Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Business Law in Canada, 7/e Chapter 4 Torts and Professional Liability 4-1

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 What Is a Tort? A social wrong (not necessarily a crime) A civil wrong (between individuals) When an intentional or careless act harms another Injured party usually sues for monetary compensation 4-2 Continued on 4-3

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 What Is a Tort?/2 Crimes are social wrongs that affect society as a whole Some crimes are also torts A tort is an inherently wrongful act that causes injury to another 4-3

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Question for Discussion It is possible for wrongful conduct to be both a tort and a crime. Is it appropriate for a person who engaged in wrongful conduct to be prosecuted criminally and then to be subject to a civil law suit to compensate the victim for the injuries suffered? 4-4

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Categories of Tort Intentional or deliberate acts that cause injury or loss 4-5 Careless or negligent acts that cause injury or loss

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Intentional Torts Intentional conduct that causes injury Examples Assault and Battery Trespass to Land False Imprisonment Nuisance Defamation Courts may award punitive damages 4-6

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Intentional Torts Assault and Battery Assault - where there is fear of contact Battery – the least touching of another in anger Defences 1. Accident not mistake 2. Consent (informed) 3. Self-defence (reasonable force) 4-7

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Trespass to Land Being on another’s land without authority permission implied for business offering public services Occupier owes only minimal duty to trespasser Continuing trespass remedied by injunction 4-8

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 False Imprisonment The unlawful and intentional restraint of a person against his/her will Restraint must be total Victim must submit or be forced to comply 4-9 Restraint may be justified if the person has done something s/he can be arrested for. Remedies: special, general and punitive damages

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Private Nuisance Public nuisance affects public in general Private nuisance interferes with another’s use of his/her property Strict Liability for inherently dangerous situations or products 4-10

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Defamation A false statement about someone to his or her detriment - must be published or broadcast Slander - spoken defamation Libel - written defamation Continued on

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Defamation/2 Defences 1. Truth 2. Absolute Privilege 3. Qualified Privilege 4. Fair Comment 4-12

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Privacy Privacy protection provided by statute law Personal Information Protection and Electronic Documents Act Regulates collection and use of private information Provides a model code 4-13

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Question for Discussion Tort law is designed to provide compensation for injury or damages suffered. Is it appropriate for the civil court to award damages where no loss has been suffered by the person suing? For example, in a case of trespass. 4-14

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Negligence Inadvertent, careless conduct that causes injury to another Important area of tort liability for professionals 4-15

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Negligence A - D Essential Elements: A: A duty to exercise care B: Breach of the standard of care C: Causation – The act caused the injury D: Damages -Victim suffered a loss 4-16

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Reasonable Person Test Reasonable person is a prudent person exercising care conduct falling between average and perfect 4-17

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Is a Duty Owed? Reasonable Foreseeability Test If it would be apparent to a prudent person that the conduct was likely to cause injury - duty is owed. We owe a duty to anyone we can reasonably anticipate might be harmed by our conduct Is there any reason to reduce or eliminate this duty? (Anns case) 4-18

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Case Summary Donoghue v Stevenson set several precedents in the law of negligence the test to determine the existence of a duty product liability - manufacturer owes a duty to customer privity of contract will not defeat an action for negligence in product liability cases 4-19

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 A - Duty of Care Misfeasance an act that causes harm to another court will provide remedy Nonfeasance a failure to prevent an injury courts reluctant to provide remedy If a person attempts to help there is a duty to exercise reasonable care Courts reluctant to provide remedy without special relationship 4-20

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 B – Breach of a Standard of Conduct What would a reasonable person have done in the circumstances? Actions that fall below socially acceptable standards create liability for damages Risk - The greater the risk of injury the higher the standard 4-21

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Liability of Children Children liable for their torts standard is that of a reasonable child of that age Parents not generally responsible for their children’s torts except where there is obvious failure to control, instruct or supervise or a statute imposed duty 4-22

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 C - Causation The injury must be a direct result of the careless conduct But for test - but for the conduct of the plaintiff no injury would have resulted 4-23

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 D – Damages Plaintiff must show injury to self or loss of property as a result of defendant’s negligence – Physical Causation Remoteness Test Whether the specific type of injury suffered was reasonably foreseeable - Legal Causation 4-24

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Judicial Remedies Courts will compensate for: Mental disorder, but not simply mental distress Economic loss Court attempts to restore victim to original position 4-25

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Defences Contributory negligence plaintiff partially responsible for own loss last clear chance doctrine Negligence Act now allows court to apportion responsibility Continued on

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Defences/2 Voluntarily assuming the risk a person who volunteers to enter a situation where the risk of injury is obvious cannot recover damages 4-27

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Special Situations 4-28 An occupier of property owes a duty to people who come onto the property as licensees trespassers invitees The obligation is on the tenant not the landlord n Occupiers Liability Act Continued on 4-29

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Special Situations/2 Duties of Innkeepers safeguard property of guests post appropriate section of Innkeepers Act prevent guests from becoming intoxicated 4-29

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Question For Discussion Social Host Liability The courts have found both commercial establishments and private hosts liable for injuries sustained by their guests when they have consumed alcohol on their premises. What is the standard of care expected of a social host and do you think the courts have gone too far in assessing this kind of liability? 4-30

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Modification by Statute Motor Vehicle Legislation Insurance is compulsory in most jurisdictions No-fault insurance schemes help to distribute risk Vicarious liability of owner 4-31

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Negligent Misstatement People who suffer economic loss because of a professional’s negligent statements may recover damages Whether a duty was owed is determined by reasonable foreseeability test This test has been modified by the Anns Case 4-32

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Case for Discussion Haig v. Bamford This case established the legal principle that: Liability is restricted to situations where the plaintiff knew or should have known that the information provided would be relied on by a limited group. Is this restriction appropriate? 4-33

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Strict Liability Liability when there is no fault When a dangerous situation is created by an unusual use of property, the owner/occupier is liable for all damages when it escapes E.g., water, animals 4-34

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Vicarious Liability A form of strict liability—or liability without fault—is imposed on employers when they are held liable for torts committed by employees during the course of their employment. 4-35

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Product Liability Manufacturers are liable for injuries caused by defective products Plaintiff must establish that the manufacturer was negligent Breach of manufacturer’s duty can be implied from circumstances Manufacturers must warn of dangers associated with product 4-36

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Liability of Experts Professionals and experts held to a high standard require skills and abilities expected of a professional in that field must exercise skill with degree of care expected from a reasonable person in that profession inexperience does not excuse incompetence common practice that is dangerous or careless is not an excuse. 4-37

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Professional Liability Duty often set out in contract But tort liability requires adherence to a reasonable standard of performance Courts may extend liability to parties outside of the contract 4-38

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Negligence Standard of care expected of professionals Reasonable member of the profession Common practice may not measure up to reasonable standard Courts will examine the circumstances to determine if the conduct was reasonable 4-39

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Case for Discussion The Hercules Case In Haig v Bamford, the SCC determined that accountants owed a duty of care to those they knew would rely on the statements they prepared. In the Hercules case the SCC applied the Anns test and limited the range of liability to only those they knew would rely on the statements they prepared and who used them as intended. 4-40

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Risk Avoidance Professionals should be aware of the standard of care expected of them Adapt practices to avoid risk Professionals owe a fiduciary duty to clients Must act with loyalty and good faith Must disclose pertinent information Must use extreme care with funds entrusted to them 4-41

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Insurance Often a condition of practice for professionals Protects against damages resulting from errors and omissions Premiums can be a significant business expense May cover legal costs when professional is sued 4-42

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Professional Disciplinary Bodies Some exercise significant control over their members With membership required With power to levy penalties and suspend Activities regulated by administrative law Charter rights may apply Compliance with human rights legislation required 4-43

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Other Business Torts Inducing breach of contract Deceit Conversion Passing off action Injurious falsehood 4-44

Copyright © 2005 Pearson Education Canada Inc. Business Law in Canada, 7/e, Chapter 4 Privacy Current business concern because access to information has been facilitated by data storage and retrieval systems and by the Internet Legislation protects private information 4-45