Vicarious Liability and the Employer’s Conundrum

21 April 2017

Since the Royal Commission’s and a number of subsequent child abuse allegations in schools and religious institutions, vicarious liability has become a hallmark for personal injury compensation claims.

By way of a short explanation, vicarious liability is a legal doctrine that in some circumstances holds employers responsible for the actions of their employees. Vicarious liability is seen most commonly in cases of sexual or physical abuse in schools, in which both the offending teacher and the school are held liable for civil prosecution.

The difficulty with vicarious liability is attempting to establish its borders – in what circumstances in particular does it arise, and how does an employer discharge his or her responsibility to avoid liability under it?

In a recent High Court case involving allegations of sexual abuse by an employee of Adelaide’s prestigious Prince Alfred College, the Court recognised that there was a distinct lack of guidance for employers on the subject of vicarious liability.

The Court held that whether or not vicarious liability will arise depends on the nature of the role an employer has assigned to an employee. Where that role includes power, authority, trust, control and the ability to achieve intimacy with a potential victim, any actions by that employee may immediately create an instance of vicarious liability.

This definition, however, creates problems for employers operating schools, day care centres and other similar institutions – anyone necessarily involved in supervising or instructing children or other vulnerable persons falls within the scope of this definition.

While the High Court proceedings failed to give employers any reasonable guidance on preventing instances of vicarious liability from arising, it goes without saying that a pre-emptive approach has to be taken. Employers should take steps in whatever way possible to ensure that workplace policies are in place which prevent these situations from ever arising.

Timothy Ashton of Hentys Lawyers has over 30 years of experience in workers compensation, industrial relations and discrimination claims and proceedings, and works for a significant number of multi-national companies and household names. Please contact Timothy for advice by sending an email to hjk@hentys.com.au.