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Vicarious Liability and Remoteness of Damage

Generally, a person is only liable for his own wrongful acts and one does not incur any liability for the acts done by others however in some special cases like that of a vicarious liability, it is the liability of one person for the act done by another person. For such a liability to arise there has to be a certain type of relationship between the two parties involved. Common examples of vicarious liability arising are:

• Liability of the principal for the tort of his agent 
• Liability of partners for torts of each other 
• Liability of master for the tort of his servant

1. An agent is someone who acts on your behalf, i.e. an agent is someone who is authorized to do an act by another person and consequently, acts on his behalf. The authority to do the act may be express or implied. The principal may 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 principal becomes liable for the same.

Example: In Lloyd v Grace Smith & Co, Mrs. Lloyd owned two cottages and was not satisfied with the income from these cottages. She approached her bank to seek advice on her property. The managing clerk of the company advised her to sell the cottages and invest the money in a better way. She was asked to sign two documents, which were supposed to be sale deeds. However the clerk actually made her sign gift deeds, after which he sold the property and kept the sale amount with him. It was held that since the agent was acting in the course of his apparent authority, the principal i.e. the bank was held liable for the fraud. However, if the agent were acting in his personal capacity, example as a relative of the lady, the bank would not be held liable. This is because in such a situation, the agent would not be approached as an agent of the bank, but as a relative who can advice. An agent is different from an independent contractor because the agent does an act on behalf of and/or for the principal, while the independent contractor is not authorized, but hired to do an act. Independent contractor fulfills his obligations independently and in his own capacity.

2. The relationship between partners, in a partnership firm is similar to that existing between a principal and agent. They are all considered as acting jointly for the purpose of business. For the tort committed by any partner in the ordinary course of the business of the firm, all other partners are liable to the same extent as the guilty partner. For this purpose, any one of the partners, some of them in any possible combination or even all of them together can be sued. That is, the partners are liable jointly or severely.

Example: In Hamlyn v Houston & Co, one of the partners of a firm bribed the plaintiff’s clerk and induced him to commit a wrongful act, i.e. leaking secrets of the plaintiff’s business. It was held that both the partners were liable for the wrongful act.

3. Master and Servant: In case a servant in the course of employment does a wrongful act, then both the master and the servant can be held liable for the act. The wrongful act of the servant is deemed to be the act of the master as well.

The doctrine of the liability of the master for the act of his servant is based on two Latin terms namely:

i. Respondent superior: This means let the principal be liable, and it puts the master in the position as though he had done the act himself. The logic behind this maxim is that the principal is in a better position to meet the claim as he is placed in a better position financially.

ii. Qui facit per alium facit per se: This means he who does an act through another is deemed in law to do it himself.

Who is a Servant?

A servant can be defined as a person employed by some one to do a work under the directions and control of the employer. This employer is called the master. As a general rule, a master is liable for the tort of his servant but is not liable for the tort of an independent contractor.

Few Exceptions:

Liability of employer for acts of independent contractor: as a general rule the master is liable for the torts committed by his servant, but an employer is not liable for the torts committed by an independent contractor employed by him. However, if employer authorizes the doing of an illegal act or subsequently satisfies the same, he can be made liable for such an act. 

Outside the course of employment: when a servant does any act, which is not in the course of master’s business, the same is deemed to be outside the course of employment. An act may be in the course of employment even though that is not strictly in the performance of the duties of the workman. The actsdone outside the ordinary course of a master’s business are acts outside the course of employment and the idea of vicarious liability will not apply.

Remoteness of Damage: There may be a number of consequences of a wrongful act. The wrongdoer is liable only for those consequences that are not too remote from his conduct. He cannot be made liable for all the consequences that follow as an indirect result of the wrongful act.

There are two approaches while determining whether damage is remote or not:

• The test of reasonable foresight: If the consequence of the wrongful act could have been easily foreseeable by a prudent man then such an act of the wrongdoer would constitute the tort.

• Test of directness: According to this test, the wrongdoer is liable for all direct consequences of his wrongful act. The consequences, which directly follow, cannot be remote.

Example: In Haynes v Harwood [1935] 1 KB 146, case the Defendant left a horse-drawn van unattended in a crowded street. The horses bolted when a boy threw a stone at them. A police officer tried to stop the horses to save a woman and children who were in the path of the bolting horses. The police officer was injured. It was held that the defendant was liable because they should have anticipated such a mishap. 

Example: In Scott v Shepherd [1773] 96 Eng. Rep. 525, the defendant threw a squib, which is a small, lit firework, into a busy marketplace with lots of people and stalls. In order to protect themselves and avoid damage, the squib was thrown by two other people. When it landed near to the complainant, it exploded and caused injury to his face. He later lost the use of one of his eyes. It was held that the injury to the complainant was the direct and unlawful act of the defendant who originally threw and intended to throw the squib. The other people were not ‘free agents’ in this situation and threw on the squib for their own safety and this was justifiable. The throwing on was classed as a continuation of the defendant’s action, which was intended. Whatever followed this was part of the defendant’s original act.

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