Vicarious Liability
Vicarious Liability: Two-Stage Test, Extensions and Implications
Introduction
Vicarious liability is a common law doctrine of strict, no fault, secondary liability under which one party, typically an employer or principal, is held responsible for torts committed by another, usually an employee or agent, in the course of their relationship. In essence, an employer may have to answer for wrongs committed by its employee in connection with that employee’s job, even if the employer itself is blameless. The doctrine serves important policy goals, distributing losses fairly to the enterprise that created the risk and encouraging employers to prevent harm, but it operates within defined legal limits. Over the past two decades, English courts at the highest levels have refined a two stage test for determining when vicarious liability arises. This article outlines that modern test and its principal cases, and then discusses the statutory extensions and related doctrines, such as non delegable duties, dual liability and agency principles, that complement the common law framework.
Stage One: The Relationship Requirement (Employment or Akin to Employment)
Stage One of the test asks whether the relationship between the wrongdoer and the defendant is one that can give rise to vicarious liability. The classic case is a contract of employment: an employer is generally liable for torts committed by an employee in the course of employment. Modern law, however, extends beyond formal contracts of service to relationships akin to employment, where no traditional contract exists but the incidents of the relationship are sufficiently analogous to employment to make it fair to impose liability. In other words, courts look to the substance of the relationship rather than its label. Factors that indicate a relationship akin to employment include:
- Integration into the defendant’s enterprise: Is the tortfeasor acting in furtherance of the defendant’s business or mission as an integral part of that enterprise, rather than pursuing their own independent business?
- Control or delegated authority: Does the defendant have a significant degree of control or authority over how the person carries out the work, even if not micromanaging every task?
- Benefit to the defendant: Is the person performing work that directly or indirectly achieves the defendant’s objectives and benefits the defendant’s undertaking?
- Creation of risk: Did the defendant, by assigning the task or role, create or significantly enhance the risk of the wrongful conduct occurring? However, the Supreme Court has clarified that this “creation of risk” factor is a policy rationale rather than an independent legal criterion for Stage One.
If these features are present, the relationship may be deemed sufficiently employment like to satisfy Stage One. A leading example is Various Claimants v Catholic Child Welfare Society (Christian Brothers) [2012] UKSC 56. In that case, members of a religious order were assigned to teach at a school. Although they were formally employed by the school and merely bound by vows to the order, the Supreme Court held the order vicariously liable for abuse committed by the brothers. The institute had a hierarchical structure and directed the brothers’ teaching as part of its mission. The teaching activity was in furtherance of the institute’s goals and under its control. The relationship was therefore akin to employment despite the lack of a contract.
Subsequent Supreme Court cases confirmed the breadth of Stage One. In Cox v Ministry of Justice [2016] UKSC 10, a prisoner working in a prison kitchen negligently injured a staff member. The Court held the prison service liable: the prisoner was integrated into the prison’s operation, preparing meals as part of the catering function, and was working under the direction of prison staff, not pursuing his own enterprise. Lord Reed observed that the prisoner’s forced labour and subordination bound him into a closer relationship with the prison service, and it would be unjust if injury compensation depended on whether the kitchen worker was an inmate or an employee. These cases illustrate that Stage One casts a wide net, not just formal contracts of employment, but relationships, even in institutional or quasi-employment contexts like prison work or foster care, where the defendant has placed the tortfeasor in a position within its organisational structure to carry out a part of its enterprise, thereby creating or significantly enhancing the risk of the wrongful act.
By contrast, if the wrongdoer is truly an independent contractor carrying on business on their own account, Stage One is not satisfied. The general rule, recently reasserted by the Supreme Court, is that an entity is not vicariously liable for torts of independent contractors. An independent contractor works to their own account, outside the defendant’s enterprise, and the hiring entity typically lacks the type of integration, control and risk creation that justify vicarious liability. The Supreme Court underlined this limit in Barclays Bank plc v Various Claimants [2020] UKSC 13. There, a bank had engaged a self employed doctor to conduct pre employment medical examinations. Years later the bank was sued for sexual assaults that the doctor allegedly committed during those exams. The Supreme Court held the bank not vicariously liable because the doctor was not an employee nor akin to one, he was a classic independent contractor in business on his own account. Key facts signalled his independence: he operated his own practice from separate premises, was paid per examination, and was free to refuse work. Lady Hale emphasised that the expansion of vicarious liability does not extend to truly independent providers of services. In short, Stage One draws a firm line at independent contractors: if the primary tortfeasor was carrying on an independent business of their own, vicarious liability is excluded at the threshold.
Stage Two: The Close Connection Test
Even when a sufficient relationship (employment or akin to employment) is established, Stage Two requires that the wrongful act be sufficiently connected to that relationship. An employer (or analogous principal) is not automatically liable for everything an employee does. The tort must have been committed in the course of employment in a broad sense that fairly implicates the defendant. The modern formulation of this test originates from Lister v Hesley Hall Ltd [2001] UKHL 22, where Lord Steyn asked whether the tort was so closely connected with the employment that it would be fair and just to hold the employers vicariously liable.
In Lister, the warden of a boarding school had systematically abused children under his care. The House of Lords held the school liable for those intentional criminal acts because the warden’s duties to care for the children placed him in a position of trust and authority which he exploited to commit the abuse. The wrongdoing was not a coincidental occurrence but was inextricably interwoven with the carrying out of his entrusted duties. The employment had not merely given the warden an opportunity to commit wrongdoing, it had created and materially enhanced the risk of that wrongdoing. Lister thus marked a turning point, making clear that even intentional or criminal acts by an employee can fall within the scope of employment if they are sufficiently linked to the employee’s duties and the risks inherent in the role.
Under the close connection test, the core inquiry is whether the employee was acting in the course of carrying out the defendant’s work, or purporting to act on the defendant’s behalf, when the tort occurred, as opposed to pursuing purely personal ends. In practical terms, was the wrongful act a misguided or unauthorised mode of doing the employee’s job (in which case the employer may be liable), or was it an independent venture unrelated to any assigned duties (in which case the employer is not liable)? It is not enough that the employment merely provided the setting or opportunity for the act. There must be a connection in nature or context between the work and the wrong, not just a coincidence of time or place.
Courts consider factors like the timing and location of the incident and whether it arose out of a work related dispute or interaction, but the decisive element is whether the tort can fairly be seen as a risk inherent in the employer’s enterprise or in the authority entrusted to the employee. If the employee was ostensibly acting within his role, even if improperly, liability can arise. If the employee had stepped outside his role and was acting entirely for personal reasons, liability will not attach.
Over the years, a series of cases has delineated the boundaries of this fact-sensitive inquiry, especially in scenarios of employee misconduct:
Mohamud v WM Morrison Supermarkets plc [2016] UKSC 11. In this case, a petrol station employee suddenly assaulted a customer. The Supreme Court held the employer liable, viewing the employee’s violent conduct as a seamless continuation of his customer service duties. He was purporting to act in his job role when he ordered the customer to leave, and the assault was closely connected to that interaction.
WM Morrison Supermarkets plc v Various Claimants [2020] UKSC 12. By contrast, when an employee, Mr Skelton, maliciously leaked thousands of colleagues’ personal data online to harm his employer, the Court held the company was not liable. Mr Skelton was pursuing a personal vendetta unconnected to his duties, and the mere fact that his job gave him access to the data did not make his rogue act part of his employment.
Trustees of the Barry Congregation of Jehovah’s Witnesses v BXB [2023] UKSC 15. This provides a recent illustration of the limits of Stage Two. In that case, a Jehovah’s Witness elder raped a congregation member (the claimant) during a social visit at his home. The Supreme Court held the religious organisation was not vicariously liable. Although the elder held an official position akin to employment (satisfying Stage One), the assault occurred purely in a private setting, unconnected to any duties or activities he was entrusted with. He was not carrying out, or even misusing, any role on behalf of the church at that time, but acting in a personal capacity. The Court drew a clear distinction between the misuse of authority in the course of performing one’s role (which might result in liability) and conduct which is essentially private and outside any institutional role. There was not a sufficient connection between the rape and the elder’s quasi-employment, and no policy reason to make the organisation bear the cost of such an incident.
Lower court decisions have also illustrated these boundaries. For example, an immediate assault following a workplace confrontation has been deemed within the course of employment, whereas a revenge attack by an off duty employee after a time lapse was not. In another case, a company was held liable when its managing director attacked an employee during a work-related argument at an unofficial after-party, because he was acting in a managerial capacity at the time, whereas purely social incidents unconnected to work have been held outside the scope.
In summary, Stage Two’s close connection requirement confines vicarious liability to wrongs that can be fairly seen as part of the risks of the defendant’s enterprise. The doctrine will attach even for extreme misconduct if, viewed in context, the employee was still acting within the field of activities entrusted to them, for example, maintaining discipline or serving a customer, however improperly. But where the employee has shed the role and is pursuing personal objectives unrelated to their employment duties, the law treats them as acting outside the course of employment, and the employer is not liable.
Statutory Extensions of Vicarious Liability
Although vicarious liability is a creature of common law, Parliament has in some instances created analogous forms of liability for employers and principals by statute. These statutory schemes typically make an organisation directly or vicariously liable for specified wrongs committed by those performing work for it, subject to particular defences. They reflect deliberate policy choices to hold enterprises accountable for certain kinds of misconduct by their staff or agents. Two notable examples in UK law are section 109 of the Equality Act 2010 and section 7 of the Bribery Act 2010.
Equality Act 2010: Employer Liability for Discriminatory Acts
Section 109 of the Equality Act 2010 makes an employer liable for acts of discrimination, harassment or victimisation committed by its employees in the course of employment, as well as for similar acts by its agents under the employer’s authority. In effect, the statute deems the employer to have done the unlawful act as well as the employee. Tribunals have emphasised that “in the course of employment” in this context is interpreted expansively, not strictly limited by the common law tests. It can cover acts occurring in any work related context, including some off duty social settings.
Recognising that this imposes a form of strict liability on employers, the Act provides a defence in section 109(4). The employer is not liable if it can prove that it took all reasonable steps to prevent the employee from doing the discriminatory act, or anything of that description. This is a high threshold. It requires the employer to show it had implemented truly robust and proactive measures, such as comprehensive equality policies, training and disciplinary procedures, before the incident. In practice, very few employers succeed with the “all reasonable steps” defence, as it demands evidence that the employer did everything reasonably possible to prevent the wrongdoing. The Equality Act’s scheme thus ensures that victims of workplace discrimination can hold the employer to account without needing to prove a common law close connection, while also giving diligent employers a narrow safe harbour if they genuinely tried to prevent such misconduct.
Bribery Act 2010: Corporate Failure to Prevent Bribery
Section 7 of the Bribery Act 2010 creates a specific offence for commercial organisations that fail to prevent bribery by persons associated with them. In particular, a company or partnership is guilty of an offence if a person associated with it bribes another person with the intention of obtaining or retaining business or a business advantage for the company. An “associated person” is defined broadly to mean anyone who performs services for or on behalf of the company, in any capacity. This can include employees, agents, subsidiaries, intermediaries or contractors.
The provision effectively imposes strict liability on companies for bribes paid by those acting on their behalf, even if senior management was not involved or aware. However, the Act also provides a statutory defence. The organisation is not guilty if it can prove that it had in place adequate procedures designed to prevent persons associated with it from engaging in bribery. The burden is on the company to show that, prior to the offence, it had implemented proportionate anti-bribery controls, such as clear policies, training, due diligence and monitoring, in light of its risk profile.
Conceptually, this failure to prevent offence is akin to vicarious liability, although it is structured as the company’s own breach. It penalises companies for wrongful acts (bribes) by those performing services for them, unless the company did everything reasonably possible to avoid such acts. The Bribery Act’s strict approach was a conscious policy decision to spur companies into actively policing their operations. By threatening corporate liability in the absence of adequate preventive measures, it incentivises firms to create a culture of compliance.
Other Statutory Examples
Beyond these two Acts, other laws likewise impose liability on organisations for misdeeds of those who work for them. For example, health and safety legislation and the Corporate Manslaughter and Corporate Homicide Act 2007 can render an employer or company liable for accidents or deaths caused by workplace failings, attributing certain negligence of employees or management to the company itself.
Partnership law is another area where legislation makes business principals liable for each other’s wrongs. Under the Partnership Act 1890, a partnership is civilly liable for any wrongful act or omission of a partner done in the ordinary course of the partnership’s business. This is a codified form of vicarious liability among partners. These statutory mechanisms complement the common law doctrine, ensuring that particular harms do not slip through the cracks simply because the technical requirements of vicarious liability are not met.
Non-Delegable Duties: Direct Liability for Independent Contractors
Alongside vicarious liability, English law recognises non-delegable duties, situations where a defendant has a personal duty of care that it cannot discharge by delegating performance to an independent contractor. In such cases, if the contractor is negligent, the defendant itself is held liable for that negligence, not vicariously through a special relationship but directly for breaching its own duty to ensure the task was performed safely. Non delegable duties are an exception to the general rule that one is not liable for the torts of independent contractors.
Classic examples include the duties of schools towards pupils, hospitals towards patients, and certain duties of employers or authorities towards those in their custody. The leading case defining the modern scope of non delegable duties is Woodland v Swimming Teachers Association [2013] UKSC 66. In Woodland, a 10-year-old pupil suffered a severe brain injury during a school swimming lesson run by an independent contractor. The Supreme Court held that the local education authority (the school) owed the child a direct, non delegable duty to ensure reasonable care was taken in conducting the lesson. This meant the school could be held liable for the negligence of the contractor it had engaged to fulfil its educational duty.
Lord Sumption in Woodland set out five defining features of a situation giving rise to a non delegable duty (outside established categories like inherently hazardous activities). In summary, these features are:
- Vulnerability of the claimant: The claimant is especially vulnerable or dependent on the defendant for protection, such as a child, hospital patient, prisoner or care home resident, and is owed a positive duty of care by the defendant.
- Existing relationship: There is a pre existing relationship between the claimant and the defendant which places the claimant in the actual custody or care of the defendant, and from which it arises that the defendant has a positive duty to protect the claimant from harm, not merely a duty to refrain from causing harm. Typical examples include school pupil or hospital patient relationships, where the defendant has assumed a role of care over the claimant.
- Lack of control by the claimant: The claimant has no control over how the defendant chooses to perform the relevant obligations. They must rely entirely on the defendant to either perform the duty itself or arrange for its performance.
- Delegation of integral function: The defendant has delegated to a third party some function that is an integral part of the defendant’s positive duty to the claimant, and the third party is exercising the defendant’s custody or care of the claimant in carrying out that function.
- Negligence in the very function delegated: The third party was negligent in performing the very function which the defendant assumed responsibility for towards the claimant that is, the harm resulted from the breach of the duty the defendant owed, not from some entirely collateral act of the contractor.
Even if all these criteria are satisfied, the court will consider whether it is fair, just and reasonable to impose a non delegable duty in the novel situation, a policy check to ensure the doctrine is not applied too expansively.
Non delegable duties are thus reserved for limited scenarios where the law insists that certain responsibilities cannot be escaped by outsourcing. They often involve vulnerable persons or important obligations, such as education, healthcare or safety,where the claimant is entitled to expect that the institution’s duty of care will be upheld regardless of who actually performs the task.
The policy rationale is to protect those who depend on the defendant. For example, schoolchildren or patients should be able to trust that the school’s or hospital’s duty of care to them will be fulfilled, whether through employees or contractors. If a non delegable duty is found and breached, the defendant is directly liable for that breach. Vicarious liability need not be invoked, since liability does not hinge on any relationship with the tortfeasor but on the defendant’s own failure to ensure the duty was met.
In practical terms, a claimant who cannot satisfy the Stage One relationship requirement, because the immediate wrongdoer was an independent contractor, might still succeed by establishing a non-delegable duty. The courts, however, have been cautious in extending this doctrine, given it is a strict exception to the independent contractor rule. It is applied sparingly and only when justified by the nature of the relationship and the vulnerability of the claimant, thereby aligning liability with the party who had the ultimate responsibility and power to prevent the harm.
Dual Vicarious Liability
In most cases, a given tortfeasor has a single employer, or analogous relationship defendant, who will be vicariously liable. However, there are exceptional situations where two different entities can each be vicariously liable for the same tort. This dual vicarious liability typically arises where a worker is so much a part of the business of two entities simultaneously that both exert a substantial degree of control over the work. Scenarios include borrowed employees, agency workers on assignment, or joint ventures where personnel are shared.
The leading authority is Viasystems (Tyneside) Ltd v Thermal Transfer (Northern) Ltd [2005] EWCA Civ 1151. In Viasystems, a subcontractor’s fitter’s mate caused a flood through negligence while installing ducting. At the time, he was working under the simultaneous instruction of two supervisors: one employed by Company A and one by Company B, each of which had supplied labour to the project. The Court of Appeal held that both Company A and Company B were vicariously liable for the damage. Both companies had a sufficient degree of control over the worker’s actions and both were benefitting from his work as part of their business operations. Liability was apportioned 50/50 between them.
Notably, the Court of Appeal in Viasystems acknowledged that dual liability can be appropriate in a case of truly shared employment. One judge focused on the criterion of control if two employers each have substantial control over the worker’s actions, both can be liable while another looked to integration, asking whose enterprise the worker was serving. Under either approach, if the reality is that the worker was acting as part of the business of both defendants, then both can be held liable.
The Supreme Court has since signalled approval of this flexible, enterprise focused approach. In Various Claimants v Catholic Child Welfare Society (Christian Brothers) [2012] UKSC 56, Lord Phillips observed that in some situations two defendants may each have sufficient integration and control to justify both being vicariously liable, asking in effect whose enterprise was being furthered by the tortfeasor at the time.
More recently, in NatWest Markets plc v Bilta (UK) Ltd (In Liquidation) [2021] EWCA Civ 680, the Court of Appeal held both an original employer and a host company vicariously liable for employees’ fraud committed while on secondment. This demonstrates that in a secondment scenario, if the employees are fully integrated into the host’s business but remain employees of the original employer, both entities may have to share liability.
From a claimant’s perspective, if dual vicarious liability is established, the two defendants are jointly and severally liable for the full loss. The claimant can recover from either (or both) of them, and it is then for the defendants to sort out between themselves a fair apportionment or indemnity. In practice, the two employers might have a contract placing liability on one or the other (for example, an agency agreement might require the agency to indemnify the host for a temp’s negligence), but such arrangements do not affect the injured party’s rights. The law’s priority is that an innocent victim is compensated by those who, as between them, had the responsibility and control over the risk that materialised.
For businesses, the possibility of dual liability means that sharing an employee does not guarantee an escape from exposure. Borrowing someone else’s worker and directing their work can result in shared liability if that worker is effectively part of both businesses. Organisations using secondments or agency staff should be mindful of this risk and manage it through clear contracts and insurance. However, no contractual label will prevent a court from imposing dual vicarious liability if the facts warrant it, the courts will look at the reality of who had control and whose purposes were being served.
Agency and Partnership Liability
Two related areas of law extend the principle of vicarious liability beyond the strict employer, employee example: general agency law (principal and agent), and the liability of business partners. These operate on similar principles of holding one party answerable for the conduct of another, though with their own technical rules and applications.
Agency
Outside the employer/employee context, the law of agency provides that a principal can be liable for acts done by an agent on the principal’s behalf. If an agent is acting within the scope of their authority (whether actual authority or apparent authority), the principal will be bound and liable to third parties for those acts. In many situations this overlaps with vicarious liability, as an employee is often also an agent of the employer, but agency can extend to non-employment relationships as well.
The classic common law formulation, from cases such as Barwick v English Joint Stock Bank (1867), is that a principal is liable for the acts and omissions of an agent done in the course of the agent’s employment or authority, even if those acts were fraudulent or contrary to the principal’s instructions, so long as they were within the agent’s ostensible authority. The rationale is akin to vicarious liability: if the principal puts the agent in a position to deal with third parties, it is fair that the principal bear the consequences of the agent’s misconduct in that role.
However, agency liability has limits. If the agent is acting completely outside the scope of authority given by the principal, pursuing a purely personal agenda rather than the principal’s business, then the principal is not liable, because the agent is no longer acting on the principal’s behalf. Courts often distinguish between acts that are within the field of activities entrusted to the agent (for which the principal will be liable even if the agent disobeys instructions or acts deceitfully) and acts that are wholly outside any delegated authority (for which the principal bears no liability). In the context of vicarious liability, simply calling someone an agent does not bypass the close connection analysis. But if a true agency relationship exists, the test of liability is essentially whether the agent was acting within the scope of the authority conferred by the principal. If yes, the principal can be liable. If the agent was on a frolic of their own outside any authority, the principal is not.
Partnership
Partners in a partnership, and members of an LLP, by analogous principles, are collectively liable for wrongs done by any partner in the ordinary course of the partnership’s business. This is effectively a statutory form of vicarious liability among partners. Section 10 of the Partnership Act 1890 provides that the firm, and thus all the partners jointly, is liable to third parties for any wrongful act or omission of any partner acting in the ordinary course of the partnership’s business or with the authority of the co-partners. In other words, each partner is an agent of the firm, and all partners can be held to account for torts committed by one partner in carrying on the firm’s business.
A striking illustration is Dubai Aluminium Co Ltd v Salaam [2002] UKHL 48. In that case, a partner in a law firm, along with others, drafted fraudulent documents as part of a client’s dishonest scheme. The innocent partners knew nothing of the fraud. The House of Lords held that the law firm was liable for the partner’s wrongdoing. Drafting contracts for a client was within the ordinary course of the firm’s business, providing legal services, and the fact that the partner did it dishonestly did not alter the firm’s responsibility. Lord Nicholls explained that if a partner’s wrongful conduct is closely connected to the acts he was authorised to do on behalf of the partnership, it is fair and just to hold the firm liable. In Dubai Aluminium, the fraudulent drafting was closely related to the kind of work the partner was entrusted to do (drafting contracts), so the firm was vicariously liable for his acts even though those acts were unauthorised and malicious.
In practice, partnerships typically cover this risk through insurance and indemnity agreements, so that any liability for a partner’s misdeed is borne by the firm as a whole. In modern LLPs, the LLP entity rather than the individual members is liable for wrongs committed by its members in the course of the business, but the principle is the same. The organisation is answerable as a unit for torts committed in carrying on its business. From a third party’s perspective, the victim can recover from the firm or LLP as a single entity with collective responsibility. Naturally, if a partner’s act is entirely outside the business of the firm, a purely personal frolic, then the firm is not liable. But if the act was done in the ordinary course of the firm’s business, the firm (and all partners, or the LLP) will be held liable, notwithstanding the innocence of the other partners.
Vicarious liability may also arise in the context of professional negligence. If a solicitor, trainee or other member of staff within a firm commits a negligent error in the course of their professional duties, the firm may be held responsible. The same two-stage test applies: first, whether the individual was an employee or in a relationship akin to employment, and second, whether the negligent act was sufficiently connected to that role. This ensures that clients who suffer loss due to errors made within a professional practice are able to seek redress from the firm itself, rather than being left to pursue only the individual concerned. For further guidance on this area, see our dedicated page on professional negligence.
Vicarious liability is also relevant in the law of defamation. An employer or publisher may be held liable for defamatory statements made by an employee or agent in the course of their duties. For example, a newspaper is vicariously liable for the defamatory articles written by its journalists in the ordinary course of employment. Likewise, companies can be held accountable for statements made by senior employees when acting in a representative capacity. The courts apply the same two-stage test: first, whether the author of the statement was an employee or in a relationship akin to employment, and second, whether the defamatory publication was closely connected to that role. This ensures that victims of defamation are not left without effective redress where the publication was made through the enterprise of an organisation. For further information, see our dedicated guidance on defamation law.
Conclusion
Vicarious liability remains a cornerstone of English tort law, ensuring that victims of wrongdoing have recourse not only against individual tortfeasors but also against the organisations or enterprises that enabled or benefited from those tortfeasors’ activities. The modern two stage test, Stage One focusing on the relationship and Stage Two on the connection between that relationship and the tort, provides a structured and principled framework for analysing these cases. Over the past twenty years, the Supreme Court has honed this framework and has continuously calibrated the balance between fairness to claimants and fairness to defendants. Stage One is broad in scope, extending liability to relationships that in reality function like employment even if not formally so, but draws a bright line excluding truly independent contractors. Stage Two is fact-sensitive, insisting on a meaningful link between the tort and the tortfeasor’s role, thereby preventing liability for aberrant acts that cannot fairly be said to be part of the employer’s enterprise.
Thus, vicarious liability, though a form of strict liability, is not unbounded. Cases such as Morrison and BXB illustrate that liability will not extend to an employee’s purely personal wrongdoing unconnected to the employer’s enterprise, ensuring that employers are not made insurers for risks they cannot fairly control. If the two-stage test is not satisfied in a given case, the claimant must seek other avenues of redress, for example, suing the individual tortfeasor or alleging a non-delegable duty, rather than stretch the vicarious liability doctrine beyond its principled limits. Conversely, where the test is met, the courts have shown willingness to apply vicarious liability even to unusual relationships or intentional torts when justice requires, demonstrating the doctrine’s flexibility.
For legal practitioners and clients, the current state of the law carries some clear implications. Organisations should not assume that using novel work arrangements or labels (independent contractors, volunteers, franchisees) will automatically shield them from vicarious liability. Courts will examine the real substance of the relationship, looking at how integrated and controlled the person was in the business. Conversely, where an employee’s wrongdoing was truly a personal frolic outside the scope of employment, the employer has strong grounds to contest liability and will not be held liable. It is prudent for employers to maintain robust training, supervision and compliance programmes, both to prevent incidents and to avail themselves of statutory defences (such as the “all reasonable steps” defence under the Equality Act). Companies should also manage risk through contractual indemnities and insurance, especially when borrowing staff or engaging individuals whose status may be borderline.
Looking ahead, the doctrine will continue to be tested by evolving work arrangements. For example, the rise of the gig economy and platform-based employment will pose questions about who is truly “akin to an employee” for Stage One purposes, and whether certain wrongs are sufficiently connected to those new forms of engagement. Future cases will undoubtedly refine the application of the established principles to such scenarios. As of 2025, however, the law of vicarious liability is relatively settled. The two stage test and recent Supreme Court guidance provide a clear yet flexible framework. Vicarious liability remains a powerful tool for ensuring that enterprises bear responsibility for the risks inherent in their activities, but it is wielded with restraint and confined by rational limits.
If you are concerned about potential liability in your organisation, whether arising from an employee, agent, volunteer or another representative, our firm can advise on whether vicarious liability may apply and on the best course of action. For a confidential, obligation-free consultation, please call 0151 541 2040 or 0203 846 2862. You may also email info@carruthers-law.co.uk, or use our online enquiry form, and we will respond promptly.
Disclaimer: This article is provided for general information purposes only and does not constitute legal advice. Carruthers Law accepts no responsibility for any reliance placed on the contents. This article may include material from court judgments and contains public sector information licensed under the Open Justice Licence v1.0.