THE LAW OF TORT AND BUSINESS Unit 3 – Law for Business THE LAW OF TORT AND BUSINESS

FUNDAMENTAL ASPECTS OF TORT In practice it is difficult to define a tort but a good way of thinking about a tort is that it involves a civil wrong other than a breach of contract A tort is a duty fixed by law which affects everyone. Lots of torts including; Defamation of character Nuisance The purpose of taking action in tort is to obtain compensation

FORMS OF TORT Most common form is negligence that is dealt with in the next assignment Other types with a significant impact for business are those relating to; Consumer Protection Act 1987 Private nuisance Occupiers Liability Acts 1957 and 1984

WHAT THE COURTS ARE CONCERNED WITH What was done, rather than why it was done If someone's rights are infringed they are entitled to compensation A particular event may involve a crime, a breach of contract and a tort. EXAMPLE: I have a contract with a supplier to supply me with new components. The supplier breaks into my premises to steal used components which they then sell on to me as new. They have: Broken the contract Trespassed on my property Stolen from my company

ACTIVITY 1 In pairs discuss the information you have already gained and try to think of a few more similar situations where all three areas are involved.

TORTIOUS LIABILITY AND BUSINESS OPERATIONS Whereas contracts are entered into voluntarily by two parties concerned, in the case of a tort responsibility is not voluntary. EXAMPLE: A company has a responsibility to ensure that its premises are safe. Failure to keep safe premises which cause injury is likely to result in the injured party seeking compensation.

CONTRACTUAL AND TORTIOUS LIABILITY The remedy for breaking a contract or tortious liability are the same, that is, both involve liability for damages.

PURPOSE OF CONTRACTUAL DAMAGES To put the injured party back into the position which would arise if if the contract had been successfully fulfilled.

PURPOSE OF DAMAGES UNDER TORT Is to put the injured party back into the position they were in before the tort was committed. A person affected by tort will often also seek an injunction against the person committing the tort. The purpose of the injunction is to prevent or restrain the other party from committing the tort, or receive a penalty of a fine or an imprisonment.

ADVANTAGES OF USING TORTIOUS REMEDIES Organisations are able to insist on their rights being met With the emphasis being on them put back to a position before the tort was committed Contractual remedies involves studying the fine print of business contracts = expensive and time consuming Tortious remedies = based on case law involving similar case over time

TORTIOUS LIABILITY OF OCCUPIERS Responsibility under: Occupiers Liability Act 1957 Occupiers Liability Act 1984 Duty is owed by the occupier, that is, the person in control of the premises at the time who may be a tenant or licencee. Organisations must also take care to protect unwanted visitors such as trespassers against harm. (see case Adams v Southern Electricity Board)

EMPLOYERS LIABILITY The Employers Liability (Compulsory Insurance) Act 1969 makes it compulsory for every employer to insure against liability for injury or disease incurred by their employees and arising in the course of their employment General duty to take care of employees.

ACTIVITY 2 Research and discuss the ‘control tests’ that have been developed over the years to decide on a definition for a person who is regarded as an ‘employee’

VICARIOUS LIABILITY When a person is liable for the torts of another, most commonly found in relation to emploers liability; To make sure employers develop safe working systems To prevent employers taking on employees to commit torts on their behalf, and Because employers will be better placed to pay compensation than their employees

Vicarious Liability exists even when the employee carries out an action that they have been expressly told not to do by their employer. However, if the employee leaves his or her duty and carries out an event then the employer is not liable. EXAMPLE: a sales rep who is supposed to be visiting customers in Luton, who crashes his company car on a trip to a pop concert in Paris

WHAT MUST BE PROVEN FOR VICARIOUS LIABILITY An actionable wrong was committed by the employee The worker is an employee The wrongful act occurred during the course of the employees employment

HEALTH AND SAFETY ISSUES Health and Safety regulations wre set out in 1992 in a series of measures known as the ‘six pack’. These regulations set out the general duties that employees and members of the public, as well as obligations that employees have to each other.

HEALTH AND SAFETY REGULATIONS Every employer with five or more employees must carry out a risk assessment The employer must then take Health and Safety measures in line with the risk assessment The employer must appoint competent people to help carry out the health and safety arrangements Employers must set up emergency procedures Employers must provide clear information and training to employees

STRICT LIABILITY AND ITS APPLICATION Typical liability within an organisation normally involves carrying out an intentional act or negligence. However, there are cases where the business acts neither intentionally or negligently. In these situations the law has imposed a strict limit on the organisations or persons liability. If this limit is exceeded the defendant is strictly or absolutely liable. EXAMPLE: Consumer Protection Act 1987 creates strict liability for procedures of defective goods which cause damage to an individual or property

TORTIOUS LIABILITY AND CONSUMER PROTECTION Criminal offences are made up of two elements; An actus rea or guilty act Mens rea or guilty mind. The mens rea element is concerned with an individual seeking or intending to carry out the act. In a law court the prosecution needs to prove both the actus rea and mens rea beyond a reasonable doubt. The actus rea and the mens rea must have taken place at the same time.

TRADING LAW Law relating to trading activity has created a range of legal devices: The regulation of trading activity such as the licensing of consumer credit provision and registration under the Data Protection Act Creating legal remedies which are available through legal action through the courts, for example under the Sale of Goods Act Establishing criminal liability for certain unacceptable trading activities, for example under the Consumer Protection Act and the Trades Description Act

SALE OF GOODS ACT (1979) Provides an important framework of protection for consumers of goods and services. These requirements relate to any sort of trader and any goods you buy should meet the following requirements; ‘of satisfactory quality’ ‘fit for the purpose’ ‘as described’

ACTIVITY You are to investigate the requirements stated on the previous slide and discuss in further detail

CASE STUDY Read through the case study and answer the following questions, justifying your arguments Why do you think the court ruled against Jewson? What would you see as being a suitable remedy for Kelly?

THE SALE AND SUPPLY OF GOODS TO CONSUMERS REGULATIONS New piece of legislation (March 2003) Regulations insert a new rule in the Sale of Goods Act Sets out: For the first 6 months after purchase or delivery, the burden of proof when reporting faulty goods is reversed in the consumers favour.

CONSUMER PROTECTION ACT (1987) Protects consumers against defective goods, including goods within the Sale of Goods Act, and a range of other goods such as crops and intangible goods such as electricity supply and components. The act provides liability for damage if goods do not meet the required standards and cause harm to people.

EXAMPLE An example of strict liability relates to elements of the Trades Descriptions Act 1968. Here it is an offence to supply goods to which a false description has been applied. Both of these offences are crimes of strict liability. They can only be carried out by people acting in the course of a trade or business, I.e. someone who sells used cars for a living, and adjusts the milometer on these vehicles to make them appear newer than they are.