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Taxi Company Not Vicariously Liable When Employee Sexually Assaults Client

Another Setback for Sexual Assault Victims in Ontario?

David Elmaleh
David Elmaleh
Partner

Émilie-Anne Puckering
Émilie-Anne Puckering,
Law Student

June 2017

by David Elmaleh and Émilie-Anne Puckering

In an important decision released June 2, 2017, the Court of Appeal of Ontario considered the novel issue of whether a taxi company is liable for a sexual assault allegedly committed by one of its drivers, absent any fault on its part.

A unanimous Court of Appeal ruled that the taxi company was not vicariously liable, suggesting that not all employers are vicariously liable for the intentional acts of their employees, even when their clientele may find themselves in the most vulnerable of situations.

Overview

In Ivic v. Lakovic, 2017 ONCA 446, the incident occurred during a late night taxi ride. The appellant alleged she was sexually assaulted by her driver while in the taxi. She had just left a party — drunk and feeling unwell. The taxi company's name was on the roof light of the vehicle and in large graphics on the taxi that arrived to drive the appellant. She sued the taxi company, claiming that it was vicariously liable for the acts of its employee.

The claim was initially dismissed by the motion judge, and the primary issue on appeal was whether a taxi company could be held liable for sexual assault allegedly committed by one of its drivers, absent any fault on its part. The appellant took the position that the motion judge erred on three issues, most notably in his application of the principles established in Bazley v. Curry.1

The Law

In the pivotal decision of Bazley v. Curry, Justice McLachlin (as she was then) established the test for vicarious liability of an employee's unauthorized, intentional wrong in cases where the precedent is inconclusive: “whether the wrongful act is sufficiently related to conduct authorized by the employer to justify the imposition of vicarious liability”.2 She presented a non-exhaustive list of factors to determine the sufficiency of this nexus:

  1. the opportunity that the enterprise afforded the employee to abuse his or her power;
  2. the extent to which the wrongful act may have furthered the employer's aims;
  3. the extent to which the wrongful act was related to friction, confrontation or intimacy inherent in the employer's enterprise;
  4. the extent of power conferred on the employee in relation to the victim;
  5. the vulnerability of potential victims to wrongful exercise of the employee's power.3

... the appellant was in fact very vulnerable (drunk, unwell and alone late at night).

The Court of Appeal in Ivic agreed with the motion judge that the appellant was in fact very vulnerable (drunk, unwell and alone late at night). It was also accepted that she was exposed to a situation where predatory misconduct could have easily occurred between an employee and the clientele.

However, notwithstanding the appellant's vulnerability, the Court of Appeal found that the driver's unauthorized, wrongful acts were not committed with the purpose of attaining his employer's goals, nor were they performed in relation to any potential confrontation intrinsic to his employment. The appellate judge found that the taxi company did not grant any power to its employee with respect to the appellant. Ultimately, it was decided that as an employer, the taxi company did not increase the risk of harm towards the appellant by requiring the employee to do his job.

Simply put, the test in Bazley was not met.

Food for Thought

In certain instances, employers can be held vicariously liable for their employees' wrongful acts committed while completing their duties. Nonetheless, this case demonstrates courts' reluctance to hold employers liable for an employee's repugnant, criminal, intentional acts. The law continues to recognize the need to balance the principles of victim remediation with the probability of discouraging future harm when imposing vicarious liability on employers. This result may produce a double-edged sword.

This result may produce a double-edged sword.

On one hand, this precedent adds protection against the customary “deep pockets” rule whereby a plaintiff will include another party to a lawsuit because of its higher potential to pay the judgment (and not necessarily because of its role in the act). It is a victory for employers and insurers alike, and not a small one. This case is a clear announcement from the Bench that absent direct fault by an employer, it will be difficult to pin liability on an innocent employer for an employee's intentional criminal conduct. The principles and analysis can (and will) be applied in a wide array of employment scenarios.

Sadly though, this outcome also demonstrates another frustrating deficiency in remedies for victims of sexual assault, many of whom will continue to suffer from physical, emotional and psychological effects without a realistic ability to receive the damages for pain and suffering they no doubt deserve, not to mention pecuniary damages for the support they often require.

Some may take the view in this case that the fifth factor — the vulnerability of potential victims to the wrongful exercise of the employee's powers — ought to be given more weight, such that the pendulum should swing in these cases towards a finding of liability on employers. After all, as the Court of Appeal acknowledged, a woman who is intoxicated and alone in a taxi at night is certainly in a very vulnerable position.

Unfortunately for the appellant, as the Court of Appeal noted, she was prey not only to taxi drivers, but others as well — the power the driver allegedly wrongfully exercised was not predicated on his employment. Some would challenge this assertion. Many may challenge the way these cases are decided in the future.

For now, it appears the status-quo has been maintained.

To read the full case decision, see the Ontario Courts document.

 

1 Bazley v Curry, [1999] 2 SCR 534.
2 Ibid at 41.
3 Ibid.


 

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