Date: Fri, 5 Oct 2007 11:19

From: David Cheifetz

Subject: Police liability

Expanding on the point of paras 59 and 61 of Hill v Hamilton-Wentworth, which I see as central to the majority's justification for their decision, even if they didn't put it that way -

I suggest the premise in those paragraphs flows from and is a continuation of the "enterprise liability" philosophy the Supreme Court of Canada began to expound at least in Bazley v Curry, [1999] 2 S.C.R. 534. Bazley and enterprise liability aren't mentioned in Hill, but that's a so what. It wasn't necessary given the content of paras 59 and 61. I point to the following paragraphs in Bazley - 31, 38, 53, 54 - which I suggest lead to the Hill decision. Inexorably? No. Probably? I think so.

Bazley v. Curry, [1999] 2 S.C.R. 534

31 However, effective compensation must also be fair, in the sense that it must seem just to place liability for the wrong on the employer. Vicarious liability is arguably fair in this sense. The employer puts in the community an enterprise which carries with it certain risks. When those risks materialize and cause injury to a member of the public despite the employer’s reasonable efforts, it is fair that the person or organization that creates the enterprise and hence the risk should bear the loss. This accords with the notion that it is right and just that the person who creates a risk bear the loss when the risk ripens into harm. While the fairness of this proposition is capable of standing alone, it is buttressed by the fact that the employer is often in the best position to spread the losses through mechanisms like insurance and higher prices, thus minimizing the dislocative effect of the tort within society. “Vicarious liability has the broader function of transferring to the enterprise itself the risks created by the activity performed by its agents” (London Drugs, per La Forest J., at p. 339).

38 Where the risk is closely associated with the wrong that occurred, it seems just that the entity that engages in the enterprise (and in many cases profits from it) should internalize the full cost of operation, including potential torts. See generally A. O. Sykes, “The Boundaries of Vicarious Liability: An Economic Analysis of the Scope of Employment Rule and Related Legal Doctrines” (1988), 101 Harv. L. Rev. 563. On the other hand, when the wrongful act lacks meaningful connection to the enterprise, liability ceases to flow: Poland v. John Parr and Sons, [1927] 1 K.B. 236 (C.A.) (noting that the question is often one of degree). As Prosser and Keeton sum up (Prosser and Keeton on the Law of Torts (5th ed. 1984), at pp. 500-501), when the harm is connected to the employment enterprise:

"The losses caused by the torts of employees, which as a practical matter are sure to occur in the conduct of the employer’s enterprise, are placed upon that enterprise itself, as a required cost of doing business. They are placed upon the employer because, having engaged in an enterprise, which will on the basis of all past experience involve harm to others through the torts of employees, and sought to profit by it, it is just that he, rather than the innocent injured plaintiff, should bear them; and because he is better able to absorb them, and to distribute them, through prices, rates or liability insurance, to the public, and so to shift them to society, to the community at large."

53 The third argument, essentially a variation on the first, is that vicarious liability will put many non-profit organizations out of business or make it difficult for them to carry on their good work. It is argued that unlike commercial organizations, non-profit organizations have few means of distributing any loss they are made to assume, since they cannot increase what they charge the public and cannot easily obtain insurance for liability arising from sexual abuse. While in this case, it may be that the loss can be distributed to the public (since the province pays the Foundation for caring for children like the respondent), many non-profit organizations may have no way to obtain contribution from other sources to cover judgments against them. In sum, attaching liability to charities like the Foundation will, in the long run, disadvantage society.

54 I cannot accept this contention. It is based on the idea that children like the respondent must bear the cost of the harm that has been done to them so that others in society may benefit from the good work of non-profit organizations. The suggestion that the victim must remain remediless for the greater good smacks of crass and unsubstantiated utilitarianism. Indeed, it is far from clear to me that the “net” good produced by non-profit institutions justifies the price placed on the individual victim, nor that this is a fair way for society to order its resources. If, in the final analysis, the choice is between which of two faultless parties should bear the loss - the party that created the risk that materialized in the wrongdoing or the victim of the wrongdoing - I do not hesitate in my answer. Neither alternative is attractive. But given that a choice must be made, it is fairer to place the loss on the party that introduced the risk and had the better opportunity to control it.

If I had to guess, I'd say that one or more of the majority drafts included something that referenced Bazley and the enterprise liability concept more explicitly than paras 59 and 61, perhaps even a paraphrase of para 54 and, particularly, the concluding sentence. It's rather obvious, no?

If I've spotted it, don't we have to assume the SCC did, too?

David Cheifetz

-----Original Message-----
From: David Cheifetz  
Sent: October 5, 2007 5:10 AM
Subject: ODG: police liability

John,

My take, for what it's worth. If it's viewed as cynical, so be it.

Canada is litigious. People sue. It's simply not as bad, yet, as in the US because litigation isn't yet as remunerative for lawyers & clients. There's money to be made but it's not quite the pot of gold some people might think. It's an expensive process for the lawyers. People who are plaintiffs in these claims usually don't have any money. They're judgment proof as often as not but the lawyer still has to spend his or her time. The defence will be well-funded. (The majority recognizes these "controls" this when discussing the prospect of suits after dismissals of the charges: see para 64.)

Will the decision actually impair police investigations? You mean, will the individual police officer worry about the financial consequences of being sued civilly? I doubt it. Why should they? They're insured. Or, even if not, they'll be acting in the course of employment in almost every case I can imagine and be entitled to indemnity from their employer who has the state's deep pocket. Will it cost the municipalities and taxpayers anything? Only if the claims are in excess of limits or the conduct is so egregious that it attracts punitive (exemplary) damages. Let's assume that that's going to be a most unlikely situation. So, did that play a part in the majority's decision.

Let's see.

59 It should also be noted that many police officers (like other professionals) are indemnified from personal civil liability in the course of exercising their professional duties, reducing the prospect that their fear of civil liability will chill crime prevention.

61 The record provides no basis for concluding that there will be a flood of litigation against the police if a duty of care is recognized. ... The best that can be said from the record is that recognizing a duty of care owed by police officers to particular suspects led to a relatively small number of lawsuits, the cost of which are unknown, with effects on the police that have not been measured. This is not enough to negate the prima facie duty of care established at the first stage of the Anns test.  

Make your own decision.

Ultimately, this decision is going to cost the municipal insurers lots of money. But it isn't going to cost the taxpayers very much unless the insurers bail out or the insurers raise rates astronomically or limit the policy limits significantly. I don't see that happening. I'm sure the insurers' actuaries have already number-crunched the possibilities to rate the risk and found it tolerable. Will insurance rates go up in any relevant way? I don't know. Would that sort of evidence have made a difference to the majority?

Charron J, by the way - one of the dissenting judges - is an ex-Crown. Criminal law is her background. She is the only judge on the bench with that sort of practical background in criminal law.

But, as I said, I'm cynical. (Blame it on too many pucks in the head.)

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