Vicarious Liability: Justifications under English Law and Czech Law

Tereza Procházková

1. Introduction

It might be said that liability is attached to people who do things badly. However, only those who do things at all can do them badly. Therefore, it is the working class who is likely to be guilty of torts.[1] But it is not always the workers who may be found liable. Vicarious liability is a form of secondary liability[2] that makes one person responsible for the wrongs of another.[3] Under English law, the classic common law rule states that employers are vicariously liable for the torts of their employees that are committed during the scope of their employment.[4] Nevertheless, the categories of vicarious liability are rapidly expanding. It applies also in the context of principal and agent, volunteers, or temporal workers.[5] Importantly, it has also been argued that, under special circumstances, it may apply also to the torts of independent contractors.[6] Therefore, particular emphasis will be placed on this seeming breakthrough of the classical concept of vicarious liability.

The aim of this work is to outline the main similarities and differences between the English and Czech legal systems and to compare them. According to Zweigert and Kötz, “the basic methodological principle of all comparative law […] is that of functionality.[7] They argue that “different legal systems give the same or very similar solutions […] to the same problems of life.”[8] Therefore, focus will be placed on the grounds of justifications in each country as they reflect the function of vicarious liability in a given society.

2. English legal framework

Morgan notes that the concept of vicarious liability is “the creation of many judges who have different ideas of its justification […] or no idea at all”.[9] He sees the problem in English law in the absence of overarching doctrine which would unite the many rationales behind vicarious liability.[10] However, in Lister v. Helsey Hall[11], three principles central to the imposition of vicarious liability were established. These are: a solvent defendant, an employer’s vigilance, and distributive justice.[12]

The first, a solvent defendant, is justification based on the “deep pockets” of the employer. The wealth of an employer or its access to resources through insurance has in some cases had an undeniable influence.[13] The underlying idea behind this justification is that the possibility of a victim’s compensation should be taken into account. It increases the victim’s chance to fair compensation and creates a fair loss distribution. This justification is, therefore, more of a practical nature.

The second justification is based on prevention, or even on deterrence.[14] The idea is that vicarious liability encourages employers to be more thoughtful about recruitment and selection of their employees.[15] The employer has to consider whether the person is capable, qualified, and of a suitable nature for the position.[16] In this instance, deterrence means that the employer will take appropriate measures to ultimately avoid the consequence of imposing vicarious liability. Vicarious liability based on such justification was found, for example, in Mattis v Pollock[17] where the employer was held liable for the behaviour of its employee, a bouncer in a night club, as it should have not employed a man with a previous record of aggressive behaviour for the position.

The last justification, so-called enterprise liability, is based on the idea that those who profit from the activities of another should also bear any losses that these activities cause. It is based on “fair allocation of risk given that enterprises create risks and gain from them.”[18] It is assumed that employers have calculated and accepted this by accepting their liability.[19] Inspiration for this justification comes from Bazley v. Curry,[20] a Canadian case, and has become widely accepted after the Lister v. Hasley Hall[21] case and subsequent case law.[22] For example, in Dubai Aluminium Co Ltd v. Salaam[23], partners of a solicitor who committed a wrong were held vicariously liable as the wrong of the solicitor was regarded as being a part of the ordinary course of business. The Majrowski case[24] holds that an employer is vicariously liable for the harassment committed during the course of employment from one employee towards another. Therefore, in both of these cases, enterprise liability applied. In other words, in both of these cases, the liability of the one who gained from the actions of another, even in the negative sense, as in the Majrowski case, was established. For the persons who were ultimately found vicariously liable, the risk was primarily introduced by running their enterprises.

The law regarding vicarious liability is now reasonably clear, and this rationale may recently be seen to be prevailing.[25] Nevertheless, there is a recent shift in the concept of vicarious liability as it seems that, under certain circumstances, courts are more willing to find an “employer” liable even in the cases of independent contractors. Taking into account the just described rationale for vicarious liability, it may not be that hard to find support for such a shift.

Over the last few decades, there were a few cases that suggested this change in a contemporary direction. For example, in the Hawley v Luminar Leisure Ltd[26], the “employer” was held vicariously liable for a person who was not its employee but was integrated into its business in a similar manner. Another, and perhaps the best example, is the Lane v. Shire Roofing Company case.[27] The claimant, a one-man firm builder, was hired by the defendant to work on a roof, but suffered an injury while doing the contracted work.[28] Despite the contractual relationship, he was ultimately held to be an employee in the context of a personal injuries claim, and the “employer” was found vicarious liable as the work was part of its undertakings.[29] The court emphasised that, regarding the question of “who is responsible for the overall safety of the men[30], this is the correct way. The court argued that there is a public interest in recognising the position of the “employer” for the purposes of imposing liability.[31] A similar conclusion was also reached in R v. Associated Octel Ltd[32] where one company (Octel) hired another company, operating as an independent contractor, whose employee was hurt while carrying out the work. Ultimately, Octel was held liable in accordance with the Health and Safety at Work Act 1974 for such injury as the contracted work formed part of Octel’s undertakings and with no regard whether the work was provided by its own employee or an independent contractor. In summary, in situations where independent contractors can be regarded as engaged in the conduct of the enterprise, the contractual nature of the relationship is irrelevant, especially when a certain public interest, such as health and safety, is present.

Therefore, the present exclusion of an independent contractor seems increasingly odd.[33] In a contemporary working environment, many businesses have become largely dependent on the contribution of workers and other service providers who are not employees (for example, the construction industry).[34] As explained before, enterprise liability requires that those who introduce risk have to also manage it. Also, for the imposition of vicarious liability, there always has to be a certain linkage between the two entities in question.[35] Therefore, the question is whether an independent contractor may fit into these postulates.

It may be argued that, if an employer uses an independent contractor to do work which can be seen as a part of the conduct of the employer’s undertaking, it also has to bear the risk of the employee’s failure.[36] Therefore the employer may be responsible for the wrongs of contractors in cases where they can be regarded as engaging in the conduct of the employer’s enterprise.[37] Thus, the link between an employer and an independent contractor exists and can be justified on the basis of enterprise liability, [38] as happened, for instance, in the Lane case.[39]  In other words, with benefits come burdens, and it is of little importance whether these benefits come from an employee or an independent contractor.

3. Czech legal framework

Vicarious liability is primarily contained in the Civil Code.[40] The core regulation of the liability for the acts of another person consists of Section 1935 and Section 2914 of the Civil Code. The former states “if a debtor performs through another person, the debtor is liable in the same way as if he performed himself.”[41] The rule is that, in principle, debtors perform debts personally.[42] However, their responsibility is linked to the result, e.g. that the debts will be fulfilled properly.[43] Therefore, it is up to the debtors how they meet their obligations. They are essentially free to use a different person unless it is exempted by the contract or it is against the nature of the commitment.[44] However, Section 1935 contains a contractual liability towards creditors. Even though acting through another person is possible, it cannot be regarded as a counterpart to vicarious liability under English law in the strict sense, as no tort is committed.

The latter rule provides that a “person who […] uses an agent, employee or another helper shall provide compensation for the damage caused by such a person as if he caused it himself.[45] Therefore, it is Section 2914 which contains a tortious liability towards third parties, i.e. it fits more accurately to the concept of vicarious liability under English law. It does not matter what the position of the chosen person is, e.g. whether the person is in a dependent position (typically an employee) or whether it acts independently as an independent contractor.[46]

A different case is when the person employed to undertake certain activities pledges to do so independently. In such case, the person is no longer considered to be a helper. It is expressed in the second sentence of Section 2914: “[…] in the case of a performance provided by another person, someone has undertaken to carry out a particular activity independently, he is not considered to be a helper; however, if such other person has chosen him carelessly or exercised inadequate supervision over him, that other person is liable as a surety for the fulfilment of his duty to provide compensation for damage.” The provision thus distinguishes a helper in the strict sense and an independent contractor, who undertakes to carry out activities independently.[47] In the latter case, the superior (the one who hires) is not obliged to compensate for damage. Nevertheless, it still serves as a guarantor for liability upon a culpable breach of careful selection (culpa in eligendo) and a lack of appropriate supervision (culpa in custoniendo).[48] In summary, Czech legislation has chosen the path of either directly imposing vicarious liability or at least imposing the guarantee obligation of the superior.

There can be long discussions about what can be practically understood under the term “carried out independently”.[49] However, in any case, it cannot be said that every contractor carries out its activities independently within the meaning of the second sentence of Section 2914.[50] It would imply that the superior would always be only a guarantor in the case of independent contractors, which is not the aim of the regulation. The key element for imposing vicarious liability is the presence of certain intervention while conducting the contracted activity.[51] In other words, there must be a certain relationship in which the contractor does not have a subordinate role but is still restricted by certain conduct exercised by the one who was hiring. For example, it is necessary to consider whether the contractor is limited by certain guidelines or directions (although contractually agreed).[52] If so, the person who imposed them assumed the risk of harm and therefore the first sentence of Section 2914, e.g. the imposition of direct vicarious liability, would apply.[53] However, what else could be perceived as such intervention (beside those mentioned above) remains unclear, since there is no case law on this matter so far. The rationale behind the Czech legal regulation and the similarities and differences from their English counterpart will be explained and contrasted below.

4. Comparison

At the outset of the comparison of the two previously described legal orders, the roots of each system will be considered. English law is a part of the common law legal tradition. As such, law is made primarily by the decisions of judges with precedential character. Czech law is a part of the civil law legal tradition that had its roots in ancient Roman law and had been affected by various influences over the centuries, e.g. canonical, feudal, or local practices. Each legal order is, therefore, driven by very different principles.

As mentioned before, Zweigert and Kötz argue that different legal systems give the same or very similar solutions to the same problems of life. They see comparative law as a tool to deepen the belief in “the existence of the unitary sense of justice.”[54] The legal framework of vicarious liability under English and Czech law may, to a certain point, confirm this idea.

When we consider the three prevailing justifications for vicarious liability under English law, we realise that the Czech outcome is surprisingly similar. The first justification, based on the fact that the employer/superior has usually more resources than the employee/helper, has its counterpart also in Czech law. The principle applied here is that the status of the victim cannot be degraded by the use of another person as the right to compensation for injury usually applies better to the superior.[55] According to Section 2953 of the Civil Code “[f]or reasons deserving special consideration, a court shall proportionately reduce the compensation of damage [taking into account] the personal and property situation of the individual who caused and is liable for the damage”. Legislation without the provision regarding vicarious liability would, therefore, open the way for avoiding compensation by simply transferring responsibility to the impecunious employee/helper. Thus, it would be more difficult for the victim to enforce the claim and obtain satisfaction for the harm done. The underlying idea of fair victim compensation is, therefore, present in both legal orders.

Also, the second justification in English law, prevention, as described above, has its reflection in Czech rationales. The essential rule is to choose your employee (or helper or contractor) carefully enough to avoid the imposition of vicarious liability. The difference under Czech law is that there are more elaborate theories regarding selection and supervision. The obligation of careful selection (cura in eligendo) is a legal obligation to consider whether the person chosen is competent enough for the proposed activity. The obligation to supervise (cura in custoniendo) sometimes arises from law, but mostly is based on contract.[56] In any case, the particular circumstances will be considered (e.g. the history of the contractor, references on the market, insolvency, etc.).[57] For both legal orders, therefore, employers and superiors need to ensure that the persons used are adequately trained and supervised.

In addition, the last justification under English law, enterprise liability, is embedded in Czech legal order. The underlying idea (notably similar to English law) is that when one benefits from the work of another, one should also bear the risk of failure.[58] Although on a theoretical level, there are differences between an employee, a helper, or a contractor, the practical outcome of the new Czech legislation is nearly the same. In any case, the employer or the superior will bear the risk of failure instead of the employees or helpers.

However, as explained above, a certain relationship is required under both legal orders. Under English law, it is the engagement in the employer’s enterprise undertakings, and under Czech law, it is certain guidelines or interventions. The rule that the particular circumstances of each case will be considered applies in both jurisdictions. Therefore, under both legal orders, there is wide space for the court’s discretion. Although English courts seem now reluctant to include an independent contractor under vicarious liability without further reservation, it may be overruled in the very near future, as the current development suggests. The approach taken by modern health and safety law under English law, as described above, might be a good example of such development.[59] Both English law and Czech law have chosen the manner for considering each case individually with regard to all factual circumstances.

5. Conclusion

According to Zweigert and Kötz, “comparative law is an “ecole de verité” which extends and enriches the “supply of solutions” and offers […] the opportunity of finding the “better solution” for a [given] time and place.”[60] The fact that the two different legal orders have come to almost the same conclusion suggests that it truly might be “the best” solution in contemporary society.

The concept fulfils the same functions in both legal orders: the function of loss distribution and victim compensation through a solvent defendant which, in both legal orders, arises from the assumption that the victim is more likely to obtain fair satisfaction from the superior entity than from the individual.

The second function is that of prevention and deterrence, which has a motivational character in the future as it promotes the future thoroughness in selecting the person who is authorise to act on someone else’s behalf.

Finally, the function of fair allocation of risk through enterprise liability has found its place in both legal orders, as it perhaps responds most closely to the contemporary needs of society. It shows that the binary divide between employer and employee, and employer and independent contractor[61], is proving untenable, as the distinction between employees and independent contractors is diminishing due to the rapid changes in society both under English law and Czech law.

Tereza Procházková is currently finishing her law degree at Charles University in Prague. During her studies she spent one year at University of Kent as participant in Erasmus program. She currently works as research asisstant at Center for Comparative Law at Law Faculty of Charles University in Prague.

[1] Merkin, R. and Steele, J. (2013). Insurance and the Law of Obligations. Oxford: Oxford University Press, p. 318

[2] There is an alternative theory holding that vicarious liability is a form of “primary” liability. For more details, see Merkin, R. and Steele, J., ibid., p. 302.

[3] Merkin, R. and Steele, J., ibid., p. 302.

[4] Morgan, P., (2012). Recasting Vicarious Liability. 71 The Cambridge Law Journal 03, pp. 614–650, p. 617.

[5] Morgan, P., (2012)., ibid., p. 650.

[6] Merkin, R. and Steele, J., op. cit., note 1, p. 305.

[7] Zweigert, K. and Kötz, H. (1998). An Introduction to Comparative Law. 3rd Ed. Oxford: Oxford University Press, p. 40.

[8] Zweigert, K. and Kötz, H., ibid.

[9] Morgan, P., op. cit., note 4, p. 617.

[10] Morgan, P., ibid., p. 618.

[11] Lister and others v Hesley Hall Ltd [2002] AC 215.

[12] Lockwood, G., The widening of vicarious liability: implications for employers, 53 International Journal of Law and Management 2, pp. 149–164.

[13] Lockwood, G., ibid., p. 150.

[14] Merkin, R. and Steele, J., op. cit., note 1, p. 309.

[15] Lockwood, G., op. cit., note 12, p. 150.

[16] Lockwood, G., ibid.

[17] Mattis v Pollock (trading as Flamingos Nightclub) – [2003] 1 WLR 2838.

[18] Merkin, R. and Steele, J., op. cit., note 1, p. 309.

[19] Hamlyn v. John Houston & Co. – [1903] 1 K.B. 81.

[20] Bazley v Curry [1999] 2 SCR 534. It denotes as the ultimate justification for the imposition of vicarious liability the creation of enterprise risk.

[21] Lister, op. cit., note 11.

[22] Brodie, D., Enterprise Liability: Justifying Vicarious liability, 27 Oxford Journal of Legal Studies 03, pp. 493–508, p. 496.

[23] Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48.

[24] Majrowski v Guy’s and St Thomas’ NHS Trust [2006] UKHL 34.

[25] Brodie, D., op. cit., note 22, p. 496.

[26] Hawley v Luminar Leisure Ltd and others [2006] EWCA Civ 18.

[27] Lane v Shire Roofing Co (Oxford) Ltd [1995] EWCA Civ 37.

[28] Brodie, D., op. cit., note 22, p. 503.

[29] Brodie, D., ibid.

[30] Lane, op. cit., note 27.

[31] Brodie, D., op. cit., note 22, p. 503.

[32] Regina v Associated Octel Co. Ltd [1996] ICR 972.

[33] Brodie, D., op. cit., note 22, p. 503.

[34] Brodie, D., ibid.

[35] There is a number of tests in order to determine employment for the purpose of vicarious liability, for example, the Salmond test, the close connection test, etc. For more details, see Morgan, P., op. cit., note 4.

[36] Brodie, D., op. cit., note 22, p. 504; Regina v Associated Octel Co. Ltd [1996] ICR 972.

[37] A supportive argument can be found in contemporary health and safety law. See Brodie, D., ibid.

[38] Brodie, D., ibid., p. 506.

[39] Lane, op. cit., note 27.

[40] Zákon č. 89/2012 Sb., občanský zákoník [Act No. 89/2012 Coll.].

[41] Section 1935 of Act No. 89/2012 Coll.

[42] Hulmák, M. a kol. (2014). Občanský zákoník V. Závazkové právo. Obecná část (§1721-2054). Praha: Nakladatelství C.H. Beck, s. 952.

[43] Hulmák, M., ibid.

[44] Hulmák, M., ibid.

[45] Section 2914 of Act No. 89/2012 Coll.

[46] Hulmák, M., op. cit., note 42, p. 1579.

[47] Explanatory report to Act No. 89/2012 Coll.

[48] The latter only if it obliged to do so.

[49] Králík, F. and Ševčík, L. (2016). Nová odpovědnost subdodavatele za škodu. epravo.cz [online]. Available at: http://www.epravo.cz/top/clanky/nova-odpovednost-subdodavatele-za-skodu-101013.html [Accessed 5.11.2016].

[50] Hulmák, M., op. cit., note 42, p. 1581.

[51] Králík, F., and Ševčík, L., op. cit., note 49.

[52] Hulmák, M., op. cit., note 42, p. 1581.

[53] Hulmák, M., ibid., p. 1581.

[54] Zweigert, K. and Kötz, H, op. cit., note 7, p. 3.

[55] Hulmák, M., op. cit., note 42, p. 1578.

[56] Hulmák, M., ibid., p. 1578.

[57] Králík, F., and Ševčík, L., op. cit., note 49.

[58] Hulmák, M., op. cit., note 42, p. 1578.

[59] Brodie, D., op. cit., note 22, p. 504.

[60] Zweigert, K. and Kötz, H., op. cit., note 7, p. 8.

[61] Morgan, P., op. cit., note 4, p. 642.