TRU/Law3020/GroupG

Legal Realism

According to the underlying principle of legal realism, law is whatever judges say it is. Legal realists believe that judges are not bound by any universal set of rules, they create them. Holmes, a proto-legal realist, argues that legal outcomes can be predicted on the basis of rules in similar cases, but that is where the aid of precedent ends. Jerome Frank goes even further than Hobbs and argues that judges not only make up the rules, but also the facts; judges insert a fiction into their judgments so as to reach an outcome justified by the legal rules.

Jerome Frank, a legal realist, explained that "courts begin with the results they desire to accomplish...their conclusions determine their reasoning". Applying this view to Bazley v. Curry, we may reasonably believe that a legal realist would expect a judge to "begin" as a proponent for the respondent, a child and an innocent victim. Thus, a legal realist would predict that a judge in this case would frame the issue and the facts in such a way as to enable their desired outcome. Specifically, they would argue that McLachlin J "began" with the desire to find the organization liable and so created a story justified by the legal rules of our judicial system, in particular with policy arguments. This story then "allowed" McLachlin J to depart from the traditional test that found sexual abuse by employees outside the "scope of employment" and thus would not find an organization vicariously liable (para 41).

The Court in this case uses vicarious liability as an instrument for fairness and as a deterrent in order to protect vulnerable children from future harm. However, legal realists contend that judges are not bound by precedent, and so from this perspective deterrence is not as effective. Clearly, the impact of the ruling in Bazley is lesser if other organizations are not necessarily subject to it in future cases. Additionally, while judges are not bound by precedent, judges make decisions at least partially based on their own personal experience and personalities, what legal theorists call their "hunch". With respect to the case of Bazley, it would be argued that McLachlin J's personal experiences and her personality created a "hunch" within her to protect vulnerable children, and so inevitably she found the Foundation vicariously liable in order to deter other organizations from creating such a risk of harm. Unfortunately, because of legal theorist's belief in judges' "hunches", and that they are not bound by precedent, according to this perspective, judge's rulings are less certain and thus ironically less effective with regards to deterrence.

Natural Law Theory

Contrary to legal realism, natural law theory states that law is not man made; instead it is the rational result of human beings' struggle to attain the common good. However, natural law theorists do not believe law is man-made like legal realists do, and instead they believe it is made by God but through man whose nature (as created by God) is inclined towards the common good. Further, whereas legal realists believe judges create laws at least partially based on their "hunches", legal theorists hold that true laws are consistent with natural law. Thus, because natural law is morally inherent, natural law theorists believe a true law must have parallel moral aims. This is unlike the belief of legal realists who see law as simply being what a judge believes it should be. With respect to our current case, few would argue contrary to the notion that protecting children from sexual abuse is moral, and thus natural law theorists would most likely agree the law in Bazley is morally parallel to natural law and thus a true and valid law. Thomas Aquinas, a prominent natural law theorist, points to four additional elements that are essential for a valid law, namely, a law must: be directed to the common good; follow practical reason; be enacted by a valid law maker; and, be promulgated.

Thomas Aquinas, with respect to his first essential element, would explain that the Court in Bazley was interested in upholding vicarious liability to assert the goals of “social harmony” and the good of the community. For people to live in society harmoniously, they need to be assured that when a wrong or injustice is done to a disadvantaged person, someone needs to be held responsible. In this case, where the wrong was committed by an employee to a victim under the care of a facility, the facility was found to be best-suited to bear the costs. Additionally, by holding the employer vicariously liable for an intentional tort, the court prioritized the greater common good of the community over the individual interests of the Foundation. Aquinas finds it imperative that laws promote the common good because law is teleological, as in law's function is the rational pursuit of the common good. Thus, just as a dull knife is not a knife, a law that does not achieve the common good is not a law.

Aquinas declares that a second element must be met, namely, that laws must have practical steps that direct people towards achieving common good. In the case of Bazley, the common good was to prevent sexual abuse of children occurring at the hands of an employee, whilst in the care of an organization. Aquinas would most likely argue that the judgement of the Court in Bazley directs organizations towards the common good. For instance, the Court sets out very specific, practical and reasonable steps for determining "whether an employer is vicariously liable for an employee’s unauthorized, intentional wrong” (para 41). In order to obey the law, the Foundation would need to avoid creating an enhanced risk of sexual abuse and thus would be directed towards achieving the common good. For example, if they limited the authorized conduct sufficiently connected to sexual abuse, such as bathing, they would be able to minimize the risk of sexual misconduct.

The third necessary element of law according to Aquinas, is that it be made by a valid law maker. Aquinas describes this law maker as somebody who is put in this lawmaking position by God, and thus knows what is the common good. With respect to our case, Bazley, this is where Aquinas would struggle to say the judgement is a true law. For instance, he would likely view Parliament as a valid law maker, but would be less inclined to view the Court as such. However, as this is a torts case, it is a matter of common law, or judge made law, rather than legislation. Thomas Aquinas felt that legislation was preferable because the few legislators possessed greater authority, wisdom, and neutrality; in contrast, the multitude of judges can “create contradictory law” and, as pointed out by the legal realists, are likely to be swayed by emotion. However, Aquinas did believe that in emergency factual situations, judges have the right to implement law in a just way to ensure it conforms to the law of nature. Aquinas held that such a law may be permitted to be contrary to the written law in order for justice to prevail. In the case of Bazley, there is no relevant legislation,and so it is up to judges to mete out justice, as long as it conforms to the law of nature.

As with the previous element, promulgation is somewhat problematic for this case. Although common law judgments are written and available to the public, they are not as easily “known” as laws that are written in legislation. The rule of this case is with regards to whether an employer can be held vicariously liable in tort. The judgement can be found in a collection of Supreme Court of Canada rulings, but such sources are less publicly accessible than codified laws. Additionally, for the common person, it would be difficult to understand what the “law” is by simply reading the case, which means that it is harder to “know.” However, in reality, organizations typically make it a priority to take notice of such fundamental legal decisions and take steps to mitigate their risks in response.

Legal Positivism

Legal positivism is a reaction to the teleological nature of natural law whereby to be considered valid law, laws must promote the ‘common good’. While there are several positivism theorists, each with their own characterizations and justifications of legal positivism, the basic tenet of legal positivism is the idea that the law is a human construct. While natural law theorists propose that all law derives from God or some higher power, legal positivists do not reject religion entirely as a source of law, but distinguish God’s law from other human sources of law.

According to John Austin, a leading 18th century positivism theorist, there are three kinds of directives governing humans: God’s law, positive morality, and positive law. Positive morality refers to societal norms and other rules that do not have the force in law. Positive law captures those rules which meet the requirements of valid law according to Austin. In order to be a valid law, a law must be a command issued by superiors to subordinates and backed by sanctions.

In Bazley, the Court establishes a test for vicarious liability. Based on Austin’s definition of positive law, it is not entirely clear if he would accept this decision as positive law. This case refines the previous test for vicarious liability and establishes the rules where employers may be held liable for actions of their employees. It is difficult to interpret this as a command issued by superiors as it does not explicitly state what conduct is appropriate or not for citizens. In fact vicarious liability speaks directly to being held responsible for the actions of others. Where an employer is creates a situation of risk, the Courts test does, however, direct employers to the factors they must consider in order to reduce their risk of being held vicariously liable for the actions of their employees. Through these considerations, Austin may have considered this a sufficient command. Finally, while perhaps not a command to citizens, this case certainly establishes that employers could be subject to sanctions, namely the liability for the wrongs of their employees when related to risks inherent in their operations.

It is also unclear if Austin would accept this judgement as meeting the requirement of being the command of a sovereign. While legislation enacted by Parliament would be considered law established by a sovereign in Canada, our common law system of judicial decision making proves more difficult for Austin who interprets judicial decisions as specific commands applying to individuals rather than generalized rules to apply to all. Austin establishes that common law decisions may act like law if they are tolerated by the sovereign, that is if they are not overruled by Parliament. In the absence of any legislation establishing rules on vicarious liability, it is possible that Austin would be satisfied with the test established in this case to be considered positive law. Further, given the common law system in Canada, Austin would likely accept that the test for vicarious liability passes what is known as the ‘pedigree’ test, confirming that a law comes into being in accordance with the rules of a given system of law.

Another fundamental aspect of legal positivism is the separation of law and morality, also known as the separation thesis. While legal naturalists propose that morality is inherent in all law, positivists contend that morality is not a necessary element of law. Austin proposes, however, that citizens have a moral obligation to follow law. Although in contrast to the inherent morality of natural law theorists, the outcome of both may be similar in the social benefit of following laws. In this case, the imposition of vicarious liability and holding those accountable when a wrong has been committed may be a moral outcome that satisfies both theories. Natural law theorists would account this outcome as promoting the common good, while Austin may view it simply as the obligation to follow what appears to be a moral law. According to other legal positivists such as Jeremy Bentham, this would be viewed as a function of utilitarianism whereby the law maximizes the greatest good for the greatest number of people. The imposition of vicarious liability on employers balances the need for fairness and establishes that the party who establishes the risk should be the one who bears the loss, thereby maximizing the utility to all the parties.

Separation Theory

Legal positivists still acknowledge morality, albeit as a separate rule system, and would admit that the law set out in Bazley appeals to a moral system. Few people would argue that a legal rule that addresses the assignment of losses and creation of risk of harm to children is not also a moral one. As a theorist still grappling with the recent horrors of Nazi Germany, HLA Hart would be pleased that in this case, both the moral and legal systems run parallel. Still, he would not agree with Aquinas in considering morality to be what makes the legal test in Bazley valid. Further, Hart would disagree with Aquinas' sentiment that a valid law must aim towards the common good, which in this case is to protect vulnerable children from the harm of sexual abuse.

Despite appearing to be morally sound and directed towards the common good, Aquinas would most likely not find the law in Bazley to be valid. Aquinas believed that a valid law must be made by a valid lawmaker, a ruler who holds their position by reason of the natural order. Judges are not considered to be this type of ruler and thus their “laws” are not valid to Aquinas. Both legal positivist John Austin and HLA Hart would disagree with this stance, as neither believe that a law must be made by such a “ruler” to be valid. However, HLA Hart and John Austin would not necessarily agree with one another. Austin believed that a valid law must be a command, issued by superiors to subordinates, and backed by sanctions. John Austin’s view of the validity of the law in Bazley was discussed previously. Applying John Austin's view of valid law to the test in Bazley was difficult, mostly because a legal test is not strictly considered a “command”. In contrast, Hart’s view is easier to relate to the law in Bazley because he does not believe in “command” type law but instead he believes valid law is one we feel we "ought" to follow. To elaborate, Hart believes that valid laws are rules of recognitions, those that most of society, in particular legal officials, feel they “ought to” follow and apply consistently. Thus with regard to the law in Bazley, Hart would agree it is a rule of recognition and that most people would feel they ought to uphold it. It is easily argued that the majority of society would feel they "ought" to uphold a law that deters the creation of risk to children, and reassigns the losses of innocent victims to the creators of said risk. Thus, Hart would most likely disagree with Aquinas and Austin and find this legal test of vicarious liability to be a valid law.

The legal test in Bazley does not fit well with Austin’s theory that the role of the courts and judges is to simply apply law. Hart, on the other hand, was a proponent for the maturation of legal positivism, and instead believed the theory should include an allowance for a change in approach with penumbra cases. The penumbra is a factual situation that falls outside the usual "settled meaning” of the law. The penumbra allows for judges to deviate from mechanically applying the law to unique factual situations, which Austin would have them do. Bazley falls outside the “settled meaning” of the vicarious liability test because it consists of a factual scenario the courts are unfamiliar with. For example, this is a no fault liability case so it is unclear as to where the losses should fall. As well, this case involves a non-profit organization as an employer rather than the usual profit making employers. Further, this case requires the Court to consider the unanswered issue of “whether an employer is vicariously liable for an employee’s unauthorized, intentional wrong in cases where precedent is inconclusive”. The Court treats this penumbra case by redefining the "settled core" of vicarious liability by modifying the legal test. Whereas before, sexual abuse by an employee was considered outside the scope of employment activity, the new test finds otherwise and thus enables the Court to find the employers vicariously liable for such conduct.

The legal test in Bazley promotes a fair assignment of losses, as well as deterrence from creation of risk of harm towards children. It may be the case that this legal test runs parallel with morality, and Hart would most likely recognize that. However, it is important to note that Hart would not agree that this morality is inherent in the legal test itself. Aquinas on the other hand would see that in an emergency factual situation, a notion similar to the penumbra, judges must apply morality in making law. Aquinas' view then quite clearly disregards the separation thesis and he would consider it an illusion. Hart would not only disagree with him on this point, but he would also disagree that judges simply make laws based on their own opinions or to serve good social policy purposes. Instead, to Hart, the legal test of vicarious liability from Bazley is valid and exists because people “ought” to follow it.

The Morality of Law

Lon Fuller’s approach to the law and the legal system is highly critical of the separation thesis. His criticism revolves around the following main premises: that the social acceptance of legal rules depends on its grounding in external morality; that the law itself has an inner morality; and that immoral laws cannot be explained by the separation thesis nor are the concepts of the "core" and "penumbra" useful.

Fuller challenges Hart's idea of the basis of law as a set of obligations, and instead argues that to be a functioning law, it must be grounded in morality external to the law itself. Hart, unlike Fuller, does not believe the reason we obey law is because law has a moral outcome and purpose. Hart explains that our obedience to the law is related to the rule of recognition, the social psychological fact that most of us, recognize the law as being valid and it ought to be followed. In particular, Hart argued that its necessarily important for the legitimacy of the law for the officials to feel they "ought" to uphold the law. Fuller essentially believes this is all nonsense. In stark contrast to Hart, Fuller explains that the only way to understand the social acceptance of legal rules, and to understand the social fact that most people, most of the time, understand legal rules as a special set of rules, is by recognizing an association between those legal rules and morality.

In applying Fuller's views to Bazley we can predict he would agree that most organizations will follow the legal rule set out in Bazley because it is a part of a special set of rules (the law) and in particular because it is a moral rule (that protects children from the risk of harm of sexual abuse). Additionally, he would agree with McLachlin J distancing herself from positivism, which holds that the law is all about words. Whereas previous cases were decided on trivial semantic meanings of "scope/mode of employment", McLachlin J concludes that semantics is not law and it is too artificial to provide any solid foundation by which judges can make substantive decisions (para 24, 41). Like Fuller, McLachlin J found that the law is more than words, and Fuller explains that it is grounded in external morality.

The certain characteristics necessary of law, namely coherency, rationality, and the capability of being explained, enable law to generate its own inner morality. Firstly, Fuller would agree that the law in Bazley conforms to the internal requirement of being coherent because it synthesizes the seemingly arbitrary decisions of previous cases in the area of vicarious liability. Vicarious liability cases are strange (or to Hart, they are penumbra cases) because they are no-fault liability torts and so allow victims to recover from entities that technically have no fault in the harm. Thus, Courts must rely heavily on public policy in deciding when someone should provide compensation for a harm they are not at fault for. This reliance on public policy left the Court in Bazley with no clear precedent to work with, and also is what made the decisions of each previous vicarious liability case appear arbitrary. McLachlin J rectifies the lack of precedent and this arbitrariness through Fuller's requirement of internal coherency by redefining the test of vicarious liability. In other words, McLachlin J brings uniformity and coherency to the unconnected decisions of previous vicarious liability cases through the law in Bazley.

Not only is the law in Bazley coherent, it is also rational, and this is evident when one looks at the logical process McLachlin J embarks on in reaching her conclusion of the redefined vicarious liability test. Whereas a legal realist would claim McLachlin J started her analysis with a decision in mind, Fuller would argue McLachlin J was led to her decision by her thorough and methodical scrutinizing, specifically, of the influence of public policy on vicarious liability over the years. For example, McLachlin J begins by looking as far back as the traditional rule that stated masters were liable for all actions by their servants (para 26). She then describes how the rule was later relaxed because the broad traditional rule adversely restrained trade and commerce (para 26). McLachlin J elaborates further, describing how the rule morphed yet again due to the economic protection modern insurance practices confer on employers (para 26). Through the methodical and logical analysis of the history of vicarious liability law, Fuller would argue that McLachlin J reached a rational and functional law as her decision, specifically, a functional redefined vicarious liability test.

Fuller believes that an essential element of a functioning legal system is the requirement that decision makers be compelled to justify, explain and give reasons for their outcomes. Fuller explains that when judges adhere to this requirement, they are necessarily pulled towards good outcomes. McLachlin J's transparency in describing her analytic process fulfills Fuller's requirement; the law in Bazley is thoroughly explained by the Court. Thus, Fuller would find McLachlin J's vicarious liability test to be a moral law because McLachlin J explained her reasoning process and justification for it. This view of what makes a moral law is obviously contrary to that of Hart who would say law is completely separate from morality. Further, natural law's stance disregards Fuller's requirement that law be explained to be moral, and instead holds that laws made by a valid lawmaker are automatically moral because God imbued them with the knowledge of what moral law is.

It should thus far be clear that Fuller does not take the view, like Hart, that morality and law are separate entities. In fact, Fuller is highly critical of the separation thesis, in particular, its failure to provide adequate explanation for a general obligation to obey the law. To simply say, as Hart would, that if a law is too immoral you just simply should not follow it is an unsatisfactory response to an incredibly important question, at least from Fuller's point of view. Further, those who promote the separation thesis struggle to reconcile the notions of the duty to obey law, duty to disobey immoral law, and when/how to prioritize one law over the other. And so, Fuller provides what he thinks is a satisfactory explanation. He starts by declaring there is no such thing as a "settled core meaning" and thus there are no "penumbra" cases. Instead, judges in every case must turn their attention to the context as well as the purpose of the law in interpreting law. Judges must make sure that law remains consistent with its purpose, and by this Fuller means particular areas of law (such as torts) as well as the general legal system's purpose. This is where the external morality as well as the internal morality of a law will come into play, as it will guide a judge towards and understanding of the good and the purpose the law is supposed to achieve. Thus, in Bazley, the meta principles of tort law such as compensation, fairness, and deterrence, directed McLachlin J to a legal decision that is consistent with the purpose of law i.e., to protect vulnerable children and compensate innocent victims for their losses. In considering the external and inner morality of law, McLachlin J finds that vicarious liability is unique in that it is predicated on policy considerations, and is naturally led to relate the law in Bazley to the purpose of the law; McLachlin J relates her decision to the creation of risk and the empowerment of the employee by the employer to commit a tortious act. As a result, Fuller would likely find that she accurately reflected the aims of the morality of the law and thus fulfills law’s purpose in producing good order through her process.

Dworkian Legal Analysis

Like Lon Fuller, Ronald Dworkin rejects legal positivism, especially that of Hart, and embraces his own theory of legal analysis. In his distillation of positivism, Dworkin objects to the positivist view of: (1) the separation thesis; (2) penumbra cases as decided by judges exercising discretion by drawing on the “terms of rule governed practice”; and (3) legal rights and obligations as being the product of legal rules alone. Instead Dworkin asserts that: (1) law contains both rules and principles; (2) hard cases are decided through the legal reasoning process by applying principles to factual scenarios, not through judicial discretion, and (3) that legal principles inform the law and exist outside of, and with legal rules.

Similarly, Dworkin would also disagree with Fuller on the basis of his assertion that functioning law must have an inner morality. For Dworkin, law includes legal principles as well as legal rules, not a self generated inner morality. He believes that through the process of adjudication, judges find “law” using legal principles to guide them to the right answer. In contrast, Fuller believes that although decision makers are compelled to justify, explain and give reasons for their decisions, it necessarily pulls towards moral outcomes. The fundamental difference is that for Fuller, the judicial process is about maintaining morality, and for Dworkin the judicial process is influenced by principles and fails to decree whether these principles are “moral” or not.

Adjudication, the process of legal reasoning, is a fundamental tenet of Dworkian legal analysis. He contends that legal principles are as much laws as legal rules are. Through adjudication, judges draw on the principles to interpret the law, to change or inform the rule, and to “find” a new rule that is infused with the principles. Bazley is a prime example of a case where McLachlin J uses principles to inform existing legal rules, specifically, to “discover” the new legal rule of vicarious liability for an intentional tort. However, in Bazley, the Court often uses the phrase "policy" to describe what Dworkin would call “principles”.

Hart would state that Bazley is a penumbral case and that the judge would use discretion to “create” a new rule, whereas, Dworkin maintains there is always a right answer, and it derives from the application of those principles in “hard cases” by judges, through the process of legal reasoning. Bazley is what Dworkin would call a “hard case” because pre-existing legal rules do not decisively decide the issue, thus judges must use principles to provide the right answer and “discover” the correct “new rule” for future cases. In the present case, McLachlin J states that she will attempt to “articulate a rule consistent with both the existing cases and the policy reasons for vicarious liability” (para 15). According to Dworkin, this would be the correct process for adjudication. McLachlin J has looked to the existing rules and has determined that there is a gap in the rules of vicarious liability in dealing with intentional torts conducted by employees. Subsequently, she applies legal principles to the gap, in her search for the new rule.

Throughout the judgement, McLachlin J attempts to use policy and principles to fill the gap created by legal rules relating to vicarious liability. The Court states that vicarious liability has always been concerned with policy. Dworkin considers policy to be the social goals pursued on behalf of some segment of the population by legislators. Thus, when the Court states that “policy considerations relating to the fair allocation of loss to risk-creating enterprises and the deterrence of harms tend to support the imposition of vicarious liability on employers” he would likely agree that these are policies rather than principles, since they are “goal” orientated (para 35). Similarly, the “new test” espouses three principles that are needed for the imposition of vicarious liability for an intentional tort on an employer. They include answering whether: (1) “liability should lie against the employer,”; (2) “the wrongful act is sufficiently related” to authorized conduct; and (3) “the connection between the employer’s creation or enhancement of the risk and the wrong complained of” is sufficiently related through subsidiary factors (para 41). This shows how the principles of fairness, deterrence, and compensation are articulated by the Court into a legal rule.

Dworkin would be satisfied that the Court arrived at the “right answer” since they appropriately balanced and applied legal principles to the case. To him the Court’s discussion of the purpose of vicarious liability, its application of the pre-existing rule to the case, its exploration of guiding policy considerations, and its usage of legal principles to articulate a new rule, is consistent with the iterative process of adjudication. Hence, Dworkin would proclaim the test in Bazley a valid law.

Liberty and Paternalism

Liberty

In the late 19th century, John Stuart Mill discussed the role of liberty in the justification of authority through law. This is a departure from other philosophers who had examined the role of law from the perspective of the law itself and its connection to morality. Mill asks not what law is but when and why law is justified in its restrictions on individual liberty. His presumption is that since liberty is fundamental, the law must always be justified in its interference. Mill proposes that the only justification for law interfering with liberty is based on the harm principle, meaning the prevention of harm to others. While he does allow an exception to this rule for persons of “non-age”, these circumstances are not addressed in Bazley.

Bazley is, however, a perfect example of how one’s liberty may be interfered with to protect others from harm. The Court grappled with whether to impose vicarious liability on employers for harm inflicted on others at the hands of their employees. In this case, the sexual abuse of a child was considered a very serious harm and the Court very clearly wanted to shift the costs of the harm away from the victim.

Given that the employer has not actually inflicted the harm on the victim but may be held liable for it, the Court must justify how the liberty of the employer may be restricted in order to prevent harm to others. The Court spends a significant portion of the judgement examining in what circumstances imposing vicarious liability would be appropriate and the factors that must be considered in this analysis. The Court establishes specific justifications which require the employer to have created the risk that resulted in the harm, as well as taking into account whether the employer's aims are promoted by the acts of the employee.

Mill would likely accept the test for vicarious liability as an appropriate limit on authority when imposing restrictions on employers in these circumstances. The test prevents the law from imposing liability in circumstances involving random acts unconnected to the employment context. The test controls the reach of authority, limiting its ability to arbitrarily restrict the liberty of employers to situations where employees cause harm.

Paternalism

Gerald Dworkin provided a response to Mill’s theory that the harm principle provided the only justification to laws restricting an individual’s liberty. Mill rejected the idea that laws may be paternalistic in preventing an individual from causing harm to themselves. While Mill proposes that the objective of any law must be about preventing harm to third parties, Dworkin accepts that the purpose of a law may be to protect individuals from themselves.

In the case of Bazley, Mill would propose that the only purpose of imposing vicarious liability on an employer is to prevent harm to others. This is supported by the policy consideration of deterrence the Court establishes for consideration in applying the test. Dworkin, however, may have also seen this rule as ‘weak’ paternalism, where although the primary purpose is protecting third parties from harm, there is also an aspect of protecting employers from the imposition of liability. The Court is establishing the test to determine where vicarious liability will or will not be imposed. Employers can be protected from being held liable by considering the factors outlined in this decision. The imposed restraint on the employers actions in establishing situations of risk is analogous to the Ulysses agreements where allowable restriction of autonomy are needed to protect the long-term autonomy of the employer.

Law and Economic Theory

The economic theory is quite different from other legal theories in that it is not concerned with where laws come from, but instead asks what they do; specifically, whether or not they are “efficient.” Contrary to natural law theorists, who deem good and true laws to be moral, economic theorists claim that successful laws create efficiency and maximize wealth, even if they are adopted for other reasons, such as justice. These theorists explain that the concept of efficiency directs us as to why some laws develop as they do, and why some laws survive and others do not. They also emphasize that efficiency involves the maximization of social wealth, which may refer to both money as well as non-monetary “measurable satisfactions.”

Based on economic theorists’ descriptive and explanatory claims of laws as creating efficiency, it naturally follows that these theorists contend that good legal rules are efficient rules. These theorists essentially agree that we ought to have efficient law and we ought to develop laws that incorporate characteristics that promote efficiency. In doing so, economic theorists rely on an integral assumption, namely, the rational man theory. According to this theory, in voluntary market transactions, a rational man (which includes most of society) will not choose loss for which he is not compensated.

If we apply the rational-man assumption to Bazley, economic theorists would contend that a rational non-profit organization, such as the Foundation, would not choose to internalize the cost of the harm to the child if given the choice. No rational person or organization would spend their money, time, and resources on reducing a risk of harm voluntarily. This is where, according to economic theorists, the law should intervene to ensure the wealth-maximization of the entire society. In the case of Bazley, the Court's duty would therefore be to manipulate the behaviour of the Foundation, and others like it, so as to increase the wealth-maximization of society by reducing the risk of harm to children.

One strategy the law can use to alter the behaviour of the Foundation is to provide incentives. Economic theorists explain that because people are rational, they will respond to incentives. In particular, one can alter the level of an activity by alternating its price. Since economic theorists describe the law as fundamentally being a pricing mechanism, through law we can make some activities more or less costly. In this way, law can motivate people to engage in more or less of any particular activity. In tort law, this is quite often achieved through deterrence as we see in Bazley. To be more specific, we see the Court, in pursuit of wealth-maximization, alter the price that organizations will pay if they fail to take appropriate measures to prevent the harm of sexual abuse to a child. Before Bazley, the price of this activity was unknown for non-profit organizations. However, in the decision of this case, the McLachlin J decides that non-profit organizations are not exempt from vicarious liability. In deciding this, the Court alters the price from unknown and potentially nothing, to a cost of damages to the victim. According to the rational-man assumption, the Foundation and others like it, being rational beings, will now alter their practices to avoid potential monetary losses. Thus, the judgement in Bazley creates deterrence that alters the practices of non-profit organizations to reduce the likelihood of being held vicariously liable for harm to a child.

The rational-man assumption also dictates that all people, when they make choices, are rational maximizers of their own self-interest. However, many people care about other members of society as well. Consequently, advances in the welfare of those whom they care about or want to help will also serve their self-interest. Therefore, with regards to the judgment in Bazley, the rational person in society would see the decided law as serving their self-interest since in general, most people in society care for the welfare of children. Economic theorists would see this as being efficient and wealth-maximizing because most people would be having their self-interests served. Further, even though it is not desirable to see non-profit organizations penalized monetarily, the majority of society would prioritize the well-being of children over that of non-profit organization. In turn, protecting children from harm is what will serve most people’s self-interest in the Bazley case.

As already discussed, economic theorists believe that the law and judges must intervene to ensure wealth-maximization in society and thus to alter the behaviour of rational people. In tort law, that means not allowing costs to simply “lie where they fall” but instead allocating them in the most efficient manner possible. In doing so, judges must consider the problem of externalities. The problem of externalities describes a situation where the actions on behalf of certain entities causes a burden to a third party. In Bazley, the risk of harm is being created by the Foundation, the harm is carried out by the employee, and thus the third party on whom the harm befalls is the victim, the child. In dealing with this problem of externalities, judges must consider who is best suited to bear the costs of a harm, and how to reduce incidents of future harms and the costs associated with them to an optimal level. A key mechanism by which judges address these two considerations is through the mechanism of cost internalization, or enterprise causation.

The decision of the Court in Bazley employed the mechanism of cost-internalization by assigning the losses to the Foundation. This assignment encouraged the Foundation and others, in the future, to bear the cost of reducing the risk of such a harm from happening again. In coming to her decision regarding who must bear the costs of the harm, and how to rectify the problem of externalities, McLachlin J analyzed both the victim and the Foundation's arguments on why they should not bear the costs. From the victim’s perspective, it is fair that between him and the institution that enhanced the risk, the institution should bear legal responsibility for his abuse and the harm that befell him. The Foundation, on the other hand, first argues that it is unfair to fix liability without fault on non-profit organizations performing needed services on behalf of the general public. The Court is sympathetic to this plea because it finds that charitable organizations are often the ones that undertake work that few others do, but the perspective of the innocent child trumps this view. According to McLachlin J, it does not matter how meritorious the organization is; the Foundation enhanced the risk and thus should be held liable. The Foundation’s second argument is that non-profit organizations are less able to control and supervise the conduct of their agents, many of whom are volunteers, which enhances the unfairness of imposing vicarious liability and diminishes its deterrent effect. In response, McLachlin J finds that non-profit organizations still have a duty to screen or supervise those whom they entrust with their important work, therefore it does not matter whether they are non-profit or commercial. Thus in the end, McLachlin J decides that since the costs should not simply lie with the innocent, third party victim, it is the Foundation that must internalize the cost of the harm they created. Although McLachlin J claims this decision was made with regard to fairness, economic theorists would say that regardless of why the decision was made, it is still efficient because the Foundation was the party best able to bear the costs, and having to pay damages will reduce the likelihood of future harm.

Some critics argue that tort law is actually concerned with corrective justice rather than with efficiency. In response to these critics, Richard Posner, a prominent economic theorist, argues that corrective justice is reconcilable with efficiency. He explains that in the pursuit of efficiency, tort law satisfies the precepts of corrective justice. For example, McLachlin J's reasoning, regarding who should and should not bear the costs, involves a constant consideration of what is corrective and just. McLachlin J also discusses the unfortunate reality that people working with vulnerable groups may abuse their position and claims that tort law does and should demand that liability be assigned when this harm occurs. This claim is in line with the efficiency and corrective justice models, both of which require that victims of wrongful harms be compensated and the risk of harm be corrected. Thus, when McLachlin J finds the Foundation vicariously liable, she is not only efficiently allocating costs, but is also deterring, and thus correcting, the likelihood of such harms from occurring in the future.

Feminist Legal Jurisprudence

Feminist legal theorists reject metatheories that purport to describe all human beings at all times. Instead they favour a focus on the “specific, concrete, lived experiences of women in all of their particularity and contextual detail.” This requires understanding that traditionally, women have been the silenced subjects of law. Further, the legal theory proposes the following question: what does the law mean for women while focusing on the areas of law that particularly impact women? In answering this question, feminist theorists are able to evaluate the law.

Unlike Lon Fuller who contends that the law is grounded in morality, or Posner who submits that the law is inherently tied to economics, feminist legal theorists posit that laws are part of the systemic promulgation of patriarchy. Patriarchy is the systematic and systemic domination of women by men. Laws and the legal system are part of this institutionalization and feminist jurisprudence is the lens that reveals patriarchy in society while understanding how laws can be changed for the betterment of women. Additionally, patriarchy subjugates children and naturalizes male access to children. Feminist scholars argue that traditional legal values of the rule of law, judicial reasoning and the separation of law from morality all function to “render the inequality of men and women both invisible and legitimate.”

At first glance the facts of Bazley v Curry appear to have little contribution to feminist jurisprudence. However, Bazley is not limited to the context of vicarious liability of an employer concerning an employee’s intentional tort; it is about sexual abuse in an employment context. Many facilities and foundations such as the one in this case involve an employer placing an employee in a position of authority over vulnerable clients, many of whom are women and children. Often these situations involve intimate “parent like duties” which enhance the risk of sexual abuse. Across the world sexual abuse predominately affects women and children of all ages, races, and abilities. Thus, feminist theorists would ask how vicarious liability for an employee’s intentional tort affects women or children in these situations.

McLachlin J explores the patriarchal history of vicarious liability when she writes “ [t]he view of early English law that a master was responsible for all the wrongs of his servants (as well as his wife’s and his children’s) represented a policy choice, however inarticulate, as to who should bear the loss of wrongdoing and how best to deter it” (para 26). In this passage it is clear that vicarious liability was simply another tool of patriarchy. It reveals that the origins of vicarious liability are grounded in a system where the man of the household is dominant over other members. Despite this, in Bazley the focus of modern vicarious liability is to deter wrongdoing and to compensate the victim. Accordingly, feminist legal theorists would find that the test articulated in Bazley successfully advances the equality rights of women and children, rather than supporting their subjugation. They would find this because the rule protects the vulnerable party and assigns liability for the wrong to the employer. Traditionally, if a woman or child was sexually abused in this context, they would bear the loss, whereas the employer who created the risk would not. Under the new rule, the employer, who is in the best position to bear the burden and prevent the risk of harm, is held responsible for their employee's conduct.

One of the prominent feminist legal theorists is Catherine MacKinnon. She espouses that law is the “site and cloak of force.” The law legitimates the use of force in liberal society and disguises itself in terms of fairness and justice. This view is somewhat similar to legal positivism. Legal positivists, such as Austin, view valid laws as a command followed by a sanction or threat of force. Although both theorists describe a component of law in terms of force, MacKinnon does not equate force with the validity of the law. Instead, she disparages the law as a site and cloak of force, since it legitimizes and makes invisible male domination.

For MacKinnon, law is a male creation that is an instrument for male domination. As such, women can only demand actual equality through law by: 1) claiming their concrete reality as a social and political institution; and 2) recognizing male power over women embodied as individual rights in law. In the context of Bazley, there is no specific demand for actual equality through law for women. However, the ruling does recognize a demand for actual equality for vulnerable groups through law. The concrete reality of vulnerable groups in the care of facilities such as the Foundation is one of subjugation and domination by the institution. The institution is aware and takes heed of their everyday care and needs, thus they are completely at the mercy of these people and do not have true equality. Second, by imposing vicarious liability on the employer, the Court recognizes the power of the Foundation over the vulnerable client’s right to liberty and security of person. Bazley holds that this individual right is more important than the Foundation’s “lack of fault” in hiring or supervising Curry, thus they were found legally responsible for the wrong. Overall, feminist legal jurisprudence can lend insight into the law of vicarious liability.

Critical Legal Studies

According to Duncan Kennedy, Critical Legal Studies (CLS) is not as much a theory as it is a collective of activists and the literature they produce, grounded in grassroots law school politics. Dating back to the 1960’s, this collective was not motivated by a single cause, but by social issues and an interest in radical politics. Thus, these activists carefully analyzed legal doctrines and the way law is taught. Legal doctrines, they propose, should not be accepted as rules derived from reason through judges and legislatures, as legal formalists would do. Legal doctrines are not a set of rational rules to be interpreted by neutral judges, but should be understood to have their basis in political motivations, seeking to maintain the political balance of power in society. While similar to legal realists in the sense that they believe the law is ‘decided’ through the motivations of judges and legislatures, they part ways due to legal realists basing their legal reasoning in purely political motivations. In contrast, the activists questioned the neutrality of judges and emphasized their political power.

While they reject the idea that law has a purpose of a common good, they suggest that the law is an unconscious maintenance of social and political power. This unconscious acceptance of what is good, just and right as a motivator and justification, is similar to natural law theorists such as Thomas Aquinas, who suggest that it is the unconscious acceptance and motivator of the common good that makes humans capable of creating laws.

A CLS theorist would approach an analysis of Bazley by looking at the legal doctrines associated with torts, and more specifically with vicarious liability. Kennedy describes a CLS theorist's approach to torts, focusing not only on the black-letter application of the law, but on the themes of abuse, gender, power, and other social issues that run through intentional torts. Kennedy points out that many intentional torts arise from traditionally imbalanced relationships. It appears that the tort in Bazley re-affirms this proposition; in this case it is the sexual abuse of a vulnerable person by a person in a position of authority, an inherently imbalanced relationship.

Vicarious liability, however, is distinguished in torts and contradicts some ideas of CLS. From this perspective, Bazley sets itself apart from the theory that legal doctrines reinforce relationships of dominance of power. It appears that Bazley rejects the theory that all law will result in the maintenance of power with those who already have it, and re-distributes power accordingly.

A closer examination of Bazley reveals that McLachlin J confronts the notion of vicarious liability in the law and distinguishes it as a doctrine separate from others. An examination of previous decisions on vicarious liability reveals that at the heart of these cases are considerations of fairness and policy (para 21). It is then, perhaps, that vicarious liability does not fit the conclusion of CLS theorists that all law will lead to the maintenance of power. She recognizes that vicarious liability, rather than having its basis in legalistic premises, is a balancing of policy considerations.

McLachlin J, however is careful to explain the relationship between legal doctrine and policy. She states at paragraph 27: “A focus on policy is not to diminish the importance of legal principle. It is vital that the courts attempt to articulate general legal principles to lend certainty to the law and guide future applications. However, in areas of jurisprudence where changes have been occurring in response to policy considerations, the best route to enduing principle may well like through policy. The law of vicarious liability is just such a domain.”

It is through policy that the goals of vicarious liability are identified, namely of providing a just and fair remedy that includes compensation to the victim, and the deterrence of future harms. Providing these objectives are met, vicarious liability seems to be isolated from the influence of politics and power, focussing instead on fairness and shifting of burdens to those more capable of bearing the costs.

In this case, McLachlin J also examines the previous test for vicarious liability known as the Salmond test. She suggests that the test is insufficient, as it allows decisions to turn on the semantics of what acts constitute an unauthorized mode of performing an authorized act. This ambiguity would appear to be an opportunity for cases to be decided according to the power maintenance that CLS theorists suggest is the basis for all decisions. McLachlin J effectively closes the door on this ambiguity in the development of the new test for vicarious liability, ensuring that cases will be decided on factors of fairness, and not on semantics.

A CLS theorist would view Bazley as a progressive decision, reflecting the changing attitude of the strict legal reasoning purported by legal formalists. It rejects the notions of enforcing the political power structures in society, and breaks away from the societal norms that brought on the early radicalism of CLS. Therefore, it is likely that a CLS theorist would support the outcome of Bazley.