Learning Outcomes
This article outlines the principles of vicarious liability, specifically focusing on when an employer or an entity in a similar position might be held legally responsible for torts committed by an employee or someone in a relationship akin to employment. For the SQE1 assessments, you will need to understand the key requirements for establishing vicarious liability, including the nature of the relationship required and the connection between the tort and that relationship. Your understanding will enable you to identify and apply the relevant legal rules to SQE1-style single best answer questions.
You should also be comfortable distinguishing employees from independent contractors using modern multi-factor tests, recognising when relationships are sufficiently “akin to employment”, and applying the course-of-employment and close-connection analyses to a range of negligent and intentional torts. It is important to identify where vicarious liability does not apply (for example, truly independent contractors) and where liability may instead arise through other routes (such as non-delegable duties or negligent selection of contractors). You should be able to deal with edge cases such as borrowed employees and situations of potential dual vicarious liability and understand contribution and indemnity issues between joint tortfeasors.
SQE1 Syllabus
For SQE1, you are required to understand the principles governing vicarious liability, particularly in employment contexts and similar relationships, and to determine whether vicarious liability arises in a given scenario by applying the relevant tests and legal principles, with a focus on the following syllabus points:
- the core elements required to establish vicarious liability: a tort, a relevant relationship, and the tort occurring in the course of that relationship or being closely connected to it.
- the tests used to determine whether a worker is an employee or an independent contractor (control test, embeddedness test, economic reality test), including indicia such as mutuality of obligation, right of substitution, provision of equipment, tax/NI treatment, incorporation into the business, and exposure to profit or risk.
- the concept of relationships 'akin to employment' and the factors indicating such a relationship, with examples such as prisoners working, religious orders, and placement-based care arrangements.
- the meaning of 'in the course of employment', including the 'close connection' test for intentional torts, and how disobedience to instructions and deviations from authorised journeys are treated.
- distinguishing acts within the course of employment from an employee being on a 'frolic of their own', appreciating the degree and purpose of the deviation.
- borrowed employees and the possibility of dual vicarious liability where control is shared.
- situations where vicarious liability is not available (e.g., independent contractors) but non-delegable duties or negligent selection may expose defendants to liability.
- contribution and indemnity between employer and employee (joint tortfeasors), including the Civil Liability (Contribution) Act 1978 and common law indemnity.
Test Your Knowledge
Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision.
- Which three elements must typically be established for an employer to be held vicariously liable for the actions of a worker?
- What is the key difference between an employee and an independent contractor regarding vicarious liability?
- Name one test used by courts to determine employment status.
- True or false? An employer can never be vicariously liable for an employee's criminal act.
Introduction
Vicarious liability is a form of secondary liability where one party (D2) can be held liable for a tort committed by another party (D1), even though D2 was not personally at fault. This liability arises because of the relationship between D1 and D2. The most common example encountered in legal practice is the liability of an employer for torts committed by their employees. Understanding when this liability arises is essential for advising clients involved in disputes where an employee's actions have caused harm.
Key Term: vicarious liability
The legal principle where one party can be held liable for the torts committed by another, due to a specific relationship between them (e.g., employer-employee).
Vicarious liability rests on policy considerations and risk allocation. Courts recognise that enterprises that organise and benefit from activities are often best placed to bear the cost of risks those activities create (typically via insurance), and that victims should have a practical route to compensation. At the same time, the doctrine is bounded: liability is imposed only where the relationship and the connection between the wrongdoing and the assigned activities make it fair, just, and reasonable to do so.
For vicarious liability to be established against an employer, three core requirements must be met:
- A tort must have been committed by the employee.
- The tortfeasor must be an employee of the defendant employer (or be in a relationship akin to employment).
- The tort must have been committed in the course of employment (or have a sufficiently close connection to the relationship).
Two stages often help structure the analysis:
- There must be a relevant relationship between the defendant and the tortfeasor (employee or akin to employment).
- There must be a sufficient connection between that relationship and the tort (course of employment/close connection).
The Requisite Relationship: Employee or Akin to Employment?
An employer is generally liable only for the torts of their employees, not those of independent contractors. Therefore, determining the nature of the relationship between the tortfeasor and the defendant is a critical first step.
Distinguishing Employees from Independent Contractors
Historically, courts used various tests to determine employment status. While no single test is conclusive, the following are important factors:
Key Term: control test
An early test focusing on whether the employer had the right to control not just what work was done, but how it was done. Less decisive now, but still relevant.Key Term: embeddedness test
Considers whether the worker's role is central to the business (suggesting employment) or merely accessory to it (suggesting an independent contractor).Key Term: economic reality test
A modern approach looking at the overall financial and practical relationship, considering factors like payment method (salary vs fee), provision of equipment, tax/NI handling, degree of financial risk, and opportunity for profit.
The modern approach, often encompassing elements of the earlier tests, looks at the substance of the relationship rather than just the label the parties give it. The economic reality test, considering multiple factors, is particularly influential. In one widely cited formulation, three core conditions for an employment relationship are often considered:
- the worker provides work/skill in return for remuneration,
- the worker agrees (expressly or impliedly) to work under the employer’s control,
- the other contractual terms are consistent with a contract of employment.
Further indicia include:
- mutuality of obligation (employer’s obligation to provide work and pay; worker’s obligation to accept and perform),
- right (or absence) of genuine substitution by the worker,
- incorporation into the business (wearing uniform, appearing on rota, using the employer’s systems),
- who bears the financial risk and enjoys profit opportunities,
- who provides tools/equipment,
- tax and NI arrangements (PAYE vs self-assessment).
No single factor is determinative; the court weighs all. Labels in contracts (“contractor”, “self-employed”) do not bind the court if inconsistent with reality.
Borrowed or “hired-out” employees illustrate how control and practical arrangements can affect the analysis. If a worker is lent to another business (with equipment), the original employer is presumed to remain the employer unless control truly passes. There can, in exceptional cases, be dual vicarious liability where two entities materially direct the worker at the time of the tort.
Relationships 'Akin to Employment'
The scope of vicarious liability has extended beyond the traditional employer-employee contract. Courts may impose liability where the relationship, while not formal employment, has similar characteristics making it fair, just, and reasonable to do so.
The Supreme Court in Various Claimants v Catholic Child Welfare Society (the Christian Brothers case) identified policy reasons often supporting vicarious liability which can also indicate when a relationship is 'akin to employment':
- The “employer” is more likely to have the means to compensate the victim and to be insured.
- The tort was committed as a result of activity undertaken by the tortfeasor on the “employer’s” behalf.
- The tortfeasor’s activity is part of the “employer’s” business activity.
- The “employer” created the risk by assigning the activity to the tortfeasor.
- The tortfeasor was, to some degree, under the control of the “employer”.
Cases like Cox v Ministry of Justice (prisoners working in the prison kitchen) demonstrate this extension. The key is whether the tortfeasor’s activities are integrated into the defendant’s enterprise and carried out for its benefit, thereby creating the risk that led to the tort. Similarly, Armes v Nottinghamshire County Council found liability for placement-based carers’ abuse, given the local authority’s role in placing and supervising placement-based care as part of its functions and the creation of risk arising from that arrangement. In contrast, where a professional is clearly an independent contractor conducting their own enterprise (e.g., a medical examiner engaged ad hoc), the relationship is unlikely to be “akin to employment”.
Key Term: close connection test
A test used to decide whether the tort is sufficiently connected to the field of activities assigned to the tortfeasor so that imposing vicarious liability is fair and just (especially for intentional torts).
Course of Employment or Close Connection
Once a relevant relationship is established, the tort must have been committed in the course of that employment or relationship.
Authorised Acts and Unauthorised Modes
Traditionally, the 'Salmond test' considered acts to be in the course of employment if they were either:
- expressly or impliedly authorised by the employer; or
- an unauthorised way of doing an authorised act.
If the employee does what they are employed to do but in a careless or prohibited manner, this often remains within the course of employment. Courts distinguish between the scope of duties (what the employee is employed to do) and the manner of performance (how they do it). A breach of instruction as to manner will not necessarily take the act outside the course of employment; a breach that goes to scope (doing something entirely different for personal ends) usually will.
Worked Example 1.1
A delivery driver, employed by Courier Ltd, is told not to exceed 60 mph. While making deliveries, he drives at 70 mph and negligently causes an accident. Is Courier Ltd likely to be vicariously liable?
Answer:
Yes. Driving the delivery van is an authorised act. Exceeding the speed limit is an unauthorised mode of performing that authorised act. The tort occurred in the course of employment.
Prohibitions must be analysed carefully. A prohibition that regulates how the job is done does not usually remove vicarious liability if the employee continues to do the job (albeit improperly). A prohibition that forbids an employee from undertaking an activity outside the scope of employment (“do not give lifts”, “do not dispense petrol if you are not qualified”) may, depending on the facts, indicate that the tort occurred outside the course of employment.
'Frolic of One's Own'
If an employee's act is entirely for their own benefit and unrelated to their employment duties, they are said to be on a 'frolic of their own', and the employer is generally not liable. Whether a deviation amounts to a frolic is a question of degree. Courts consider the extent of the deviation in time and distance and its purpose. Minor detours for incidental purposes (e.g., stopping for lunch during a work trip) will typically not break the course of employment; substantial deviations for purely personal aims may do so.
Worked Example 1.2
Same delivery driver as above. After his last delivery, instead of returning to the depot, he drives 50 miles in the opposite direction to visit a friend. On this detour, he negligently causes an accident. Is Courier Ltd vicariously liable?
Answer:
Unlikely. This appears to be a significant deviation from his employment duties for a purely personal purpose. He is likely on a 'frolic of their own', taking him outside the course of employment.
A separate issue arises with travel: commuting to and from work is ordinarily outside the course of employment, whereas travel between workplaces on the employer’s business is usually within it. Where an employer pays a worker for travel time and requires urgent business travel, accidents occurring during that business travel are more likely to be treated as within the course of employment.
Intentional Torts and the 'Close Connection' Test
Employers can also be liable for intentional torts (like assault, battery, or fraud) committed by employees, even if the act was unauthorised or criminal. The key test, established in Lister v Hesley Hall Ltd, is whether the tort was so closely connected with the employment that it is fair and just to hold the employer liable.
This involves considering the functions entrusted to the employee and whether the employment created or significantly enhanced the risk of the tort occurring. A dishonest way of doing an authorised act may be sufficiently connected; a personal vendetta or a pursuit of purely private ends may not. Recent guidance emphasises that courts must identify the “field of activities” assigned to the employee and ask whether the tort is fairly regarded as occurring while the employee was engaged in that field—not merely “opportunistic” acts carried out independently.
Worked Example 1.3
A supermarket employs B as a petrol station attendant. A customer, C, becomes abusive at the kiosk. B follows C out to his car and assaults him. Is the supermarket vicariously liable?
Answer:
Possibly yes. Following Mohamud v WM Morrison Supermarkets plc, B's job involved customer interaction. Although the assault was wrong, it arose from a confrontation that started within his field of activities. A court might find a sufficiently close connection between his employment and the assault.
Intentional wrongdoing is a fact-sensitive area. Post-Lister, cases have held employers liable for assault where it flowed from duties involving customer engagement, but not where the employee acted from a purely personal motive (for instance, revenge or spite unrelated to assigned tasks), or where the wrongdoing was not closely connected to the employee’s field of activities. In large-scale data breach scenarios caused by a rogue employee acting out a personal vendetta against the employer, courts have held there was no close connection to the employee’s functions and declined to impose vicarious liability.
Worked Example 1.1
A van driver employed by ParcelCo is expressly instructed that he must not give lifts to members of the public. He nevertheless allows a hitchhiker to ride along, and, while chatting, negligently crashes and injures the hitchhiker. Is ParcelCo vicariously liable?
Answer:
Likely no. The prohibition relates to scope. Giving lifts to unauthorised passengers is outside the driver’s assigned field of activities. Although the accident occurred while driving, the presence of the hitchhiker arose from a personal act outside the scope of the employment.
Worked Example 1.2
An engineer works for PowerGrid and is seconded for three weeks to a subcontractor’s site, where both PowerGrid’s team leader and the subcontractor’s foreman direct the engineer’s daily tasks. During this period, the engineer negligently injures a third party while operating plant under the foreman’s instruction. Who is likely vicariously liable?
Answer:
Potentially both. If, in practice, control and direction were shared and both enterprises were materially exercising supervision over the engineer’s work when the tort occurred, dual vicarious liability can arise. If, however, effective control remained with PowerGrid, liability is likely to rest there.
Further Points on the Relationship Stage
Borrowed employees: When an employer lends both worker and equipment to another, the original employer is presumed to remain the employer for vicarious liability unless control genuinely passes. Mere contractual statements that “X is the employer” will not displace the presumption if they do not reflect reality.
Dual vicarious liability: In uncommon situations, two organisations may be liable where the negligent worker was working under the direction of both entities’ personnel at the time of the tort.
Independent contractors: The default position is that a person hiring an independent contractor is not vicariously liable for the contractor’s torts. However, separate bases of liability may arise:
- Non-delegable duty: Some duties (e.g., an employer’s duty to employees to provide a safe system) cannot be delegated; if a contractor’s work harms the protected class, the principal may be liable for breach of their own duty.
- Negligent selection or supervision of a contractor: If the principal fails to take reasonable care in selecting a competent contractor or negligently supervises the work, they may be personally liable.
Key Term: frolic of one's own
A substantial deviation by an employee for personal purposes, breaking the course of employment and usually defeating vicarious liability.
Exam Warning
Do not confuse the employer's primary liability in negligence (e.g., for failing to provide competent staff or a safe system of work – see Employers' Liability) with vicarious liability. Vicarious liability arises even if the employer was not personally negligent, based purely on the employee's tort and the relationship.
Indemnity and Contribution
Where an employer is held vicariously liable, both employer and employee are joint tortfeasors. The employer may seek contribution from the employee under the Civil Liability (Contribution) Act 1978, based on what is “just and equitable”. In some circumstances, an employer may be able to recover the full amount as a common law indemnity where the loss was caused by the employee’s breach of their implied contractual duty to exercise reasonable care and skill. Courts scrutinise the employer’s own conduct: if the employer bears any blame, full recovery may not be available.
Key Term: joint tortfeasors
Multiple parties legally responsible for the same tort. Responsibility may be joint and several, enabling a claimant to recover full damages from any one of them.
Worked Examples: Additional Nuances
Worked Example 1.3
A restaurant’s security guard restrains a suspected shoplifter, using excessive force that amounts to battery. Is the employer vicariously liable?
Answer:
Likely yes. Restraining suspected thieves is within the guard’s field of activities; excessive force is an unauthorised mode of performing an authorised task.
Worked Example 1.1
A company analyst attends its office party. Several hours after the event ends, while continuing to drink in a different venue, the analyst assaults a colleague in a dispute unrelated to customers or business duties. Is the employer vicariously liable?
Answer:
Unlikely. On these facts, the assault appears to be a private, after‑hours altercation not closely connected to the employee’s field of activities. The close connection test is unlikely satisfied.
Key Point Checklist
This article has covered the following key knowledge points:
- Vicarious liability makes one party (e.g., an employer) liable for the tort of another (e.g., an employee) due to their relationship.
- Three elements are needed: (1) a tort committed, (2) an employee or akin-to-employee relationship, (3) tort committed in the course of employment or closely connected to it.
- Distinguishing employees from independent contractors involves considering control, embeddedness, and economic reality, including mutuality of obligation, substitution, incorporation, risk and reward, and tax/NI arrangements.
- Liability can extend to relationships 'akin to employment' based on factors like incorporation into the defendant’s enterprise and risk creation (with examples such as prisoners and placement-based care), but not where the tortfeasor is clearly running their own independent enterprise.
- 'Course of employment' includes authorised acts and unauthorised modes of doing authorised acts, but not 'frolics of one's own'. Disobedience to instructions may or may not remove liability depending on whether the prohibition regulates manner or scope.
- For intentional torts, the 'close connection' test applies, assessing the link between the employment duties (field of activities) and the wrongful act. Purely personal vendettas are unlikely to satisfy this test.
- Borrowed employees and dual vicarious liability can arise where two entities materially direct the worker at the time of the tort.
- Where vicarious liability does not apply (independent contractors), consider non-delegable duties and negligent selection or supervision as potential bases of liability.
- Employers and employees are joint tortfeasors; contribution or indemnity may be available to adjust ultimate responsibility between them.
Key Terms and Concepts
- vicarious liability
- control test
- embeddedness test
- economic reality test
- close connection test
- frolic of one's own
- joint tortfeasors