'The Distortion of Vicarious Liability in Queensland'

Year 11 Legal Studies

Unit 2: Balance of Probabilities

Topic 3: Negligence and the Duty of Care

Investigation – Argumentative Essay

Vicarious liability – Schokman v CCIG Investments Pty Ltd [2022] QCA 38

Word Count – 1505 (excluding in-text referencing, references, title page, contents page & headings)
The current Civil Liability Act 2003 (Qld) in Queensland does not adequately guarantee employers fair and
just outcomes in court in relation to employee criminal misconduct and negligence. This essay will address
the unfair burden on employers due to court precedence and appeals broadening the scope of vicarious
liability for employers as highlighted in the Schokman v CCIG Investments Pty Ltd [2022] QCA 38 case. This
report will discuss what constitutes negligence and the fault-based legal system in Queensland. The primary
legal issue will then be explained, and two viewpoints compared. Subsequently, the justified and equitable
suggestion for a legislative amendment will be made.

When someone fails to act with the same degree of care as would be anticipated of a prudent person in an
identical situation, that person has engaged in negligence (Gibbs Wright Litigation Lawyers, 2020). The
plaintiff suffers harm or damage as a result (Gibbs Wright Litigation Lawyers, 2020). The elements to
establish a valid claim of negligence are as follows; duty of care, breach of duty of care, and damages
caused by the breach of duty (Makela, 2022). Common law is the primary source for the development of
negligence law (Rule of Law Education Centre, 2018). The law governing negligence in Queensland has been
legislated in the Civil Liability Act 2003 (Qld) (Rule of Law Education Centre, 2018). Common defenses for
negligence actions include obvious risk, inherent risk and illegality (Caxton legal centre inc, 2018). Remedies
are damages, injunctions or restitution of property (bits of law, 2013).

The Queensland fault-based system is founded on the idea that someone is accountable for another
person's injuries (Allsop, Dalal, & McCrathy, 2009). On the contrary, the success of the no-fault system
depends more on the caliber of the legal counsel than on the case's particulars (Armstrong & Tess, 2008).
This system is formulaic, regimented, and has consistent costs (Armstrong & Tess, 2008). The two systems
vary in that the no-fault system priorities compensating the plaintiff while the fault-based system prioritises
finding someone responsible for the harm or injury.

The legal notion known as vicarious liability places responsibility on one individual who did not directly
partake in the injury but has a special superior legal connection to the individual who did so during their
employment (Australia Lawyers, 2020).

The continuous broadening of vicarious liability regarding the duty of care obligations for employers has
left them even more subjected to being held liable for employee misconduct and criminal offences out of
hours even if their job merely creates the environment in which the action takes place. One of the most
commonly argued cases in Queensland is negligence cases and is still a relevant legal issue as it hasn't yet
been argued at a higher court. The primary source of this concern has arisen from Queensland courts
continuously granting appeals and forming decisions in trials that target the employer for the negligence of
one of their employee in extreme, unconnected scenarios (Jesser, 2022). Even if the employee's act was
criminal, they should be rightfully held accountable out of hours. Such legal issue is relevant and
substantiated in the Schokman v CCIG Investments Pty Ltd [2022] QCA 38 case (Queensland Judgments,
2022). In this case, Schokman was injured while off duty by another staff member in their private
accommodation (Queensland Judgments, 2022). On appeal, CCIG investments were found liable through
vicarious liability (Queensland Judgments, 2022). However, this issue also affects many individuals and
widespread groups in Queensland, such as the owners and employers of companies involved in
accommodation services. Such include farmers who provide shared housing on-site and the government
with halfway homes. This broadening concept of vicarious liability has left many employers struggling to
fight lawsuits that are unjustly targeting them for the negligence and criminal acts of their employees out of
hours, leaving even the rising work cover insurance harder to secure (NB Lawyers, 2022).

Under the Queensland fault-based system, victims of malpractice by an employee can easily present an
argument to unjustly hold an employer accountable for their employees' negligence under countless
circumstances and even if it occurred out of working hours. Mr. Schokman, in the concerning case, sued his
employers believing that the "respondent was in breach of the employer's duty owed to him as its
employee" and hence, holding the employer vicariously liable for the incident should be applicable (Jesser,
2022). The plaintiff's appeal/ argument was that the resort required him to stay in shared accommodation
despite expressing his concern about sleepwalking and request for solo housing, which was denied (Jesser,
2022). Further, they argued that the incident was committed during his employment and that the company
provided the environment in which it took place; hence, implied responsibility on the employers for the
safety of employees at all times (NB Lawyers, 2022). A consequence of this viewpoint is that the plaintiff is
responsible for presenting the relevant evidence against the employer to establish their negligence. In
addition, employers are increasingly subjected to being held vicariously liable for any employee negligence.

Employers of accommodation services are struggling to present evidence against claims of negligence and
criminal offences committed by their employees out of hours due to the difficulty and instability of
reasonably identifying defendants under the absence of legislation addressing a regimented vicarious
liability scope. The employer, in this case, argued that it was unreasonable to be held vicariously liable for
the employees' intoxicated acts because the occurrence was far too remote from his duty altogether and
classified it as unconnected with his employment (NB Lawyers, 2022). In addition, they established how the
employee did not assume to act within the scope of his employment. However, he was still found
vicariously liable upon appeal (NB Lawyers, 2022). This viewpoint implies that accommodations are
subjected to hefty fines for the criminal incidents and negligence committed by their employees out of
hours which makes insurance companies reluctant to cover them. As a result, there could indefinitely be a
decrease in resort numbers, with even halfway housing and government-issued accommodations on a
decline while this system and lack of legislation are in place.
This situation and evaluation have validated the unfair burden on employers due to this extended view of
vicarious liability in court due to case outcomes like the Schokman v CCIG Investments Pty Ltd [2022] QCA
38.

The first possible alternative is for Queensland to adopt a no-fault system for employee workplace
negligence and malpractice, similar to the nations like Sweden and New Zealand concerning medical injury
(Wallis, 2010). This suggestion would ensure that compensation reaches the victim of the negligent act.
Injuries are considered inevitable under the proposed no-faults system, allowing victims to get accessible
compensation without dealing with the strain of the civil judicial system (Allsop, Dalal, & McCrathy, 2009).

As an alternative, it is highly advised Queensland amend the current Civil Liability Act 2003 (Qld) to ensure
it covers vicarious liability appropriately and the extent to which it can and cannot be argued reasonably in
writing as it is not currently. This suggestion would entail ensuring any employee that has committed a
criminal act out of hours is held personally accountable for their actions, legalising it as unjust to persecute
the employer instead for merely providing the environment in which it takes place.

The second legal alternative is advised.

Amending the Civil Liability Act 2003 (Qld) to incorporate a new detailed section covering vicarious liability
allows for just and equitable outcomes. This is so because it would prevent the unreasonable scope of
vicarious liability on employers and thus reduce the current unfair burden they are receiving. It would
prevent the ability of employees to argue related cases in court to an unjust extent. Moreover, it is just and
fair to all stakeholders by ensuring each party would receive justice and would not allow for particular
circumstances to be considered. The victim would receive compensation from the accountable perpetrator,
and enforced parameters would ensure that the employers are only vicariously liable with reasonable
evidence in the scope of their duty of care obligations. Employees would also be rightfully held accountable
for their criminal actions and other negligent actions out of hours. This recommendation balances the rule
of law by holding the government responsible and further ensures that the employee still has the right to
present circumstantial and reasonable evidence against the employer if their act was not a criminal
offence.

The implication of the recommendation is that insurance will not necessarily increase, and companies
operating accommodation services will still be in business and able to afford work cover insurance. There
will also be a decreased burden and risk on employers of being held vicariously liable in all employee-
related incidents as there will be strict guidelines to whether it is reasonable to be held vicariously
responsible. However, under this recommendation, there will be fewer instances where companies can be
vicariously liable. As a result, the actual individuals causing the harm will instead face punishments for their
actions.
In Queensland, the constant broadening of vicarious liability for employers in trials and appeals is a severe
issue that necessitates new verdict guidelines for all claims on this ground. As the case Schokman v CCIG
Investments Pty Ltd [2022] QCA 38 suggests, the current Civil Liability Act 2003 (Qld) isn't designed to
properly ensure justice for victims of employee negligence and the just punishment for the appropriate
offenders at blame, with many employers being held unjustly vicariously liable. However, the
recommendation of developing a new section in the act enforcing the parameters of vicarious liability
sentencing was proposed to counter this issue.
References
Allsop, N., Dalal, H., & McCrathy, P. (2009, November 22-24). To Fault or Not to Fault That is the Question?

Retrieved from Institude of Actuaries of Australia:

https://www.actuaries.asn.au/Library/ACS09_Paper_Allsop%20et%20al.-

To%20Fault%20or%20Not%20to%20Fault%20-%20That%20is%20the%20Question.pdf

Armstrong, K., & Tess, D. (2008, November 9-12). Fault versus No Fault - Reviewing the International

Evidence. Retrieved from Institute of Actuaries of Australia:

https://actuaries.asn.au/Library/Events/GIS/2008/GIS08_3d_Paper_Tess,Armstrong_Fault%20versus%20N

o%20Fault%20-%20reviewing%20the%20international%20evidence.pdf

Australia Lawyers. (2020, November 20). Australia Lawyers. Retrieved from What is Vicarious Liability?:

https://australialawyers.com.au/what-is-vicarious-liability/

bits of law. (2013, April 29). Remedies: Damages. Retrieved from bits of law:

http://www.bitsoflaw.org/tort/negligence/study-note/degree/remedies-damages-principles-special-

general

Caxton legal centre inc. (2018, March 28). Defences to a Negligence Action. Retrieved from Caxton legal

centre inc: https://queenslandlawhandbook.org.au/the-queensland-law-handbook/health-and-

wellbeing/accidents-and-injury/defences-to-a-negligence-action/

Gibbs Wright Litigation Lawyers. (2020, May 25). Careless or reckless: a guide to negligence in Australia.

Retrieved from Gibbs Wright Litigation Lawyers:

https://gibbswrightlawyers.com.au/publications/negligence-disputes-australia#h-what-are-the-elements-

of-negligence

Jesser, D. (2022, March 1). Missing the toilet - Employer vicariously liable for an Employee accidentally

urinating on a co-worker! Retrieved from Linkedin: https://www.linkedin.com/pulse/taking-piss-employer-

vicariously-liable-employee-urinating-jesser?trk=articles_directory
Legal Aid Queensland. (2022, July 29). Negligence, duty of care and loss. Retrieved from Legal Aid

Queensland: https://www.legalaid.qld.gov.au/Find-legal-information/Personal-rights-and-safety/Injury-

loss-and-compensation/Negligence-duty-of-care-and-loss

Makela, M. (2022). Negligence in Queensland. Retrieved from gotocourt.com.au:

https://www.gotocourt.com.au/personal-injury/qld/negligence/

NB Lawyers. (2022, April 11). Drunk And Intoxicated Employee – How Far Does Vicarious Liability Go To

Hold An Employer Accountable (5 Reasons To Be Concerned). Retrieved from Employment Law:

https://www.lawyersforemployers.com.au/vicarious-liability-drinking-human-resources-drunk-misconduct-

duty-of-care-health-and-safety

Queensland Judgments. (2022). Schokman v CCIG Investments Pty Ltd. Retrieved from Queensland

Judgments: https://www.queenslandjudgments.com.au/caselaw/qca/2022/38

Rule of Law Education Centre. (2018, October 5). Case Note – QLD – Negligence and Risk. Retrieved from

Rule of Law Education Centre: https://www.ruleoflaw.org.au/negligence-and-risk-

qld/#:~:text=In%20Queensland%20that%20law%20has,caused%20the%20injury%20to%20occur.

Wallis, K. A. (2010). Under a system of no-fault compensation for medical injury, is fear as a driver of over-

diagnosis diminished? . Retrieved from The University of Auckland Faculty of Medical and Health Sciences:

https://www.preventingoverdiagnosis.net/2014presentations/Board%203_Katharine%20A%20Wallis.pdf

Legislations

Civil Liability Act 2003 (QLD) (Austl.).

Limitations and Actions Act 1947 (QLD) (Austl.).

Legal Authorities

Schokman v CCIG Investments Pty Ltd (2022) QCA 38 (Austl.).