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Lecture 10

AFM 231 - Lecture 10 (2013.02.07).doc

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Accounting & Financial Management
AFM 231
Sally Gunz

AFM 231 – Business Law Thursday, February 7, 2013 Lecture 10: Torts: Introduction to Negligence Damages  Basic distinction between pecuniary and non-pecuniary damages. See definitions p. 218.  In practice, non-pecuniary are those that non-lawyers have the most difficulty understanding – how do you e.g. translate ‘pain and suffering’into a money amount?  Courts rely heavily on precedent to guide them. Punitive Damages  Philosophically they are hard to grasp –they do contradict the basic distinction between criminal and tort law (punishment vs. compensation).  Relative rare in Canada – and where applied, conservative decisions.  Whitten vs. Pilot Insurance Co. (2002) Supreme Court of Canada – see quote next slide:  “Insurance contracts, as Pilot’s self-description shows, are sold by the insurance industry and purchased by members of the public for peace of mind. The more devastating the loss, the more the insured may be at the financial mercy of the insurer, and the more difficult it may be to challenge a wrongful refusal to pay the claim. Deterrence is required. The obligation of good faith dealing means that the appellant’s peace of mind should have been Pilot’s objective, and her vulnerability ought not to have been aggravated as a negotiating tactic. It is this relationship of reliance and vulnerability that was outrageously exploited by Pilot in this case. The jury, it appears, decided a powerful message of retribution, deterrence and denunciation had to be sent to the respondent and they sent it.” 129  Supreme Court troubled by amount but accepted it with lots of caveats. Question  Spend the next few minutes researching Liebeck v. McDonald's Restaurants  Think about the following questions  How hot was the coffee?  How hot does coffee need to be? Can you drink coffee at the temperature it was?  Do you think most people know the effects of coffee at the temperature it was?  What was the difference between where McDonald’s said most people drank their drive-thru’coffee and what in fact their own research showed to be the case?  Was the driver driving?  What was Mrs. Liebeck doing when she spilled the coffee?  How old was Mrs. Liebeck?  What happened to Mrs. Liebeck?  Did the original jury reduce the damages at all and why?  Was the jury award of $2.7 m punitive damages the final amount received? Negligence  What you need to know (class with text as back up)  Why Donoghue v. Stevenson was so important  How do you prove negligence  Defences: no negligence plus contributory negligence  Special circumstances:  Negligent misrepresentation  Product liability  Serving alcohol  Contrast with strict liability Key to Understanding Negligence  Negligence arises out of an unintentional interaction that causes harm.  Let’s use as e.g. the classic Canadian ‘slip and fall’cases e.g. I go to anATM when it is dark. The Bank has not bothered to clear snow for a few days and the snow around the ATM is packed down and has become solid ice. The lighting
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