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PBL ASSIGNMENT FOR TORT (GROUP TUTORIAL 5)

VICARIOUS LIABILITY & REMEDY

UUUK2203 LAW OF TORTS II


PROBLEM BASED LEARNING ASSIGNMENT
GROUP TUTORIAL 5
VICARIOUS LIABILITY & REMEDY

NAME
1. DG ROZIEKAH BINTI USSIN
2. PANG YONG ENG
3. ANITA A/P VOODIAYAKUMAR
4. CHONG KUAN HORNG
5. FATIMAH HANNAH BINTI ABD WAHAB
6. ASMA BINTI ABD HAMID
7. LIM JIN HONG
8. LIM YEE THENG
9. NG SIEW HOON
10. SHARANNYA SUNDARAMOORTHY
11. HEW WAI LIN
12. WOI PUI TEEN
13. TEE SIOK KIAN
14. THAM YONG WEN
15. NUR SYAFIQAH BINTI KHIRUDDIN
16. WAN AZREEN BT WAN ZAID
17. NURFARZANA BINTI ROSLI

A146498
A146448
A146428
A146469
A146927
A146419
A146446
A146417
A146445
A146425
A146437
A146471
A146433
A146480
A146453
A146489
A146952

LECTURER
DR TENGKU NOOR AZIRA BT TENGKU ZAINUDDIN
PUAN ROZLINDA BINTI MOHAMED FADZIL

PBL ASSIGNMENT FOR TORT (GROUP TUTORIAL 5)


VICARIOUS LIABILITY & REMEDY

Vicarious Liability & Remedy


We are assigned with two topics under Law of Torts, which are vicarious liability and
remedy. There two issues under these topics that we choose to discuss on, which are
regarding;
1. Hospital Vicarious Liability for the Negligence of Staff Physicians and Independent
Contractors; and
2. Vicarious Liability for Fraud on Securities Markets.
In the first issue, we will look whether the relationship of the hospital and staff physicians,
and also of the hospital and independent contractors, plays any role in determining the
vicarious liability of the employer hospital for the negligence committed by both parties. Will
the hospital be held vicariously liable?
In the second issue, we will explore the world of securities markets in which the fraud is
committed by the agent in terms of making deceitful misrepresentation to the third party. Will
the employer be held vicariously liable?
After we go through each issue and establish the vicarious liability of employer in both
situations, we will look upon the remedies that can be sought and obtained by the tort victim,
which is the plaintiff, in a judicial claim against the tortfeasor.
CONTENTS
Part I
Part II
Part III

Hospital Vicarious Liability for the Negligence of Staff Physicians


and Independent Contractors
Vicarious Liability for Fraud on Securities Markets
Remedy

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PBL ASSIGNMENT FOR TORT (GROUP TUTORIAL 5)


VICARIOUS LIABILITY & REMEDY

PART I:
Hospital Vicarious Liability
for The Negligence of Staff Physicians and Independent Contractors
Hospital is a place for people who are sick, ill or suffer injury to seek for treatment. Until the
mid-nineteenth century, hospitals were generally charitable institutions. 1 Medical care was
strictly the responsibility of the attending physician 2. However in todays modern health care
industry, it can be noticed obviously that health care industry distances itself from its
charitable past and has experienced a significant conversion from non-for-profit health care to
for-profit hospital business.3 Nowadays, hospitals largely regulate their own staffs and take a
more active role in supplying the medical treatment for the patients.
This change is accompanied with the significant changes in medical law. Due to the
economic existence of the hospital, the Charitable Immunity Doctrine 4 has been abolished.
Thus the greatest question in cases of medical malpractice by staff physicians nowadays is,
Where will the liability fall: who will pay? Does the liability fall to the staff physicians or
the hospital? Will the hospital be held liable for the negligent acts of its physicians?
For the purpose of this article in determining the circumstances in which the hospital will be
held liable for the negligence of the physicians, it will be assumed that there is in fact
negligent conduct on the part of the physician.
Theory of Vicarious Liability
1 Howard Lewin, Hospital Vicarious Liability For Negligence By Independent Contractor Physicians: A New
Rule for New Times (2005) 5 University Illinois Law Review, p 1294.

2 William H Payne, Recent Developments Affecting a Hospitals Liability for Negligence of Physicians, South
Texas Law Journal, Vol. 18, Issue 2, p 389.

3 Howard Lewin, Hospital Vicarious Liability For Negligence By Independent Contractor Physicians: A New
Rule for New Times, p 1295.

4 A public hospital will not be held liable for the negligent acts of its employee-physicians.
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Liability of hospital on physician medical malpractice has increased with the emergence of
new types of negligence claims. One relatively new type of hospital liability is vicarious
liability for medical malpractice of its physicians.5 What is vicarious liability?
Vicarious liability is defined as a legal liability imposed on one person for torts or crimes
committed by another although the person made vicariously liable is not personally at fault. 6
The situation is where a person, who is related to the tortfeasor in the employment aspect,
takes the responsibility towards the tort committed by the tortfeasor during the time of his
employment.7
It must be established that there is a special relationship between the person who bears the
responsibility and the person who committed the tort. The relationship must be an employeremployee relationship and the tortious conduct must happen within the course of the
employment. 8 It is important to establish the special relationship because if the court decides
there is no nexus between the defendant and the tortfeasor, the employer will not be
responsible towards the tortfeasors act.

5 Howard Lewin, Hospital Vicarious Liability For Negligence By Independent Contractor Physicians: A New
Rule for New Times, hlm 1295.

6 Law Jonathan (ed), A Dictionary of Law, Oxford University Press, New York, 2009, p
577.
7 Norchaya Talib, Law of Torts in Malaysia, Sweet & Maxwell Asia, Malaysia, 2013, p 411.
8 Imperial Chemical Industries Ltd v Shatwell [1965] AC 656 at 685.
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In order to establish the special employer-employee relationship, the court has been using
three types of tests, which are the control test9, the organization test10, the multiple test11 and
the independent business test12. In Malaysia, the courts generally favour the control test.13
However, there are grey areas in certain situations in determining whether the worker is
deemed to be an employee or otherwise. This includes the vicarious liability of hospitals for
the negligence of their staff. The uncertainty surrounding the nature of the relationship
between the hospital and its staff is because it seems absurd to describe the hospital board as
controlling the work of professionals such as physicians, surgeons and consultants who are
experts in their own fields. 14
In any case, the liability of a hospital for the negligence of its health care professionals is
dependent on whether the professional is engaged in his own business or that of the hospital,

9 Short v J & W Henderson Ltd [1946] 62 TLR 427 at 429. According to Lord Thankerton,
four factors to be considered are the power of selection by the employer, the power in
determining salary, the power to control the method in which the work was done and the
power to instruct the employee.
10 Stevenson, Jordan and Harrison Ltd v Macdonald and Evans [1952] 1 TLR 101.
According to Lord Denning, the works done by the employee must be part of the organisation
and his work forms an integral part of that organisation.
11 Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance
[1968] 2 QB 497. Three factors that need to be established are the consideration of the
employee to use his own expertise and be paid by the employer, he is bound to the
employers instructions and all conditions in the agreement are consistent with the nature of
the job being a contract of service.
12 Market Investigations Ltd v Ministry of Social Security (1968) 3 All ER 73. If a person is
carrying out activities that resemble a businessman which is taking risk of loss or chance of
profit, he can be said to be an independent businessman and is not under the contract of
service.
13See Bata Shoe Co (Malaya) Ltd v Employees Provident Fund Board [1967] 1 MLJ 120 and
Employees Provident Fund Board v MS Ally [1975] 2 MLJ 89.
14Norchaya Talib, Law of Torts in Malaysia, p 416.
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and only if the conduct of the medical officer is deemed to be part of the hospitals business
will the hospital be found vicariously liable.15
Therefore, the distinction between the employee-physician and the independent contractor is
crucial in determining vicarious liability of the hospital, if any.
Dual functions of Hospital as Business Enterprises and Public Servants
As been discussed earlier, hospitals are unique institutions in that they have two sometimes
conflicting functions which are to operate a financially viable business; and to provide health
care services to the public. The cases expanding the hospital's vicarious liability have been
quick to recognize the increasing sophistication of the business of operating a hospital, and
have concluded that hospitals should therefore be treated like any other employer or business
enterprise.
Although hospitals should be treated like any other employer or business enterprise, there are
still distinctions between the liability of the hospitals and business enterprises. A grocery
store can decline to sell things to anyone if it chooses. On the other hand, hospitals may be
liable for refusal to admit or treat a patient in an emergency situation.16
Hospitals are unique social institutions deserving of special attention because of their
importance to the health and well-being of citizens. The consuming public is entitled to
certain health services- and hospitals, as one of the agencies of community service, have a
strong obligation to make certain health services available to the consuming public and thus
shall be liable for the breach of its duty to the patients. Imposing vicarious liability on
hospitals will provide two important purposes. First, it will provide compensation for patients
15 Ellis v Wallsend District Hospital [1989] 17 NSWLR 553.
16 Arthur F.Southwick, Vicarious Liability of Hospital, Marquette Law Review, Vol 44, p
154
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who receive negligent treatment from independent contractors and staff physicians. Second, it
will provide an impetus to hospitals to adhere to the same standard of care which other
corporations and individuals must meet when providing services to the public.17
Regarding the first purpose of imposing vicarious liability on hospitals in the situation of
negligent treatment from independent contractors and staff physicians, it is important to see
whether hospital will be liable for tortious conduct done by both independent contractors and
staff physicians.
Hospital Liability for Staff Physicians
The general rule is that a hospital can only be held vicariously liable if the negligence
physician is employee of hospital acting within the course and scope of his employment. 18
This principle is as been established under Doctrine of Respondeat Superior19. This is a
purely vicarious theory of liability, meaning a finding of liability is not based on any
improper action by the employer20; but solely on the employee.
In health care claims, by using the control test in determining employer-employee
relationship, the focus is on whether the employer has the ability to control the employees
provision of evaluation, diagnosis, or treatment services to patients. 21 If this is established, it
is clearly then that the hospital is vicariously liable for the tortious act or treatment or
omission done by its staff physicians.
17 J.L.C, Vicarious Liability of Hospital, Willamette Law Journal, 1970, p 312-313.
18 St Joseph Hosp v Wolff, 94 SW3d 513, 541-42 (Tex 2002); Baptist Meml Hosp Sys v
Sampson, 969 SW2d 945, 947 (Tex 1998).
19 Literally translated, the doctrine of respondeat superior means let the master answer.
20 Thornton, Russell G. Responsibility for the Acts of Others Proceedings (Baylor
University. Medical Center) 23.3 (2010): p 313.
21 Farlow v Harris Methodist Fort Worth Hospital, 284 SW3d 903, 911
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This is as can be seen in the case of Roe v Ministry of Health22. Lord Denning stated that the
hospital would still be held liable even though the negligence is committed by a part time
employee as the employee is still part of the organization. In other situation, if the negligence
occurs in a hospital, and the tortfeasor cannot be identified, the hospital will be held
vicariously liable for the negligence. 23
In short, the hospital will be vicariously liable for the tortious act done by its employee staff
physicians if it can be established that the staff physician employed with respect to the
physical conduct in the performance of the services is subject to the hospitals control or right
to control. 24
Hospital Liability for Independent Contractors
On the other hand, as the doctrine of respondeat superior is not applicable to non-employees,
hospitals are immune from medical negligence claims if the negligence physician is an
independent contractor unless the work being done by the latter is deemed to be inherently
dangerous25 or unless there is public policy to impose vicarious liability on the employer26.
The question now is who is regarded as an independent contractor? An independent
contractor is a person who, although working for the employer, is not controlled by the

22 [1954] 2 QB 66.
23 Cassidy v Ministry of Health, [1951] 1 All ER 574, CA. Plaintiff lost his fingers due to the
negligence of the doctors in post-operational treatment.
24 William H Payne, Recent Developments Affecting a Hospitals Liability for Negligence
of Physicians, p 389.
25 Cage v Creed, 308 S.W. 2d 78 (Tex. 1957). On the facts of this case, excavation in public
highway is an inherently dangerous activity and the employer is liable for the negligence of
the excavator.
26 Adams v F.W. Woolworth Co, 144 Misc, 27, N.Y.S. 776 (1932). Employer is liable for tort
of defective agency, an independent contractor.
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employer in the method or conduct relating to the performance of that work. 27 It means that if
no right of control exists, the relationship is an employer-independent contractor relationship
and not an employer-employee relationship.
In the case of Tan Eng Siew v Dr Jagjit Singh28, the court held that a private consultant who
has clients of his own, and pays the hospital for using the hospitals facilities such as running
a clinic and other operating facilities is not an employee but an independent contractor. No
liability could be attached to the hospital as it never had any control over the course or form
of treatment, management and care of the patient, the hospital only provided the premises and
operating facilities which use were paid for by the consultant. Thus the hospital cannot be
vicariously liable for any negligent conduct on the part of the consultant.
One of the most common situations is when the sick person goes to his own doctor for
treatment and the doctor recommends hospital care. Even if the patient is subsequently sent to
a hospital where the negligent conduct happens, the fact that the patient is primarily seeking
treatment from the doctor will place the doctor in the role of an independent contractor. 29 The
private treatment which is performed by the consultant, physician or surgeon not on behalf of
the hospital but is pursuant to a direct engagement with the patient will not held the hospital
vicariously liable for the formers negligence. 30
It can be clearly seen that the doctrine of respondeat superior does not apply when the one
employed is an independent contractor. The basis for this rule is that no vicarious liability

27 Norchaya Talib, Law of Torts in Malaysia, p 430.


28 [2006] 1 MLJ 57.
29 William H. Payne, Recent Developments Affecting a Hospitals Liability for Negligence
of Physicians, p 391.
30 [Norchaya Talib, Law of Torts in Malaysia, p 417.
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should exist if there is no right to control on behalf of the employer to the workmans
activities. 31
Nevertheless, there are circumstances under which an employer can be responsible for the
tortuous conduct of an independent contractor. Generally it will refer to the doctrine of
ostensible agency in the United Kingdom, the United States, and Canada. This theory is when
a hospital intentionally or otherwise, causes a patient to reasonably believe the physician is an
agent of the hospital when in fact he is not. 32 It means that a hospital is vicariously liable to
the malpractice of an independent physician if plaintiff relied upon representation of the
hospital, believes that the physician is an employee of the hospital. This as can be seen in the
case of Stratso v Song33, which the court held that a physician negligence imputed to the
hospital where the patient relies, to his detriment, upon demonstrable indications that the
physician is an employee of the hospital.
It can be concluded that the applicability of the doctrine of respondeat superior depends upon
the relationship in fact between the employer and the staff physician. This doctrine only
applies in the relationship of employer-employee, but not in employer-independent contractor
relationship. The hospital will not be held vicariously liable to the malpractice of an
independent physician, except when the defendant hospital causes the patient to reasonably
believe that the physician is an employee of the hospital when in fact he is not under the
theory of ostensible agency.
Conclusion

31 Arthur F. Southwick, Vicarious Liability of Hospitals, p 165


32 Claire Granpre Combs, Hospital Vicarious Liability for the Negligence of Independent Contractors and
Staff Physicians : Criticisms of Ostensible Agency Doctrine in Ohio (1987) 56 Cincinnati Law Review, p 714.

33 (1984), 17 Ohio App.3d 39, 17 OBR 93, 477 N.E.2d 1176.


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Based on the legal framework that has been laid out earlier, in a typical hospital practice, staff
physicians will be employees as they are generally present during and to assist in the day-today operation of the practice and be subject under the control of the employer hospital. Thus,
the hospital will be liable under the doctrine of respondeat superior for any negligent act or
omission of the employee staff physicians performed within the scope of their duties.
Without the right of control by the hospital towards the conduct of the staff physicians, the
latter are regarded as independent contractors, which the doctrine of respondeat superior is
not applicable and therefore the hospital will not be vicariously liable for the independent
contractors negligence. However, we need to be aware of liability exposure under ostensible
agency like in the United States, the United Kingdom and Canada.

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PART II:
Vicarious Liability for Fraud on Securities Markets
The securities industry is generally vulnerable to fraud and abuses. The fraud of the securities
market, also known as securities fraud, stock fraud and investment fraud, is a deceptive
practice in the stock or commodities markets that induces investors to purchase or sale
decisions on the basis of false information, frequently resulting in losses, in violation of
securities laws.34
In Malaysia, generally, securities fraud can be defined as the fraud connected to the issue of
securities, their trading and dealing, regardless of who is the perpetrator, be he the investor,
the broker or the corporate body itself. Frauds involving investments or other matters that do
not fall within any of the definitions of securities under the relevant legislation, such as, the
Malaysian Securities Industry Act 1983, may not be strictly considered as securities fraud. 35
For the purpose of this article, we will be focusing on the securities fraud that involves false
or misleading statements about a firm made to the market by its corporate officials.
Generally, these statements may take the form of a fraudulent registration statement for a new
issue, public statements by officers, or a press release.36
As the fraudulent statements regarding a corporations securities made to the market by its
agent in the course of their employment, will the corporation be liable under the rule of
vicarious liability?

34 Jennifer H. Arlen, William J. Carney, Vicarious Liabilities for Fraud on Securities


Markets: Theory and Evidence, 1992 U. iii. L. Rev. 691 1992, pg 736
35 Engku Rabiah Adawiah Bt Engku Ali, The Concept of Securities Fraud: Some
Comparisons between the Malaysian and the United Kingdom Law, IIUM Law Journal, p
245.
36 Jennifer H. Arlen, William J. Carney, Vicarious Liabilities for Fraud on Securities
Markets: Theory and Evidence, pg 697.
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Vicarious Liability on Securities Fraud


In the securities market, it involves three-party relationship called agency, in which the agent
is directed to deal with the third party by the principal. The issue of securities fraud usually
arises when the agent in dealing with a third party makes deceitful representations of which
his principal either had directed the agent to do so, or the principal had no knowledge in
which the agent does an act for which he has not been directed, or does an act in a manner
different from that directed. 37
In the situations above, the general principle is that a principal may be vicariously liable for
the acts of his agents who are also his employees.38 If the person commits fraud, he has to be
imposed with fraud liability. Under the rule of vicarious liability, fraud liability can be
extended to the other party responsible for the misstatements or omissions, 39 which in this
instance will be the principal of the agents.
The first situation mentioned above is when the principal had directed the agent to do such
deceitful representations to the third party. In this occasion, the principal will be vicariously
liable as the agent is only carrying out his duty or task that has been authorised or requested
to him by his principal. 40 It was held in Yeo Tin Sang v Lim Choo Kee41, that where the injury

37 Frank Edward Horack, Vicarious Liability for Fraud and Deceit in Iowa, 16 Iowa L. Rev.
361 1930-1931, p 361
38 Norchaya Talib, Law of Torts in Malaysia, p 438.
39 H. G. Basu, Fraud and Mistake in Law (Civil and Criminal), Third Edition Law Book
Company 1992, p 198
40 See Adnan bin Haji Mat Jidin & Anor v Irwan Wee bin Abdullah & Anor, [1997] 3 AMR
2390, CA.
41 [1961] MLJ 23. Here the plaintiff recovered damages from the defendant, who owned the
car in question, when the driver, X, through his negligent driving cause injuries to the
plaintiff.
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or loss is caused to a third person by the wrongful act of an agent who is acting within the
scope of his authority, the principal is liable and jointly and severally with the agent.
The issue now is regarding the second situation in which the principal had neither the
knowledge nor had directing its agent to make a deceitful representation. In this occasion,
will the principal be imposed with the liability of securities fraud and if yes, to what extent
that liability will be?
The Extent of Principals Liability
The court tried to describe the acts which create liability as acts which are "apparently
authorized" by the employer, or as acts committed within the course of employment of the
agent or employee but it is such an uncertain measure.42
Employer will often be held liable for their employee conduct even though he had no mala
fide intention. The main reasons are the employer would be in a better financial position to
compensate the injured third party and for the employers failure to control the employee 43.
This is because employers will always control the employees method of works within the
course of employment.44 The extent of liability should not exceed the reasons for it.
One of the explanations of the principals liability is founded on the maxim that where one
of two innocent parties must suffer, he that has placed the deceiver in a position to do harm
must bear the loss.45 Other cases suggest that the principal is made vicariously liable because

42 Frank Edward Horack, Vicarious Liability for Fraud and Deceit in Iowa, p 363
43 Norchaya Talib, Law of Torts in Malaysia, pg 411
44 It is the control test, which was laid down in the case of Short v J & W Henderson Ltd.
(1946) 62 TLR 427
45 Hern v Nichols, 1 Salk 289 (K.B. 1708).
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the agents acts or representations may be imputed to him 46 and also when the statement was
made within the scope of the agents employment47.
Notwithstanding of the control test, the common law doctrine of respondeat superior
nowadays applies to securities fraud actions. Accordingly, enterprises can be held liable,
regardless of good faith, if an agent's fraudulent statements occurred within the scope of his
employment. Many decisions also simply treat the corporation itself as the person uttering the
fraudulent statements and hold it liable for false statements made in its name48.
It has been explained by Lord Wilberforce in the case of Kooragang Investment Pty Ltd v
Richardson & Wrench Ltd49 that the manner in which the common law has dealt with the
liability of employers for act of employees (master for servants, principals for agents) has
been progressive: the tendency has been toward more liberal protection of innocent third
parties.
Therefore, the principal may be liable for the securities fraud done by its agents despite the
circumstances in which the former had no knowledge of the fraud committed by its agents
and had never directed its agents to do so.
Principals Power to Limit Liability
Fortunately, the principals still have the power to limit the liability in protecting themselves
from their agents fraud. This can be done by incorporating into the written contract which
their agents tender, a statement that no representation other than those contained in the

46 Hopkins v Hawkeye Ins. Co., 57 Iowa 203, 10 N. W. 605 (1881).


47 Lindmeier v Monshan, 65 Iowa 24, 29 N. W. 839 (1884).
48 William, Mary, Vicarious Liability for Securities Law Violations: Respondeat Superior
and the Controlling Person, 15 Wm. & Mary L. Rev. 713 (1974)
49 [1982] AC 462
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contract have been made50 or a statement that the agent executing the contract is without
authority to make any representations other than those contained in the written form or the
contract may include both such provisions.
The purpose of such provisions is to protect the principal from claims that the agent
prevented the contract from being read, or claims that the contract was induced by false or
deceitful representation of the agent.51
If the third party reads the contract and either overlooks the limitations provisions or else
relies on a further representation by the agent that notwithstanding such provisions he still
can make certain representations not included in the written contract, then the reasonableness
of the third party's reliance, as tested by his business experience and the nature of the
representations made, should determine whether or not the principal should still be
responsible for the representations in spite of the warning given by the principal. For if the
third party understood the character of such limitations or had conducted himself in so
careless manner as to be indifferent to the terms of the contract, the principal should not be
responsible for the fraudulent representations of his agent.52
Thus it is clear that the employer is liable for all acts which he directs his agent to perform
and on the other he is not liable for acts committed by those who are not agents, or for acts
which the third party knew were not authorized, or for acts or representations upon which the
third party did not rely.
Conclusion

50 Universal Fashion Co. v Skinner, 64 Hun 293, 19 N. Y. Supp. 62 (1892)


51 See Peterson v Reaping Mach. C, 97 Iowa 148, 66 N. W. 96 (1896)
52 Ibid pg 376
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The scope of securities fraud is unarguably big, but for the purpose of this article, the focus is
only on the securities fraud that involves false or misleading statements about a firm made to
the market by its corporate officials. It can be concluded that although the principals are
personally innocent, they are almost universally held responsible in an action of deceit for
some of the frauds and deceits of their agents. Fortunately the principals still have the power
to limit the liability.
This falls under the rule of vicarious liability that revolves around the liability of the principal
in respect of its agents.

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PART III:
Remedy
Remedy is vital to the litigant to know what remedy he may expect to receive if he is
successful as claimant, and conversely what his liability may be if he is an unsuccessful
defendant53. In the claim against tortious act against the tortfeasor, a plaintiff may seek and
obtain judicial remedies in terms of damages, injunction, and specific restitution of property.
Focusing in the two main topics that have been discussed earlier, which is regarding vicarious
liability of the hospital for the negligence of its staff physicians and also vicarious liability of
fraud on securities markets, the two relevant remedies are damages and injunction.
The remedy of specific restitution of property, an order by the court for the delivery of the
goods to the plaintiff, is not applicable in the cases of vicarious liability as this remedy would
only arise in the torts of conversion or detinue 54, or trespass to land55. This is because in both
situations of negligence in hospital and fraud on securities market, no goods or property
involves.
Damages
The remedy of damages is the most common form of remedy sought by a plaintiff in a tort
action as it comprises monetary compensation.56 There are six types of damages as below:
i.

General damages57

53 John Lewthwaite, John S. Hodgson, Law of Torts, 3rd Edition, Blackstone Press Limited,
2001, p 417
54 Specific Relief Act 1950, Act 137, s 9.
55 Ibid. s 7(1) to be read together with subsection (2).
56 Norchaya Talib, Law of Torts in Malaysia, p 466
57 General damages refer to damage that the law presumes a person incurs as a consequence
of a tort.
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ii.

Special damages58

iii.

Contemptuous damages59

iv.

Nominal damages60

v.

Exemplary damages61

vi.

Aggravated damages. 62

Before the plaintiff can successfully claim for damages, there are two elements needed to be
proved. Firstly, a tort has occurred; and secondly, the plaintiff has suffered some damage.
Regarding the first element which is to prove a tort has occurred, we can see in the case of
Cassidy v Ministry of Health63, plaintiff has successfully claimed that the loss of his fingers
was due to the negligence of the doctors in post operational treatment.
In regards with the second requirement of proving damage, it is only a general principle as
there are torts which are actionable per se that is; these torts are actionable without proof of
damage such as intentional torts. However, damages may still be awarded by the court as
recognition of the plaintiffs right. Where actual damage is suffered by the plaintiff, the

58 Special damages refer to damage which the law does not presume to arise from the tort.
59 Contemptuous damages are awarded when the court feels that the plaintiff does not have a
good claim or morally, the plaintiff deserved what happened to him.
60 Nominal damages are awarded when the plaintiff proves that the defendant has committed
a tort, even though the plaintiff has not suffered any actual loss.
61 Exemplary damages are awarded to deter the defendant from repeating his act in the
future.
62 Aggravated damages are awarded when the plaintiff has suffered injury or loss other than
pecuniary loss, such as a smear on reputation.
63 [1951] 1 All ER 574, CA.
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amount of damages will differ accordingly to reflect the loss incurred. 64


In the cases of vicarious liability in which the employer is held to be vicariously liable for the
tort committed by his employee during the course of employment or where a person has
authorised another to commit a tort or where the parties have all agreed to commit a tort 65,
the employer and employee are regarded as joint tortfeasors. In this occasion when the
plaintiff only claims against one of them and obtains judgment in his favour, this shall not bar
the plaintiff to an action against the other person. 66
In the negligence by staff physicians in hospitals, generally it involves claims for personal
injury67. Two types of claims may be made by the plaintiff patient under this category, which
are pecuniary loses and non-pecuniary loses. Pecuniary losses is the claim for loss of earnings
or loss of future earnings68 whereas non-pecuniary losses in the claim for the injury itself,
pain and suffering, and loss of amenity or enjoyment of life.
In the fraud on securities markets, generally it involves pure economic loss. The general
principle is that pure economic loss is recoverable, subject to some requirements; if the loss is
caused by a negligent misstatement.69 As been discussed earlier, one type of fraud on
securities markets involves misstatement by the agents, thus the plaintiff can recover the loss,
provided it is foreseeable.70
64 Norchaya Talib, Law of Torts in Malaysia, p 445.
65 Norchaya Talib, Law of Torts in Malaysia, p 453
66 Civil Law Act 1956, Act 67, s 10(1)(a)
67 Ibid, s 28A(1).
68 Ibid, s 28A(2)(c).
69 Norchaya Talib, Law of Torts in Malaysia, p 452
70 See Steven Phoa Chen Loon & 72 Ors v Highland Properties Sdn & 9 Ors [2000] 3 AMR
3567.
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Injunction
Injunction, an additional remedy granted at the discretion of the court, may be obtained where
damages alone are not an appropriate or sufficient remedy.
Conclusion
In conclusion, the plaintiff in the cases of negligence of physicians in a hospital and securities
fraud by an agent can seek and obtain remedy in terms of damages or injunction. This remedy
will not be affected by the fact that the employer hospital and the principal may also be
vicariously liable for the tortious acts by their employees and agents, as there is a separate
heading of remedy against joint and several tortfeasors under law of torts.

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CONCLUSION
From the two issues that we discussed above, it can be concluded that the relationship of
employer-employee and principal-agent plays a significant role in imposing vicarious liability
on the employer or principal for the negligence or tortious act done by their employer and
agent respectively.
If the employee and agent are not under the control of the employer and principal in regard to
the method of doing their work in the course of employment, they are regarded as
independent contractor. In this instance, the employer and principal will not be vicariously
liable for the tortious conduct of the independent contractor.
However this general principle is subject to some exceptions and limitations as been laid out
in details above.
The doctrine of vicarious liability is important as there will be incentive on the parts of
employers to minimise the risk created in the course of business and will inevitably maximise
the efficiency of employees, who can work safe in the knowledge that their liability is
covered and they do not have to be constantly looking over their shoulders. We believe that it
is indisputable that the purposes which it is designed to serve are highly valuable and hence
the adequacy of the doctrine of vicarious liability is met.

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