Abstract
The doctrine of vicarious liability may be found across the common law world, rendering, in its most typical form, an employer strictly liable for the torts of its employees provided they take place in the course of employment. This formula, as is often the case in law, is easier to state than apply. In recent years, common law jurisdictions have come to re-examine this legal framework, leading to significant expansions of liability in jurisdictions such as the United Kingdom and Canada. To a certain extent, such growth has been triggered by claims against institutional defendants arising from revelations of sexual abuse of minors by paedophiles working for these organisations, but it has also been due to changes in working practices and the willingness of the courts to embrace ideas such as loss distribution and enterprise liability. Changes in the law have challenged the assumption that tort law is now dominated by ideas of fault-based liability and of corrective justice, that is, that tort law intervention can only be justified when it seeks to render parties liable for those they wrongfully harm. As Lord Nicholls famously commented in Majrowski v Guy’s and St Thomas’ NHS Trust [2006] UKHL 34, [8]: Th[e] principle of vicarious liability is at odds with the general approach of the common law. Normally common law wrongs, or torts, comprise particular types of conduct regarded by the common law as blameworthy. In respect of these wrongs the common law imposes liability on the wrongdoer himself. The general approach is that a person is liable only for his own acts.
The brief historical introduction is interesting and ably demonstrates that, despite the evolution of vicarious liability in the common law from medieval times, the early cases contain no or very bare reasoning to support their assertions of principle (p 21). In describing developments in the United Kingdom, Australia and (more briefly) Canada and the United States, Gray rightly observes that the test for ‘scope of employment’ is an inherently ambiguous concept and raises particular problems in relation to wilful or intentional misconduct. His dissection of the current law, analysing in detail the reasoning in leading cases, highlights the absence of any single rationale or set of principles across the common law. This is extremely pertinent, as is his concern, shared by many, that the English test for course of employment is descending into a mere test for opportunity (see, e.g. Morgan (2016) 75 CLJ 202). His criticism of the recent High Court of Australia decision in Prince Alfred College is also of particular value, coming from the perspective of an Australian lawyer and placed in the context of developments in Australian case law. His concern as to the degree to which the Australian alternative test of ‘occasion’ can avoid arbitrary and incoherent distinctions in practice is shared by many, although a more optimistic view would be that much will turn on the future exposition of this test by the Australian courts. It is also of interest that the United States, the initial source of enterprise risk theory, continues to adopt a restrictive approach to vicarious liability for sexual assaults—it would have been of interest to explore US law in more detail in this respect.
It seems odd, however, to this reviewer to focus on analysing developments in this field primarily in relation to the ‘course of employment’ test. Bearing in mind the two-stage test for vicarious liability, involving both the existence of a particular type of relationship and that a tort is committed in the course of employment, it seems a curious decision to relegate the ‘relationship question’ (described by Gray in Ch 2 as the threshold question) to Ch 9—it is mentioned only briefly in limited detail in Ch 2. Two recent UK Supreme Court decisions (Cox v Ministry of Justice [2016] UKSC 10 and Armes v Nottinghamshire CC [2017] UKSC 60) both focus on (and develop) the relationship aspect of the test. More recently, the Court of Appeal in Barclays Bank PLC v Various Claimants [2018] EWCA Civ 1670 highlighted that the application of this threshold question was far from settled in English law. These cases are addressed by Gray (and Barclays Bank condemned—’In no sensible way is a doctor part of the enterprise of a bank’ (p 215)), but given such controversy, can this be said to be less important than the second stage question? Admittedly, there have been fewer decisions on this point in Australia, which continues to adhere to the traditional employee/independent contractor dichotomy, but the High Court decision in Hollis v Vabu Pty Ltd [2001] HCA 44, relying as it does on matters of enterprise liability to label a bicycle courier an employee, does seem to suggest that Australian courts may come to re-examine traditional tests for the employment relationship (see Giliker (2018) 77 CLJ 506, who suggests that it is vital that they do so).
What is important, however, in a book subtitled Critique and Reform, is that Gray proposes an alternative theory of vicarious liability based on ideas of agency. Here, his historical approach is of significant help in that references to agency can indeed be found in early case law, although, outside particular contexts such as partnership agreements and fraudulent misrepresentation, less so today. He first addresses the dominant justification found in UK and Canadian case law: enterprise risk. Other justifications—deep pockets; fair, just and reasonable; evidentiary (i.e. difficulties in proving the claim)—are mentioned, but in less depth. Gray argues that enterprise risk reasoning is unable to explain the actual law, assist in the resolution of future cases and is based on assumptions making it open to challenge. His coverage of the relevant literature is impressive, setting out the key contributions with considerably clarity for the reader. He persuasively, in my view, makes the case for the inadequacy of enterprise risk reasoning as the sole justification for the current legal position in all the jurisdictions studied.
More controversial, however, is his own theory set out in Ch 8. Agency, Gray asserts, forces us to ask whether the employee can truly be said to be acting on behalf of their employer for their purposes and benefit. Put simply, the employer should only be vicariously liable if the employee has actual or apparent authority to act. While this is not agency in the narrow contractual sense, it is placed in the context of moral blameworthiness and corrective justice: …individuals should only be civilly liable for acts that are morally blameworthy and deserving of punishment. It is sound to make an employer liable for what an employee did for their purposes and benefit because the actions were authorised, expressly or implicitly, by the employer. The law either sees that the employee’s actions are those of the employer, or…the law says that the employer is liable for the actions of the employer as if they were the employer’s actions. This is because the employer has authorised that type of action…If it is more accurately described as ‘direct’ rather than ‘vicarious liability’, I have no objection to the change in label. (p 186)
This is not, however, vicarious liability as we know it, but rather a parallel universe where ideas of distributive justice play no role in our courts. It does not take into account the sexual abuse scandals which have led to fundamental changes to how the courts apply the doctrine of vicarious liability and the role the courts play in responding to both changes in employment practices and societal concerns that the needs of vulnerable parties should (morally?) be taken into account by the law of torts. It even potentially denies the very term ‘vicarious’ in favour of a form of direct liability. ‘The attraction of the close connection test’, Lord Toulson commented in Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11, [53], ‘is that it is firmly rooted in justice. It asks whether the employee’s tort is so closely connected with his employment as to make it just to hold the employer liable’. Whether one agrees or not, the courts do utilise arguments based on social justice/distributive justice. Gray is therefore arguing for a revolution or, alternatively, to turn the clock back to life pre-Lloyd v Grace Smith [1912] AC 716 where the implied command theory of vicarious liability still received respect. Although argued with zeal, it is hard to believe, bearing in mind the radical consequences of his theory outlined above, that the common law courts, even in Australia where a more restrictive approach is taken, would be convinced by his reasoning.
Nevertheless, in terms of a critique of the current law, this is a valuable addition to the literature and, in framing an alternative theory, Gray makes his own distinctive contribution to the debate concerning the justifications for vicarious liability. This is also not to say that the agency argument is defunct. In the United Kingdom, we now await the Supreme Court ruling on the appeal from Frederick v Positive Solutions (Financial Services) Ltd [2018] EWCA Civ 431 where the Court of Appeal frustratingly left open (at [77]) the question whether reliance-based torts such as deceit or misrepresentation are to be treated as a category distinct from ordinary cases of vicarious liability in that the principal cannot be vicariously liable unless the agent had actual or ostensible authority, ruling that either way the claimants had to fail. (For arguments for retaining a separate test for fraud, see Giliker, Vicarious Liability in Tort (CUP, 2010) 180–181.) Nevertheless, it is hard to disagree with the conclusion that the ‘agency’ argument is struggling to survive and may finally be put out of its misery when the UK Supreme Court decides Frederick.
In sum, Gray is to be congratulated for producing a thoughtful study of this problematic area of law and for his attempt to move vicarious liability from what he characterises as ‘a Robin Hood-style of justice’ (p 152) to one which has a principled basis and represents values consistent with modern tort law. While my own view is that finding one justification to explain vicarious liability is, in reality, difficult, nay impossible, given the lack of clarity of judicial reasoning in this area of law and the fact that the justifications for vicarious liability have varied over time—Lord Oliver’s metaphor in Caparo v Dickman [1990] UKHL 2 of the pursuit of a will-o’-the wisp comes to mind—Gray is to be praised for this brave attempt to rationalise the law relating to vicarious liability and in presenting, in particular, the arguments for and against enterprise liability in such a clear and accessible manner.