Vicarious Liability, Frolic and Detour - Assignment Example

Running Head: BUSINESS LAW Business Law Insert Name Institution Date Vicarious liability George can sue the employer under the doctrine of vicarious liability. This is a doctrine in the English tort law that holds the employers liable for the wrong doing of their workers. Under the doctrine an employer is basically held liable for torts which their employees have committed in the course of executing their duties. This liability is now wide to even cover international torts such as sexual assault and cheats. Vicarious liability at the present covers even the activities that are closely related with a worker’s duties. George is likely to be successful since in the common law tort, policy reasons should allow employees injured in the course of carrying out their duties have better means of getting compensation. Employers are generally assumed to have more assets compared to their employees to offset losses. At the same time since the employee is under the control of the employer, then it is under the employer’s instructions that a worker commits a tort. The consequences of the tort should thus be offset by the employer. It has also been justified that as a means of minimizing the taking of risks by employers, adequate precaution measures should be observed in the course of carrying out the duties (Levinson, 2005). Employers’ liability George is still favored by the doctrine of employer liability. In the case of employer liability, the employers are held liable under the respondeat superior doctrine for torts such as negligence or omissions committed by their employees in the course of carrying out their duties. Although George committed an act of negligence by failing to wear the appropriate protective clothing or gear when carrying out his duties, the employer is still liable since all employees are under his/her control. In some cases, the courts distinguish between a worker’s detour and frolic. For example an employer will be held liable is liable if it is proved that the worker had gone on a mere detour when executing the assigned roles while a worker acting in his or her own right instead of the employer’s interest is considered a folic and does not render the employer liable for any injuries. Under these conditions, George’s employer is liable for the injuries since he was working in the interest of the business. The underling conditions clearly indicate that George was working for the interest of the employer. Suppose the case was different und George was working for his own interest, then the employer would be relieved of vicarious liability which is mainly evaluated via the doctrine of respondeat superior. In that the law of worker’s compensation would also relieve the employer of the liability of the injuries caused during a frolic or a detour. Just as a principal has the liability for intentional torts committed by his/her agents, an employer is held liable for unintentional torts of his workers. George’s tort of negligence can be classified as unintentional which implies that the employer automatically becomes liable for the injuries. A similar case applies to partners in a partnership. Each partner is held liable for unintentional tort committed by any of the other partners (Levinson, 2005). Frolic and detour In order for an act to be classified as a frolic or detour, the action must exclusively be unrelated to the employer’s business. For the employer to be relieved of the liability the action must be both a frolic and a detour. For instance, when a senior manager of an institution like a bank travelling for a business trip and brings a girlfriend who is not his wife to his hotel room and starts smoking and consequently starts a fire, his wife and/or children will get compensation should the fire kill both the girlfriend and the manager. It is considered that the room was rented was for the business purpose which is the interest of the employer. An employer who takes an obvious detour by using a risky route to travel for business purpose is not considered to be engaging in a frolic though a substantial detour is evidenced. Frolic or acts of detour do not necessarily relieve either the employer or the principal of their own liability for negligent entrustment. For instance when an employer negligently allows a worker who is considered or known to be reckless in driving to use the firm’s vehicle, the employer is liable for injuries that would occur in case the driver causes an accident (Levinson, 2005). In the case of George, the employer allowed him to use an electronic metal grinder without protective goggles which exposed him to risks. This makes the employer liable for the harm caused to George. Developments in establishing liability An employer is strictly held liable for torts committed by people under his command when they are established to be his employees. At this point the courts must look for a reasonable relationship to this effect in cases where matters of vicarious liability are raised. Since it has been explained judiciary no one particular test can sufficiently can cover all forms and conditions of employment, the type of test applied in the ultimate determination of cases are based on the particular conditions McKendrick. Once it has been confirmed that there exists a reasonable relationship between the employer and the employee, it is then a pre-requisite that every tort be committed during the employment. The tests preferred by courts to determine such cases are those laid down by John William Salmond which states that an employer has the liability for either the wrong activities they have authorized or a wrong or unauthorized means of an act that was authorized (Levinson, 2005). This perfectly fits George’s case. The act of grinding metals using the electronic grinder was authorized but the manner in which he did it was wrong. People using the machine are supposed to be in protective goggles which George did not comply with. The action is thus authorized but the means is wrong thus making the employer liable. Negligence Negligence is a tort which is based on existence of a breach of duty of care accrued to one person by another. A very relevant case to illustrate this is the case of Donoghue v. Stevenson. In this case Mrs. Donoghue consumed a portion of a drink which contained a decomposing snail while in a public pub in Scotland and claimed that it made her sick. The snail could not be seen since the bottle containing the beer was not transparent. Her friend who had bought her the drink and the seller were not aware of the snail. Mrs. Donoghue sued the producer Mr. Stevenson for injuries caused by negligence. Although she could not sue the producer for breach of contract since they were not in contract, majority of the House of Lords ruled that she had a valid claim. Though they could not agree on why such a claim should prevail, they agreed that it is valid and she should be compensated. This led Lord MacMillan to think that the case should be treated as a new product liability case. Our case above would be argued on similar grounds. George’s employer didn’t know that George was not wearing protective goggles while working on the electronic metal grinder. This is negligence of which the employer is liable. His case is thus projected to be successful (McKendrick, 1990). Employers’ indemnity The doctrine of vicarious liability can be bypassed through a legal instrument called Employer’s indemnity. After the employer is successfully sued, they can decide to sue the tortfeasor for an indemnity in order to recover the damages. An alternative of relieving the employer of the liability would be to employ the workers compensation policy. In this case, the employer cover the workers with some form of insurance which offers compensation medical care for the workers in exchange for a compulsory relinquishment of the worker’s right to sue the employer. Negligent Misstatements Abdul can sue Li Smith and/or Brunswick Local Council for negligent statements that led to an economic loss. This is because he relied on the information he received from Li Smith who is an expert in town planning and development to purchase the piece of land for development. The liability for negligent statements resulting to economic loss was first recognized in Hedley Byrne (1963) 2 All ER 575. From that time the cases categorized in this class of law include negligent misstatements made by: experts/professionals and non-professionals, surveyors and valuers, accountants and auditors, barristers and solicitors as well as government officials. Caparo Industries plc v. Dickman & Ors (1990) 1 All ER 568 which was determined 27 years after Hedley Byrne is regarded as a significant milestone on negligent misstatements and economic loss. The case involved auditors who gave negligence statements concerning accounts which resulted to economic losses to prospective investors in a take over of the defendant’s firm. Although it has long been realized that liability in tort can emerge from negligent actions, liability resulting from negligent misstatements as well as negligent advice has not been accepted accordingly by courts (Mark & Ken, 2003). A negligent statement can be referred as a representation of fact, carelessly made, and which the claimant rely on for their advantage. In case the advice or statements given are fraudulent, the matter changes to tort of deceit. In Dery v. peek (1988), the House of Lords ruled that dishonesty was a key factor to deceit and that cases of sheer carelessness would not arise. The ruling was interpreted wrongly to imply that no liability in tort for such statements. Since this ruling predated the Donoghue V Stevenson (1932), there was no well established law of negligence at that time. The conclusion made at that time therefore will not affect Abdul’s case. Following the establishments for negligent misstatements are rather difficult and complicated since the cases that have so far been reported are snarled up with bete noire that is liability for Pure Economic Loss. This doesn’t come as a surprise since in most cases the claimant only suffers the economic loss. This is not different from our case where Abdul suffered from economic loss since he was not able to develop the land that he had purchased following the construction of a freeway on the piece of land he had bought. It was claimed that on behalf of the defendant, based on Derry, there was no liability arising from negligent misstatements. The Court of Appeal opted for the view that Derry as well as other authorities was concerned with economic and not physical loss. Thus the cases involving negligent misstatements are technically bound up with the issue of pure economic loss. Abdul case can thus be worn on pure economic loss before even extending to other issues surrounding negligent misstatement (Mark & Ken, 2003). The first main shift in the law concerning negligent misstatements arose from the House of Lords ruling in the HedleyByrne v. Heller (1963). In this case, the claimant firm, an advertisement agency, sought to recover damages from the defendant bank on the basis that the bank had negligently exaggerated the financial status of one of the agency’s customers. It was ultimately agreed by the House, that, in principle, an individual who provides inaccurate information where it is realistically foreseeable that it will be relied upon, could be held liable for damages or losses suffered due the reliance. This decision can be viewed as a broad interpretation of Donoghue- the neighbor principle that is applicable to special relationships existing between the claimant and the defendant. The claimants in Hedley Byrne did not succeed in their case. Their losses were recoverable by law only that they failed to prove that their reliance on the defendant’s information reasonably led to their losses (Deakin et al 2007). In Abdul’s case, the case is not different. If he can be able to convincingly prove that the losses he suffered were due to reliance on the information he received from Li Smith, then he can successfully recover them by law (Mark & Ken, 2003). Hedley Byrne was concerned much with liability for statements and not pure economic loss. However after the realization that there are certain economic situations where pure economic losses are recoverable by law, Hedley Byrne established a way for a rapid expansion in proceedings for economic loss. Due to that, when analyzing the cases that followed Hedley Byrne and especially those that did not involve economic liability, it is difficult to determine whether the ruling by the court was influenced by the need to limit liability for economic loss or for reasons related to negligent misstatements. Many cases subsequent to the Hedley Byrne have emphasized on establishing what a special relationship. It is obvious that the main factor is whether the defendant has assumed accountability for the consequences of his/her statements on the claimant. It has also become necessary to establish whether it is sensible for the claimant to rely on the defendant’s advice or information. The courts have been interpreting the issue of sensible reliance differently. In one of he most striking cases, Chaudhry v. Praphakar (1989), an individual was held liable for giving unsound advice on purchasing a secondhand vehicle to a friend (Simon et al, 2003). In 1990, two cases in the House of Lords seemed to place limits on the scope to which it could be regarded as sensible for a claimant to rely on information that was not issued for his own benefit. In Smith V Eric S Bush (1990), it was ruled that it is unreasonable for a buyer of a modern house to rely on information from the valuation done by a mortgage’s surveyor, while it is unnecessarily reasonable for a purchaser of an expensive property to do so. In Caparo v Dickman (1990), it was found unreasonable for investors to rely on data from the findings of a firm auditor when the audit was not carried out for their benefit. Abdul in our case can prove the information he acquired from Li Smith, an expert from planning and development was meant for his (Abdul), benefit and that it was reasonable for him to rely on it for investment. (Flannigan, 1987) In Henderson v. Merrett (1995), the House of Lord was summoned to decide whether agents in insurance underwriting were responsible for prevention of pure economic losses to members of underwriting consortiums, despite their contractual relationship. The members had suffered huge loses which they claimed that they were as a result of negligent advice provided by the agents. The agents in respond claimed that they had no liability since there were no contractual relationships between them and the claimants or their liability was limited to their contract which excluded a parallel liability in tort. Due to lack of a contractual agreement or one to preclude a claim for the damages suffered by the claimants, the defendants claimed that the losses were unrecoverable. In general pure economic losses are recoverable where the defendant has assumed accountability to the claimant either directly or indirectly. White v Jones case proves that liability can either be through omission or action. References Deakin, S. et al. (2007). Markesinis and Deakin's Tort Law. Oxford: Oxford University Press  Flannigan, R. (1987). "Enterprise Control: The Servant-Independent Contractor Distinction". The University of Toronto Law Journal (University of Toronto Press) 37 (1).  Heuston, R.F.V. Donoghue v. Stevenson in Retrospect (1957) Levinson, J. (2005). "Vicarious liability for intentional torts". Journal of Personal Injury Law (Sweet & Maxwell) Mark L. & Ken O, Tort Law - Texts, Cases (2003) 2nd Ed. Oxford University Press McKendrick, E. (1990). "Vicarious Liability and Independent Contractors: A Re Examination". The Modern Law Review (Blackwell Publishing) 53 (6). Mutual Life and Citizens Assurance Co Ltd v Evatt (1968) 122 CLR 566 at 572-573; Shaddock and Associates Pty Ltd v Parramatta City Council (1981) 150 CLR 225 at 250; San Sebastian Pty Ltd v The Minister (1986) 162 CLR 340 at 356; See further N. Katter, Duty of Care in Australia (LBC, Sydney, 1999) p149 Simon D. et al (2003). Tort Law.5th Ed. Oxford: Oxford University Press. Torts. Liability of negligent manufacturer to remote vendee. The Rule of Winterbottom v. Wright". 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