A person harmed by a truck driver's fault, a receptionist's negligence, or a security guard's assault faces a practical question: do they claim against the employee, who may have nothing, or against the business, which has the means? Here the rule of vicarious liability intervenes, among the most frequently applied liability rules in practice and among the least known to the public. Kuwait Civil Code No. 67 of 1980 provides for it to ensure that an injured party obtains real rather than theoretical compensation. This article explains its conditions and limits.
The Basis of Liability
- The idea: a person who benefits from and directs another's activity should bear its risks, so a business reaping the fruits of its employees' work bears the harm arising from it.
- Securing means: the practical purpose is ensuring there is a responsible party able to compensate, so the injured party's right is not lost through the employee's insolvency.
- Its nature: liability for another's act founded on risk allocation, and no fault on the employer's own part is required.
- The employee remains liable: this liability does not relieve the employee of personal responsibility, and they remain jointly liable with the employer to the injured party.
- The injured party's choice: they may proceed against the employer, the employee, or both, and in practice they proceed against the employer for their means.
Conditions of Liability
- A relationship of subordination: the employer must hold actual power of supervision and direction over the employee, even if not technical direction.
- The test: actual authority governs rather than the written contract, so subordination may exist without a formal employment contract and may be absent despite one.
- Independent contractors: subordination does not ordinarily arise between an employer and an independent contractor who organises their own work, an essential distinction in construction disputes.
- The employee's fault: the employee's fault, the damage, and causation must be established, as the employer's liability is derivative.
- Fault in or by reason of the employment: the most exacting and most contested condition, addressed below.
The In or By Reason of Employment Test
This is where most of the dispute lies in these claims:
- Fault during employment: occurring in the time and place of the work and in connection with it, as with a driver colliding while delivering goods.
- Fault by reason of employment: what would not have occurred but for the employment providing the opportunity or the means, as with a bank employee exploiting access to client accounts.
- Wholly unconnected fault: where the act occurred in circumstances entirely unconnected with the employment, the employer's liability is negated, as with a driver using a vehicle for a personal journey after hours.
- Acting contrary to instructions: an employee breaching their employer's instructions does not of itself relieve the employer, as what matters is that the employment provided the opportunity.
- Intentional acts: liability may arise even for an employee's intentional act where the employment enabled its commission, as with a security guard assaulting a visitor during work.
- Partial deviation: where an employee deviates slightly from their task and damage occurs, the extent of deviation is examined, and a minor deviation does not sever the connection with the employment.
Limits and Defences
- Absence of subordination: the strongest defence, establishing that the person was an independent contractor or that direction lay with another body.
- Absence of the employee's fault: where the employee's fault is negated, the employer's liability falls with it.
- Severance from the employment: establishing that the act occurred entirely outside the scope of the work.
- External cause: force majeure, a third party's act, or the injured party's own fault.
- No exclusion by agreement: an agreement excluding the employer's liability towards an injured party carries no effect, as the rule protects third parties.
- Insurance: public liability policies ordinarily cover such claims, and their scope should be reviewed.
The Employer's Recourse
- Right of recourse: where the employer pays compensation, they may recover it from the employee, since the fault was ultimately theirs.
- Limits: recourse within the employment relationship is restricted. An employee may not be charged with the consequences of ordinary business risk, and a distinction is drawn between slight fault and gross or intentional fault.
- Deduction from wages: an employer may not deduct from wages by way of compensation save within the limits and by the procedures the labour legislation prescribes.
- Investigation first: a written investigation with the employee is required before imposing any liability, and its omission invalidates the step.
- Recommendation: regulate this in the internal rules and the employment contract in terms respecting the statutory limits.
Practical Guidance
- Injured parties should direct their claim to the business rather than the employee alone, which secures a solvent defendant.
- Document the person's capacity at the time: work uniform, vehicle and its livery, identification badge, and the time of the incident.
- Businesses should review public liability policies and confirm they cover employees' acts.
- Issue clear written instructions, train staff, and document the training, which mitigates the assessment of liability.
- Do not permit personal use of company vehicles without documented controls.
- Where an employee causes an incident, conduct a written investigation immediately, the basis of any later recourse.
Vicarious liability is what makes compensation real rather than theoretical, and its limits are defined by the connection between the act and the employment. Yamnak Law Firm advises businesses on managing employee liability risk and represents injured parties in compensation claims and businesses in defending them.
