This column looks at a troubling subject matter and a difficult area for the law; civil responsibility for the sexual assault of children. Non-profits and charities are featured in several recent cases which impose a very high standard of conduct. As a result, non-profits and charities working with children need to be aware of the potential trend these cases represent. In addition, groups need to actively consider how to better manage the risks associated with the possible liability of their own organizations.
The Limits of Responsibility
Should an employer be civilly responsible for sexual assaults by staff members? Are volunteers the same as paid staff? What, if any, should be the limits of responsibility? In a decision called a first in Canada, a Vancouver charity running homes for emotionally disturbed children was successfully sued by a former resident for the sexual assaults of an employee. The judge decided the Children's Foundation was liable as the organization was .
.. sufficiently connected to what [the employee] was authorized to do that it can be said he was acting in the course and scope of his employment.
The case involves a claim of vicarious responsibility-the responsibility of an employer for the wrongful acts of an employee. The oft-cited policy reason for vicarious liability is to attach the employer with employee wrongdoing because the employer has the benefit of the employee's work. As one would expect, this policy was developed in the context of for-profit enterprise. But where an organization hires people to fulfill the objects of the organization in contrast with making a profit to return to the shareholders or owners (the broad function of non-profits and charities) the employer benefit argument does not seem to have the same force.
The question always asked in these cases is whether the employee is acting in the course and scope of their employment. And the constant issue is always the scope or range of the employee's work. In the Children's Foundation case, the wrongdoing took place during the employee's hours of work and within the employer's facilities. The employee was authorized as part of his job to have physical contact with the child in question.
Traditionally, the line of employer responsibility is drawn by asking whether the harm results from employee conduct which the employer generally authorizes. At some point, employee deeds are their own, independent acts for which the employer has no responsibility. Most times this is relatively easy to spot. The city is likely not vicariously liable for a bank customer's injuries resulting from one of the city's bus drivers stopping to rob a bank. But what if the driver robs the passengers? What if the robbery takes place at the bus stop? And so on.
Other Considerations
The difficulty with the Children's Foundation case and the Boys' and Girls' Club of Vernon (heard a few months later) is the basis of the reasoning: because the employee came into contact with the children in the course of working, any wrong that results is the responsibility of the employer. Therefore the wrongful acts of employees on duty are the responsibility of the employer. It follows that the employer is vicariously liable where it puts an employee in a position to commit wrongful acts.
This standard of care is nearly one of strict liability: if a wrongful act is committed by an employee, the employer is liable. And while the need to find someone responsible is easily justified, considering the abhor rent nature of the sexual acts against children, other troubling questions are also raised. Is a non-profit organization the proper one to be held accountable? Can this kinds of organization bear the cost of this type of wrongful employee action? Already there is indication that insurers will not insure this peril in the future. And as for past coverage, each situation has to be closely studied. Will this formulation of the doctrine of vicarious liability be extended to include non-paid staff, the essential volunteer? How can non-profit groups go about doing the things they are set up to do, and, at the same time, reasonably protect themselves?
What Now?
In the months ahead, the results of the appeal of Children's Foundation will be known. Everyone hopes the BC Court of Appeal takes the opportunity to carefully consider the application of vicarious liability to non-profits and charities. As this and other cases are decided a body of law will emerge, giving more definition to these issues. In the meantime, non-profits and charities must assess their risk in light of these decisions.
Operating a nonprofit organization is filled with dangers: some known, most not. To ensure an organization's success, a board of directors must consciously face risks and reduce them to tolerable levels. Thinking about loss is not a pleasant exercise. Even well-meaning boards may overlook the duty to do so. For many board members, considering risk is beyond the focus of the immediate work to be done. But boards and management must examine on-going ways to monitor risk and develop knowledge and techniques to protect their organizations and themselves from unanticipated loss.
References
Bazley v. The Children's Foundation (B.C.S.C.) 30 June, 1995; Gail Taylor-Jacobi v. Griffiths and the Boys' and Girls' Club of Vernon (B.C.S.C.) 25 October 1995; G.B.R. v Hollet (N.S.S.C.) 24 July 1995; R v Audet (S.C.C.) 30 May 1996. There are other cases. These four are chosen because they represent an apparent trend in how the issues are treated. Bazley v. The Children's Charity is being appealed on this important point.
Law Suit Against Charity: A First in Canada: Canadian Non-Profit News November 1995 pp 81 (Vol 3).
The above column examined several cases about the liability of non-profit organizations where civil claims of sexual assault had been made. In late March, the British Columbia Court of Appeal released the appeal decisions in two of them: B.(P.A.) v. The Children's Foundation and T.J.(G), J.(R.C.) and S.(J.M.) v. Griffiths and Boys' and Girls' Club of Vernon. These cases are important as they virtually overhaul the law of vicarious liability for employees' sexual misconduct. And in late April, a decision of the BC Supreme Court relying on the law developed in the Court of Appeal decisions arguably took the law one step further. (1) What is that law and how might it affect non-profit organizations in Alberta?
What the BC Court of Appeal Decided
The Children's Foundation a non-profit society and charity appealed an order finding it civilly liable for acts of sexual abuse committed nearly 30 years ago by one of its employees on a resident at one of the Foundation's group homes. In the Vernon case, a brother and sister successfully sued the Boys' and Girls' Club for sexual assaults 15 years ago by the Club's program director. These took place in the director's home, outside working hours. The Club appealed. The Foundation lost its appeal while the Vernon Boys' and Girls' Club was successful in having its liability reversed.
What's Involved
The first point is that British Columbia recently changed its law about when claims for sexual misconduct can be brought. Now there is no time limit. Alberta is currently changing its law about limitation periods. It used to be that a claim of this sort had be made within two years from when the incident happened or within two years from the time when the damage caused by the incident was discovered. Soon the law will be that a claim for a breach of duty must be brought within 2 years of the date on which a person knows (or ought to have known) that their injury was caused by the breach, or, in any case, within 10 years. If the situation involves a minor, these periods do not begin to run until the age of majority is reached. (2)
The second point is that the Court of Appeal rejected the argument that non-profit organizations should be held to a less stringent standard of care than commercial enterprises on the basis of public policy. In the words of Justice of Appeal Huddart:
I can see no reason to exempt non-profit organizations from the ordinary principles of vicarious liability. The wrong is not more or less worthy of compensation by the nature of the employer to whom the Superintendent has delegated its responsibility as guardian of children in need of protection: be that a government department or agency, a non-profit organization, or a commercial entity.
Finally, there is no equivalent decision in the Alberta courts. Whether our courts adopt the same reasoning as the BC Court of Appeal remains to be seen.
How the BC Court of Appeal Decided
The Children's Foundation and Boys' and Girls' Club of Vernon cases will be discussed and litigated for a long time to come. In the two decisions the same five judges wrote eight separate sets of reasons. (3) The following is a summary of their combined reasoning.
- Historically, employers were legally responsible (and therefore
required to compensate vic-tims) for the wrongful acts of their
employees. This was so even for unauthorised acts, pro-vided
these deeds are so closely connected with authorised acts as
to be regarded as a way of doing what the employee was hired
to do-although an improper one. This is the basis of vicarious
liability: an otherwise innocent employer is responsible for
the wrongful actions of an employee against an innocent victim.
The Court of Appeal says this is not appropriate law in the case
of sexual assault. The unique features of sexual assault cases
require a contextual approach that permits courts to examine
the nature of the authority conferred on the employee and the
likelihood that the conferral of that authority will increase
the probability of a wrong taking place.
- In place of the mode of performance test, the different Justices of the Court of Appeal sub-stituted one of two similar tests: the conferral of authority test or the close connection test.
- Conferral of authority provides not mere opportunity, but the power over another that makes a wrong more probable. The employer should be vicariously liable for any wrong that results from the abuse of that power. The kind of power involved is where an employee has parental-like authority over children. Children placed in a position where the employee will have complete control over every aspect of their life perceive themselves to be powerless in relation to that parental figure.
4. There is also a need for there to be close connection between the employee's authorized duties and his or her wrongful acts; the necessary degree of connection will have to be determined on the facts of each particular case
...the general proposition for the imposition of vicarious liability (in cases of sexual assault) is that there must be sufficient nexus between the duties of the employee as such and his miscon-duct. Whether or not there is that sufficient nexus will depend on the nature of the power con-ferred on the employee by his employment and the likelihood that that conferral of power will make probable the very wrong that occurred.
Up to now, an employer was not generally responsible for the wrongful acts of independent contractors resulting in injury to another person, their property or reputation. But in the Critchley case, on the basis of both the conferral of authority test and the close connection test, the Supreme Court of British Columbia found the province liable for the sexual assaults of an independent contractor.
What These Cases Mean and Might Mean
Stepping back a bit, the reasoning of the BC courts really is common sense: there is a clear relationship between your responsibility, the influence you allow and encourage in other people you supervise, and the harm you should recognize can reasonably occur as a result of the exercise of that authority. The problem is that every situation needs to be examined on its own merits and then judgments made. But making hard decisions is the job of leadership and the responsibility of elected officials and their senior staff in non-profit organizations. What these cases say is that where the likely harm is great, the supervision has to be high or the authority and opportunity to do the harm have to be removed.
Now that Critchley extends vicarious liability for sexual assault to independent contractors, are unpaid volunteers far behind? Not likely. But by the reasoning the Court of Appeal uses, isn't that how it should be? The risk management task for non-profits is to clearly determine what authority is being conferred on employees, volunteers, and anyone whom the organization authorizes to do things and to judge whether any likely harm is so closely connected to the exercise of that authority that heightened standards are required. That is why the assaults in the Foundation's group home during the employee's regular working hours, (and related to what he was hired to do) were the responsibility of the employer. And that is why the assaults in the program director's home after hours and without any reasonable connection to the work the program director did as part of his employment were not the responsibility of the Vernon Boys' and Girls' Club. While raising any number of short-term practical difficulties for organizations dealing with clients potentially at risk, the reasoning of these cases is sound and the guidance clear.
References
- CA, CH, LK, and MD v. John William Critchley and Her Majesty The Queen In Right of British Columbia
- The Limitations Act was passed on May 1, 1996. It has yet to be proclaimed. There are currently cases from Alberta proceeding to the Supreme Court which might affect the scheme of limitations the Act uses.
- Together the Children's Foundation, Boys' and Girls' Club of Vernon and Critchley and Her Majesty The Queen In Right of British Columbia cases are more than 200 pages of findings and reasoning.
Laird Hunter is a lawyer with the firm of Worton & Hunter in Edmonton, Alberta.
