Vicarious liability – the doctrine that if an employee is negligent, their employer is liable – has been discussed often on this blog – see https://emergencylaw.wordpress.com/?s=vicarious+liability.  I have consistently argued that even though the doctrine has its genesis in employment law there is every reason to think that it would extend to ensure that organisations that use volunteers are vicariously liable for the negligence of those volunteers (see Vicarious liability for volunteers (April 23, 2018)).  That argument has been given further strength by the decision of Schmidt AJ in Plaintiff A and B v Bird; Plaintiff C v Bird; Plaintiff D v Bird [2020] NSWSC 1379 (and thank you Bill Madden of Bill Maddens WordPress for drawing this case to my attention).

The case was about claims for compensation by two children and their mothers, arising from allegations of abuse by a minority shareholder of a company which operated a childcare centre.  An issue arose whether the defendant, Mr Bird, was an employee or volunteer with the relevant childcare centre. The court found that he was an employee, but Her Honour said she would have found the centre vicariously liable if Mr Bird had been a volunteer. She said (at [418]-[425]):

If Mr Bird was not an employee

Contrary to the defence case I have concluded that the evidence does establish that in reality Mr Bird was an employee, even though he was not paid wages for his work and was represented to be a volunteer.

If I had not reached this conclusion I can see no reason, in principle, why there should not have been vicarious liability for his acts …

A case like this does not appear previously to have arisen for consideration in Australia, as it has in the UK. There in Cox v Ministry of Justice [2016] UKSC 10 the advent and principles of a “modern theory of vicarious liability” which extends beyond the strict relationship of employment was explained …

Those principles are concerned with harm done by an individual who carries on activities as an integral part of a business and for its benefit, rather than as part of the conduct of a recognisably independent business of his own, or of a third party, where the commission of the wrongful act is a risk created by the assigned activities.

Thus in DSN v Blackpool Football Club Ltd [2020] EWHC 595 (QB) the application of those principles resulted in the Club being vicariously liable for abuse committed by an unpaid volunteer.

These principles … demonstrate how the common law develops, when new situations arise for consideration.

I consider that application of the Australian principles to the facts I have found, would permit the conclusion that Little Pigeon was vicariously liable for Mr Bird’s acts, even if he provided his services to Little Pigeon as a volunteer, rather than as an employee.

But it is not necessary to decide the case on that basis.

As noted, Her Honour relied on the UK decision in Cox v Ministry of Justice. In that case, (heard in the UK Supreme Court which replaced the Judicial Committee of the House of Lords and is now the ultimate court of appeal in the UK, the equivalent of the High Court of Australia) LordReed (with whom Lord Neuberger, Lady Hale, Lord Dyson and Lord Toulson agreed) said this about vicarious liability (at [15]-[30] emphasis added and references omitted):

Vicarious liability in tort is imposed upon a person in respect of the act or omission of another individual, because of his relationship with that individual, and the connection between that relationship and the act or omission in question. … [T]he relationship is classically one of employment, and the connection is that the employee committed the act or omission in the course of his employment: that is to say, within the field of activities assigned to him, … [or] in the course of his job, considered broadly…

It has however long been recognised that a relationship can give rise to vicarious liability even in the absence of a contract of employment. …

The general approach to be adopted in deciding whether a relationship other than one of employment can give rise to vicarious liability, subject to there being a sufficient connection between that relationship and the tort in question, was explained by this court in the Christian Brothers case, in a judgment given by Lord Phillips with which the other members of the court agreed. That judgment was intended to bring greater clarity to an area of the law which had been unsettled by a number of recent decisions…

The case concerned the question whether the Institute of the Brothers of the Christian Schools, an international unincorporated association whose mission was to provide children with a Christian education, was vicariously liable for the sexual abuse of children by members of the institute…

At para 35 of his judgment, Lord Phillips stated:

“The relationship that gives rise to vicarious liability is in the vast majority of cases that of employer and employee under a contract of employment. The employer will be vicariously liable when the employee commits a tort in the course of his employment. There is no difficulty in identifying a number of policy reasons that usually make it fair, just and reasonable to impose vicarious liability on the employer when these criteria are satisfied: (i) the employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability; (ii) the tort will have been committed as a result of activity being taken by the employee on behalf of the employer; (iii) the employee’s activity is likely to be part of the business activity of the employer; (iv) the employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employee; (v) the employee will, to a greater or lesser degree, have been under the control of the employer.”

At para 47, he added:

“At para 35 above, I have identified those incidents of the relationship between employer and employee that make it fair, just and reasonable to impose vicarious liability on a defendant. Where the defendant and the tortfeasor are not bound by a contract of employment, but their relationship has the same incidents, that relationship can properly give rise to vicarious liability on the ground that it is ‘akin to that between an employer and an employee’.”

The five factors which Lord Phillips mentioned in para 35 are not all equally significant. The first – that the defendant is more likely than the tortfeasor to have the means to compensate the victim, and can be expected to have insured against vicarious liability – did not feature in the remainder of the judgment, and is unlikely to be of independent significance in most cases. It is, of course, true that where an individual is employed under a contract of employment, his employer is likely to have a deeper pocket, and can in any event be expected to have insured against vicarious liability. Neither of these, however, is a principled justification for imposing vicarious liability. The mere possession of wealth is not in itself any ground for imposing liability. As for insurance, employers insure themselves because they are liable: they are not liable because they have insured themselves. On the other hand, given the infinite variety of circumstances in which the question of vicarious liability might arise, it cannot be ruled out that there might be circumstances in which the absence or unavailability of insurance, or other means of meeting a potential liability, might be a relevant consideration.

The fifth of the factors – that the tortfeasor will, to a greater or lesser degree, have been under the control of the defendant – no longer has the significance that it was sometimes considered to have in the past, as Lord Phillips immediately made clear. As he explained at para 36, the ability to direct how an individual did his work was sometimes regarded as an important test of the existence of a relationship of master and servant, and came to be treated at times as the test for the imposition of vicarious liability. But it is not realistic in modern life to look for a right to direct how an employee should perform his duties as a necessary element in the relationship between employer and employee; nor indeed was it in times gone by, if one thinks for example of the degree of control which the owner of a ship could have exercised over the master while the ship was at sea. Accordingly, as Lord Phillips stated, the significance of control is that the defendant can direct what the tortfeasor does, not how he does it. So understood, it is a factor which is unlikely to be of independent significance in most cases. On the other hand, the absence of even that vestigial degree of control would be liable to negative the imposition of vicarious liability.

The remaining factors listed by Lord Phillips were that (1) the tort will have been committed as a result of activity being taken by the tortfeasor on behalf of the defendant, (2) the tortfeasor’s activity is likely to be part of the business activity of the defendant, and (3) the defendant, by employing the tortfeasor to carry on the activity, will have created the risk of the tort committed by the tortfeasor.

These three factors are inter-related… The essential idea is that the defendant should be liable for torts that may fairly be regarded as risks of his business activities, whether they are committed for the purpose of furthering those activities or not. This idea … was reaffirmed in the cases of Lister and Dubai Aluminium. In the latter case, Lord Nicholls of Birkenhead said at para 21:

“The underlying legal policy is based on the recognition that carrying on a business enterprise necessarily involves risks to others. It involves the risk that others will be harmed by wrongful acts committed by the agents through whom the business is carried on. When those risks ripen into loss, it is just that the business should be responsible for compensating the person who has been wronged.”

Lord Phillips’s analysis in the Christian Brothers case wove together these related ideas so as to develop a modern theory of vicarious liability. The result of this approach is that a relationship other than one of employment is in principle capable of giving rise to vicarious liability where harm is wrongfully done by an individual who carries on activities as an integral part of the business activities carried on by a defendant and for its benefit (rather than his activities being entirely attributable to the conduct of a recognisably independent business of his own or of a third party), and where the commission of the wrongful act is a risk created by the defendant by assigning those activities to the individual in question…

It is also important not to be misled by a narrow focus on semantics: for example, by words such as “business”, “benefit”, and “enterprise”. The defendant need not be carrying on activities of a commercial nature: that is apparent not only from the cases of E and the Christian Brothers, but also from the long-established application of vicarious liability to public authorities and hospitals. It need not therefore be a business or enterprise in any ordinary sense. Nor need the benefit which it derives from the tortfeasor’s activities take the form of a profit. It is sufficient that there is a defendant which is carrying on activities in the furtherance of its own interests. The individual for whose conduct it may be vicariously liable must carry on activities assigned to him by the defendant as an integral part of its operation and for its benefit. The defendant must, by assigning those activities to him, have created a risk of his committing the tort. …

Discussion

If we consider volunteers, particularly volunteers in the various state operated ambulance, fire and emergency services, they are not employees. But they are engaged and trained by the service in accordance with the service policies and procedures. They are tasked by the relevant service.  When a call is made to triple zero or 132 555 the request is for assistance by the service and the volunteers enable the service to meet that request.

The volunteer responds and conducts ‘activities as an integral part of the business activities carried on by [their service] and for its benefit’ that is to allow the service to meet its statutory obligations and provide the service it is established to provide. The volunteer’s activities are not ‘entirely attributable to the conduct of [their own] recognisably independent business’.  The fact that the service is not being provided ‘for profit’ is irrelevant, the volunteers are still conducting the ‘business’ of their ambulance, fire or emergency service. The volunteer stands in the relevant relationship with the agency such that the agency will be vicariously liable for the negligence of the volunteer.

The comment by Lord Reed that ‘[a]s for insurance, employers insure themselves because they are liable: they are not liable because they have insured themselves’ is also an important reminder. People tell volunteers ‘if you do the right thing, you’ll be covered by the agencies insurance’ but that is not correct. It is the agency that is insured because it is the agency that is liable. If the volunteer is negligent the agency is liable. If the agency has relevant insurance, they can look to that insurance to meet the liability. If they do not have relevant insurance it does not mean the volunteer (or employee) has to wear the liability, it means the agency has to meet the liability from its operational budget or other reserves rather that from insurance. The presence or absence of insurance, or the terms of insurance, do not determine whether an agency is vicariously liable for its volunteers or staff.

Statute law

Apart from the developing common law, many jurisdictions have provided volunteer protection to ensure that volunteers are not personally liable for their mistakes, but the organisation for which they volunteer is – see Civil Law (Wrongs) Act 2002 (ACT) s 9; Personal Injuries (Liabilities and Damages) Act 2003 (NT) s 7; Civil Liability Act 2002 (Tas) s 48; Wrongs Act 1958 (Vic) s 37; Country Fire Authority Act 1958 (Vic) s 92; Victoria State Emergency Service Act 2005 (Vic) s 42; Volunteers And Food And Other Donors (Protection From Liability) Act 2002 (WA) s 7 and Commonwealth Volunteers Protection Act 2003 (Cth) s 7.

Conclusion

The decision in Cox v Ministry of Justice [2016] UKSC 10 developed the justification for vicarious liability. The court’s reasoning is consistent with those of Australian decisions such as Hollis v Vabu (2001) 207 CLR 21 (see the discussion in Trying – again – to put to bed a myth about vicariously liability (November 30, 2019)).  Her Honour, Schmidt AJ relied on the decision in Cox to confirm that in her opinion that vicariously liability would also extend to Mr Bird even if he were a volunteer not an employee.

The developing case law comes as no surprise and is consistent with arguments I have been making since at least 1999 (see Michael Eburn, Emergency Law (1st ed, Federation Press 1999) p. 16).

Volunteers should not be in any doubt that if there is an allegation of negligence in the course of their duties, it is the agency that they volunteer for that will be liable.