FULL NAME: BABIRYE REHEMA NAMULI

REGISTRATION NUMBER: AS19B11/038

ACCESS NUMBER: A86992

COURSE UNIT: NATURE AND HISTORY OF TORT LAW

LECTURER: MS NAMIRIMU REBECCA

TUTOR: MS KYALIMPA JUDY

STREAM: LLB 2 A

QUESTION: The underlying legal policy is based on the recognition that carrying
on a business enterprise necessarily involves risk to others. It involves the risk that others
will be harmed by wrongful acts committed by the agents through whom the business is
carried on. When those risks ripen into loss, it is just that the business should be
responsible for compensating the person who has been wronged. (Dubai Aluminum Co
Ltd v Salaam [2003] 2 AC 366, per Lord Nicholls.)
With the aid of relevant cases assess the accuracy of this statement with special
emphasis to the definition of the “scope of employment” and how the principle has evolved
over time.
The Dubai Aluminum case1 is an outstanding case when it comes to vicarious
liability. In this case, the senior partner of a firm drafted a consultancy
agreement and other relevant documents for a fraudulent enterprise. The firm
was sued and held liable vicariously. The issue that was before court was
whether the firm could be held vicariously liable.
The House of Lord justified holding the firm vicariously liable by saying vicarious
liable can only exist where the employer acted in the ordinary cause of their
employment. This case ably establishes the scope of employment rule which is
crucial and must exist if an employer is to be held liable. In addition, it also
justifies the doctrine of vicarious liability thus, because the employer benefits
from the activities of the employee, it is only fair for him to also incur the costs
that arise out of his work both positive and negative.

In this essay, I will define vicarious liability and give a brief background and how
it has evolved overtime. I will also ably cover the three essential ingredients that
must exist for vicarious liability to stand which include: The relationship between
the employer and the employee or who an employee is, the establishment of a
tortious act and the employees course of employment.

John Cooke2 defines vicarious liability as “where one person is made liable for
the person.” Historically, vicarious liability was established during the period of
industrial capitalism 1700-1800. During this period, there were so many
developments that took place in the law. The most significant being the increase
in production. The seminal case that lies down the vicarious liability was lied
down in the case of Herne V Nicholl3 the period of industrial capitalism) where
Holt CJ stated ‘ For seeing somebody must be a loser, it is more reason, that he
that employs and puts a trust and confidence should be a loser rather than a
stranger.’ .

Employers are liable under a Latin phrase ‘qui facit per alium facit perse’
which means he who acts through another acts himself and the Latin maxim
of ‘respondeat superior’4 which means ( let the master answer) establishes
the question of scope of employment such that one must be an employee. The
                                                            
1
 Dubai Aluminum Co Ltd V Salaam [2002] 3 WLR 1913

2 John.M. & C. Witting,(2011) Street on Tort, 13th Edition, Oxford University

Press
3 (1700)

4 Winfield &Jolowicz, (2014)Tort, Nineteenth Edition, Sweet&Maxwell

emphasis of scope of employment was seen in the case of Catholic Child Welfare
Society V Institute of the Brothers of the Christian Schools5, Lord Phillips
referred to the “first stage” of asking whether the relationship between the
Defendant and his worker is “one that is capable of giving rise to vicarious
liability.”

If it was so crucial for the scope of employment to exist, then it is important to

answer the question of who an employee is in law. The criteria of identifying who
an employee is done by establishing the relationship between the employer and
the employee. The tests put in place have evolved with time to establish three
concrete tests and these include: the control test, the organization/integration
test and the economic reality test.

The control test was the first test to be considered and this mainly
encompassed what a master and servant relationship entailed in order for one
to be termed as the employee. This was applied in such a way that court had to
be able to establish that the employer retained control over the work and told
the person how to do that work6. This test was soon phased out due to the
developments of the time such that employees were now more skilled than their
employers. Consequently, the employer only told them what to do and not how
to do it. This made courts opt for other approaches.

The next test that was established to fill in the loopholes was the organizational
/ business test. This was lied down by Lord Denning in Stevenson, Jordan
and Harrison Ltd V McDonald and Evans7 in this test an employee was seen
as someone who was an integral part of the business. This test ably
distinguished an employee from an independent contractor where the latter
works for the business but as an accessory not as an integral part of the
business.

Later on, the economic test was established and the main aim of this test was
to establish what a contract of service is and a contract of services is. In Ready
Mixed Concrete V Minister of Pensions8, the Court held that employment
under a contract of service exists when a person agrees to perform a service for
a company in exchange for renumaration and also where a person agrees
expressly or impliedly to subject himself to the control of the company to a
                                                            
5 [2012] UKSC 56,SC
6 John.M. & C. Witting,(2011) Street on Tort, 13th Edition, Oxford Universty
Press
7 (1952) 1 TLR.

8 [1962] 2QB. 497 

sufficient degree to render the company his master including control over the
tasks performance.

In the case of Market Investigations Ltd V Minister of Social Security9,

another condition was added to the economic test where the court also held
that employment is determined by the degree and the extent of control that the
company has over the performance. Secondly, the difference between contract of
‘services’ and ‘for services’ required a test of whether the person is engaging the
services as person in business on his own account. When court considers the
circumstances and the answer is no, then that person is considered to be under
a contract of service.

The second element to be established is a tortious act of the employee. This

means that vicarious liability can only exist when there is a tort committed. In
Broom V Morgan 10while explaining the rationale of vicarious liability, he stated
thus: “[the master] takes the benefit of the work when it is carefully done, and
he must take liability of it when it is negligently done.”

The third and most vital element for vicarious liability to exist is that the
employee must have committed the tortious act during the course of his
employment as earlier on established in the Dubai Aluminum Case11. Tortious
acts that can occur during the course of employment can be through authorized
acts, unlawful activities and doing authorized acts in unauthorized way.

In the first instance where a tortious act can be committed while during
authorized act .In dealing with this matter a test was put in place in the case of
Pol V Parr and Sons12 court established that it was important to pose the
question of whether an employee was or has at any material time been given
implied authority to act as a result of the scope of employment.

The second instance where an employer can be held liable for the acts of the
employee is where he does an authorized act in an unauthorized way. This
was discussed in the case of Century Insurance V N I Road Transport 13 The
test to impute vicarious liability here was whether the acts took place during the
course of employment. Court held that even though the act was very careless,
the driver did it while delivering the petroleum tank and this fell squarely into

                                                            
9
 [1969] 2 QB. 173
10 [1953] 1 QB. 597
11 Supra
12 [1927] 1 KB. 236
13 [1942] AC. 509
his course of employment. He was doing an authorized act in an unauthorized
way.

However, doing authorized acts in an unauthorized way should be distinguished

from doing acts which are expressly prohibited because the latter completely
removes vicarious liability. The case of Beard V London Omnibus Co.14 can be
distinguished from the above case where court rejected vicarious liability
because what the employee was doing was expressly prohibited by the employer.
The conductor in this case drove carelessly without the bus driver and ended up
injuring a man.

Also important to note is the difference between an unauthorized act and the
‘manner of action’ which although both still make the employer liable. Manner
of action was seen in the case of London County Council V Cattermoles
(Garages) Ltd15where the employer was held liable even when the employer
claimed they had prohibited the manner in which the employer acted. However,
court rejected this argument and held that whilst they had prohibited this
manner of action, the employee was still engaging in his duty of moving vehicles
which was also within his scope of employment.

The third instance where an employer can be held vicariously liable is where
there is unlawful activity. Not all unlawful activities make the employer liable
as seen in the case of Lister et. al V Hesley Hall Ltd.16 The test was said to be
whether there is a connection between the criminal record and the employees’
usual conduct. In this case, the employers were held liable for their employees’
sexual abuse of school boys under his care. Court held that there was a more
than reasonable connection between the work that the warden was employed to
do and the abuse committed.

This law thus makes a distinction between an employee’s conduct with in the
course of employment and that which can be considered a ‘frolic of his own’.
This was seen in the case of Joel V Morison 17where the servant drove a cart
carelessly and injured a person, court held that the master cannot be liable for
the careless driving of the servant because it was a his own doing.

The general rule is that the employer will only be held liable for the acts of an
employee during the course of his employment. This rule is subject to an
exception where an employer can be held liable for acts of an independent
                                                            
14[1900] 2 QB. 530
15[1973]
16 [2002] 1 AC.
17 [1834] 172 ER 1338
contractor under any of these circumstances. If the employer authorizes,
procures or ratifies a tort of an independent contractor. This was seen in the
case of Barker V Braham18. The sheriff in this case was immune from liability
however the defendant was held liable. Court held, “He who instigated or procures
another to commit the tort is deemed to have committed the tort himself.”

Where there is personal negligence on the part of an employer as demystified

in the case of Hughes V Percival 19where the employer fails to provide in the
contract for precautions more so where the risk of harm is foreseeable. It is
important to note that an employer cannot be held liable for the acts of an
independent contractor where it is possible to impute collateral negligence20.

In conclusion common law has provided for an employer to recover from the acts
of an employee in what can be referred to as employer’s indemnity but this
only occurs where an employee has acted in breach of a contract as seen in the
case of Lister V Ronford Ice and Cold Storage Co. Ltd21 but where the
employer is partially at fault, indemnity can fails as seen in the case of Jones V
Manchester Cooperation22.

                                                            
18
 (1773) 3 Wils 368
19 (1883)8 App Case 443
20 Street on Torts (Supra)
21 [1957] AC. 553
22 [1952] 2 QB. 852
 REFERENCES

CASE LAW

Herne V Nicholl (1700)

Barker V Braham (1773) 3 Wils 368

Joel V Morison [1834] 172 ER 1338

Hughes V Percival (1883)8 App Case 443

Beard V London Omnibus Co [1900] 2 QB. 530

Pol V Parr and Sons [1927] 1 KB. 236

Century Insurance V N I Road Transport [1942] AC. 509

Stevenson, Jordan and Harrison Ltd V McDonald and Evans (1952) 1 TLR.

Jones V Manchester Cooperation. [1952] 2 QB. 852

Broom V Morgan [1953] 1 QB. 597

Lister V Ronford Ice and Cold Storage Co. Ltd [1957] AC. 553

Ready Mixed Concrete V Minister of Pensions [1962] 2QB. 497

Market Investigations Ltd V Minister of Social Security [1969] 2 QB. 173

London County Council V Cattermoles (Garages) Ltd [1973]

Lister et. al V Hesley Hall Ltd [2002] 1 AC.

Dubai Aluminum Co Ltd V Salaam [2002] 3 WLR 1913

Catholic Child Welfare Society V Institute of the Brothers of the Christian

Schools [2012] UKSC 56, SC

BOOKS

John.M. & C. Witting, (2011) Street on Tort, 13th Edition, Oxford University
Press

Winfield &Jolowicz, (2014) Tort, Nineteenth Edition, Sweet&Maxwell