Management of Vicarious Liability Risk

When considering the broad range of crimes that can be committed in the business world that fall under the banner of fraud, bribery and corruption, the list is quite lengthy.  We are able to categorise business crime into four major categories of business crime, as follows (Latimer, 2012, p. 96).

Category	Examples
White-collar crime	Embezzlement Insider trading Money laundering
Organised crime	Illegal drugs Illegal services
Computer crime	Unauthorised access Unauthorised impairment of data Internet fraud
Regulatory offences	Breaches of: The Corporations Act 2001 (Cth) Environmental lax; and Workplace laws

A company is deemed to be liable for the crime if the plaintiff’s actions are considered to be within the course of employment.  In Australia, a vicarious liability can arise under contract law, tort law, criminal law, and any other statutes.  The existence of vicarious liability is justified by the fact that it encourages good management practices.  In order to manager the risk of vicarious liability, managers and directors should take more care when recruiting.  Specifically, they need to consider whether a person is capable, qualified and of a suitable temperament for the post (Lockwood, 2011, p. 150).

References

Latimer, P.  (2012).  Australian Business Law (31^st ed.).  CCH Australia Limited.

Lockwood, G. (2011).  The widening of vicarious liability: Implications for employers. International Journal of Law and Management, 53(2), 149-164. DOI: 10.1108/17542431111119414