A correspondent from Tasmania writes with a question about the functions and responsibility of wardens in an emergency control organisation.  My correspondent asks:

… in respect to the legal liability  of a warden whilst performing their role in accordance with the site emergency plan. Can the individual (chief warden, area warden or floor warden) be sued for actions they may take during an emergency?  I note that in Tasmania the crown solicitor has ruled that wardens in the public sector are protected if they are “acting in good faith”, I’m not sure that the private sector has a similar or can rely on the same ruling (a legal nexus?) Are you able to provide comment or advice?

The answer is ‘no; the individual (chief warden, area warden or floor warden) be sued for actions they may take during an emergency’ but not for reasons suggested by the question.  The answer here depends largely on the common law so will be relevant and equally applicable in all jurisdictions.

The Tasmanian Crown Solicitor does not determine what the law is.

First, the Tasmanian Crown Solicitor may have given advice in relation to wardens in the public sector but an advice is just that, an advice, it is not a ruling and does not determine the law.  It is the solicitor’s opinion as to what the law is and how it might apply (just as this blog sets out my opinion).  So the Crown Solicitor has not ‘ruled’ that there is protection.  The Crown Solicitor’s advice is not a ‘precedent’ that sets out legal principles to be applied in subsequent cases.  It follows that the private sector cannot rely on it as a ‘ruling’ as they could if a judge had determined the matter in court.

Good faith is not a common law defence to a claim in negligence

So what is the position?  The first is that ‘good faith’ is not a defence to a claim in negligence.  In negligence the plaintiff has to show that the defendant owed them a duty to take reasonable care, they failed to act ‘reasonably’ in the circumstances and the defendant’s failure was the cause of the plaintiff’s harm.  The fact that the defendant was genuinely trying to do the right thing is not a defence known to the common law.  In Vaughan v Webb (1902) SR(NSW) 293 a fire brigade superintendent pulled down a wall.  The parties agreed that his actions were negligent but were done in good faith.  Did the fact that he was acting in good faith mean there was no liability for the negligence?  The answer, according to all three judges (Stephen ACJ, Owen and Pring JJ) was ‘no’.  Pring J said (at p 307):

… in my opinion, the words “bona fide” when used to qualify a negligent act are quite meaningless.  A negligent act is one which a man exercising ordinary care and prudence would not commit.  The element of bad faith has manifestly no place in such a definition.  A man may act with the most perfect bona fides and yet be guilty of imprudence or carelessness.

It was because of that decision that all fire and most emergency service legislation now have provisions that say a fire fighter, or the agency, is not liable for acts performed ‘in good faith’.  If good faith was a defence at common law, those sections would not be required.

Vicarious liability

So what could the crown solicitor have meant?  I would infer that he or she was really talking about the concept of vicarious liability.  That rule says that an employer is liable for the negligence of an employee who is acting in the course of his or her employment.  In the course of employment means doing your job – even if you are doing it badly or negligently.   The neat summary is that an employer is liable even if the employee does ‘authorised acts in an unauthorised way’ (New South Wales v Lepore (2003) 212 CLR 511).  Vicarious liability can also extend to any act that is for the employer’s benefit, at the employer’s direction or endorsed by the employer (CCH Australian Torts Commentary, [¶3-340] Vicarious liability).

The justification for vicarious liability is not easy to explain – as the judges of the High Court of Australia noted in Hollis v Vabu (2001) 207 CLR 21 ‘A fully satisfactory rationale for the imposition of vicarious liability in the employment relationship has been slow to appear in the case law’ ([35], Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ).   Some justifications are that the point of liability is to ensure that a person who is injured is compensated.  The ‘person’ that can best ensure that happens, either because they have the funds or the insurance policy, will be a person running a business not their employee.   If a person is running a business and employs someone the business owner reaps the rewards of the person’s labour, they pay the wages granted but the employee is acting in the employer’s interest not their own.  As the employer gets the benefit so too they should take the risk.  The employer is also responsible for selecting employees, training them, building the relevant culture that may or may not prioritise safety etc.  All things that a person who engages with the business has no control over.   So the employer is liable but he or she or it can do much to limit that liability by the way they run the business.

Let us then assume a person is employed and one of their duties is to act as the fire warden. There is a fire alarm and they fail to perform their duties as instructed or expected.  If anyone could show that it was that failure that caused their loss and damage (rather than, say the fire) it is the employer that would be liable.   Further if the employee is not up to the task, then it is the employer who will be liable as it is the employer’s obligation to ensure the workplace is safe and that there are appropriate emergency plans in place.  If the fire warden fails, it is the employer who has failed – see Work Health and Safety Act 2012 (Tas) s 19 and Work Health and Safety Regulations 2012 (Tas) r 43.  But vicarious liability won’t apply if there’s actual malice, ie bad faith.

Good faith v Bad faith (or bona fides v mala fides)

Assume that there is a person who works in a building who is deaf and so cannot hear an audio fire alarm. The fire warden is instructed that in the event of a fire alarm it is the warden’s responsibility to enter this person’s office and make sure they are aware of the alarm and are told of the need to evacuate.  If a fire alarm goes off and the warden forgets to do that, or in the melee of real smoke and flames just fails to do that, then the employer would be liable for the negligence of the fire warden.  If, on the other hand, the warden saw this as a chance to get rid of an unpleasant work colleague and deliberately didn’t warn the deaf employee in the hope that he or she would be killed in the fire, then that would be an act of bad faith and there would not be vicarious liability.

As an aside, it should be noted that if the injured person is also an employee none of this matters.  If an employee is injured they will be entitled to workers compensation whether their death or injury was due to neglect or malice. Workers compensation is a ‘no fault’ scheme so he or she will get compensation and questions of ‘vicarious liability’ won’t actually arise.

Misconceptions about insurance

This discussion is important for another reason.  People are often told words to the effect of ‘if you go outside the training, or do something wrong, you won’t be covered by our insurance’.  That is a poor explanation.  An employer (and here we can extend the discussion to agencies that use volunteers like the fire and emergency services) has insurance to cover their liability.  They are liable for the negligent or other wrongful act of their employees (or volunteers).  This liability is not something that they extend to their employees as a matter of respect or loyalty, it is a legal position that they cannot avoid. So an employer (or anyone) takes out insurance to indemnify them should the insured risk occur – eg an employer will (or should) have insurance so that if, in the course of running their business, they cause someone a loss or injury then the insurance company will pick up the bill.  The insurance company is not ‘insuring’ the employee, it’s insuring the employer but the employer is liable for the negligence of the employee.   If the employee does an ‘authorised act in an unauthorised way’ (so that they are negligent) the employer is liable.    The issue is not whether the employee is or is not ‘covered’ by the insurance, it is whether they are acting in the course of their employment.  If the risk that arises is one that the employer does not have insurance for, it is still the employer who is liable.

Another important point about insurance is the issue of ‘subrogation’.  Subrogation is a rule that says that an insurance company that indemnifies their insured is then given all the rights of the insured.  If, for example, my house is insured against the risk of fire and there is a negligently caused bushfire that destroys my home. I claim on my insurance policy and get paid out and provided I had adequate insurance, I’m happy.  My insurance company then has all my rights and can go and sue the person or agency that caused the fire and they sue in my name and they don’t need my permission to do so.    Although a court case may have many named plaintiffs, there may be really only one insurance company that is taking the action – see Class action over the 2013 Blue Mountains (NSW) fires starts –but who’s suing who? (August 24, 2015).

All else being equal, if an employee negligently caused injury the employer would be liable. If the employer then claimed on an insurance company and was indemnified the insurance company could then sue the employer to recover the damages paid.  But all is not equal, the right of subrogation has been removed so an insurer cannot sue a negligent employee to recover any damages paid (Insurance Contracts Act 1984 (Cth) s 66); in NSW see also the Employees Liability Act 1991 (NSW) s 3).

Conclusion

A fire warden who is trying to do his or her job and is acting in good faith is protected in that if they are negligent (and if it is there negligence that caused a person’s loss or damage, something that would be hard to prove if there really was a fire or explosion) then it is their employer that would be vicariously liable for that negligence.   The employer may well be liable if their emergency plan fails on the basis that the staff were not properly selected, trained or otherwise capable of performing their duties.

If the warden was acting in bad faith, that is they take the chance of the fire to maliciously do the wrong thing to advance their own interest then they would not be protected by vicarious liability.