B. Vicarious Liability

• Library: The South Carolina Law of Torts (SCBar) (2023 Ed.)

B. Vicarious Liability

Vicarious liability means that one person (A), who has not committed a tort, is liable to a victim (B) for the tort of another person (C). A's liability to B is premised on C's having committed the tort. Consequently, the issues that would be relevant to a tort action between B and C will also be relevant to the action between B and A. For example, if B sues A for C's negligence, B must prove that C was negligent and that this negligence proximately caused B's injury. In addition, the suit of B v. A will involve new issues concerning whether A is vicariously liable for C's tort. This section addresses these additional issues.

Situations involving the vicarious liability of A should be distinguished from situations where a person like A has committed a wrong and as a result of A's wrong, C injures B. For example, if A is an employer who negligently selects or supervises his employee C and C injures B as a result, A is liable to B for negligent hiring or supervision.⁷⁵ However, even though C caused B's injury, A's liability is referred to as primary liability because it is based on A's own wrong in hiring and supervising; vicarious liability for the wrongs of another is not necessarily involved. This is an important qualification for two reasons. First a plaintiff may press a claim for negligent hiring, training, supervision, or entrustment even if the employer admits vicarious liability.⁷⁶ Second, there are numerous situations where a person owes third persons an obligation to use due care either to protect those persons from some types of harm in general or to protect them from a particular person.⁷⁷

Vicarious liability can also serve as a defense. For example, if a negligent motorist hits a truck driven by a servant, the master (who is also the owner of the truck) would be barred from suing the motorist for injuries to the truck if the servant was contributorily negligent.⁷⁸

Vicarious liability does not eliminate the primary liability of the tortfeasor. Thus, in the situations discussed above, C is normally liable for B's injury even if A is vicariously liable.⁷⁹ However, they are a special class of jointly liable parties because: (1) the judgment against A for compensatory damages⁸⁰ cannot exceed the judgment against C;⁸¹ (2) A has a right of indemnity against C;⁸² and (3) a release of an agent tortfeasor automatically releases a vicariously liable principal.⁸³

Vicarious liability is imposed in a wide variety of situations, and there is no central unifying scheme for organizing this variety. Perhaps the most important situation involving vicarious liability is the master-servant relationship, and this topic will be addressed in the general context of agency-principal relationships in the next subsection. The second subsection will briefly address other situations involving vicarious liability. The final two subsections discuss punitive damages and equitable relief.

1. Agent-Principal Relationships

a. Terminology

Before discussing the doctrine applicable to agent-principal relationships, some terminological distinctions are necessary. Traditionally, the agency relationship is viewed in the following terms:

(1) Agency is the fiduciary relation which results from the manifestation of consent by one person to another that the other shall act on his behalf and subject to his control, and consent by the other so to act.
(2) The one for whom action is to be taken is the principal.
(3) The one who is to act is the agent.⁸⁴

Further distinctions are made in terms of defining a master, a servant, and an independent contractor.

(1) A master is a principal who employs an agent to perform service in his affairs and who controls or has the right to control the physical conduct of the other in the performance of the service.
(2) A servant is an agent employed by a master to perform service in his affairs whose physical conduct in the performance of the service is controlled or is subject to the right to control by the master.
(3) An independent contractor is a person who contracts with another to do something for him but who is not controlled by the other nor subject to the other's right to control with respect to his physical conduct in the performance of the undertaking. He may or may not be an agent.⁸⁵

Most South Carolina cases generally follow these terminological distinctions.⁸⁶

There are, however, a number of cases that take the view that an independent contractor is not an agent. The difference between the two lines of cases is only terminological, however. All the cases agree that a servant cannot be an independent contractor. In those cases which state that an agent cannot be an independent contractor, "agent" is treated as the equivalent of servant.⁸⁷

b. Basic Doctrine

With these definitions in mind it is possible to summarize the rules concerning the vicarious liability of a principal for the torts of his agent:⁸⁸

First, a master is liable for the tort of his servant if the tort is committed within the scope of his employment.
Second, a principal is not vicariously liable for the tort of an independent contractor, regardless of whether the independent contractor is an agent, unless one of several exceptions is applicable.

The person seeking to take advantage of vicarious liability doctrine may sue only the master or both the master and servant and has the burden of proving that the facts support the application of vicarious liability.⁸⁹ However, once a prima facie case of master-servant relationship is established, then the one claiming that an independent contractor relationship was involved bears the burden of going forward with the evidence and perhaps even the burden of proving that relationship.⁹⁰ In terms of pleading, the South Carolina focus is on whether the party to be held vicariously liable is on notice that such would be the basis of his liability.⁹¹

c. Policy Basis of Doctrine

The doctrine imposing liability on the master is often referred to by the Latin phrase respondeat superior. Literally translated, the phrase means "let the superior make answer."⁹² Roughly translated, the phrase can be viewed as a Latin equivalent of: "Let's speak to the boss; he is the one who is responsible because his agents are just the hired help."

This latter phrasing of respondeat superior is useful because its focus on responsibility makes us aware that the rule imposing vicarious liability on a master for the action of his servant is based on policy. In Sams v. Arthur,⁹³ the South Carolina Supreme Court emphasized that respondeat superior is based on public policy and stated:

The reason which has supported the principle of respondeat superior, based upon the judicial interpretation and declaration of public policy, is that the principal, selecting his agent and directing the manner in which he shall execute the agency, should, in justice to third persons with whom the agent may deal, and who are not responsible either for his selection or conduct, be held liable for his torts.

The South Carolina Supreme Court has not indicated in detail what "public policy" or requirement of justice is involved. Nevertheless, it seems clear that several different concerns are involved.⁹⁴

First, there is the desire to allocate the costs of accidents fairly.⁹⁵ If a principal not only selects an agent to act for him but also reserves substantial power to control the agent, then the principal has gained a considerable benefit in terms of his ability to accomplish his goals. Having gained the advantages of controlling and acting through servants, it is fair to hold the principal liable for a servant's misconduct where that conduct harms an innocent third party. In other words, the torts of a servant are more fairly viewed as a cost of the master's undertaking than as a cost of life to be borne by innocent victims.⁹⁶

This general concern with fairness is made clear in many of the earliest cases. For example, in 1824 an English court noted that "respondeat superior is bottomed on this principle that he who expects to derive advantage from an act which is done by another for him must answer for any injury that a third person may sustain from it."⁹⁷ This concern has also been expressly stated in South Carolina fraud cases:

"In every such case the principal holds out his agent as competent and fit to be trusted, and thereby, in effect, he warrants his fidelity and good conduct in all matters within the scope of the agency." In stating the reason for this rule Lord C.J. Holt says: "Seeing that someone must be loser by the deceit, it is more reasonable that he who employs and confides in the deceiver should be the loser than a stranger."⁹⁸

A second policy underlying respondeat superior is the concern with preventing accidents.⁹⁹ Selections from two South Carolina cases reflect this concern:

This doctrine has its foundation or origin in the consideration of public policy, convenience, and justice. It was designed to protect innocent third parties from the acts of agents to whom the principal has entrusted the means of committing an injury.¹⁰⁰
[R]espondeat superior . . . is founded upon public policy and convenience, for in no other way could there be any safety to third persons in their dealings, either directly with the principal, or indirectly with him through the instrumentality of agents.¹⁰¹

Thus, the court has relied upon the obvious fact that the master is often in a good position to prevent misconduct. Making both the master and the servant liable results in continuing pressure to find ways to improve safety and prevent improper behavior. Thus, even if the master has, by today's methods and standards, used due care in selection, training, and supervision, vicarious liability may result in new, improved methods of preventing injury through the exercise of the master's power of control.

Another policy in favor of vicarious liability is that the employer is often in a better position to provide a...