Hong Kong) to consider civil law, notably a civil law system currently considering reforms to its civil code – France – and a hybrid socialist legal system (China) which is engaged in a fresh process of codification (here the 2009 Tort Liability Law (TLL)) in order to respond to economic change.

What draws all these diverse systems together is the same basic framework for vicarious liability in tort.  My article seeks to ascertain to what extent commonality in form translates into practice and whether there are other contextual factors which determine the operation of vicarious liability/liability for the acts of others in the law of tort.  Some of my conclusions will not surprise comparative lawyers.  The operation of the law in England and Wales, Australia and Hong Kong differs despite common rules and case-law sources.  Hong Kong comes across as unduly deferential to English case-law to the detriment of local needs.  Australia is determinedly different, rejecting English case-law despite dealing with cases raising very similar issues.  France shows similar traits to England and Wales: a willingness to expand strict liability on the basis of enterprise risk.  The March 2017 projet de réforme, introduced by the French Ministry of Justice, seeks to consolidate many of the case-law developments in this field and accepts the dominant view that expansion is permissible where insurance exists to ensure victims obtain compensation, notably for personal injuries.  China is of particular interest being a system in transition, struggling with the essentially capitalist notion of vicarious liability which takes as read a hierarchical employment structure which requires the employer to compensate victims for the torts of its employees.  Nevertheless, consistent with the move from a socialist command economy to a modern economy driven by both exports and domestic demand, Article 34 of the TLL 2009 provides that where an employee of a work unit employer causes harm to others for the purpose of performing the work task, the work unit employer shall bear tort liability.  The economic reforms introduced in China have therefore triggered a demand for civil liability for torts committed by employees of business associations, especially private ones, notably in the context of personal injury claims.  There is now a greater willingness to seek recourse in the courts with measures to protect both consumers and workers and the less well-off generally.

What conclusions can we draw from this.  First, and most obvious, that the idea of vicarious liability is one that translates and moves across legal cultures, even in relation to hybrid socialist systems.  Secondly, divergence will arise due to the nature of local legal cultures.  The insurance crisis in Australia, for example, in the 2000s led the courts to adopt a restrictive approach towards tort liability.  In contrast, in the UK and France, insurance seems to be assumed (rightly and sometimes wrongly) to be present to ensure compensation will be paid.  China, with more limited insurance provision, is clearly at a disadvantage here in terms of expansion, although claims against state-owned enterprises and wealthy for-profit corporations are still envisaged.  Thirdly, linked to this is the extent to which the jurisdiction accepts risk-based reasoning which clearly prospers more readily in jurisdictions dominated by free market concerns.  Note, however, as Gray indicates in his book, that such arguments have been rejected by the High Court of Australia.  This cannot therefore be taken as a given.  Fourthly, in my article, I identify two further issues which seem to be influential across legal systems – the importance given to the goal of ensuring compensation for personal injury victims and the discretion given to the judiciary to develop principles of vicarious liability over time.  Such a study seeks to provide an insight into judicial law-making and the tensions which exist between the courts and the State in determining matters of social policy.  It further indicates the difficulty of finding one set rule of vicarious liability/liability for the acts of others which should apply globally and simultaneously respecting the values of local legal cultures.

Vicarious liability is a topic on which much has been written.  I would argue, however, as illustrated in these two publications, a comparative perspective offers the reader greater depth and understanding into the operation of legal rules and helps us to identify the underlying theoretical bases which a study of a single system cannot provide.

Posted by Professor Paula Giliker (Professor of Comparative Law, Bristol)

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