Contracts that Place the Employee in Danger
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"Contracting Out" of Liability by a Goods • or Passenger , Operator May. Place an Employee in the Position of being Sued
by Our Legal Adviser
WHEN a person suffers injury at the hands, and through the negligence, of another person, in the employ of a third person and acting in the course of his employment, then it is well known that the 'employer is liable. This is the normal example of what is called " vicarious liability " and is in complete accord with common sense, for in such a case the act of the servant is the act of the master as much as if the latter was himself in control of the vehicle or machine that caused the damage.
Wherever this vicarious liability exists, however, it should, be remembered that the employee whose fault gave rise to it is himself equally liable with his master, and the victim can—and generally does, for safety's sake—join both as defendants in any action which he may 'bring to recover damages.
Generally, however, it will be obvious that for the satisfaction of any damages which he may be awarded the victim looks to the employer, whether this be an individual or a firm or a limited company. This is for the obvious reason that in most cases the employee responsible will be financially unable to make amends.
This is not a theoretical, but a practical, objection, as is evidenced by the recent case of the company awarded damages of £9,000 against its own employee, discussed in The Commercial Motor on June 11.
,Employee Solely Liable An even more recent case has drawn attention to the possibility of the employee alone being liable—not because he was not acting in the course of his employment, which has always been the case, but because his employers "contracted out" of their liability. The case—Adler v. Dickson, reported in The Times on July 31—arose out of an accident to a passenger -on a cruise liner, but that fact should not blind one to the realization that the principle involved is of far wider application and could occur in any field of transport.
The passenger had been issued with a ticket on which were printed the conditions of carriage. The whole aspect of " conditions " sought to be introduced into such contracts by one party is a complete branch of the law in itself, but suffice it to say here that the shipping company had introduced a condition that passengers were carried entirely at their own risk and that "the company shall be exempt from all liability in respect of any injury to any passenger .. . whether the same shall be occasioned by the negligence of the company's servants. . ."
It appeared that the plaintiffs legal advisers considered that these words succeeded in exempting the shipping company from all liability, although, as I have pointed out before, the courts' view such exempting clauses with marked hostility and will stretch a point in the plaintiffs favour if they can.
However, they proceeded to sue the two employees whose alleged negligence had caused the accident: the ship's master and boatswain, neither of whom need necessarily have been "men of straw." A preliminary question of law as to whether the words of the exempting condition in the contract of carriage were sufficient to cover not only the company but also its employees was decided in the negative by Mr. Justice Pilcher.
It may be of importance to recall that it was held in the House of Lords, as long ago as 1924, that agents "concerned in the carriage of goods on behalf of a principal are entitled, in appropriate circumstances, to claim the benefits of exemption clauses in the contract of carriage between their principal and the owner of the goods.
A Free Pass
On the other hand, there was a case in 1944. in which the London Passenger Transport Board, in issuing a free pass, had specifically provided that when not travelling on their business, "neither the company nor their servant would be liable" for injuries to the holder of the pass. Nevertheless, the plaintiff was held entitled to recover against a servant of the Board for his negligence on the ground that the term of the contract quoted above could not be invoked for the benefit of the servant as he was not a party to the contract.
In the present case, the judge held that there was no authority which prevented him from saying that the exemption clause could not apply to the company's servants. The case mentioned in relation to the carriage of goods was distinguishable as, here, one was dealing with an instance of personal injuries and not agency, which has particular mutual rights and obligations of
• its own.
If the company had desired to extend the exemption clause so that their employees could take advantage of its protection, they would have to make it quite clear to the other party that they were contracting in those terms on their own behalf and as the agent for their employees.
An Alternative Target
This decision—if not taken to appeal or subsequently overruled—may have a wide effect. " Exempting " clauses are, of course, common in all forms of contract for the carriage of goods or passengers. Although it may not be worthwhile for an injured person to take a judgment against a man earning £7 to £8 a week, there is nothing to prevent his doing so if he cannot reach the employers.
Moreover, if careful inquiries reveal that the employee does possess a little property or savings of his own, or if the employee happens to be a senior executive with a more secure financial position, no victim is likely to hold his hand.
It is a serious point for consideration by employers, whether they do not owe it to their employees, if they are seeking to limit their own liability, to extend that cover to them also. That it can be done with proper phraseology is undoubted.