VICARIOUS LIABILITY AND THE MASTER'S INDEMNITY

DOIhttp://doi.org/10.1111/j.1468-2230.1957.tb00440.x
AuthorGlanville Williams
Date01 May 1957
Published date01 May 1957
VICARIOUS LIABILITY AND
THE
MASTER’S
INDEMNITY
TEE
decision of the House of
Lords
in
Lister
v.
Romford
Ice
and
Cold
Stwage
Co.,
Ltd.l
settles the rule that when
a
master
is
made
vicariously liable for the fault of
his
servant, he can claim an in-
demnity against the servant, except, perhaps, in the field covered by
the scheme
of
compdsory third-party insurance. The consequences
of
this decision are likely
to
be
far-reaching, and they hold possi-
bilities of great hardship for employees. Crushing liability
in
tort
or
contract may
be
of
small
&niiicance
to
the very low-paid worker,
for
his
poverty protects
him.
But when,
as
is
now
the case, the
class
of employed people includes the highly paid managers
of
in-
dustry
as
well
as
a
host of professional persons and
skilled
artisans,
nearly
all
of whom spend their lives
accumulating
a
little property,
by way of savings and endowment policies, against their old age,
the enforcement of the employer’s right
of
indemnity is likely to
cause
a
devastation of individual fortunes and
a
frustration
of
hopes
on
a
scale that can hardly fail to cause concern.
If
the master wishes to assert
his
right of indemnity, he
will
generally do
80
in the injured party’s action, bringing
in
the servant
by
a
third-party notice
if
the servant is not already joined
as
co-
defendant. The advantage of this course is that the servant becomes
bound by the judgment in the action, and cannot raise anew the
issue
of
his
negligence.
If
the master settles the injured party’s
claim
out of court,
and
then sues
his
servant for
an
idemnity, he
runs
the risk
of
failing
to
make out negligence
in
the servant.* The
effect is likely to be
that
the master,
or
an
insurance company
defending the claim
on
his behalf, will be less willing to settle out
of
court. Unless the servant’s negligence
or
other tort
is
clear,
or
the servant admits liability, it may pay the master to put the
injured party
to
proof, knowing that the servant will have to
reimburse the costs
as
well
as
the damages.
The seriousness of the position for the servant is increased by
the fact that the decision to sue
him
is not necessarily
in
the em-
ployer’s hands.
In
Lister’s
case, the employer who had been made
liable
in
damages had had those damages paid for
him
by
an in-
surance company.
It
was this company that, claiming
to
be
1
C196.71
2
W.L.R.
168.
1
The master can give evidence of the amount of the settlement, and
support
it
by showing that
it
was a reasonable settlement; if this evidence is accepted,
the master may be allowed the amount of the settlement, plus costs,
as
the
measure
of
his indemnity a ainst the servant. See
Biggin
(e
Co.,
Ltd.
v.
Pemnite,
Ltd.
[1961]
2
$fB. 314
(C.A.).
But the issue of the servant’s
negligence
is
still at large between the parties, and
if
it is held that the
servant wm not negligent, the claim for an indemnity must fail.
220
Mar
1957
VICARIOUS
LLhBILMY
AND
MUTEB’S
INDEMNITY
221
subrogated
to
the employer’s rights, successfully sued the servant
in
the
employer’s name, though
against
his
wishes.
It
follows
that
the
friendliest
relation between the
employer
and
his
staff
can
now
be
disrupted,
and
the employee impoverished,
by
the
action
of
an
insurance
company,
which
finds itself
in
the happy
position
o€
having received premiums
for
a
risk
that
it
does not have
to
bear.
Where the
injured
p8pty’s
action
is
tried
by
d,
it
may
be
important for
counsel
for
the servant
to
inform
the jury
of
the
muter’s
right
of
indemnity.
It
is
notorious
that juries
will
give
damages
against
a
large
concern
when they
would
not give
damages
against
the individual
servant,
Unless
the
jury
are
made aware
d
the
new
rde, they
may
place a
liability
upon
the
servant
which
they
never
intended
On
the
other
hd,
if
the
new
rule
causes
a
jury
(and
perhaps
even
a
judge)
to
be
more
reluctant
to
find
for
a
plaintiff,
it
may
bring
about
a
subtle change
in
the
administration
of
the
law
of
tort.
These e~nsequmce~ may
be
avoided
if
insurance companies
make
a
practice
of
not
en€or&g
their
rights,
or
if
new
standard
tesmg
are
worked
out in insurance
policies
to
exclude
recourse
against
servants,
or
if,
throngh
the exercise
of
pram
by
trade
Unions
axad
pro€essiond
bodies,
a
new
term
is
included
in
conhaets
of
-ploy-
ment,
or
if
i%
becomes
the
pactice
of
employees
to
insure themselves
(a
gratifying
prospect
far
the
hsurance
oompanieo,
who
will
thus
be
able
to
insure
risks
twice
over),
or
finally
if
legislation
is
in-
duced
k~
reverse
the
practical
effect
of
Lhter’s
ease.
It
is
the object
d
this
article
to
consider
some
of
the
thmretical deraticurs
and
ultimate
questions
of
d
policy
which
are
involved in
the
decision
as
it
stands.
HISTORY
OF
TEE
RULE
The doctrine
of
vicarious
liability
in
tort
is
more
than
250
yervs
da;
yet
the
qnwtirm
whether
the
servant
is
liable
to
indemnify
the
master
has
not
directly
come
k€m
the
courts
anti1
cornpar&
tkly
meexat
times.
The
reason
i9
mt
to’behmd
h
the
her
de against
cont~3~tkm
between
Weascrrs,
became
even
at
cornmom
law
there
was
an
exception
fmm
~s
rule
where
one
4
the tortfeams
was
marally
hent,
in
&eh
case
he
was
dhved
to
mver
aa
indemnity
&om
the
other.s
A
pmetiad
rcam
was,
no
rhubt, the
gend
poverty
of
eervanb,
which
made the
right.
of
remume,
a~mmxing
that
it
&&ed,
am
rmprofitable
me.
At
the
gmesemt
day
a
servant
is
inore
Gbly
to
have
eambgs
or
savings
which
make
him
worth suing, pdcularly
smoe
the
extension
of
the class
of
servmts
m
quasi-servants to include professional men
like
surgeons.
Also,
it
may be
important
to
establish
the
servant’s
liability
as
a
step
hmds
diaking
against
am
insunrnce
oompamy*
a
The
rnle
is
uwelly
&tribnted
to
Adamson
v.
Jar&
(1827)
4
Bing.
66,
but
M
much
e~rlisr.

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