The extension of vicarious liability in corporate groups

This article explores the important but unresolved issue of whether one legal entity can be vicariously liable for another legal entity's tort in a corporate group primarily based on UK law. Prior literature and case law seldom provide detailed discussion on the extended application of vicarious liability in group situations. The article aims to enrich the discussion of corporate tort liability by specifically evaluating whether the relationship between the parent and subsidiary companies could be akin to employment, and by researching whether this relationship is closely connected with the tort, subsequently leading to vicarious liability. The research findings reveal that the enterprise risk theory supports the close connection between the special relationship (the parent and subsidiary companies) and the tort in certain circumstances. However, the essential tests for the relationship requirement (namely, the control, organisation, integration, and entrepreneur tests) are difficult to meet in combination in modern group situations.