Article 2.4.8 Vicarious Liability

(a) Scope and Purpose:

This Article addresses the circumstances in which one party may be held liable for tortious acts committed by another due to a relationship of employment, agency, or functional control. It aims to ensure fair redress for claimants harmed by persons acting on behalf of others while preserving accountability and predictability in employer-employee and principal-agent relationships.

(b) Employer Liability:

(i) An employer may be held vicariously liable for torts committed by an employee where:

(ii) The tort was committed in the course of the employee’s employment; and

(iii) The conduct was sufficiently connected to authorised work duties so as to justify the imposition of liability on the employer.

(iv) Liability may still arise even where the employee acted contrary to instructions, provided the wrongful act was not wholly independent of the employment relationship. In determining whether a tort was committed in the course of employment, the ICT Court may apply a "close connection" test, examining whether the wrongful act was so closely connected with authorised duties that it would be fair and just to impose liability.

(v) In determining whether an act was committed in the course of employment, the ICT Court may consider:

(vi) Whether the act was authorised or incidental to authorised duties;

(vii) Whether the act served the employer’s purposes;

(viii) Whether the act occurred within authorised times and locations;

(ix) Whether the conduct involved a personal frolic or was so unrelated as to fall outside the scope of employment.

(c) Agents, Contractors, and Functional Control:

(i) Vicarious liability may also extend to:

(ii) Agents acting under express or implied authority of the principal; and

(iii) Independent contractors where the principal or employer exercises close control over the manner and means of the contractor’s work, or where the activity involves a non-delegable duty of care.

(iv) Factors to be considered include the degree of supervision, integration into the business of the employer or principal, and the nature of the activity giving rise to harm.

(d) Liability for Delegated Activities:

Where an entity contracts or delegates a function involving inherent risks to public safety or known high-risk operations (e.g. security, transport, digital infrastructure maintenance), it may remain vicariously liable where:

(i) The harm was foreseeable in light of the delegated activity; and

(ii) The defendant failed to take reasonable steps to ensure competence, training, or risk management by the delegated party.

(e) No Displacement of Primary Liability:

Vicarious liability does not absolve the individual wrongdoer of personal responsibility. Both the primary actor and the vicariously liable party may be jointly and severally liable, subject to the ICT Court’s allocation of responsibility and remedies.

(f) ICT Context and Operator Relationships:

Where vicarious liability arises within a layered or decentralised ICT governance structure:

(i) Liability of the Operator or Operator-authorised body may arise only where it exercises direct control or direction over the tortious conduct;

(ii) The mere grant of a permit, sandbox designation, or regulatory exemption by the Operator shall not of itself create vicarious liability, unless the Operator exercised direct control over the conduct giving rise to harm;

(iii) The ICT Court may consider the principles of autonomy, subsidiarity, and contractual allocation of risk when determining vicarious responsibility; and

(iv) Where tortious harm is caused by digital systems, AI agents, or autonomous infrastructure under the operational control or instruction of a person or entity, vicarious liability may arise consistent with principles applicable to human agents, having regard to foreseeability, oversight, and the role of the system in performing authorised functions.

(g) Non-Delegable Duties:

(i) Certain duties of care cannot be transferred or outsourced to others. These are known as non-delegable duties, meaning the party with primary responsibility remains legally accountable even if another person or company performs the task. Such duties may arise where:

(ii) The claimant is especially vulnerable or reliant on the defendant for protection such as patients in hospitals, children in schools, or residents in managed facilities;

(iii) The activity involves an inherent or significant risk of serious harm such as handling hazardous materials, operating large-scale infrastructure, or managing complex digital systems;

(iv) Decisions of ICT Courts or public interest or regulatory principles embedded in this ICT Code require the duty to remain with a particular person or entity.

(v) In such cases, liability may attach to the person or organisation with operational oversight, even if the harmful act was carried out by someone else (such as a contractor or agent).

(h) Remedies and Contribution:

The ICT Court may apportion damages between the vicariously liable party and the primary wrongdoer in accordance with principles of fairness and proportionality. It may also grant indemnities or contribution rights between responsible parties based on their respective roles in the tortious conduct. Where commercially reasonable, the ICT Court may recognise contractual indemnities or liability insurance arrangements as mechanisms for managing vicarious liability within ICT business structures.