Copyright © 2004 by Nelson, a division of Thomson Canada Limited CANADIAN BUSINESS AND THE LAW Second Edition by Dorothy Duplessis Steven Enman Shannon O’Byrne Sally Gunz Presentation prepared by Allan Elliott, Southern Alberta Institute of Technology

Copyright © 2004 by Nelson, a division of Thomson Canada Limited CHAPTER ELEVEN THE TORT OF NEGLIGENCE OBJECTIVES:  The conduct that the law of negligence addresses  The principles of the law of negligence  The defences in a negligence action  The common kinds of negligence actions that businesses face  The difference between negligence and strict liability

Copyright © 2004 by Nelson, a division of Thomson Canada Limited WHAT IS NEGLIGENCE? NEGLIGENCE  a careless act that causes harm to another CARELESSNESS  a failure to show reasonable care REASONABLE CARE  the care a reasonable person would exhibit in a similar situation

Copyright © 2004 by Nelson, a division of Thomson Canada Limited STEPS TO NEGLIGENCE ACTION 1. DOES THE DEFENDANT OWE THE PLAINTIFF A DUTY OF CARE? Duty of care  the responsibility to avoid carelessness that cause harm to others Neighbour  anyone who might reasonably be affected by another’s conduct

Copyright © 2004 by Nelson, a division of Thomson Canada Limited DID THE DEFENDANT BREACH THE STANDARD OF CARE? Reasonable person ▪ the standard used to judge whether a person’s conduct in a particular situation is negligent Standard of Care ▪ the standards of behaviour that would be observed by the reasonable person in society Specialized Standard of Care ▪ the standard of care exhibited by average persons with the requisite specialized training STEPS TO NEGLIGENCE ACTION

Copyright © 2004 by Nelson, a division of Thomson Canada Limited STEPS IN A NEGLIGENCE ACTION 3. DID THE DEFENDANT’S CARELESS ACT OR OMISSION CAUSE THE PLAINTIFF’S DAMAGE? Causation  the relationship that must exist between the defendant’s actions and the plaintiff’s loss  would have not occurred ‘but for’ the Defendant’s actions

Copyright © 2004 by Nelson, a division of Thomson Canada Limited STEPS IN A NEGLIGENCE ACTION 4. WAS THE DAMAGE SUFFERED BY THE PLAINTIFF TOO REMOTE? Remoteness of Damage  the absence of a sufficiently close relationship between the Defendant’s actions and the Plaintiff’s loss Thin Skull Rule  defendant is liable for the full extent of the plaintiff’s loss even where a prior vulnerability makes the harm more serious than it otherwise might be

Copyright © 2004 by Nelson, a division of Thomson Canada Limited STEPS IN A NEGLIGENCE ACTION Pure Economic Loss  financial loss that results from a negligent act where there has been no accompanying property or personal injury damage

Copyright © 2004 by Nelson, a division of Thomson Canada Limited DEFENCES TO A NEGLIGENCE ACTION 1.contributory negligence - unreasonable conduct by the plaintiff which contributed to - or partially caused - the injuries suffered 2.voluntary assumption of risk – no liability exists as the plaintiff agreed to accept the risks inherent in the activity

Copyright © 2004 by Nelson, a division of Thomson Canada Limited NEGLIGENT MISSTATEMENT (OR NEGLIGENT MISREPRESENTATION)  negligent misstatement (or negligent misrepresentation) – an incorrect statement made carelessly; negligence taking the form of words  professional – someone engaged in an occupation requiring the exercise of specialized knowledge  third party – one who is not party to an agreement

Copyright © 2004 by Nelson, a division of Thomson Canada Limited THE NEGLIGENCE STANDARD VERSUS STRICT LIABILITY STRICT LIABILITY the principle that liability will be imposed irrespective of proof of negligence use of strict liability limited in Canada but not in –liability in contract –vicarious liability

Copyright © 2004 by Nelson, a division of Thomson Canada Limited INTERNATIONAL PERSPECTIVE ▪ members of the European Union (EU) are strictly liable for their defective prodcuts ▪ managers liable even if not negligent in any way and exercised due care NEGLIGENCE ACTIONS AND BUSINESS