Canadian Law: Expanding Vicarious Liability for Institutional Abuse

• Vicarious liability in Canada holds entities responsible for others' wrongful acts, even without direct fault, operating as a form of strict liability.
• The Supreme Court's *Bazley v. Curry* decision established the "significant connection" test, requiring a link between the creation or enhancement of risk by an enterprise and the resulting harm.
• This liability extends beyond traditional employer-employee relationships to institutions and platforms, particularly for acts committed within the course and scope of employment.
• The *Bazley* case found a children's foundation vicariously liable for abuse due to the intimate authority granted to an employee, while *Jacobi v. Griffiths* declined liability for a club where abuse occurred off-site.
• The doctrine's application hinges on whether the enterprise materially increased the risk of the specific harm, even for intentional wrongs not authorized by the employer.

The critical inquiry is whether the enterprise created by the employer materially increased the risk that led to the harm.

Canadian law increasingly holds entities responsible for the wrongful acts of others, even without direct fault. This principle, known as vicarious liability, has expanded significantly beyond the traditional employer-employee dynamic to encompass institutions and digital platforms. It operates as a form of strict liability, meaning a party can be held legally accountable for another's actions without requiring proof of their own personal wrongdoing.

Instead, the liability stems from the nature of the relationship between the parties, rather than any finding of direct fault. While the most common application remains the employer-employee relationship, where an employer can be held liable for an employee's wrongful act committed within the course and scope of their employment, this liability generally does not extend to acts driven purely by personal reasons with no link to their job.

The foundational framework for vicarious liability in Canada was established by the Supreme Court in *Bazley v. Curry*, a landmark 1999 decision ([1999] 2 SCR 534). This ruling articulated that vicarious liability is generally appropriate when there exists a "significant connection between the creation or enhancement of a risk and the wrong that accrues therefrom." Under this test, an employer's negligence or awareness of the wrongdoing is not a prerequisite for liability.

The critical inquiry is whether the enterprise created by the employer materially increased the risk that led to the harm. The Supreme Court also noted that the doctrine's limits are defined by underlying policy reasons, and liability will not arise if a wrong is only incidentally connected to employment. This framework is particularly relevant in challenging cases involving intentional wrongs, such as sexual abuse, that an employer neither authorized nor would ever condone.

The complexities of applying this "significant connection" test are starkly illustrated by two companion Supreme Court decisions from 1999, which set crucial boundaries. In *Bazley v. Curry*, the Children's Foundation, a non-profit organization, operated residential care facilities for emotionally troubled children aged six to twelve. Employees were authorized to act as substitute parents, including intimate tasks like bathing and tucking children into bed. The Foundation hired Leslie Curry, a pedophile whose history was not revealed by background checks, and he sexually abused several children, including Patrick Bazley. The Supreme Court found the Foundation vicariously liable, concluding that the employment terms created near-total intimacy and authority over vulnerable children, thereby materially enhancing the risk that led to the abuse.

In contrast, *Jacobi v. Griffiths* ([1999] 2 SCR 570), decided on the same day, presented similar facts but yielded an opposite outcome. Harry Griffiths, a program director at a Boys' and Girls' Club in Vernon, British Columbia, cultivated friendships with children from the club. He later invited them to his home after hours where he assaulted them. A 4-3 majority of the Supreme Court declined to impose vicarious liability on the Club. The majority determined that the connection between the Club's enterprise and the abuse was not sufficiently strong to justify imposing no-fault liability in this instance.

These contrasting judgments underscore the nuanced application of the "significant connection" test, particularly in cases involving intentional wrongs like sexual abuse that employers neither authorized nor condoned. The expansion of vicarious liability in Canada, from traditional employment to institutional abuse and even to emerging models like gig workers, means that the blame for harm can now travel up the chain to a broader range of entities.

This evolving legal landscape highlights the critical need for lawyers and compliance officers to understand the expanded scope of employer liability for employee wrongful acts in Canada, especially for institutions and platforms, to effectively advise clients on mitigating risks from wrongful acts by individuals beyond traditional employees, applying the 'significant connection' test from *Bazley v. Curry*.

Lawyers and compliance officers in Canada must understand the expanded scope of vicarious liability, particularly for institutions and platforms, to advise clients on mitigating risks from wrongful acts by individuals beyond traditional employees, applying the 'significant connection' test from *Bazley v. Curry*.

Source: Original reporting via Lexology