Vicarious liability and corporate negligence in organizational misconduct

Vicarious Liability Case

This present study is a vicarious liability case assignment and it is divided into two primary sections. The first section aims at distinguishing between corporate criminal liability and tort law vicarious liability resulting from the negligence of a health care organization's employee. The second section defines and discusses apparent agency and then states the impact status of the agent/employee vs. independent contractor has on analysis of liability.

Corporate criminal liability vs. vicarious liability

Corporate criminal liability falls under criminal law which defines the extent to which a company or a corporate that exists as a legal person can be held liable for the omissions or acts of an employee working for it. Crime punishable by corporate criminal liability can be defined as a breach of public right and duties which affect the whole community. The doctrine of vicarious liability is entrenched in law of torts and it states that an employer who gives consent to a tort will become personally liable for any harm or damage that result from tort of another person who was authorized to do a certain task for the employer. Vicarious liability is imposed on tort which is defined as an infringement of the civil rights belonging to the people. In tort the action is brought in the court by the victim of the tort and the wrong doer has to compensate him while in corporate criminal cases the proceedings are conducted by the state counsel and when the accused if found guilty he/she is punished accordingly. Corporate criminal liability can be presumed to be tool for regulating corporations while vicarious liability can be presumed a tool for making the employer accountable for the actions of his or her employees (Geraghty, 2002, and Laski, 2006).

As compared to vicarious liability, corporate criminal liability is difficult to prove as the law requires that some concrete element of fault, which can be knowledge of the relevant circumstances by the employee, recklessness which could have resulted in an offence or clear intentions to commit an offence. Hence corporations only become liable when the knowledge, omissions and acts of its employees can be attributed to the company itself, this can be ascertained through alter ego test, directing mind and identification tests that can show an employee has sufficient status to be assumed as the company when carrying out his roles and responsibilities. On the other hand vicarious liability doesn't require proof that the accused could have known that the act he/she was committing was wrong and furthermore it doesn't recognize anything like reasonable mistake or any excuse of honest mistake. And hence the reason why most cases which are less serious are imposed vicarious liability charges rather than corporate criminal liability (Geraghty, 2002, and Laski, 2006).

In the case whereby an employee of a health care organization acts in a negligent manner it would be difficult to hold the company liable under corporate criminal liability since negligence is considered as an accident hence the employee couldn't have had clear intentions to commit the accident neither could he have prior knowledge of the relevant circumstances of the accident. However the health care organization will be imposed a vicarious liability since the healthcare organization can't use the defence that the employee couldn't have known that his/her actions were wrong and again the court won't recognize that the act committed was out of negligence, reasonable mistake or an honest mistake.

Apparent agency

Sealy and Hooley (p 45, 2009) in their studies defined apparent or ostensible authority of an agent as an employee who has been placed in a position of responsibility and may be assumed to have such authority as normally matches with the position irrespective of his actual authority. For example in a case where a manager of a hotel was expressly instructed by his employer to order all hotel requirements and in a breach to these instructions he ordered some cigars and other goods from the plaintiff. It was held that the owner of the hotel was bound by the manager's acts because it matched with his position.

Also under apparent agency if a principal conducts himself leading another to believe that someone is his agent he is then stopped from denying this fact. For example if a person allows another to order goods on his behalf and always pay for them he will be stopped from denying the authority to a third person who relied on the appearance of the aforesaid agent (Wells, 1993).