Q: Our company is in the business of hiring out vehicles. From time to time we rent out vehicles and drivers to state government transport corporations. Recently, one such vehicle was involved in an accident whereby several passengers were critically injured. At that time the said vehicle was plying along its designated route. The accident was caused due to the gross negligence of the driver. The victims of the accident have initiated legal proceedings against both the state and our company for compensation. Who is legally liable?
J. Mukherjee,
Calcutta
A: This is a classic example of ?the case of the borrowed employee?. It is an established proposition of law that an employer is liable to third parties for any harm caused to them by reason of any negligent acts committed by its employee in the course of his employment.
However, the question of ?vicarious liability? in respect of an employee whose services have been lent to another, depends on the facts of each particular case.
The driver is admittedly your employee. You have the right to hire and fire him. Thus, the initial presumption in law would be that you should be held liable for his misdeeds. However, this presumption can be rebutted if you can prove that at the relevant time, the ?effective control? over the bus as well as over the driver had been sub-contracted or transferred to the transport corporation (the hirer) and that the said employee was under their command and instruction, notwithstanding the fact that he was still on your payroll. In which case, the hirer, as the temporary employer of the driver, would be liable for his negligent acts.
The courts have from time to time laid down various tests or criteria to ascertain who should bear the burden of the follies of the employee. Such as, whose responsibility was it to prevent the negligent act or who has immediate control over him and over the execution of the work he was carrying out, etc.? Eventually, these are questions of fact and inference.
In the facts given by you, it is clear that the driver was acting under the instructions of the hirer and was under its control, command and supervision. Further, the vehicle must have being plying along the specific route for which the hirer had a permit in its name. Also the contract of carriage with the injured passengers was with the hirer and not you. Thus, in your case, it would appear that the hirer would be held liable to compensate the victims.
In this connection it is interesting to note that ?vicarious liability? is imposed upon the employer by law by a matter of policy and equity, even though the employer is not personally at fault. Though the courts, in such cases, traditionally try to pin the responsibility of the ?borrowed employee? only on one of the employers and not both, jurists in other ?common law? countries are increasingly recognising the notion of dual vicarious liability (i.e. liability to be shared by the general and temporary employer).
Such liability could thus be shared between the ?two? employers either in terms of the actual contract entered into between them or in accordance with the discretion of the court. The aim of the law in this regard is, after all, to ensure adequate compensation to the innocent victim.
Further in India, various other statutory remedies are provided for under the beneficial or social provisions of different legislations, such as the Motor Vehicles Act, to ensure that the rights of the victims are not defeated on account of legal technicalities.
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