Welcome to the March 2015 edition of the Personal injury and fatal accident brief.
Vicarious Liability – How wide can it extend?
The English Supreme Court has recently handed down two important judgments which may well widen the law on vicarious liability in Hong Kong: Cox v Ministry of Justice and Mohamud v WM Morrison Supermarkets plc.
Mohamud is consistent with the landmark Hong Kong case of Ming An v Ritz Carlton which held that an employer would be vicariously liable for unauthorised wrongful acts of its employee so long as such act was ‘closely connected’ to his employment. Cox however, may be more far reaching as the Judgment suggests that defendants other than the employer could also be vicariously liable.
Two requirements are needed in order for vicarious liability to be imposed. Firstly, there must be a relationship between the defendant and the wrongdoer, and secondly, a connection between that relationship and the wrongdoer's act or default, such as to make it just that the defendant should be held legally responsible to the claimant for the consequences of the wrongdoer's conduct.
Relationship between the wrongdoer and the defendant
Cox concerned whether the Ministry of Justice (MOJ), as being responsible for the prison service, could be held vicariously liable for the acts of a negligent prisoner who injured the Claimant while the prisoner was carrying out duties in the prison's catering department.
The MOJ argued that there was no employment relationship, the prisoners had to work by law which was for rehabilitation purposes, their work did not further the interests of the prison services, and to hold them vicariously liable would be a major development of the common law, which should only be developed cautiously.
The Supreme Court disagreed and referred to the five features identified in the 2012 Supreme Court Judgment of Various Claimants v. Catholic Child Welfare Society as to why vicarious liability should be imposed on employers, namely:
- the employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability;
- the tort (wrongful act) will have been committed as a result of activity being taken by the employee on behalf of the employer;
- the employee’s activity is likely to be part of the business activity of the employer;
- the employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employee; and
- the employee will, to a greater or lesser degree, have been under the control of the employer.
Although these factors referred to an “employer”, they could also be applied to relationships which were "akin to that between an employer and an employee." Not all of the factors are equally significant (with factors (i) and (v) having less weight) and they do not all have to be present.
In the context of this case, factors (ii), (iii) and (iv) were all satisfied because the prisoner was carrying out an act assigned to him which was an integral part of the activities which furthered the prison’s aims (namely the provision of meals for prisoners). He was placed in a position where there was a risk that he may commit a variety of negligent acts within the field of activities assigned to him (a risk that was recognised by the prison, as they gave him health and safety training before allowing him to commence work) and he worked under the direction of prison staff (including the Claimant). Accordingly, the MOJ was vicariously liable to the Claimant for the prisoner’s negligent act.
In Mohamud, the Claimant was a visitor to a petrol station and the wrongdoer was an employee of the petrol station (“the Attendant”) operated by the defendant supermarket, who was tasked with seeing that the petrol pumps and kiosk were kept in good running order and to serve customers. The Claimant asked the Attendant to see if it was possible to print some documents being carried by the Claimant on a USB stick, after which the Attendant responded by using foul, racist and threatening language. The Attendant followed the Claimant back to his car, threatened the Claimant never to return to the petrol station again, hit the Claimant on the left temple after being asked by the Claimant to “get out of [his] car” and beat the Claimant severely after the Claimant got out of his car. The Attendant’s supervisor tried to stop the Attendant but he did not listen.
At first instance, the trial judge held the supermarket was not vicariously liable for the Attendant’s unprovoked assault. There was not a sufficiently close connection between what he was employed to do and his wrongful conduct and the Attendant was acting in contravention of instructions given to him by his supervisor. The Court of Appeal upheld the Judge's decision that the claim failed the 'close connection' test.
However, the Supreme Court overturned the decisions below and held that the supermarket was vicariously liable because
- There was a seamless episode or unbroken chain of events flowing from the Claimant’s request;
- The Attendant ordered the Claimant to stay away from his employer’s premises which was reinforced by violence and in giving such order, the Attendant was purporting to act about his employer’s business;
- Although it was a gross abuse of his position, the acts were done in connection with the business in which he was employed to serve customers and his employers entrusted him with that position so that the acts should be taken to have been between the employer and the Claimant; and
- Motive of the Attendant was irrelevant.
Implications for Hong Kong
Although Muhamud does seem far-reaching, it is consistent with the recent Hong Kong Court of Appeal Judgement in Yeung Mei Hoi v Tam Cheuk Shing & Kai Shing Management Services Limited, involving a fight between two employees. In Yeung Mei Hoi, the Court emphasised that the assault was so closely connected with the employment that it would be fair and just to hold the employer vicariously liable.
Cox could also have ramifications for businesses or organizations who engage others to carry out work (principals). For example, main contractors of construction sites, property managers, logistics companies and other similar type organizations frequently engage third parties to provide labour or services at their site or premises. If the duties the negligent individual was carrying out was an integral part of the principal's business, the principal will not escape vicarious liability even though that individual was employed by a third party employer.
As the courts widen the scope of vicarious liability, insurers’ exposure to such risks will increase and they will need to ensure that premiums adequately reflect such exposure.