When a client is in a vehicle crash and the other party is, for example, a truck with the labels “Acme Plumbing” on the outside, it may be that the other party is not just the person driving the truck but also Acme Plumbing, a fictitious name made up for this post. How can the company be liable when it was an individual who was driving?
This can occur due to a long-time legal concept called Vicarious Liability. The Nevada Supreme Court explains that, “Vicarious liability is liability that a supervisory party… bears for the actionable conduct of a subordinate… based on the relationship of the two parties. The supervisory party need not be directly at fault to be liable, because the subordinate’s negligence is imputed to the supervisor.” (citations omitted).
The employer-employee relationship is a very common one where vicarious liability occurs. If you think about it, a company can only act through its’ people. Its’ people *do* things. Yes, injuries can occur to others outside the company due to machines, or, say, websites, but it is the employees or contractors of the company that put those things in motion. It would be unfair to say “it is one of the employees who did it, not the company itself,” and allow the company to avoid liability. This is a simplistic way of describing it. Indeed, there are many other principles that are applied to determine whether vicarious liability is appropriate to the situation.
In the real world, this is precisely what commercial general liability insurance and commercial auto insurance cover: the negligent damage caused by the company’s employees. This is why companies have insurance that covers the things their employees do in certain circumstances, but not all circumstances.
Now in the recent case of McCrosky v. Carson Tahoe Regional Medical Center, no parties were challenging whether vicarious liability as a concept should be abolished. This is a well-recognized theory of liability throughout the United States. The hospital, however, was asserting that it was not vicariously liable for the damage allegedly caused by one of the physicians working there, primarily because the physician was not considered an employee and secondarily because the patient signed an acknowledgement of the lack of employee-employer relationship. The court held that vicarious liability could apply to this case.
The case has been remanded (sent back to the trial court) to either go to trial or be dealt with via another motion for summary judgement (i.e. motion to dismiss) as to the issues outlined in the McCrosky opinion.