To better understand the challenges of providing compensation to injured employees, Albert Mushai and Robert Vivian compare a compensation court case in the United Kingdom with the South African workmen’s compensation approach
The recent Shelbourne case heard in the United Kingdom (UK) Court of Appeal provides an opportunity to compare, to a limited extent, the different approaches to occupational injuries between South Africa and the UK. It’s important to be careful when making comparisons based on court cases as they deal only with limited aspects.
The entire picture does not always come out, as only issues placed before the court are addressed. Bearing these limitations in mind, we want to examine a recent UK case and compare it with the South African workmen’s compensation approach.
The plaintiff in the Shelbourne case, a female employee, sustained an injury at the annual dance organised by the Cancer Research Centre. The injury occurred while she was dancing. Her dance partner was a visiting lecturer from a local university, who was doing research at the centre.
The lecturer decided to lift the female employee as part of the dance routine, but unfortunately dropped her, seriously injuring her back. She wanted compensation. In terms of the common law (or the civil law), if one person wrongfully and negligently injures another, then the injured party can seek compensation from the person who injured him or her.
In this case, the injured female employee would seek recourse against the visiting lecturer if the common law were to apply. However, nowadays it is not what the law says that is important, but how to hold someone liable for the payment. The injured employee wanted compensation, and in that regard the law, itself, was of secondary importance.
One option would have been to claim compensation from her employer. To do this she would have had to argue that her employer was vicariously liable for the acts of the visiting lecturer. This is not the position in English law, or any other common law. The fundamental legal position is that each person is responsible for his or her own acts.
Unsuitability of the law of delict
In circumstances where those acts attract liability, a person can buy insurance to cover that liability. No one is responsible for the acts of another person. However, over 100 years ago the concept of vicarious liability began to emerge. To this day, no adequate explanation is available for the existence of vicarious liability. It can, however, be justified on economic grounds.
For example, if a truck is involved in an accident through negligence of the driver, which results in damage worth millions of rand, a pertinent question that immediately arises is whether the truck driver is solely accountable for the accident, or whether his or her employer is also liable? If the truck driver is solely liable, it makes sense to insure against this liability.
However, the cost of the premiums may well exceed the truck driver’s salary. Therefore, from a mere practical position, it makes sense for the firm to take out the insurance and be liable for the acts of the driver. From this pragmatic position, the law of vicarious liability evolved.
An employer is liable for employees’ acts of delict where these acts are committed in the course and scope of the employment. In turn, the employer can insure against that liability. Economically everything is then neat and tidy. Now, let us return to the injured female employee.
Not quickly settled
She wanted compensation from her employer ... but to get this, it was necessary for her to prove that the person who injured her was an employee of her employer and acting in the course and scope of his employment. Clearly, the visiting lecturer was not an employee of her employer. He was an employee of a local university.
Ordinarily, this should have settled the matter; however, it did not thanks to two recent cases decided in the UK Supreme Court. The cases completely changed the basis of vicarious liability in the UK. To understand this, we need to go back in time to 1979. Since then, the English law of torts has been expanding.
Expanding the law
The Shelbourne case is merely the continuation of that expansion. Back in 1979, the leading UK judge was Lord Denning. He was largely responsible for expanding the scope of the law of torts over his long judicial career.
He explained the reason behind the expansion as follows: “During this discussion, I have tried to show you how much the law of negligence has been extended. This extension would have been intolerable for all concerned had it not been for insurance.
“In most of the cases that come before the courts today, the parties appear, at first sight, to be ordinary persons, industrial companies or public authorities, but their true identity is obscured by masks. If you lift up the masks, you will usually find legal-aid funds, insurance companies or the taxpayer – all of whom are assumed [by the judges] to have limitless funds.
“In theory, the courts do not look behind the masks, but in practice they do. That is the reason why the law of negligence has been extended to embrace nearly all activities in which people engage. That is the reason the awards of damages have escalated to exceed anything that even the wealthiest individual could pay,” he added.
Therefore, as in the case of our injured female employee who sought someone to pay her compensation, courts have been obliging by holding persons liable, because, in their view, the person targeted can afford to pay. Some writers call this approach the Deep Pocket syndrome.
In terms of this syndrome, the basis of liability is not a legal principle, but the perception that the person targeted can pay. As things now stand in the UK, an employer (or company) can be vicariously liable for persons other than its employees. In the Shelbourne case, the employer was held to be vicariously liable for the acts of the visiting lecturer.
This decision did not come out of nowhere. It derives from the two other recent decisions of the UK Supreme Court where the court followed the Denning Deep Pocket tradition and extended vicarious liability. Consequently, it is safe to conclude that the Shelbourne case is merely the application of these two decisions.
Many will find this decision – to hold an employer vicariously liable for the conduct of a stranger at a dance function – both baffling and illogical.
South African approach
The South African workmen’s compensation is by far a more honest and logical system. There is no hidden agenda or scope for irrational approaches like the Deep Pocket philosophy. The system is honest in that it ensures that only employees injured in the course and scope of employment receive compensation.
The basis of workmen’s compensation is that the insured employee receives compensation. Consequently, if the female employee in the Shelbourne was injured at a work function, she would receive compensation provided the injury occurred in, and through, the course and scope of employment.
Who injured her is unimportant. What is important is that the injury took place in circumstances connected to her work. Therefore, under the workmen’s compensation system, the fact that the person who caused the injury was a visiting lecturer is irrelevant. The only thing that matters is that the injury took place in the course of work.
The recent developments in the UK (as seen from the Shelbourne and other recent cases on vicarious liability) make it virtually impossible to be certain about the scope of the vicarious liability risk facing employers. It appears that any circumstance, no matter how remotely connected to work, can create vicarious liability for the employer.
Problem of double or more compensation
The problem of double or more compensation warrants acknowledgement. As the courts open more and more avenues for persons to be compensated, it is possible that some people may end up claiming compensation from more than one source.
As indicated above, in cases that end up in court, not all details are set out, but rather only those relevant to the case. Therefore, it is possible for an employee to receive workmen’s compensation and then sue a third party, whereas behind that person is an employer facing potential vicarious liability.