Vicarious liability, Employer Indemnified by Employees
Court of Appeal
A father and son were employed by the same company. The son negligently handled a vehicle, causing injury to his father. The father sued the company for the negligence of the employee, his son. The company, or rather their insurance company, later succeeded in obtaining similar damages from the son. As a House of Lords case, it sets a precedent that, in certain circumstances, an employer who has been held liable and required to pay damages can be legally indemnified by his own employee. However, this rarely happens in practice and, following this case, the Association of British Insurers issued a statement saying they would not pursue employees through the courts in general, but that this was a special case. The case relates to the situation where an employee is injured as a result of the negligence of a fellow employee and the employer is held to be vicariously liable for the loss suffered as a result of that negligence. Traditionally, under the terms of his contract, an employee must be diligent and use reasonable skills while at work. This amounts to a general duty to take reasonable care while at work. These contractual duties are owed to the employer and not to any person who may be injured as a result of the breach. As a consequence, the employer may be able to sue the employee for breach of contract.
The House of Lords by a majority of 3 to 2 decided to accept the circular situation that the son had to pay the same as the employer.
A son backed an ice truck over his father. The
father could have sued his son but, instead, decided to sue his
son's employer as being vicariously liable. The employer claimed
that the father should sue the son. It was claimed (by the insurance
company suing in the employer's name) there was an implied term in
his employment that the son obey reasonable commands and use
reasonable care. A possible breach of contract by the son would
produce a circular situation if the employer were able to sue the
son for the total amount of damages paid.