Vicarious liability in Australia – fit for purpose, or fit for “akin”?

When legal liability is imposed upon one person for the misdeeds of another, even though the first person is themselves blameless, this liability is described as “vicarious liability”.  In Australia, vicarious liability arises most often when an employer is held to be liable for the torts of an employee.  Australian law has developed two “central conceptions” in relation to such cases:

  1. vicarious liability attaches to an employer but does not attach to a principal who engages in independent contractor; and
  2. to establish vicarious liability, it is necessary to show that the employee’s misdeed occurred “in the course of employment”.

Indeed, the High Court has said that these “central conceptions” are “now too deeply rooted to be pulled out”.   However, proposed legislation in New South Wales would extend the scope of vicarious liability (albeit only for “child abuse”) so that it covers not only employees, but anyone who is “akin to an employee”.  To extend statutory vicarious liability in this way might work something akin to a very significant change in the law.

The proposed legislation is the Civil Liability Amendment (Organisational Child Abuse Liability) Bill 2018, which was introduced into the NSW Parliament on 26 September 2018.  The Bill contains a number of interesting provisions, but the vicarious liability issue arises from the fact that the Bill provides that an organisation is liable for child abuse committed by an “employee”  of an organisation, which is defined to include a person “akin to an employee” of an organisation.  “Akin to an employee” is, in turn, defined (in section 6G(2) of the Bill) as follows:

“An individual is akin to an employee of an organisation if the individual carries out activities as an integral part of the activities carried on by the organisation and does so for the benefit of the organisation.”

The Second Reading Speech of the Attorney-General provides some examples of individuals who will be “akin to an employee”:

“In faith‑based organisations, this could include members of the clergy or similar, and in all organisations it could include volunteers or contractors, who are often involved in the child services sector.”

The organisation will not be vicariously liable for the torts of all contractors, because there is an express exclusion where a person’s “activities are carried out for a recognisably independent business of the individual or of another person or organisation”.  However, it is not clear that it will always be an easy thing to establish which contractors are engaged in their own “recognisably independent business” and which are not.

So, why is child abuse (which is defined in the Bill to mean “sexual abuse or physical abuse of the child but does not include an act that is lawful at the time it takes place”) so different from other torts that it justifies the statutory “pulling up” of what the High Court has found to be “deeply rooted”?  The pragmatic answer is that the Bill as a response to (and indeed, implements a number of recommendations of) the Royal Commission into Institutional Responses to Child Sexual Abuse.   One of the issues which the Royal Commission identified was that vicarious liability generally did not extend to volunteers or, in many cases, to clergy (who will often not be “employees” in the relevant sense).  The extension of vicarious liability to such persons once the Bill becomes law, will, in the words of the Second Reading Speech, “close this loophole” and provide victims of child abuse with the ability to seek legal redress from the organisation, rather than being limited to a remedy against the abuser.

However, it might reasonably be asked whether the extension of vicarious liability in the Bill should prompt a broader discussion.  It is not easy to explain why a child who was subject to child abuse by a volunteer should have a remedy against the organisation, whereas another child who is injured by a volunteer’s negligence should not be able to pursue the organisation. Nor is it easy to explain why a child who is sexually assaulted by a volunteer two days before their 18th birthday should have a remedy against the organisation when a remedy would be denied to the victim of a sexual assault which occurred after the age of majority was attained.

These questions are particularly acute given developments elsewhere. The highest court in the United Kingdom has recently said that, “the law of the vicarious liability is on the move”, and that “it has not yet come to a stop”.  Indeed, the distinction between employees and non-employees has been effectively abolished in the course of this movement, and the UK Supreme Court has said that:

“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’.”

Equally, it is important to bear in mind that obligations under work health and safety legislation will generally be broader than those arising under tort law.  An organisation which engages volunteers can be prosecuted for safety risks which arise from the way that volunteers carry out their work even where the organisation is not liable for the volunteers’ torts.

Accordingly, although the Bill will be of immediate importance to organisations which work with children, we think it would be an error to assume that this is where the importance of the Bill ceases. The Second Reading Speech described the Bill as “an historic milestone in the long path survivors are walking towards justice”, but the Bill might also be a signpost that the path of the law of vicarious liability is about to take a different turn.

For more on our employment law capabilities, contact Leonard Lozina or Angus Macinnis

For more on our dispute resolution capabilities, contact Dennis Vuaran or Angus Macinnis or Grace Hur

If you would like to get “Worth knowing” articles sent to you by email when we publish them, you can now sign up to our mailing list here

October 1
Employment Law Litigation and dispute resolution