Vicarious liability is a form of secondary liability, imposed upon one person for the tort of another. This usually occurs when the tortfeasor is an employee, and his act results in his employer becoming vicariously liable for his wrong. However, an employer can only be held vicariously liable for the tort committed by an employee if it occurs during the course of his employment and not ‘on a frolic of his own’ (Storey v Ashton (1869) L. R. 4 Q B 476).
How is vicarious liability established?
In order to establish vicarious liability firstly you must determine that there is in fact an employer/employee relationship (Cox v Ministry of Justice  UKSC 10). Secondly, there must be a sufficiently close connection between the tortfeasor and the defendant, usually his employer (Mohamud v Wm Morrison Supermarkets plc  AC 677).
Stage one: is there a relationship which vicarious liability may apply?
It is established that some relationships can automatically give rise to vicarious liability (for example, employment, partnership and limited liability partnership) and in those cases it is possible to move straight to the second stage. In other cases it will be clear that there is no vicarious liability (for example, where the alleged wrongdoer is plainly an independent contractor, in business on their own account).
However, when considering whether vicarious liability may arise outside one of the established relationships above, both stages of the test must be satisfied. The decision in Cox v Ministry of Justice clarified the basis on which, outside the established categories, a relationship may give rise to vicarious liability, stating that the court will consider whether the relationship is sufficiently akin to employment for vicarious liability to arise.
Stage two: is there sufficient connection with the wrongful act?
Traditionally, when deciding whether or not there was a sufficient connection, courts would ask whether the tort had been committed in the ‘course of employment’ (Salmond, Law of Torts (1907, 1st edn). This practically means if the tortfeasor (employee) did something he was employed to do when the tort occurred, then that will suffice for a close enough connection for vicarious liability to be instated.
This test was criticised in the judgment of Lister v Hesley Hall Ltd  1 AC 215 which altered the ‘course of employment’ as a satisfying element of vicarious liability, to the test of ‘close connection’.
Lord Steyn in his leading judgment stated:
‘the question is whether the warden’s torts were so closely connected with his employment that it would be fair and just to hold the employers vicariously liable’Lord Steyn
However, the decision in Lister was widely criticised as it was argued that it did not state in very clear terms what the content of the close connection test would be. Lord Toulson the landmark case of Mohamud v WM Morrison Supermarkets plc  UKSC 11, attempted to clarify the close connection test stating that courts should consider two matters:
- The first question is what functions or “field of activities” had been entrusted by the employer to the employee (or other person for whom vicarious liability is alleged), or in everyday language: what is the nature of the job. That question must be addressed broadly.
- Having addressed this, the court must decide whether there was sufficient connection between the position in which the employee was employed and the wrongful conduct so as to make it just and reasonable for there to be vicarious liability. This is to be approached applying the principle of social justice that those who carry on a business should bear the loss caused by risks associated with the business materialising, including the risk of an employee misusing his position, such a risk being “one of life’s unavoidable facts” (Lord Toulson in Mohamud at paragraph 40). To that end, Lord Toulson noted that cases in which the necessary connection had been found all involved the employee having used or misused the position entrusted to him in a way which injured the claimant.
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