The indemnity principle

CPA-Business-Law-Section-1 BLOCK RELEASE

There is a term implied at common law into contracts of employment that an employee will exercise all reasonable care and skill during the course of employment. An employee who is negligent is in breach of such a term and the employer who has been held vicariously liable for the tort may seek an indemnity from the employee to make good the loss.


The employer is generally not liable for torts committed by an independent contractor. The employer is however liable if he is deemed to have committed the tort.
This may occur in the following instances:

1. Whether the employer has authorized the commission of the tort
In many circumstances, the law will attribute to a man the conduct of another being, whether human or animal, if he has instigated that conduct.
He who instigates or procures another to commit a tort is deemed to have committed the tort himself.
In Ellis v. Sheffield gas Consumers Co the defendant who had no authority to up the street employed a contractor to open trenches and lay gas pipes along a street.
The contractor carelessly left a heap of stones on the footpath; the plaintiff fell over them and was injured.
Held: the defendants were liable since the contract was to do an illegal act, a public nuisance.
The decision would have been different had it been lawful for the defendant to dig up the streets.

2. Torts of Strict Liability
The employer is liable in those circumstances e.g. in Rylands-v-Fletcher the employer was held liable for the acts of his independent contractors as this was a case of strict liability.
These in torts of strict liability, the employer will be liable even where the tort e.g. the escape is caused by the negligence of an independent contractor.

In Terry v. Aston, the defendant employed an independent contractor to repair a lamp attached to his house and overhanging the footway. As it was not security fastened, the lamp fell on the plaintiff, a passer-by and the defendant was held liable, because: it was the defendant‟s duty to make the lamp reasonably safe, the contractor had failed to do that. Therefore, the defendant has not done his duty and is liable to the plaintiff for the consequences.
Here liability was strict.

3. Negligence
When there is an element of personal negligence on the part of the employer as to make him liable for the acts of an independent contractor. E.g. Where the employer is negligent or careless in employing an independent contractor for instance, where the contractor is incompetent.
Failure to provide precaution in a contract where there is risk of harm unless precaution is taken can make the employer liable for the tort of the contractor.

In Robinson v. Beaconsfield Rural Council, the defendant employed an independent contractor, one hook, to clean out cesspools in their district.

No arrangements were made for the disposal of the deposits of sewage upon being taken from the cesspools by hook. Hook men deposited the sewerage on the plaintiff land.
Held: The defendants had a duty to dispose the sewerage and, on construction of the contract, they had not contract with hook for discharge of this duty (disposing of the sewage) hence they were liable for the acts of the hook’s men in disposing it on to the plaintiff land.

4. Where the Duty of Care Is Wide
An example is where the independent contractor is dealing with hazardous circumstances, or works which from their very nature, pose danger to other persons.

In Holiday v. National Telephone Co, the defendant, a Telephone Company, was lawfully engaged in laying telephone wires along a street. They passed the wires through tubes, which they laid a trench under the level of the pavement.
The defendants contracted with a plumber to connect these tubes at the joints with lead and solder to the satisfaction of the defendant foreman.

In order to make the connections between the tubes, it was necessary to obtain a flare from a benzoline lamb of applying heat to the lamb. The lamb was provided with a safety valve.
The plumber dipped the lamp into a caldron of melted solder, which was placed over a fire on his footway. The safety valve not being in working order caused the lamb to explore. The plaintiff, who was passing on the highway was splashed by the molten solder and injured

Held: The defendant were liable because having authorized the performance of work which from its nature was likely to involve danger to persons using the highway were bound to take care that those who executed the work for them did not negligently cause injury to such persons.


1. Look at the mode of doing the work the servant is employed to do
In Century Insurance C v. Northern Ireland Road Transport Board, one of the respondent’s employees was delivering petrol to garage. While the petrol was flowing from the lorry to the tank, he lit a cigarette and negligence threw away the lighted match which caused an explosion damages the appellant’s property. The action of the employee was treated as being within the course of employment. On appeal it was held that the respondents were liable for the damage caused for such an action, whilst for the comfort and convenience of the employee could not be treated as isolated act as it was a negligent method of conducting his work.

In Bayley v. Manchester Sheffield and Lincolnshire Railway the plaintiff was in a train traveling to Macclesfield and he explained this to the mistakenly believed that the plaintiff was the wrong train (that train was not traveling to Macclesfield) and violently ejected the plaintiff who suffered injuries.
Held: The defendants were liable because the porter was acting within the cause of employment.

2. Whether the act was authorized within the limits of time and space e.g. if one is employed to work between 8.00 a.m. and 5.00 p.m., the master is only liable for torts committed within that time frame.
Ruddiman & Company v. Smith, the plaintiff was using the lower room of the defendant’s
House while the defendant used the upper room for carrying on business. In the upper room there was a lavatory. The clerk, after duty, went to the lavatory to wash his hands but on turning on the tap and finding no water, went away without turning the tap off. When water turned on the morning, it overflew into the lower room and damaged the plaintiff goods.
Held: The employer was liable for whether or not the use of the lavatory. Within the scope of
The clerk’s employment, it was an event incidental to his employment.

In Storey v. Aston, the defendant, a wine merchant, sent his car man and clerk to deliver wine and pick up empty bottles. On their way back, they diverted to visit the clerks house in the course of which they negligently knocked down the plaintiff and injure him.
Held: The defendant was not liable for the injury caused by the negligent driving of the car
Man for he was, that time, engaged in a new and completely unauthorized journey.

3. Whether the act was the initiative of the servant or the master had a certain control.

In Warren v. Henlys Ltd, erroneously believing that the plaintiff had to drive away from the garage without paying or surrendering coupons for petrol which had been put in the tank of his car, a petrol pump attendant used violent language to him.
The plaintiff paid his bill and gave the necessary coupons and after calling the police, told the attendant that he would report him to his employers.
The pump attendant then assaulted and injured him. In an action for personal injuries against his employers.

It was held that the defendants were not liable for the wrongful act of their employee. Since the act was one of the personal vengeances and was not done in the course of employment; it not is an act of a class which the employee was authorized to do or a mode of doing an act within that class.

In Poland v. John Parr and Sons, Arthur Hall, a carter was employed by John Parr. Parr and his son were conveying a wagon with bags of sugar. Arthur, on his way home for dinner was walking else to the wagon. The plaintiff, a schoolboy, was walking home in the same direction with his hand upon one of the bags of sugar.

Honestly and reasonably thinking that the boy was stealing, Arthur gave him a blow on the back of his neck as a result whereof he fell and the wheel of the wagon injured his foot which was amputated.
Held: In the circumstances, the carter had implied authority to make reasonable efforts to
Protect and preserve the defendants’ property; that the violence exerted was not so excessive as to take his act outside the scope of authority and that the defendant were liable.

4. Where there is an express prohibition
An express prohibition does not negate liability i.e. a master does not escape liability simply because he had an express prohibition. For liability to be determined, two factors are considered:
i. Whether the prohibition limits the sphere of employment. If it does, the master is not liable for an act done outside the sphere. (Sphere).
ii. Where the prohibition deals with the contract within the sphere of employment. If it does, the employer will be liable. (Mode)

In Canadian Pacific Railway Co v. Lockhart a servant of the appellant Company in disregard of written notices prohibiting employers from using private cars for the purpose of the company’s business unless adequately insured, used his uninsured motorcar as a means of execution of work which he was ordinarily employed to do in the course of which he injured the respondent.
Held: The means of transport was incidental to the execution of work, which the servant
Was employed to do and that the prohibitions of the use of an uninsured motorcar merely limited the mode of executing the work, breach of the prohibition did not exclude the liability of the company to the respondent.

In Rand v. Craig, Carters were employed by a contractor to take rubbish from certain works to his dump and were strictly forbidden not to hip it anywhere else. Some of the carters, without knowledge of the contractors, and in contravention of their orders took the rubbish to a piece of unfenced land belonging to the plaintiff as it was nearer the works that the dump of contractor.
Held: The illegal acts complained of where not within the sphere of the carter’s employment
And consequently the contractor was not liable for them.

5. Whether the act was a deliberate criminal act
In Lloyd-v-Grace Smith & Co., the plaintiff had sought advice from the defendants, a firm of solicitors, whose managing clerk conducted conveyance work without supervision. He advised the plaintiff to sell some property, fraudulently persuading her to sign certain documents that transferred the property to him. He disposed of it and kept the proceeds.
Held: Even though the fraud had not been committed for the benefit of the employers,
Nevertheless they were liable, for the clerk had been placed in position to carry over such work and had acted throughout in the course of his employment.

This principle is subject to the following exceptions
1) Cases where the employer is under some statutory duty which he cannot delegate
2) Where the employer retains his control on the contractor
3) Where the contract becomes a tort such as nuisance
4) Where the rule in Ryland v Fletcher (1866) applies

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