Ps boarded at a school where the warden, W, employed to look after them sexually abused them, unbeknown to the school, D. HL held that D was vicariously liable, since there was a close enough connection between the job D employed W to do and the acts he committed for him to be regarded as having acted within the course of his employment.
Lord Steyn: The policy tensions are between on the one hand compensating those from the funds of the financially responsible party and on the other hand avoiding unduly burdening businesses. He criticises the 2-step approach of Lord Ackner (above) since it creates bizarre results e.g. if a bank clerk defrauds customers by only giving them half the foreign currency they are due, the bank will not be liable provided the fraud is not part of the course of business. Instead he says the correct approach is to examine the “connection between the nature of the employment and the tort of the employee” and hence whether it would be “fair and just” to make the employer vicariously liable. Here there was a very close connection between the employment of the warden and the tort that he committed. A broad approach should be taken to determining the “course of employment”. Thus an act done in self-interest can also be within the course of business.