What is vicarious liability and what does it mean for employers?

What does vicariously liable mean?

Vicarious liability is where someone is held responsible for the actions of another person. Similarly in the workplace, employers can be liable for the wrongful act of an employee if it is carried out in the course of an employee’s employment. These acts include:

• bullying and harassment
• discriminatory acts
• breach of trust or confidentially

This has recently been the case for a large supermarket chain, in respect of a data protection breach. An incident occurred when an employee posted online the names, addresses, bank account details, national insurance numbers and salaries of more than 100,000 employees. The High Court ruled that the supermarket was vicariously liable for the data breach and that employees should receive compensation. The employee was also jailed for 8 years.

There is concern that this could be the first in a trend of class actions by employees and customers after a data breach.

The important question in any case of vicarious liability is whether the employee was acting in a personal capacity, or in the course of their employment. Sometimes this can be a grey area.

Preventing vicarious liability

The most important thing employers can do is to ensure that they have taken all reasonable steps to prevent such acts from happening in the first place. To help prevent vicarious liability employers should:

• Communicate to employees equal opportunities policies
• Provide anti-discrimination training
• Stress-test data protection security systems
• Train employees in data security and remind them of data protection measures regularly
• Control closely who has access to sensitive information
• Be prepared for any crisis situations

While it will be rare for the majority of employers to have to defend claims of vicarious liability, the potential financial and reputational risks that do exist means that employers should be reviewing their risk profile on a regular basis.