What vicarious liability means
Vicarious liability makes one person answerable for another person's wrong.
The classic case is employment. Where an employee commits a tort in the course of their employment, the employer is liable to the injured party, even though the employer was not negligent and did not authorise what happened.
The justification is practical. The employer created the risk by putting the employee in that position, benefits from the work, and is generally better placed to insure against the loss and to prevent it happening again.
Two elements must be present. There must be a relationship capable of giving rise to it, which is normally employment. And the wrong must have been committed in the course of that employment rather than while the employee was, in the traditional phrase, on a frolic of their own.
The employee remains personally liable too. Vicarious liability adds a defendant rather than substituting one.
How it is used
The line between the course of employment and a personal frolic decides most cases.
A driver who causes an accident while making a delivery is acting in the course of employment. The same driver who detours thirty kilometres for a personal errand and causes an accident there is probably not.
An employee who performs their job carelessly is within the course of employment even though the employer would never have authorised carelessness. An employee who assaults a customer during a dispute arising from their duties may still be within it, because the wrong is closely connected with what they were employed to do.
For businesses, the practical management is a short list. Insure, because public liability and employer's liability cover exists for exactly this. Train and supervise, because a business that can show proper systems is in a better position. Screen for roles involving vulnerable people or valuables. Write clear policies about permitted use of vehicles and equipment. And be careful with classification, because the label on the contract does not decide it.
Key features
- Makes an employer liable for an employee's torts committed at work
- Requires no fault on the employer's part
- The wrong must be committed in the course of employment
- The employee remains personally liable as well
- Generally does not extend to independent contractors
- Principals can be liable for agents acting within their authority
How this works in Nigeria
The exposure sits with whoever the court decides is the employer, and that is where the Nigerian complication lies.
Businesses commonly engage people as consultants or through manpower companies while directing their work daily. Where a dispute arises, the National Industrial Court and the ordinary courts look at the substance of the relationship, and a business that controlled the work may be treated as the employer for these purposes, whatever the paperwork says.
That means misclassification carries more than a tax and pension consequence. It carries the risk of vicarious liability for people the business believed were somebody else's responsibility.
The independent contractor position is the general rule with exceptions. A principal is usually not liable for the torts of an independent contractor, but exceptions apply, including where the principal was negligent in selecting them, where the duty was non delegable, and where the work was inherently hazardous.
For a Nigerian business the practical protections are insurance, documented supervision and training, careful contracting with indemnities and insurance requirements from contractors, and honest classification of workers at the outset.
Drivers are the highest frequency exposure. A company vehicle involved in an accident during working hours produces exactly this claim, and the policy on personal use of company vehicles is what a defence is built on.
Employee vs independent contractor for liability
The classification decides who answers for a wrong, and the difference is substantial.
Where the person is an employee, the employer is vicariously liable for torts committed in the course of employment. The injured party sues the employer, which usually has insurance and assets, and the employer's fault is irrelevant.
Where the person is a genuine independent contractor, the principal is generally not liable. The contractor answers for their own torts. Exceptions apply, including negligent selection, non delegable duties and inherently hazardous work.
The test is not the label. Control over how the work is done, integration into the business, provision of equipment, exclusivity and the ability to send a substitute all matter, and Nigerian courts look at substance.
So a business engaging contractors should also require them to carry insurance and should take an indemnity, because a contractor with no cover and no assets leaves the injured party looking for somebody who has both.
Limits and risks
Vicarious liability applies to torts, not to every failure. It does not make an employer liable for an employee's private conduct unconnected with the work.
The course of employment test is fact sensitive, so outcomes in borderline cases are unpredictable.
It also does not remove the employee's own liability, though in practice claimants pursue the employer because that is where the money is.
An employer who is held liable may in principle seek an indemnity from the employee, but that is rarely worth pursuing.
And insurance has limits and exclusions, so a business that assumes it is covered should read the policy, particularly on use of vehicles outside working hours.
Worth knowing
Check that your insurance actually covers what your staff do, including driving company vehicles and using personal vehicles for work. Nigerian businesses discover the gap after an accident, when the exposure is theirs and the policy excludes the very situation that produced it.
Questions people ask
What is vicarious liability?
An employer's liability for wrongs committed by an employee in the course of their employment, without any fault on the employer's part. It adds the employer as a defendant rather than replacing the employee.
When is an employee acting in the course of employment?
When the wrong is closely connected with what they were employed to do, including doing the job carelessly. An employee on a personal detour unconnected with the work is generally outside it.
Is a business liable for an independent contractor?
Generally no. Exceptions apply, including where the business was negligent in selecting the contractor, where the duty was non delegable, and where the work was inherently hazardous.
Does misclassifying a worker affect liability?
Yes. Courts look at the substance of the relationship, so a business that controlled the work may be treated as the employer for these purposes even where the contract called the person a consultant or a contractor.
Does the employee remain liable too?
Yes. Vicarious liability does not remove the employee's personal liability. In practice claimants pursue the employer, because that is where the insurance and the assets usually are.
How can a business manage this exposure?
Carry appropriate liability insurance and read what it covers, train and supervise, screen for sensitive roles, write clear policies on vehicle and equipment use, and require contractors to carry their own insurance and give indemnities.