Tort law is an area of law which has been created to provide protection to rights of the people to stay safe, enjoy their property and reputation. The law covers various aspects which are divided into intentional and non intentional torts. The paper primarily provides a discussion in relation to the effect of tort law on business situations. Thus detailed discussion is provided with respect to unintentional torts which are common in business situations. Businesses are subjected to various unintentional torts which primarily include negligence, defamation, occupier’s liability and nuisance. In case the guidelines which are set out by such laws are violated it results in the payment of damages.
The damages are set out by the courts. The rules relating to the law of torts are generally governed through the provisions of common law. However, there are specific legislations as well with respect to every jurisdiction which determine whether any civil right of a person has been violated or not. There have been various cases which have set out the precedents in relation to the law of torts. Understanding these cases can significantly help in understanding the implication of law of torts on business organizations. The paper discusses such cases and provide scenarios where tort law may have an effect on business functioning.
One of the primary areas of tort law is that of negligence. The tort of negligence is one of the most common type of tort which takes place. A person may be charged fortort of negligence in case the actions committed by them are not deliberate. These actions result out of the situation where a person has failed to take reasonable care or action with respect to any person who may be inured reasonably because of their failure.
The identification of such negligent actions generally results in damages and compensation. There are certain specific elements which constitutes the identification of negligence (Kelly et al, 2015). These include Duty of Care, Breach of duty of Care, Causation and remoteness to access damages. There have been various cases where these elements have been discussed by the court and interpreted according to law for the purpose of identifying the liability of the different parties.
The rules of negligence had been firsts coined through the case of Donoghue v Stevenson 1932 AC 562. The case also took place in a business situation. In this case the defendant was a manufacturer of a beverage and had no written contract with the plaintiff to guarantee safety. The plaintiff had purchased the beverage from a cafe and consumed it. While consuming the beverage the plaintiff had noticed that there was a snail at the bottom of the bottle. The plaintiff immediately started to feel sick. Instead of making a claim against the cafe the plaintiff make a claim for damages against the manufacturer. The plaintiff’s claim had been upheld by the court.
The court rejected the argument which had been provided by the defendant (Levine et al, 2016). The arguments stated that the defendant cannot be liable to the plaintiff as they do not have any form of contract with them. While rejecting the argument of the defendant the court provided that the plaintiff owed the defendant a duty of care. The concept of duty of care was thus coined for the first time. The rules provide that any person who is in a position that his actions or omissions may cause damages or injury to another person will be deemed to owe a duty of care to such person.
The duty if breached and caused the injury results in damages to be paid by the defendant to the plaintiff. Along with the provisions of common law there are also the rules provided the Civil Liability Legislations of every state in Australia which governs the law regarding negligence.
There are several other tests which have been imposed for the purpose of analyzing the other elements of negligence. These tests have been created by the courts while addressing issues in different cases. For the purpose of analyzing the duty of care the tests which are present includes the Alcock test for psychiatric injury, The Caparo test for property or personal injury, pure economic loss test, policy consideration test and omission relating to liability test. These tests primarily are based on proximity of the defendant with the plaintiff as well as the foreseeability. If the distance between the defendant and the plaintiff is proximate and a reasonable person in the defendant’s position can foresee the injury which have been caused to the plaintiff, the court will indentify a duty of care in the part of the defendant.
As pointed out by ABC news that chemical spray damage had resulted in $7m damages allowed by the court. These damages had been provided to farmer because of negligent spraying by the neighbour (Wright, 2017). The plaintiff in this situation was Tony Caccaviello a grape grower who won a four year legal battle to claim compensation against the destruction of his wine yard. Another cases as pointed out by Brisbane times related to negligence the plaintiff was not able to be successful against the plaintiff. In this case the plaintiff was Sarah Rudd and defendant was Starbucks. The allegation was related to a knee injury which the plaintiff had suffered while working for the defendant. In this case the judge had identified that the plaintiff had been subjected to several injuries to her right knee in the past and the injury caused at work only contributed towards her requiring a surgery.
There was an also a claim made by the plaintiff that her future career which is to work as a nurse also would be affected by the injury. However the court did not find any evidence to back up such claim from the plaintiff. The court came to this decision because the plaintiff was not able to establish before the court the element of causation. The elements of causation is established through the implementation of the But for test which had been discussed in the case of Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428.
The court provided that only but for the negligence if the injury is caused damages can be provided. In this case there has been a situation where medical treatment was delayed to a person who had been suffering from a terminal illness. The court found that even if the treatment was provided on time the person would have died. Thus the court made a judgement that there no negligence in the part of the doctor. In the same way in the Starbucks case as the surgery was not a direct result of the negligence the defendant was not found to be liable for compensation by the court.
Thus one of the most important factors with respect to negligence which business must known is that all documents needs to be satisfied for the purpose of establishing negligence. Even if a business owes a duty of care the plaintiff would need to prove that the duty of care had been breached and the breach is result in the injury. Even where the duty has been breached it needs to be provided that because of the breach the injury has taken place. Businesses are subjected to significant detriments in case they have been found guilty of a negligent action (Matter&Stutzer, 2015). The simplest thing to do in order to avoid such claims directed towards the businesses is to be reasonably careful and not to breach the duty of care.
This is because businesses tend to own a duty of care to any person who comes in contact and thus it becomes necessary not to take lightly such duty. The court also applies a test known as the objective test to determine the breach of the duty of care. This test had been issued by the case of Vaughan v Menlove (1837) 3 Bing. N.C. 467. The test is also incorporated in the civil liability legislations of the different states. The test states that a person will be regarded to have violated the duty of care if they had not applied care in the same way as a reasonable person in their position would have done taking into consideration the probability of the injury, the seriousness of the harm and the burden of taking precautions.
Thus there has to be reasonable care taken on the part of the business. One of the most common causes of negligence in Australia is related to slip and fall cases and case related to vicarious liability for employees. As pointed out by smh, a woman had been awarded with a compensation of $30000 for a slip in the supermarket. These situations can be addressed by having in place a warning signs or having business indemnity insurance in place.
The issue of vicarious liability is also an issue which has significant implications for business. This is because the business are held liable for the negligent actions committed by the employees during the course of employment (Cornford 2016). There have been several such cases in Australia where the businesses have been held liable for their employees. One of such cases is the case of Prince Alfred College Incorporated v ADC [2016] HCA 37. In this case the court had discussed the extent to which the employer can be held liable vicariously for the actions of the employee. The court held that all negligence caused by the employees during work hours is to be compensated by the employer.
Another important aspect which needs to be analyzed with respect to implication of tort law is that of damages. Damages are provided to the plaintiff to compensate them for the injury or harm caused. Damages may be extended to any expenses or losses which have been incurred by the plaintiff because of the injury. The issue of damages have been discussed in the courts on several occasions. Damages are also provided in form of financial compensation for the legal cost incurred by the plaintiff in making the claim.
The concept of contributory negligence also arises while accessing a claim for damages. This is a situation where the plaintiff has been found by the court to have been negligent themselves. In this case damages are adjusted relying upon the contribution. The contribution is analyzed based in the same principles which are put in place to analyze the negligence of the defendant. The damages are apportioned based on the contribution such as in the case of Jackson v McDonald’s Australia [2014] NSWCA 162 the court apportioned the damages to be paid by the defendant to only 50% as there had been 50% contribution to the harm by the plaintiff themselves.
The other sector of tort law is that of nuisance. This has been brought to existence for the purpose of providing protection to the public to peacefully enjoy their property. Under this tort a person is not allowed to use his or her property in such a way so as to cause problems to another person. Here also the duty of care is determined by proximity and foreseeability (Ferrara et al, 2016). Therefore the business need to use their property in a way which does not hamper the rights on any other person. It has to be further taken into consideration that the law of tort also include occupier’s liability. This means that the owner of the premises is liable for any injury caused to the person occupying such premises.
In conclusion it can be stated that the Law of tort has significant implications on business organizations. They may be subjected to significant financial losses because of being negligent or not acting in a reasonable manner. The law related to negligence has to be properly understood by the business organizations in order to avoid such liability. The law of negligence does not ask to prevent the injury to another person but asks for taking reasonable steps to ensure that no injury is caused. Business may also reduce their liability by having in place a business indemnity insurance which will protect them from suffering financial losses due to negligence claims.
References
Barnett v Chelsea & Kensington Hospital [1969] 1 QB 428
Cornford, T. (2016). Towards a public law of tort. Routledge.
Donoghue v Stevenson 1932 AC 562
Ferrara, S. D., Baccino, E., Boscolo-Berto, R., Comandè, G., Domenici, R., Hernandez-Cueto, C., …&Pinchi, V. (2016). Padova Charter on personal injury and damage under civil-tort law. International journal of legal medicine, 130(1), 1-12.
Jackson v McDonald’s Australia [2014] NSWCA 162
Kelly, K., Schwartz, V. E., &Partlett, D. F. (2015). Prosser, Wade, Schwartz, Kelly, and Partlett’s Torts, Cases and Materials. Foundation Press.
Levine, L. C., Vetri, D., Vogel, J., &Gassama, I. J. (2016). Tort law and practice. Carolina Academic Press.
Matter, U., &Stutzer, A. (2015). The role of lawyer-legislators in shaping the law: evidence from voting on tort reforms. The Journal of Law and Economics, 58(2), 357-384.
Wright, J. (2017). Tort law and human rights. Bloomsbury Publishing.
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