The Legal and Ethical Environment of Business Essay

The Legal and Ethical Environment of Business - Essay Example This is not the case where recoveries can be made directly from the agent or person causing the harm, rather the principle behind vicarious liability is that an employer exerts control over the physical conduct of an agent and is therefore responsible for the harmful conduct. In a recent case, Arena Group 2000, the maker of a sign that fell on a San Diego man and paralyzed him, was held vicariously liable for the injury caused.2 There are also several cases where private actions for securities fraud under Section 10(b) show that corporate officers and law firms are being held vicariously liable for preparing misleading disclosure documents.3 It was held in this case that even where secondary agents are involved, where they participate in a fraudulent activity to an extent which could characterize them as authors or co-authors they may be liable for damages accruing from such harmful activity4. Another case where vicarious liability for tort was imposed upon an employer was in the cas e of American Society of Mechanical Engineers Inc v Hydrolevel Corp5 where common law agency principles were used to impute liability upon an employer in a position of sufficient authority to exert control.An employer can also become liable for vicarious liability for the harm caused by its employees under a theory of negligent hiring, where adequate checking of references and skills are not carried out by an employer before the hiring is completed6. The Strict liability rule may be enforced in corporations such as DWI and especially public corporations where the corporation will be expected to assume the liability for the tortious acts of its employees.