Vicarious Liability, Especially in Respect of New Appointees - Assignment Example

Task Two a Management Team, ActiveWear of the April 20, 2009 Vicarious Liability, Especially in Respect of New Appointees. Recently, an employee of your company had caused injury to many people on account of his negligent driving of a company vehicle, in the course of his employment. In this context, it is essential for your company to be aware of the implications of vicarious liability, while engaging new staff. Consequently, the employer is responsible for the activities of his employees in the course of employment. Under the principle of vicarious liability, the principal is liable for the acts of his agent. The principal is vicariously liable for the wrongdoings of his agent and an employer for the wrongs of his employees. The concept of vicarious liability renders the principal liable for authorised and unauthorised acts of his agents. However, such acts of the agents must fall within the scope of the authority provided to them1. Vicarious liability applies even when employees or agents commit fraudulent acts or omissions in the course of employment. The requirement for its applicability is that these acts should have been committed in the course of employment or in accordance with the authority conferred upon them by their employer. Vicarious liability applies, even if these acts are against the interests of the employer2. To hold an employer responsible for the wrongdoings of his employees, there should be an employment agreement between them; and the employee’s tortious act should have been committed in the course of employment3. If the employee’s tortious act causes injuries to a third party, then action can be initiated against the employer. However, it has to be determined that the employee had acted in the course of employment or beyond it. Acts that have been expressly authorised by the employer, fall within the course of employment; whereas, acts that are not so authorised fall outside the scope of employment4. If a person receives some benefit out of an act, then morality demands that he should also bear the loss, if any, that results from that act. This notion constitutes the basis for the concept of vicarious liability. Under this principle, the employer is deemed to have contributed to the harm done, by his act of employing tortfeasors as employees. As such, the employer is responsible for the acts committed by those tortfeasors in the course of employment or within the scope of authority conferred on them by him5. In the final analysis, this variety of no fault liability’s recognition as an essential and suitable device to engender justice is founded on the realisation that the employer had the wherewithal to absorb the effect of the harm in a manner that was at once practical and economically proficient. Thus, vicarious liability is vindicated by the possibility of absorbing loss and the risk associated with any enterprise. Of these the notion of loss distribution is of greater significance6. The courts determine whether a particular act of the employee falls within the course of employment or not, by invoking the test of sphere of the employment of the employee. If the unauthorised act committed by the employee has direct or indirect relation to some authorised act, then it is deemed that the employee had performed the act in the course of employment. Acts supplementary to an employee’s duties fall within the sphere of employment. If the unauthorised act is unconnected with authorised duties, then it is held to be an independent act7. The principle of vicarious liability was established in the following cases. In Lister v Hesley Hall Ltd, the House of Lords ruled that liability was to be established by determining whether there had been an intimate connection between the employee’s act and his employment. This is a broader approach than that of the test of sphere of employment8. In Century Insurance co Ltd v Northern Ireland Road Transport Board, an unloading petrol tanker’s driver threw a lighted match lighting a cigarette. Immediately, an explosion occurred and the garage was considerably damaged. It was held that this act of the driver had occurred in the course of his employment, although he had acted improperly. As such, he was delivering petrol as required by the business of his employer. Consequently, his employer was held to be vicariously liable for damage caused to the garage9. In Kay v ITW Ltd, the defendant company authorised its employee to move obstacles in a garage, in order to clear the way for other vehicles of the company. He had not been given any instructions in this regard; and whilst attempting to move a five – ton lorry out of the way, he damaged the plaintiff’s property. The court held the defendant company vicariously liable for the damage caused; because the employee had caused damage while discharging his authorised duty of moving vehicles in the garage10. Moreover,the doctrine of res ipsa loquitur states that just the occurrence of some types of accidents is adequate for establishing negligence. In other words, such harm transpires due to the absence of proper care. It has been applied to injury caused by objects that fall from edifices, and accidents due to malfunctioning machines, equipment and vehicles. On occasion, motor vehicles have been noticed to mount the pavement and thereby cause considerable damage. This principle is applicable to such incidents11. Your employee had mounted the vehicle that he was driving onto the pavement and caused injuries to several people. Since, he had harmed others, while working for you and in the course of his employment; you are also responsible for his negligent act. From the above discussion, it is evident that an employer is liable for the wrongdoings of his employee, which the latter does in the course of his employment. Although, your employee had behaved in a negligent manner; the extant case law clearly indicates that your company is vicariously liable for the damage caused by him. b [your address] April 20, 2009 Fresco Head Office RE: Legal Rights Under Occupier’s Liability Act On account of your negligent attitude in maintaining your business premises, I slipped on a pool of cooking oil that had not been removed from your shop’s floor, and fell down. This fall resulted in injury to my leg, which necessitated surgery on two occasions. As a consequence, I had to absent myself from work for 6 weeks. Moreover, the previously booked ski holiday for me and my family had to be cancelled, on account of this injury. According to the provisions of the Occupiers’ Liability Act, your company had to provide a clean and safe environment for the visitors to your premises. This was not done by your company, thereby endangering visitors to your premises. As per the Act, you are liable for the harm and damages caused to me, on account of your negligence. In order, to emphasise my legal rights and to convince you about your liability, I have appended the relevant information in the sequel. The Occupiers’ Liability Act 1957 imposes a duty of care on the occupier of premises towards visitors. Under this duty, the occupier must take steps to prevent danger to visitors, due to the state of the premises, and due to the things done or omitted to be done on the premises12. This Act applies to the occupier of the premises, as well as visitors to the premises, in the same manner as the common law principles. It regulates the obligations of the occupier of any stationary or movable structure, like vessels, vehicles or aircraft. The provisions of this Act ensure the obligations of occupiers or owners who have control over premises or structures with regard to the damages caused to the property. The occupiers are also liable for any damage caused to others, even if they are not visitors to their premises13. The Common law also imposes several duties regarding the state of premises on persons who control them. For instance, in Rich v LCC, the Court of Appeal found that a duty was owed by education authorities in respect of the state of the premises over which they had control14. In Slade v Battersea and Putney Group Hospital Management Committee, the plaintiff was injured due to the slippery floor. The court ruled that the Hospital owed a duty of care, in its capacity of an occupier, as well as in the capacity of a hospital authority15. In Ward v Hertfordshire County Council, a child was hurt by a flint wall in the school playground16. The defendant owed a duty of care to the child in the capacity of an occupier, as well as an education authority. However, the court did not hold the County Council liable for the injury, because the wall per se was not dangerous17. Nevertheless, this decision will not be applicable to you, because the oil had been spilled on the floor of your premises. In other words, the injury had transpired, solely due to your negligence. As per the above discussion, you are under an obligation to maintain your premises in such a manner that no visitor is endangered. Since, you have failed to do so; you are liable for the harm and damages caused to me by your negligence, under the provisions of the Occupier’s Liability Act. Yours sincerely, [Student’s name] Task 3 Partnership v a Limited Company The liability of the shareholders of a limited company is restricted to the unpaid amount of the shares. In a partnership, there is no limit on the liability of partners. The latter are personally liable for unpaid debts incurred by the partnership18. Partners are severally and jointly liable, and if one partner incurs debts, then the other partners will be held liable for those debts. The absence of prior knowledge regarding the debts incurred by one of the partners, does not rescind responsibility of the other partners. All of them are required to make good these debts, and if the partnership funds are insufficient to make good, then they have to make good the loss from their personal assets19. Partnerships are regulated by partnership deeds that are signed by all the partners, and which specify the operations, objectives and responsibilities of their partnership, procedures and capital maintenance. It is akin to the memorandum and articles of association of a company. A partnership deed, also deals with the sharing of profits among the individual partners, provisions for the admission of new partners and the resignation of existing partners20. Another significant difference between a limited company and a partnership relates to taxation. A limited company pays tax on the profits earned by it, and its directors have to pay tax on the remuneration they receive from the company. This is because the company is treated as a separate legal entity. However, this is not the case with a partnership, wherein the partnership does not pay tax on the profits it makes. As such, the partners have to pay taxes on their share of the profits21. In case of forming a company, I would prefer a limited liability company for the reasons discussed hereunder. A limited liability company would be of greater advantage in comparison to a partnership firm, because personal assets would be protected. In addition, a limited liability company enjoys greater credibility in the market. Moreover, it is much simpler to raise capital for business in a limited liability company. Furthermore, costs on account of taxes and accountancy are much less in limited liability companies22. Task 4 List of References Benefits of a Limited Company, [online] available at: http://www.companyregistrations.co.uk/benefits-of-a-limited-company.asp [accessed 20 April 2009] Century Insurance Co Ltd v Northern Ireland Road Transport Board [1942] AC 509 Halsburys Laws of England/NEGLIGENCE (VOLUME 33 (REISSUE))/2. SITUATIONS IN WHICH A DUTY OF CARE ARISES/(1) DUTY OF OCCUPIER/(i) Duty to Visitors/629. Scope of the Occupiers Liability Act 1957 Halsburys Laws of England/NEGLIGENCE (VOLUME 33 (REISSUE))/3. CIVIL PROCEEDINGS AND REMEDIES/(1) THE PROVING OF NEGLIGENCE/(ii) Res Ipsa Loquitur/667. Occurrences that cannot happen without carelessness Jon Rush & Michael Ottley, 2006, Business Law, Cengage Learning EMEA Kay v ITW Ltd [1967] 3 All ER 22 Lister v Hesley Hall Ltd [2002] 1 AC 215 Lloyd v Grace Smith & Co [1972] AC 716 McIvor, Claire, 2006, ‘The Use and Abuse of the Doctrine of Vicarious Liability’, Common Law World Review, Vol. 35, Issue 4, (AN 23244969) Occupiers’ Liability Act 1957 Rich v LCC [1953] 2 All ER 376; [1953] 1 WLR 895, CA Slade v Battersea and Putney Group Hospital Management Committee [1957] 1 All ER 429, [1955] 1 WLR 207 The Difference Between a Partnership and a Limited Company, [online] available at: http://www.completeformations.co.uk/companyfaqs/business_entities/partnership_vs_company.html [accessed 19 April 2009] Walker and others v Stones and another [2004] 4 All ER 412 Ward v Hertfordshire County Council [ 1970] 1 All ER 535; [1970] 1 WLR 356, CA Read More