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Your are here: Home >> Bulletins Vicarious LiabilityThe recent case of Brinks -v- Igrox raised questions on the topics of a bailee's title to sue in tort and vicarious liability. The decision of Mr Justice Mann Q.C was handed down on the 16th day of July 2009. The case revolved around the theft of steel bars from containers shipped from London to India. The Owner of the silver bars had contracted with Brinks to provide the security and transportation of the cargo from Central London to India. In turn, Brinks contracted with Hyundai to carry the containers (within which the silver was to be carried) from Thamesport to India by container ship. Brinks collected the goods and transported them to the port fumigation area where the wooden pallets were to be fumigated. Igrox were contracted by Thamesport to provide fumigation services prior to the loading of the containers of silver aboard the vessel. After the containers were purportedly fumigated, Brinks' security personnel inspected the cargo to find that 15 silver bars were missing. Investigations were made and it was discovered that the containers had not in fact been fumigated (despite certificates of fumigation being presented by Igrox). Upon review of the CCTV footage of the fumigation area, one of the Igrox employees was seen to be loading the silver into the back of his Igrox van. He was later convicted of the theft. Under the contract between the Cargo Owners and Brinks, Brinks settled the Cargo Owners' losses directly following the discovery of the theft. As a consequence, Brinks brought the recovery action against Igrox as the employer of the thief. Brinks alleged that Igrox as the employer was vicariously liable for the tort (including conversion) of its employee. Brinks alleged that the theft occurred during the course of the employment. As a result of these circumstances two questions had to be answered. Firstly whether Brinks, as a carrier into whose custody the goods had been entrusted, had sufficient title to bring a claim in tort and secondly, whether Igrox was vicariously liable for its employee's tortious actions. Title to sueIt was found that there was no contractual relationship between Igrox and Brinks, either directly or through the agency of Thamesport. Clearly Brinks did not own the goods. However, Brinks argued that they were bailees of the cargo and consequently, were entitled to sue in tort and conversion as the party with the immediate right to possession. Vicarious liabilityThe question thus arose as to whether Igrox would be vicariously liable for the actions of its employee. In Lister v Hesley Hall Ltd [2001] Lord Steyn described vicarious liability as the "?legal responsibility imposed on an employer although he is himself free from blame, for a tort committed by his employee in the course of his employment" The test for the vicarious liability has developed over centuries. In very broad terms, the question centres upon whether the employee committed the tort in the course of his employment or whether he was "on a frolic of his own". The Defendant relied upon the authority of Heasmans (a firm) v Clarity Cleaning Co Ltd [1987]. In Heasmans an individual, employed to clean a client's offices and office equipment, made a number of overseas telephone calls without the client's permission. The employer was held not to be liable for the employee's actions. The reasoning behind this being that the tortious acts were not made in the course of the cleaner's employment. The employment, it was found, merely gave the employee the opportunity to commit the tort. Whilst the Heasmans decision has never been overturned, the law has been significantly developed since then. In Lister v Hesley Hall (supra), the House of Lords set out the relevant test for vicarious liability, namely, whether the employee?s tort was so closely connected with his employment that it would be fair and just to hold the employer vicariously liable. In Lister the warden of a school sexually abused boys at the school's boarding annex. The warden's employers argued that they had never authorised such acts in the course of the warden's duties and, therefore, they should escape vicarious liability. However, It was held that the abuse was "inextricably interwoven with the carrying out by the warden of his duties in Axeholme House." Consequently, the employer was held vicariously liable for these acts. It was argued by the defendant in the Brinks case (as in cases before it) that some distinction should be drawn between cases concerning bailees and those which did not. It was suggested many of the authorities in which employers had been found vicariously liable concerned bailment. For example, one of the leading cases is Morris v CW Martin & Sons Ltd [1965], where an employee stole a coat that had been left to be cleaned. However, Palmer on Bailment (2nd Ed) disagreed with the suggestion that the decision should be limited to cases of bailment. Palmer suggests that there is a relatively simple three part test. "?(1) [the employer] should be under an actual or apparent duty to deal with the chattel in some way, (2) he should delegate this duty to his servant, and (3) the servant should by a conduct arising from, or in purported discharge of, this duty, commit an act of conversion." He hypothesised that "if a television repairman steals a television he is called in to repair, his employers would be liable, for the loss occurred whilst he was performing one of the class of acts in respect of which their duty lay." In this example the employer would not be a bailee of the goods but should nevertheless be vicariously liable. Lord Steyn in Lister agreed with this analysis and it is generally agreed that there is no requirement for the employer to be a bailee. One of the more recent cases dealing with vicarious liability is Frans Maas (UK) Ltd v Samsung Electronics (UK) Ltd [2004]. In this case various Samsung goods were stolen from Frans Maas's premises. The judge decided, on the balance of probabilities, that the theft was an 'inside job' committed by Frans Maas employees although there was no evidence that the employees in question were in any way employed to safeguard or otherwise work with the stolen goods. The judge nevertheless held that the custody of the keys to the premises was the equivalent of having custody of the actual goods. He also held that Frans Maas had not been as diligent with security as they could have been (providing keys to all staff and rarely changing security numbers). The judge held that Frans Maas was vicariously liable for its employees' acts. This case probably demonstrates the high watermark for vicarious liability. The House of Lords in Lister relied on two Canadian Supreme Court cases Bazley v Curry (1999) and Jacobi v Griffiths (1999). Indeed Lord Steyn suggested that these two cases should be considered as the starting point for future cases dealing with vicarious liability. The Canadian cases went into some detail as to the reasoning behind imposing liability on employers. In Bazley the Canadian Supreme Court stated that "the policy purposes underlying the imposition of vicarious liability on employers are served only where the wrong is so connected with the employment that it can be said that the employer has introduced the risk of the wrong (and is thereby fairly and usefully charged with its management and minimization). The question in each case is whether there is a connection or nexus between the employment enterprise and that wrong that justifies imposition of vicarious liability on the employer for the wrong, in terms of fair allocation of the consequences of the risk and/or deterrence." Vicarious liability is not, therefore, automatically imposed on an employer by reason of an employee's actions. The recent authorities require it to be just and fair. Igrox argued that their employee's actions (namely the theft) fell outside the scope of his employment and consequently, they argued that they were not vicariously liable for the theft of the silver. The judge rejected these arguments. The Judge decided that this case was not a simple one where he simply had to decide whether it was fair and just to hold Igrox vicariously liable. In his view, the failure of the employee to fumigate the container was a breach of Igrox's duty to the client and the "tort was inextricably bound up with what was authorised and expected of [the employee] in the performance of his duties". It is an interesting question, if the facts were different and the container had been fumigated (and the employee had used the Igrox breathing equipment to enter the fumigated container), whether the judge would have decided that Igrox was still vicariously liable. On the basis of Lister and Palmer's television scenario it is submitted that the same decision would have been reached and Igrox would have been found vicariously liable. However, the reasoning of Mr Justice Mann in the Brinks decision might suggest otherwise. ConclusionThe issues regarding bailment were fairly straightforward and the traditional understanding of bailment was confirmed in this Judgment. In relation to the question of vicarious liability the Judge held that it was right and proper for Igrox to be held vicariously liable for its employee's actions. As the Canadian Supreme Court cases have explained, it is important for the courts to continue to impose a responsibility on employers to protect customers/clients and the general public. Employers must realise that they are responsible for many of their employee's actions - even those which might not form part of their job description. Consequently, companies must take all possible measures to protect their interests. If insufficient steps are taken to protect third parties' interests (be it stored cargo or in relation to some other service being provided) and damage is caused by an employee then the employer may be held vicariously liable. Such vicarious liability in tort or conversion can circumvent contractual chains and limits of liability (as indeed occurred here). For further information, please contact Christopher Chatfield or Peter Charles-Jones. October 2009 Return to Bulletins |
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