Vicarious liability for wrongful acts of employees of charitable and
nonprofit organizations
By Don Bourgeois
Canadian FundRaiser: May 10, 2000
The law in Canada recognizes two basic approaches for somebody who has
suffered damages to sue the person who caused the damages - contract law
and tort law. In the case of contract law, two parties have come to an
agreement for the purchase and sale of goods or services. If one party
breaches the terms of the contract, he or she may sue the other party for
any damages he or she suffered as a result of the breach. There is a direct
relationship between the two parties, one that the courts have recognized
for centuries.
Tort law has two major streams - intentional torts and negligence. An
intentional tort occurs, for example, if one person hits another and causes
injury. Negligence may occur where one person owes a duty of care to
another and breaches that duty of care. Motor vehicle accidents are a
common form of negligence. Other examples include a 'slip and fall' where a
sidewalk is not shoveled or faulty equipment. The law of negligence is, in
legal terms, a relatively recent development and really got started in the
early 20th century with a mouse allegedly found in a bottle of ginger beer.
Law recently extended by the courts
Until recently, the general view was that an organization would be liable
for its own negligence or the intentional torts of its employees in the
course of their duties. This approach made sense because an organization
can only carry out its objects through its officers, directors, members and
employees. It ought to be held vicariously liable for the wrongful acts of
its employees or if it was itself negligent in who it hired, the training
it provided to the employee or how it supervised the employee.
The Supreme Court of Canada, however, in the Bazley v. Curry case appears
to have extended the law of vicarious liability where children and possibly
other 'vulnerable' people are concerned. In that case, the employer was a
nonprofit organization which operated residential care facilities for
emotionally troubled children. It was a 'substitute parent' for those
children. The employees bathed and fed the children and put them to bed.
The organization carried out certain checks on a potential employee but
those checks did not reveal he was a paedophile. Unknown to the employer,
the employee sexually assaulted some children while bathing and feeding
them and putting them to bed. The employer dismissed the employee when it
became aware of the improper actions.
A number of factors now to be considered
The Supreme Court of Canada found the organization vicariously liable for
the wrongful acts of its employee, even where the acts were outside the
employee's authority. The Court held that there was a strong connection
between what the employer instructed the employee to do (bath and feed
children and put them to bed) and the wrongful acts of the employee. The
Court set out several factors that ought to be considered in cases of
intentional torts, such as sexual assault:
- the opportunity that the employer's enterprise afforded the employee to
abuse his or her power;
- the extent to which the wrongful act may have furthered the employer's
aims (and hence be more likely to have been committed by the employee);
- the extent to which the wrongful act was related to friction,
confrontation or intimacy inherent in the employer's enterprise;
- the extent of power conferred on the employee in relation to the victim;
- the vulnerability of potential victims of the wrongful exercise of the employee's power.
The test, the Court concluded, should focus on whether or not the
employer's enterprise and empowerment of the employee materially increased
the risk of sexual assault and hence the harm.
No special consideration for nonprofits
Equally important, the Court found that there should not be an exemption
for nonprofit organizations. Although these organizations perform needed
services on behalf of the community as a whole, from the perspective of the
child, it is fair that as between the child and the organization that the
organization should bear the legal responsibility for the abuse and harm.
The Court, in Jacobi v. Griffiths, released at the same time, concluded
that on the facts of that case that vicarious liability was not
appropriate. In the Griffiths case all but one of wrongful acts occurred
after working hours in the employee's home. The majority of the Court
concluded that the employer was not vicariously liable. Three judges
dissented and would have held the employer liable. The majority, however,
felt that the wrong was only coincidentally connected to the employer's
enterprise and the employee's duties in that case. The imposition of
vicarious liability would not serve any deterrent purpose. In the next
column, we will examine some ways to minimize risk.
Don Bourgeois is an Ontario lawyer who has practiced in the charitable and
nonprofit area of law and is an officer and director of several
organizations. He is the author of The Law of Charitable and Non-Profit
Organizations and The Law of Charitable and Casino Gaming, both published
by Butterworths Canada. He can be reached by e-mail at
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