Security companies, vicarious liability and joint wrongdoers

The May 2021 Supreme Court of Appeal judgment is a useful reminder that liability in a delictual claim based on vicarious liability is a form of liability which is imposed upon one person for the wrongful and unlawful conduct of another. It is, in essence, a strict liability.  The liability arises through no fault of the person held liable.

It is imposed by law on the basis of the nature of the relationship between the actual wrongdoer and the person held liable.

In a particular case, whether the law requires liability to be imposed is a matter informed by legal and public policy and the values that underpin the operation of the law.

Because vicarious liability is, at least insofar as the party liable is concerned, not fault-based the imposition of liability on that person does not involve the attribution of fault.

The intention to commit unlawful conduct on the part of the primary wrongdoer, for example usually an employee, is not attributable to the party secondarily liable person (that is the employer).

In this case the defendant was a security company liable in contract to its clients, a number of banks, for monies in it its custody and lost as a result of robbery perpetrated by an employee of the claimant acting in concert with employees of the defendant third party.

The claimant was entitled to institute a delictual action against the employer of those defendant third party robbers and any member of the gang of robbers.

The delict is committed against the claimant which was without fault and could not be both a person robbed and at the same liable in delict for the actions of their robber employee as against the party from whom they seek to recover.

The claimant might have a liability to its clients in contract whose property was lost as a result of the robbery and which harm was suffered in consequence of the conduct of the claimant’s employees and the third party’s employees. But it is not vicariously liable to itself.

The conduct of the claimant’s employees could not be attributed to the claimant in order to enable the third party defendant to resist the delictual claim.

First published by Financial Institutions Legal Snapshot