Civil Law and UAE: Simple Vicarious Liability Concept

1. Meaning of Vicarious Liability

Vicarious liability means that one person or organisation may be legally responsible for the harmful act of another person because of a legally recognised relationship between them.

The most common example is:

Employee causes harm while doing work → Employer may be liable for that harm.

The important idea is that the employer's liability does not necessarily depend on the employer personally committing the harmful act.

Simple formula

Principal/Employer + Subordinate Relationship + Harmful Act + Connection with Employment = Possible Vicarious Liability

The current UAE mainland rule is found in Article 266 of Federal Decree-Law No. 25 of 2025 (Civil Transactions Law). It provides that a principal is liable for harm resulting from a harmful act committed by a subordinate when the act occurs in performance of the subordinate's duty or because of it. It also recognises the relationship of subordination where the principal has actual authority over the subordinate in supervision and direction. (UAE Legislation)

2. Why Vicarious Liability Exists

The basic policy is practical.

Businesses operate through:

employees;

agents;

managers;

drivers;

doctors;

technicians;

construction workers;

sales representatives.

If an employee causes harm while carrying out the employer's business, the law may place responsibility on the employer rather than requiring the injured person to recover only from an individual employee who may have limited financial resources.

Example

A delivery company's driver negligently hits a pedestrian while making a delivery.

Possible responsibility:

Driver → personally responsible

and potentially:

Delivery company → vicariously responsible

The precise result depends on the statutory requirements and facts.

3. Current UAE Statutory Rule

Under Article 266 of the current Civil Transactions Law:

Requirement 1 — There must be a subordinate relationship

The relationship exists where the principal has actual authority of supervision and direction.

Requirement 2 — There must be a harmful act

The subordinate must commit an act that legally causes harm.

Requirement 3 — Connection with employment

The harmful act must occur:

in performance of the duty, or

because of the duty.

Requirement 4 — Damage and causation

The claimant must establish the legally relevant harm and its connection with the wrongful act.

Requirement 5 — Employer's responsibility

If the requirements are satisfied, the principal may be liable even though the principal did not personally commit the harmful act.

Article 267 also gives the person liable for another's act a right of recourse against the person who caused the harm, to the extent that the latter is liable for compensation. (UAE Legislation)

4. Simple Example

A construction company employs Worker X.

While carrying construction materials at the company's site, X negligently drops a metal object onto a pedestrian.

Analysis

Step 1: X is subordinate to the company.

Step 2: X committed a harmful act.

Step 3: The act occurred while X was performing his work.

Step 4: The pedestrian suffered damage.

Step 5: Causation connects X's conduct to the injury.

Therefore, the company may be vicariously liable under the applicable civil-law rules.

5. Vicarious Liability Does Not Mean Automatic Liability

It is important not to oversimplify the doctrine.

An employer is not automatically responsible for everything an employee does.

The court normally examines:

the relationship between the parties;

the employee's duties;

what the employee was doing;

whether the act was connected with employment;

the nature of the harmful act;

supervision and direction;

causation;

damage.

The words “in the performance of their duty or because of it” in Article 266 are therefore important. (UAE Legislation)

6. Employee Acting Outside Employment

Suppose a delivery driver finishes work, takes the employer's vehicle without permission for a purely personal trip, and causes an accident.

The employer may argue:

“The employee was no longer performing the employer's work.”

The court would need to examine the actual circumstances and the connection between the conduct and employment.

Therefore:

Personal activity ≠ automatically employer activity.

The employment connection is crucial.

7. Supervision and Direction

Article 266 specifically recognises subordination where the principal has actual authority in supervision and direction. (UAE Legislation)

This is important because the legal relationship does not necessarily depend only on the label:

“employee”

The court can examine the actual relationship.

Example

A medical centre describes a doctor as an “independent professional”.

But if the centre actually controls important aspects of the doctor's work and the doctor operates within the centre's organisational structure, the court may examine the substance of the relationship rather than merely the contractual label.

8. Case Law 1 — Dubai Court of Cassation Judgment No. 377 of 2025

This is an important recent UAE mainland example.

In Dubai Court of Cassation Judgment No. 377 of 2025, the dispute concerned serious medical negligence by a physician and whether the medical centre could be held vicariously liable.

The Court held that the relevant relationship of subordination could exist where the medical centre exercised actual authority through supervision and direction, including where the relationship was administrative or limited. The Court also stated that even a casual or incidental relationship could be sufficient where the physician's error occurred during or because of the physician's duties, or where the position created the opportunity for the error. (Al Tamimi & Company)

Importance

This case shows that:

The court may examine the real relationship rather than relying solely on formal labels.

It is particularly important for:

hospitals;

medical centres;

professional services;

clinics;

doctors working through institutions.

9. Medical Centre Example

Suppose:

Doctor → Medical Centre → Patient

The doctor makes a negligent medical decision.

The question is not simply:

“Was the doctor technically an employee?”

The court may examine:

where the doctor practised;

who organised the service;

who exercised supervision;

whether the doctor acted because of the professional position;

whether the centre provided the relevant facilities;

whether the harmful act occurred during the doctor's professional duties.

The 377/2025 judgment is a strong practical illustration of this analysis. (Al Tamimi & Company)

10. Case Law 2 — Mr Shiraz Mahmood v Standard Chartered Bank DIFC

In Mr Shiraz Mahmood v Standard Chartered Bank DIFC [2021] DIFC CFI 044, the DIFC Court directly considered Article 54 of the DIFC Employment Law.

Article 54 provided that an employer is liable for an employee's act, attempted act or omission done in the course of employment, subject to the statutory requirements.

The Court found that the alleged conduct was sufficiently connected with the relevant employees' employment and concluded that the bank was vicariously liable for established acts and omissions. (DIFC Courts)

Principle

Employment connection is central to vicarious liability.

Important distinction

This is a DIFC case under DIFC Employment Law, not a direct interpretation of current mainland Article 266.

11. Case Law 3 — Halsey v Halina DIFC Limited

In Halsey v Halina DIFC Limited [2016] DIFC SCT 145, the DIFC Court considered Article 51 of the then applicable DIFC Employment Law.

The provision stated that an employer was liable for an employee's act done in the course of employment, subject to an exception where the employer proved that it had taken reasonable steps to prevent the employee from doing that act or similar acts. (DIFC Courts)

Principle

The case demonstrates the importance of:

course of employment;

employer precautions;

internal policies;

compliance procedures;

preventative measures.

Exam point

Vicarious liability can involve both the employee's conduct and the employer's statutory defence, depending on the applicable legal regime.

12. Case Law 4 — Niran v Nysa

In Niran v Nysa [2023] DIFC SCT 403, the defendant relied on Article 54 of the DIFC Employment Law and argued that the employer was responsible for employee conduct where the statutory requirements were satisfied.

The judgment reproduces the statutory test, including the requirement that the conduct be sufficiently connected with employment and, in the relevant discrimination/victimisation context, the employer's ability to show that it took reasonably practicable preventative steps. (DIFC Courts)

The counterclaim in that case was ultimately dismissed on limitation/procedural grounds, so the case should not be presented as a final finding of vicarious liability against the employer.

Importance

It is useful for understanding the statutory structure and pleading of vicarious liability, rather than as a successful liability award.

13. Case Law 5 — Khorafi v Bank Sarasin

In Khorafi v Bank Sarasin-Alpen (ME) Ltd & Bank Sarasin & Co Ltd [2009] DIFC CFI 026, the claimants alleged that Bank Sarasin was vicariously liable for negligence and representations made by Sarasin-Alpen and individual employees.

The Court analysed the alleged duty of care, the employee/agent relationship and the basis on which the bank could potentially be responsible for conduct of others. (DIFC Courts)

Principle

Vicarious liability should not simply be asserted.

The claimant must establish:

Who committed the wrongful act + what relationship existed + why the law attributes that conduct to the defendant.

14. Case Law 6 — Khorafi v Bank Sarasin, Court of Appeal

The same litigation reached the DIFC Court of Appeal in Khorafi v Bank Sarasin-Alpen (ME) Ltd & Bank Sarasin & Co Ltd [2011] DIFC CA 003.

The Court considered whether Sarasin Switzerland could be vicariously liable for conduct of personnel associated with Sarasin Dubai.

Importantly, the Court distinguished vicarious liability from primary liability. It noted that an independent contractor relationship does not ordinarily create vicarious liability merely because one entity is associated with another, although specific authorisation of wrongful conduct could potentially produce a different basis of liability. (DIFC Courts)

Principle

Corporate association ≠ automatically vicarious liability.

15. Case Law 7 — AES Middle East Insurance Broker v GSB Capital

In AES Middle East Insurance Broker LLC v GSB Capital Ltd [2023] DIFC CFI 060, the claimants argued that the defendant was vicariously liable for former employees' breaches of confidentiality.

The Court rejected that basis because the pleaded case concerned breaches of employment contracts, whereas vicarious liability was being invoked as a tortious concept. The Court explained that vicarious liability applies to torts and does not simply make an employer liable for every contractual breach committed by an employee. (DIFC Courts)

Very important principle

Vicarious liability is not a universal method of transferring every employee's contractual liability to the employer.

This distinction is very useful in examinations.

16. Case Law 8 — Al Soor Investments v Julius Baer

In Al Soor Investments LLC v Julius Baer (Middle East) Ltd & Others [2022] DIFC CFI 088/2019, the applicants sought documents relevant to whether particular individuals were employees and whether the corporate defendants could be held vicariously liable for tortious acts or omissions. (DIFC Courts)

Principle

Employment status and corporate relationships can be important factual questions when determining:

who committed the tort;

who employed the person;

whether a subordinate relationship existed;

whether vicarious liability can attach.

17. Vicarious Liability vs Personal Liability

These concepts must be distinguished.

Personal liability

The person personally committed the wrongful act.

Example:

Employee negligently damages another person's property.

The employee may have personal liability.

Vicarious liability

Another person or organisation is responsible because the law attributes the employee's conduct to the principal.

Example:

Employer becomes responsible for employee's work-related negligence.

Formula

Employee → Personal liability

Employer → Vicarious liability

Both can potentially exist simultaneously.

18. Vicarious Liability vs Negligent Supervision

These are also different.

Vicarious liability

Employer is responsible because of the employee's wrongful act and the legally recognised employment relationship.

Negligent supervision

Employer is personally at fault because it failed to:

supervise;

train;

maintain safety;

investigate;

implement reasonable systems.

Therefore, one dispute can potentially involve:

Employee's negligence + employer's vicarious liability + employer's own negligence

The legal bases should be separately analysed.

19. Vicarious Liability and Independent Contractors

A major practical problem is deciding whether the person is:

employee;

subordinate;

agent;

independent contractor;

consultant;

franchisee;

separate company.

The contractual label is relevant but may not always settle the issue.

The court may examine:

control;

supervision;

direction;

integration;

actual working relationship;

who controlled the relevant activity.

The Khorafi litigation demonstrates why the relationship between separate entities must be carefully analysed rather than assumed. (DIFC Courts)

20. Vicarious Liability in Medical Services

Medical services provide an excellent example.

Structure

Hospital/medical centre → Doctor → Patient

The doctor may commit professional negligence.

Potential defendants may include:

doctor;

medical centre;

hospital;

insurer;

other responsible entities.

The recent Dubai Court of Cassation Judgment No. 377 of 2025 is particularly important because the Court found the medical centre responsible on a vicarious-liability basis even though the surgery was performed at another hospital under an arrangement between the institutions. (Al Tamimi & Company)

21. Vicarious Liability in Construction

Construction is another important area.

Example

A construction worker:

drops equipment;

damages neighbouring property;

injures a pedestrian;

damages a vehicle.

If the act occurred while performing construction duties, Article 266 may become relevant.

The injured party may examine:

worker's wrongful act;

employer's control;

employment connection;

damage;

causation;

compensation.

22. Vicarious Liability in Transport

Suppose a company employs a delivery driver.

The driver negligently hits another vehicle while delivering goods.

Analysis

Employer: controls business.

Driver: subordinate.

Act: driving for employer.

Harm: vehicle damage.

Causation: accident caused damage.

This is a classic vicarious-liability situation.

23. Vicarious Liability in Banking

Bank employees may make:

negligent representations;

payment errors;

regulatory mistakes;

improper communications.

The Khorafi cases demonstrate the importance of analysing whether the conduct of individual banking personnel can legally be attributed to another corporate entity. (DIFC Courts)

However, the claimant must establish the appropriate legal basis.

Simply saying:

“The person worked for the bank, so the bank is liable”

is insufficient.

24. Vicarious Liability and Intentional Acts

An employee may sometimes commit an intentional wrongful act while performing employment functions.

The fact that the employee acted intentionally does not automatically answer the vicarious-liability question.

The court may ask:

Was the act connected with the employee's duties?

Did the employment create the opportunity?

Was the employee acting in the course of employment?

Was the conduct purely personal?

What statutory test applies?

The recent medical case shows that UAE courts can interpret the employment connection broadly where the harmful act occurs during or because of the professional role. (Al Tamimi & Company)

25. Right of Recourse Against Employee

A very important feature of the current UAE law is Article 267.

Where one person is liable for another person's harmful act, the liable person may have a right of recourse against the person who caused the harm, to the extent that the latter is liable for compensation. (UAE Legislation)

Example

Worker negligently causes AED 100,000 damage.

Employer compensates victim.

The employer may, where the statutory requirements are satisfied, have a right to seek recovery from the worker to the extent legally permitted.

Thus:

Victim's compensation and internal allocation of liability are separate questions.

26. Vicarious Liability and Compensation

Once liability is established, the claimant must still establish the appropriate compensation.

The current Civil Transactions Law provides that compensation is assessed according to the extent of the loss, including loss of profit where it is a natural consequence of the harmful act. It also recognises moral harm. (UAE Legislation)

The 377/2025 medical-liability case is an important illustration: the Dubai Court of Cassation confirmed that bodily and moral harm can be compensable and that the assessment of compensation is a matter for the trial court within the applicable statutory framework. (Al Tamimi & Company)

27. Vicarious Liability and Multiple Defendants

Sometimes several people may be responsible.

Example:

Doctor + Medical Centre + Hospital

The court may need to determine:

individual negligence;

institutional responsibility;

vicarious liability;

causation;

contribution;

joint/several responsibility where legally applicable.

The current Civil Transactions Law also addresses situations where several persons are responsible for harm and permits the court, under the statutory conditions, to determine proportionate or joint and several responsibility. (UAE Legislation)

28. Defences and Limitations

Depending on the applicable legal regime, possible arguments include:

1. No subordinate relationship

The defendant may argue:

“The wrongdoer was an independent contractor.”

2. No employment connection

The defendant may argue:

“The employee was acting entirely for personal purposes.”

3. No harmful act

The claimant has not established wrongful conduct.

4. No causation

The employee's conduct did not cause the claimed damage.

5. No proven damage

The claimant cannot establish legally recoverable loss.

6. Contributory conduct

The claimant's own conduct contributed to the harm.

7. Special statutory regime

A particular industry may have its own liability rules.

The Halsey case demonstrates that, under the relevant DIFC employment regime, reasonable preventative measures could be relevant to the employer's statutory position. (DIFC Courts)

29. Important Difference: Mainland UAE vs DIFC

This is essential for an exam answer.

Mainland UAE

Current statutory rule:

Article 266, Federal Decree-Law No. 25 of 2025

Principal is liable for harm caused by subordinate in performance of duty or because of it, where the required subordinate relationship exists. (UAE Legislation)

DIFC

Different legislation applies.

For example, Article 54 of DIFC Employment Law No. 2 of 2019 contains its own vicarious-liability framework for employee conduct. (DIFC Courts)

Therefore:

DIFC case law should not automatically be cited as mainland UAE law.

The cases are useful for comparison and practical understanding, but the governing legal system must first be established.

30. Six Important Cases — Quick Revision Table

31. Simple Problem-Solving Method

For any UAE vicarious-liability problem, use these steps:

Step 1 — Identify the wrongdoer

Who actually committed the harmful act?

Step 2 — Identify the defendant

Who is being asked to pay compensation?

Step 3 — Identify the relationship

Is it:

employer/employee;

principal/subordinate;

agent/principal;

independent contractor;

separate corporate entity?

Step 4 — Check control

Who had actual:

Supervision + Direction?

Step 5 — Check employment connection

Was the harmful act:

During the duty or because of the duty?

Step 6 — Establish harm

What injury, property damage, financial loss or moral harm occurred?

Step 7 — Establish causation

Did the subordinate's wrongful act cause the harm?

Step 8 — Determine compensation

Calculate the legally recoverable damage.

Step 9 — Check possible defences

Consider:

independent contractor;

outside employment;

lack of causation;

claimant's contribution;

statutory defence.

Step 10 — Consider recourse

If the principal pays compensation, Article 267 may provide a basis for recourse against the person who caused the harm, subject to that person's legal responsibility. (UAE Legislation)

32. Vicarious Liability Formula for Exams

Remember:

Subordination + Harmful Act + Employment Connection + Damage + Causation = Vicarious Liability

For current mainland UAE law:

Article 266 → Principal's Liability

Article 267 → Right of Recourse

(UAE Legislation)

33. Simple Example for Examination

Facts

A company employs X as a delivery driver. During delivery, X negligently hits Y's vehicle.

Issue

Whether the company is vicariously liable for X's negligence.

Rule

Under Article 266 of the current Civil Transactions Law, a principal is liable for harm resulting from a subordinate's harmful act where it is committed in performance of the subordinate's duty or because of it, and the required subordinate relationship exists through actual supervision and direction. (UAE Legislation)

Application

X was working as a delivery driver and was performing a delivery when the accident occurred. The act therefore has a direct connection with employment.

Conclusion

Subject to proof of the harmful act, damage and causation, the company may be vicariously liable.

34. Conclusion

Vicarious liability is a form of civil responsibility where the law attributes responsibility for a subordinate's harmful act to the principal or employer.

Under the current UAE Civil Transactions Law, the central rule is Article 266:

Principal + subordinate relationship + harmful act + performance of duty/because of duty = potential vicarious liability. (UAE Legislation)

The most important practical areas are:

Employer–employee relationship

Supervision and direction

Connection with employment

Employee negligence

Professional/medical negligence

Independent contractors

Corporate relationships

Causation

Compensation

Employer's right of recourse

The recent Dubai Court of Cassation Judgment No. 377 of 2025 is particularly useful for understanding how UAE courts can apply vicarious liability to medical institutions, while the DIFC cases such as Shiraz Mahmood, Halsey, Khorafi, and AES Middle East illustrate different statutory and common-law-style issues in the DIFC framework. (Al Tamimi & Company)

Final revision line:

Vicarious Liability = Liability of One Person for Another's Wrongful Act Because of a Legally Recognised Relationship.