Recent developments in vicarious liability for criminal acts

By Matt McDonald

There have been several important recent judgments addressing the vexed question of when employers will be held vicariously liable for the criminal or wrongful acts of their employees. The High Court is set to hear an appeal in one of these cases, which will shed light on whether the accepted scope of employers’ vicarious liability for such acts will be expanded in certain circumstances.

Established principle

The principles for assessing vicarious liability for criminal acts were established by the High Court in Prince Alfred College Inc v ADC (2016) 258 CLR 134.

In 1962, the Plaintiff, who was then 12 years of age, was sexually abused by a housemaster at the boarding school in which he was placed. The High Court determined that the school should be held vicariously liable for the criminal conduct of the housemaster.

The High Court held that it is appropriate for an employer to be held vicariously liable where the employment provided not just the opportunity for the employee to do the wrongful act, but the actual occasion. The test is whether the employee was in a position of authority, power, and trust that allowed the employee to achieve a substantial degree of intimacy with their victim.

Criminal or negligent conduct?

Mr Schokman worked at Daydream Island and slept in staff accommodation. He was the direct supervisor of Mr Hewett, with whom he shared a room. In a drunken stupor one night, Mr Hewett awoke Mr Schokman by accidentally urinating in his face.

The incident aggravated Mr Schokman’s underlying cataplexy and narcolepsy and caused him to develop PTSD.

At first instance it was held that the Mr Hewett’s conduct was tortious (rather than criminal) but that the tort was not committed in the course of his employment. It followed that there was no vicarious liability. That judgment was reversed by the Queensland Court of Appeal which:

  • concurred with the trial judge that the conduct was tortious rather than criminal (because it was unintentional); but
  • held that the conduct occurred within the scope of Mr Hewett’s employment because the employment terms required him to stay in accommodation on the island. As Mr Hewett occupied the room as an employee, his employer was vicariously liable for his tortious actions.

The High Court has granted the employer special leave to appeal this judgment. Oral arguments were heard on 9 March 2023. Counsel representing the employer argued that allowing this decision to stand would mean that an employer’s liability would be absolute. Speaking of the offending act, Counsel said, ‘If that is vicarious liability, every interaction causing injury between employees or employees and guests on the island would constitute vicarious liability’. We will report on the High Court’s judgment when published.

Schokman v CCIG Investments Pty Ltd [2022] QCA 38

Vicarious liability for criminal acts outside the employment relationship

Vicarious liability for criminal acts will also arise in certain circumstances, even in the absence of an employment relationship, as demonstrated by a recent judgment of the Victorian Court of Appeal.

The plaintiff, referred to as ‘DP’, claimed damages for psychological injuries caused by sexual assaults committed by an assistant priest, Father Bryan Coffey, when he was a child living in Port Fairy in 1971. DP claimed that the Diocese of Ballarat should be vicariously liable for the assaults committed by Coffey.

The key issue in this case was that Coffey was not an employee of the Diocese, nor an independent contractor. However, at first instance and on appeal it was held that the Diocese was vicariously liable for Coffey’s criminal acts.

It was held that Coffey was very much a representative and conducted the work of the Diocese. His role, and the work he performed in undertaking that role, was necessarily and integrally interconnected with the fundamental work and function of the Diocese.

The Court of Appeal held that it was appropriate to hold the Diocese vicariously liable, because ‘the position of power and intimacy, invested in Coffey as an assistant priest of the parish, provided him not only with the opportunity to sexually abuse the respondent, but also the occasion for the commission of those wrongful acts.’

Bird v DP [2023] VSCA 66

The limits of vicarious liability for criminal acts

A recent judgment of the Victorian Supreme Court demonstrates that employers will not be held vicariously liable for the criminal acts of employees other than in exceptional cases.

The plaintiff was employed as an armed security guard. He was stationed in his armoured van on a job when his co-worker, in a very poorly judged prank, unholstered his weapon and held it to the plaintiff’s head.

As a result of this incident, the plaintiff developed psychiatric injuries, including post-traumatic stress disorder.

The plaintiff alleged that his employer should be held vicariously liable for his co-worker’s actions, on the basis that they issued his co-worker with a loaded gun and put them in close proximity over a long shift, which invited boredom and fatigue.

The Court ultimately held that the employer was not vicariously liable for the co-worker’s actions.

While the co-worker’s actions were certainly unlawful, they were not done as a part of his employment duties or in the interests of his employer. The employer was also not held to be responsible for actions of an employee that arise purely out of boredom.

Further, while the plaintiff’s employment put him in close proximity to his co-worker, their relationship was not one of authority and trust as contemplated in Prince Alfred College. It was emphasised that this ability to achieve intimacy is especially important in establishing vicarious liability.

Garrett v Victorian Workcover Authority [2022] VSC 623.

These cases probe the limits of vicarious liability for criminal acts (or tortious, quasi-criminal acts). It remains the case that employers will only be held vicariously liable for criminal acts in fairly exceptional circumstances. However, careful consideration should be given to the nature of the employment relationship, as well as the capacity for the employee to abuse relationships of trust because of the employment situation. Careful consideration also needs to be given to whether the act in question is a criminal or merely tortious act.

This article was written with the assistance of Lloyd Miller, Law Graduate.


Matt McDonald

Matt is an experienced insurance lawyer acting for leading insurers, specialising in public and product liability.

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