Gray on "The Enterprise Risk Theory of Vicarious Liability"

Professor Anthony Gray of the USQ School of Law and Justice has recently published an article titled The Enterprise Risk Theory of Vicarious Liability in Volume 46 (Part 3) of the Australian Business Law Review.  Here is the abstract:


"While the law of vicarious liability has existed for centuries, a satisfactory rationale or explanation for it has proven to be elusive. United States courts began asserting a theory of “enterprise risk” based on economic principles, seeking to allocate the costs associated with doing business to the enterprise. On this basis, the fact that an employee or other worker commits a wrong, and causes a third party injury or loss, is a “cost of doing business” which should properly be allocated to the business activity. This doctrine has apparently been accepted in Canada and the United Kingdom, including seeing child abuse committed within an educational institution as effectively a cost of doing business. While the Australian courts at one point seemed to accept such reasoning, more recently they have turned away from it. This article argues the Australian courts were right to do so, and should continue to not accept such a basis of vicarious liability."