Michael Ford
Civil Litigation

SCC won't hear case involving vicarious liability for sex assault

It’s unfortunate that the Supreme Court of Canada (SCC) will not hear a case dealing with whether to attach legal responsibility to a cab company when a driver engages in sexual misconduct against a passenger, Toronto civil sexual abuse lawyer Elizabeth Grace tells AdvocateDaily.com.

“With the recent public attention being directed at the issue of sexual harassment and assault in workplaces, and other Commonwealth courts taking divergent approaches to vicarious liability, there was good reason to believe that the time was right for Canada’s top court to take a fresh look at the law of vicarious liability and how to apply it,” says Grace, a partner with Lerners LLP.

“In Canada, employers, organizations, insurers, those who have been subjected to sexual abuse, harassment or assault — and the lawyers acting for all these parties — would all stand to benefit from clarification about where the line should be drawn for and against vicarious liability in these times of heightened sensitivity and commitment to eradicating sexual misconduct,” she says. 

Canadian Underwriter reports that a woman filed a civil lawsuit against a taxi company in 2015 after complaining that one of its drivers sexually assaulted her. The lawsuit also named the cab owner and driver, who was later found not guilty of sexual assault in a criminal trial.

The lawsuit against the cab company was dismissed in 2016 by the Ontario Superior Court of Justice, which rejected the plaintiff’s argument that the taxi company was vicariously liable, the article states. That ruling was upheld by the Court of Appeal for Ontario in 2017.

The plaintiff’s application for leave to appeal to the SCC was dismissed with costs on Feb. 1.

Grace, who was not involved in the taxi case but has more than 20 years of experience litigating sexual abuse cases, says plaintiff and defence lawyers practising in the sexual abuse, harassment and assault areas were keenly watching to see whether the SCC would take this opportunity to revisit the law.

She says it’s bound to come before the court again in some other context, noting the issue of vicarious liability for sexual assault has been considered by the SCC on approximately six occasions, the last time in 2005. 

“Vicarious liability is a no-fault form of strict liability that came into prominence in Canada in the sexual abuse area in 1999, when the SCC heard two appeals that raised the question of whether an employer who is not negligent or otherwise at fault can still be held legally responsible for damages caused by the intentional sexual misconduct of its employee,” Grace says. “The top court released a ground-breaking decision on vicarious liability for employee sexual abuse in 1999."

Relying on the principle of ‘enterprise risk,’ Grace says the court found that where an employee’s misconduct is closely tied to a risk that the employer’s enterprise has put into the community, principles of fair compensation and deterrence dictate that the employer be held vicariously liable for the harms caused by its employee, whether or not it knew or ought to have known the employee was harmful.

In that case, which involved a residential childcare facility, the SCC unanimously found in favour of vicarious liability attaching to the employer institution. However, in a companion case involving a children’s recreation club, Grace says the court was split when it applied the test for the imposition of vicarious liability laid down in the 1999 case.  

“A narrow majority held that vicarious liability should not attach to the children’s club for the sexual abuse committed by its senior staff member against children who had participated in club activities,” she says.

The SCC’s 2004 decision that found a church organization vicariously liable for its clergy member’s sexual misconduct was also a legal “game changer,” Grace says.

“Residential children’s facilities and church organizations and their respective insurers, understanding that vicarious liability was almost certain to be imposed, became more amenable to streamlining claims, entertaining alternative dispute resolution processes, and settling cases,” she says.

Negligence is notoriously difficult for a plaintiff to prove and thus, she says, it plays a limited compensatory and deterrent role for sexual abuse. 

“Yet we seem to be at an unprecedented crossroad. There is widespread recognition of the need to stop sexually predatory behaviours against those who are most vulnerable, including children and women,” Grace says. “There is also widespread acceptance that sexual abuse is prevalent not because of a few ‘bad apple’ individuals, but for systemic reasons.”

She says by capturing the enablers and facilitators of sexual abuse, such as employers and organizations that, albeit sometimes unwittingly, contribute to opportunities for sexual exploitation and abuse of vulnerable persons, vicarious liability offers a means of imposing legal accountability on those most able to prevent and stop sexual abuse.

“There are many outlier cases that do not fit neatly into the cases where vicarious liability is now accepted as applying,” she says. “The taxi case that the SCC declined to hear is just one illustration of such a case. As more and more victims of sexual abuse choose to turn to the civil justice system, rather than the criminal system, we can expect many more sexual abuse cases in which the limits of vicarious liability will be tested.”

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