Understanding Vicarious Liability in New South Wales and how it impacts your Personal Injury Claim
Published on November 13, 2024 by Imogen Mahony and David Tarrant
When someone is injured because of another person’s actions, it is natural to assume that the individual responsible for the harm should be held accountable. However, in many cases, the person who caused the injury might not be the only person liable. Vicarious liability commonly arises in employer/employee relationships. This is because under the legal principle of ‘vicarious liability’, an employer can be held responsible for the actions of their employees.
In this article, we explain what vicarious liability means, how it applies to personal injury claims in New South Wales (NSW), and what it means for your case.
What is vicarious liability?
Vicarious liability is a legal concept that holds one party responsible for the actions of another. In the context of personal injury law, this generally refers to an employer being held accountable for the wrongful or negligent actions of their employees while they are carrying out their employment duties.
For example, if a delivery driver, while making a delivery for their employer, causes a motor vehicle accident and injures another driver, the injured party could potentially bring a claim against the employer, as well as the driver. This is because the employer is vicariously liable for the actions of their employees when those actions occur within the scope of employment.
How does vicarious liability apply in personal injury claims?
In NSW, vicarious liability may arise in common law claims for personal injury whereby the injured party seeks compensation for damages which arise from the negligence of the other party. Vicarious liability is applicable to circumstances which involve a person’s failure to exercise reasonable care which causes harm to another person.
When the person responsible for the injury is an employee, vicarious liability allows the injured party to seek compensation not just from the employee, but from the employer as well. This is particularly important because, in many cases, the employer is likely to have more financial resources or insurance coverage than an individual employee. It ensures that the injured party has a better chance of receiving the compensation they need for medical expenses, lost wages, and other damages.
Conditions for establishing vicarious liability
Not all actions by an employee will result in vicarious liability for the employer. There are certain conditions that must be met for vicarious liability to apply in a personal injury claim:
- The individual must be an employee – vicarious liability applies when the wrongdoer is an employee, not an independent contractor. Employees are generally those who have a contract of service and are under the control and direction of their employer, in respect of how they perform their job. Independent contractors, on the other hand, usually operate their own businesses and are responsible for their own actions.
- The act must occur during the course of employment – the wrongful act or negligence must have occurred while the employee was performing duties related to their employment. If the employee was acting within the scope of their employment—such as driving a company vehicle, carrying out a work-related task, or interacting with customers on behalf of the employer—the employer may be liable.
- The act must be sufficiently connected to the employment – for an employer to be vicariously liable, there must be a clear and sufficient connection between the employee’s role and the incident. The courts will consider whether the employee’s conduct was incidental to their employment duties. For instance, if an employee whilst working as a security guard in a nightclub injures a patron whilst removing them from the venue, the employer may be held vicariously liable because the employee’s job involves interacting with patrons and maintaining order.
However, employers can be safeguarded from the principle of vicarious liability if it can be shown that the wrongful act was outside the scope of employment that it would be unreasonable to hold the employer liable.
Why vicarious liability exists?
Vicarious liability reflects the idea that employers benefit from the work of their employees and should therefore bear some responsibility for their actions. Since employers often have greater resources and insurance to cover personal injury claims, vicarious liability serves to ensure that injured parties have access to adequate compensation.
It also encourages employers to take reasonable steps to supervise their employees and create safe working environments. By holding employers accountable for the conduct of their staff, the law incentivises businesses to ensure proper training, monitoring, and compliance with safety standards.
Examples of vicarious liability
Vicarious liability can apply in various situations, depending on the nature of the employment and the circumstances of the injury. Below are a few examples where vicarious liability may arise:
- Workplace injuries – if an employee causes an injury to a colleague while performing their duties, the employer could be held liable for the resulting harm. For instance, if a factory worker accidentally causes another employee to be injured by operating machinery negligently, the employer may be responsible for the injured worker’s medical costs and other damages.
- Motor vehicle accidents – when an employee is driving as part of their job—such as a delivery driver, courier, or service technician—and causes an accident, the employer may be vicariously liable for any injuries caused. Even if the driver is directly responsible for the accident, the injured party may seek compensation from the employer’s insurance policy.
- Assaults or other wrongful acts – vicarious liability can also arise from intentional wrongful acts committed by employees. For example, if a security guard working for a venue uses excessive force and injures a patron, the injured person could bring a claim against the security guard’s employer, provided the incident occurred within the scope of the employee’s duties.
- Medical Negligence – hospitals and medical practices can be held vicariously liable for the negligent actions of their employees, including specialists, doctors, nurses and other medical staff.
- Public Liability – employers may also be vicariously liable in circumstances where an employee has been negligent in maintenance and/or cleaning of the place of employment which leads to a person suffering injury due to a slip and fall.
Defending against vicarious liability
Employers do have defences against vicarious liability claims. As previously stated, they may argue that the employee was on a frolic of their own volition and therefore not acting within the scope of their employment at the time of the incident, or that the employee was engaging in conduct that had nothing to do with their work responsibilities. For instance, if an employee commits a wrongful act during their personal time or while on a break, the employer may not be held liable.
Additionally, if the negligent party is an independent contractor rather than an employee, the employer may avoid the implications of vicarious liability. This distinction can be significant, and courts will look closely at the nature of the relationship between the worker and the employer when determining liability.
Further, employers may claim that the injured party’s own negligence or wrongful conduct contributed to their injury. Whilst contributory negligence is not a complete defence to vicarious liability, employers may use this defence to reduce liability in personal injury claims.
What does this mean for you?
If you have been injured due to the negligence or wrongful act of another person, and that person was acting in the course of their employment, you may be entitled to bring a claim not only against the individual but also against their employer. The use of vicarious liability is a strong legal strategy that is especially important when seeking compensation, as employers are often better positioned to provide the financial resources needed to cover your medical bills, lost income, and other damages.
Please note that this article does not constitute legal advice. If you are seeking professional advice on any legal matters, you can contact Carroll & O’Dea Lawyers on 1800 059 278 or via our Contact Page and one of our lawyers will be able to assist you.
