1. CHAPTER 3 INTRODUCTION TO TORTS (Negligence)  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

2. WHAT IS A TORT? A tort is a “civil wrong” (rather than a criminal wrong) with the purpose of compensating the plaintiff for such wrongs It is not a breach of contract and so an action does not lie under contract law but under the laws of torts The usual remedy for a tort is damages but an injunction may also be appropriate depending on the type of tort  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

3. DIFFERENT TYPES OF TORTS The law of torts recognises that there are various rights that individuals have that require protection against interference: To protect your physical person Assault Battery False imprisonment Intentional infliction of nervous shock To protect your land Trespass to land Private nuisance Public nuisance  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

4. DIFFERENT TYPES OF TORTS To protect from careless conduct Negligence To protect reputation Defamation To protect from false representations Deceit  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

5. DEFENCES OF INTENTIONAL TORTS The are several defences to the intentional torts : –Consent –Self defence or the defence of others or property –Unavoidable accident –Necessity –Statutory or traditional authority  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

6. ELEMENTS OF NEGLIGENCE To succeed in an action for negligence, the plaintiff must establish the following elements: the defendant owed the plaintiff a duty of care the defendant breached the standard of care the plaintiff suffered loss or damage as a result of that breach the damages were reasonably foreseeable (not too remote) the defendant may well be liable unless they can prove a valid defence or excuse  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

7. FINDING THE DUTY OF CARE Reasonable foreseeability of harm + Proximity DUTY OF CARE  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

8. FINDING PROXIMITY There are four (4) recognised forms of proximity –Physical –Circumstantial –Casual –Reliance  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

9. PHYSICAL PROXIMITY If there is sufficient proximity, or closeness in time and space, this may create a duty of care. Example: Rikki is carelessly driving her car along a street and collides with a cyclist on the side of that street. Here there is a physical proximity due to the closeness in space and time between Rikki and the cyclist. Rikki owes the cyclist a duty of care.  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

10. CIRCUMSTANTIAL PROXIMITY There is some recognised relationship between the parties which creates a duty of care Examples Gavin employs Kelly to cut timber. This is an employment relationship. Matthew pays Sven to supply accurate investment financial or legal advice. In both these examples the employer has a duty to employees to provide safe working conditions and a professional adviser has a duty to the client to give proper advice.  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

11. CAUSAL PROXIMITY Where the plaintiff proves that a connection between the negligent act and the damage suffered is close enough to justify the finding of a duty of care. Sometimes it may not be essential for the plaintiff to prove a duty of care. Under the principle of “res ipsa loquitur” (the facts speak for themselves) the mere occurrence of an accident or loss may raise a presumption of careless conduct, eg Madge drives on the wrong side of the road or the wrong way down a one-way street.  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

12. RELIANCE Where information, advice or opinions are supplied on professional or commercial matters, the plaintiff may be able to sue the provider in negligence where: there was REASONABLE RELIANCE on the false information; there was resulting financial or economic losses to the plaintiff; for a good example, see Shaddock v Parramatta City Council  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

13. NEGLIGENT MIS-INFORMATION Cases on negligent mis-information or misrepresentation have strongly suggested that a duty of care arises if the following are proved: 1.Incorrrect advice/factual information/opinions were supplied by the defendant to the plaintiff unintentionally 2.It was supplied in the course of business or by a public authority generally providing such information 3.The defendant reasonably foresaw the plaintiff would rely upon it 4.The plaintiff relied upon it (acting reasonably) 5,. The plaintiff suffered losses or damage as a result 6. There was no valid written disclaimer of liability  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

14. THE STANDARD OF CARE Would a reasonable person in the defendant’s position have foreseen that their conduct involved a risk of injury to the plaintiff? If so, the court must decide what a reasonable person would do by way of response to the risk. The court must balance the magnitude of the risk and the likelihood of it occurring, against the expense and difficulty of taking preventive action, along with any other “conflicting responsibilities”.  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

15. DEFENCES TO NEGLIGENCE There are two (2) main defences to an action for negligence: Voluntary assumption of risk Contributory negligence  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

16. VOLUNTARY ASSUMPTION OF RISK It is a total defence to an action for negligence to show that the plaintiff voluntarily accepted the risk This is sometimes known by the Latin maxim “volenti non fit injuria” The defence requires that the plaintiff was: -fully aware of the risk; and -genuinely and totally assumed it The defendant must show that the plaintiff voluntarily consented to it  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

17. CONTRIBUTORY NEGLIGENCE Where the plaintiff has contributed to the situation by their own careless conduct this may reduce the damages that may be claimed Example Leigh drives a car and collides with Narelle’s car causing damage of $20,000. She sues Leigh for damages of $20,000. Suppose the court finds that Narelle was partly to blame (contributory negligence) for the accident and decides she is 40% responsible for the collision. Narelle would only be awarded $12,000.  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

18. CIVIL LIABILITY ACT 2002 (NSW) Under the Act negligence is defined as the “failure to exercise reasonable care” Section 5B provides that a defendant is negligent if they fail to take precautions against a risk that is: Foreseeable Significant Any reasonable person would have taken precautions  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

19. WHEN DOES A DEFENDANT ACT REASONABLY? Under the Civil Liability Act, in deciding whether a person acted reasonably, the court may consider such matters as: –Probability of harm: very high or very low? –Seriousness of harm: fatal/serious/minor? –Burden of taking precautions to avoid risk: very expensive or difficult/cheap and easy? –Social utility/benefit of activity creating risk  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

20. CAUSATION AND THE CIVIL LIABILITY ACT Section 5D provides that negligence is shown to have caused the harm where: It was a necessary condition of the occurrence of the harm (factual causation) AND It was appropriate for the scope of the defendant’s liability to extend to the harm so caused (scope of liability)  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

21. SECTIONS SF – SI ASSUMPTION OF RISK The Act makes it more difficult to claim negligence where risks are obvious or inherent. In general terms: –A plaintiff may not succeed in negligence where risks are obvious –A plaintiff is presumed to be aware of an obvious risk –In some cases there is no duty to warn about obvious risks –No liability simply because harm was caused by an obvious risk  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

22. PROFESSIONAL LIABILITY: NEGLIGENCE Section 5O in Division 6 provides that a professional may not be negligent when supplying a professional service if it can be established they acted in a manner that was: –Widely accepted by peer professional opinion –As being competent professional practice –Opinion not irrational ( in court’s view) Two case examples are:- 1. Dobler v Kenneth Halverson 2. Walker v Sydney West Area Health Service  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

23. THE ACT AND CONTRIBUTORY NEGLIGENCE Sections 5R-5T recognise the principles of contributory negligence and, in appropriate cases, permit a court to reduce damages by 100% if it is just and equitable to do so. Under ss 27-33 there are restrictions imposed on claims for pure mental harm caused by nervous shock. Generally no damages will be paid unless the plaintiff witnessed the accident or was a close family member of the victim. Damages can be reduced where there has been contributory negligence.  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition

24. NEGLIGENCE: NEW OBLIGATIONS ON LAWYERS? The Civil Liability Act 2002 has imposed restrictions on legal practitioners in starting negligence cases Lawyers are prohibited from supplying legal services in relation to claiming/defending damages for negligence unless they believe there are “reasonable prospects for success” Failure to comply amounts to professional misconduct Courts may award damages against the lawyer for doing so  2011 Thomson Reuters Legal & Regulatory Ltd. All Rights Reserved. PowerPoint  slides to accompany A Guide to Business Law, 19 th Edition