"Am I responsible for the actions of an intermediary/employee I use?"

Δημοσίευση: March 15, 2024

“Am I responsible for the actions of an intermediary/employee I use?”

The transactional life today is characterized by great mobility, and possibly the individual may not always be able to be present in their affairs. For this reason, intermediaries are often used to carry out specific tasks. Typically, this is done to save time/money so that the individual can dedicate themselves to other tasks as efficiently as possible. However, in the legal world, there is a question: If the intermediary breaches their obligations or causes harm to a third party, who will ultimately be responsible for compensation? Let’s examine in detail what the law stipulates on the matter, as well as how the ‘gaps’ that may arise are covered.

1.When is an intermediary used?

It is generally important to note that the law is based on rules, one of which is that everyone is responsible for their own actions. However, this rule has significant exceptions, especially when a person involves another person in their (financial) sphere of risks in order to benefit from the latter’s actions. Indeed, it would not be reasonable for someone to benefit from the actions of others without being responsible for their own actions and facing the consequences, whatever they may be.

For this reason, and to avoid circumventions, the law explicitly states that when someone uses intermediaries to carry out a task, they will be responsible for the actions of these individuals, given that they will benefit from their actions if they are beneficial. Moreover, this provision exists to prevent the principal from ‘hiding’ behind the responsibility of the intermediaries for their actions, especially if these actions ultimately have a negative outcome.

2.Is the principal responsible for the actions of the intermediary?

For me to be responsible for the actions of an intermediary I use, the law requires certain conditions to be met. Specifically, I must:

Have some sort of legal relationship with the intermediary (which can be contractual or even directly mandated by law).
The intermediary must intervene in the matter with my consent (and not arbitrarily with only their consent).
The intermediary must be liable for their specific behavior (whether through intent or negligence).
The behavior of the intermediary must fall within the typical risks of the profession/task they are performing.
Due to the above behavior, the task assigned is not performed correctly/at all.

3.Do I need to give them a power of attorney?

In case I assign someone to draft a contract in my name/on my behalf, apart from the power of representation, I must also provide them with a power of attorney so that our relationship with the third party with whom the contract will be made can be proven. The key points regarding the power of attorney, which are useful to know, are as follows:

The power of attorney is generally informal (=even verbal), unless the contract to be concluded requires it to be in writing (e.g., if a property is to be transferred).
If the power of attorney was given through a notarial document, I must use a new notarial document if I want to revoke it.
When the power of attorney expires in any way, the attorney-in-fact is obligated to return the power of attorney to me along with any copies they have, without being entitled to raise objections.
If there was no power of attorney and the agent enters into a contract with a third party without my approval, the contract does not bind me, and it is up to me whether to approve it or not.
Thus, if I do not approve the contract, the agent must either execute the contract with the third party at their own risk or compensate them for non-performance of the contract.

4.What if I have given them money?

To answer this specific question, we need to distinguish between direct and indirect representation as legal concepts, and depending on what the parties agreed upon, we can reach a conclusion.

In direct representation, the agent declares to third parties that they are acting directly in my name and on my behalf, so anything acquired from the contract is considered to be acquired by me according to the law. If they do not deliver it to me, they commit the offense of embezzlement (Criminal Code 374), and I can file a complaint (this is called a complaint when it is filed by the victim of an act), as well as a lawsuit for damages for the harm I suffered (due to it being a tort).

In indirect representation, the agent initially contributes in their own name without appearing to act on my behalf. For this reason, anything acquired from the contract is acquired in their own name. Subsequently, from the representation relationship that binds us, they usually must transfer to me the provision and anything acquired from the contract. However, if they do not transfer it, they do not commit embezzlement or any offense. Therefore, I can only request the transfer of what they acquired from the contract through our internal relationship (this internal relationship is critical because some (legal) relationships in the law contain the right of the other party to retain what they acquired from the contract, acting as a representative, such as in the case of a donation).

5.Is it my responsibility if my employee causes harm to another person?

Firstly, we need to clarify that it is different for my employee not to perform their duties correctly = I am responsible to the client according to our contract, and for my employee to cause harm to the client/someone else. In the latter case, the third party would have a claim for compensation for the harm they suffered against the employee, and consequently against me. The conditions of the law in this case are as follows:

There must be a relationship of agency between me and the intermediary = I have entrusted them with the execution of a task concerning my interests.
It must have been with my consent, meaning that the intermediary does not intervene spontaneously in my affairs.
This agency relationship (as it is called) must be characterized by the intermediary’s dependence on my instructions/guidance/prompts.
The intermediary must commit a tort against a third party (for the concept of tort, I refer you to my relevant analysis).
This tort committed must be related to the service/work that the intermediary has undertaken to perform.

6.What if I pay for the damage caused by my employee?

If the conditions mentioned in the previous question are met, then both I and the intermediary are jointly liable to the victim for the damage they suffered due to the tort. Joint liability means that the victim can demand compensation from either of us, and if one does not cover it, then they can seek the remaining amount from the other.

Furthermore, the victim can also request compensation for the moral damage they suffered from the tort, and as the principal of the affairs, I cannot avoid liability for the act of the intermediary, because I am objectively responsible for their act = I do not need to be ‘at fault’, as it is sufficient that the act occurred and the victim was harmed.

In the event that I pay the third party for the damage caused by the intermediary, then the law provides me with a recourse against the intermediary = I can demand that they reimburse me for the amount I had to pay to the victim, i.e., the entire amount by principal/interest/expenses. The intermediary, on the other hand, can raise against me the objection of abuse of rights if I had given them faulty instructions for the execution of the work, and as a result, the damage to the third party was caused.

7.When is an assistant considered to be acting within the scope of their duties?

Greek courts, through a series of decisions, have highlighted several criteria based on which it is considered whether or not an intermediary is acting within the scope of their duties, so as to determine whether they will ultimately be liable for compensation to the victim who suffered the harm. The two most important criteria used are:

The criterion of typical risks, i.e., whether the assistant’s behavior of fulfilling their duties occurred during the course of their work or on account of it, which includes obligations of care towards the legal interests of another person (e.g., a store must ensure the safety of its customers, so if there is no warning sign on a freshly mopped floor and a customer slips, a waiter who should have identified the risk of injury to someone may be liable).
The criterion of action during service, according to which the assistant’s act falls within their service when it is performed during it, as well as in cases where the assistant abuses their service to engage in other acts unrelated (or only tangentially related) to it. Thus, these actions also create an obligation to compensate the third party who suffered harm.

8.Can I limit the liability of the intermediary?

In contracts between individuals, the parties can agree to limit their liability for obligations arising from the contract, without, however, reaching the point of complete exclusion of liability. Moreover, since such an agreement must be accepted by the other party, the parties must draw it up in writing for easier proof.

A similar agreement to limit liability can also be made regarding the liability of the intermediary, and the validity of such an agreement is judged by the same criteria that apply to the liability of the principal = there is no differentiation at this point.

The rule here is that, by agreement, one party may be exempted from liability for slight negligence (except for certain exceptions listed in the law), while conversely, the reduction of liability to the point where one party is not liable for willful misconduct and gross negligence is explicitly prohibited. This is because such an exemption of one party from liability would undermine the negotiating balance that the parties must have in the contract in order to exercise their rights without obstacles.

9.And if multiple intermediaries are used?

It is not uncommon in practice for the principal to use multiple individuals to handle their affairs. In this case, taking into account what we have discussed above regarding the liability of the intermediary, we can draw the following conclusions:

Each intermediary used has corresponding liability for their acts/omissions towards third parties.
The principal will be liable for each individual separately (provided, of course, that the conditions of the law are met).
If multiple intermediaries cause harm to a third party, they will be jointly liable with the principal.
However, the extent to which each individual contributed to the extent of the damage must be determined in order to specify the compensation owed.
If it is not possible to determine the percentage of contribution of each individual to the damage, it will be calculated based on the degree of fault of each in causing the damage.
If neither of the above methods yields results, then each individual will be equally liable = they will owe an equal share of compensation to the victim.

10.I want to use someone for a job. What does the law provide?

Quite different from the concept of an agent and an intermediary/employee discussed above is the case of a mandate. The mandatary, in simple terms, is a person who undertakes to carry out a matter on behalf of another person without being considered to represent the latter or act as their employee.

Indeed, the mandatary usually has their own organizational/business structure and therefore does not use the means provided by the mandator. Characteristic examples of mandataries are lawyers, investment service companies, etc. Moreover, the mandate contract does not differ significantly because the mandatary is obliged to provide information to the mandator about the progress of the matter, while the mandatary himself is personally liable if he causes damage to a third party (and not the mandator, unless the latter has also contributed to the damage).

A key characteristic of the mandate contract that one should be aware of is that the mandator must advance to the mandatary all the expenses necessary to execute the matter. Furthermore, if the mandatary incurs any damage while executing the matter, the mandator must compensate them for that damage. Conversely, the mandatary must render to the mandator whatever they received from the matter as consideration, whether it is monetary or not.

Next to the client and his needs.

Athina Kondogianni-Lawyer

The above does not constitute legal advice, and no responsibility is assumed for it. For more information, please contact us.