Vicarious liability

How BC law treats it

Vicarious liability is mainly a common law doctrine. In Bazley v Curry, [1999] 2 SCR 534, the Supreme Court of Canada held an employer liable for an employee's wrong where there is a strong connection between the risk the employer created or enhanced and the wrong that occurred. The employer is liable even if it was careful in hiring and supervising. The employee remains personally liable too. The relationship must normally be employment, not an independent contract. In 671122 Ontario Ltd. v Sagaz Industries Canada Inc., 2001 SCC 59, the court asked whether the worker is in business on their own account, looking at control, ownership of tools, chance of profit and risk of loss. Labelling someone a contractor in the agreement does not decide the question. Some statutes create specific forms. Under the Motor Vehicle Act, RSBC 1996, c 318, s. 86, a vehicle owner is liable for loss caused by a driver using the vehicle with the owner's consent. Under the Partnership Act, RSBC 1996, c 348, a partnership is liable for wrongs a partner commits in the ordinary course of its business. Workplace injuries are different. The Workers Compensation Act, RSBC 2019, c 1 is a no fault insurance scheme funded by employer assessments, and s. 127 bars most lawsuits by injured workers against employers and other covered workers. It is not a vicarious liability statute.

What it means for your business

An employer can be sued for the mistakes, negligence and sometimes the deliberate wrongs of its staff, even when management did nothing wrong. That risk reaches delivery drivers, installers, sales staff and anyone dealing with customers. Commercial general liability and auto insurance should match the work staff actually do. Calling workers contractors does not shift the risk if the relationship is really employment. Clear policies, training and supervision reduce the chance of a claim and support a strong connection defence. Example: A Richmond moving company's employee damages a client's antique cabinet while unloading it. The client sues both the employee and the company, and the company is vicariously liable because the damage happened while doing the very work it assigned.

Risks and common mistakes

Assuming a contract labelling a worker an independent contractor ends the inquiry, when courts look at the real relationship. Believing an employer escapes liability by showing it hired and supervised carefully. Treating the Workers Compensation Act as a source of employer liability to injured workers, when it largely bars those lawsuits. Lending a company vehicle without checking insurance, forgetting the owner's liability under Motor Vehicle Act s. 86. Overlooking that the employee who caused the harm can also be sued personally.