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LAW 122 (625)
Chapter 6

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Law and Business
LAW 122
Theresa Miedema

Chapter 6 – Negligence Negligence; the most important tort! “Carelessness” in non-legal terms – BASIC ISSUE; whether the type of harm Plaintiff suffered was a reasonably foreseeable result of the Defendant’s carelessness Tort of Negligence • Determines if Defendant can be held liable for carelessly causing the plaintiff to suffer a loss or injury • Can arise in many ways; EX: • manufacturer can produce a beverage that make consumer sick • investment counsellor’s bad advice may lead a client to purchase worthless stocks • a golfer can hit a bad shot that cracks a spectator’s skull • an employer may write an inaccurate report that prevents an employee from receiving a job promotion Tort of Negligence requires a PLAINTIFF TO PROVE: 1. Owed a duty of care in that they were required to act carefully toward the plaintiff 2. Breached the standard of care by acting carelessly 3. Caused harm to the plaintiff Liability unless defense; the DEFENDANT MAY PROVE THAT THE PLAINTIFF; 1. was guilty of contributory negligence that caused or contributed to the injury 2. voluntarily assumed the risk of being injured by the defendant 3. was injured while engaged in some form of illegal behaviour Professional Negligence – not its own tort; negligence performed by professionals in professional context; EX. Banker, lawyer, etc. • the special considerations that shape the general cause of action in negligence when it is applied to professional people Negligence contains a TENSION BETWEEN TWO IMPORTANT VALUES; 1. COURTS; want a wide scope of liability so that those who have suffered a loss can be compensated 2. LIABILITY SOMETIMES HURTS SOCIETY; can cause businesses to shut down, or force them into bankruptcy Duty of Care Exists if the defendant is required to use reasonable care to avoid injuring the plaintiff TEST FOR DETERMINING THE EXISTENCE OF DUTY OF CARE Historically; Plaintiff could only win if they fell within a certain defined relationship; EX: innkeeper/traveller, railway company/passenger, etc. COURTS REPLACED THIS STRATEGY WITH A SINGLE DUTY OF CARE TEST; you could claim duty of care based on certain conditions rather than relationships. THESE CONDITIONS ARE BASED ON THE FAMOUS CASE OF DONOGHUE V. STEVENSON  CASE: DONOGHUE V. STEVENSON • PLAINTIFF: Mrs. Donoghue; went to a café and drank a ginger-beer that the DEFENDANT manufactured • Donoghue drank some and poured the rest into a glass that had a decomposed snail in it Donoghue sued Stevenson for carelessly allowing a snail to get into the drink. Issue before the court; does a manufacturer owe a duty of care to a person who consumes, but did not personal buy a particular product?  YES. You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who is legally defined as your neighbour? Anyone who is so closely and directly affected by the act that one must reasonably hold them in contemplation as being affected when I am directing my mind to the acts or omissions in question.  Case; ETHICAL PERSPECTIVE: Duty of Care A woman does not owe a duty of care to her unborn child while pregnant. This rule does not apply to other people however; others owe a duty of are to the woman’s unborn child. EX: pregnant woman driving carelessly causes an accident that results in the premature birth of her child. The child cannot sue mother for negligence despite being born with a disability. If the father were driving the car; the child can sue as he DOES owe a duty of care to the child. RULE: denies the existence of a duty of care between a mother and her unborn child; • Court’s attempt to strike a balance between the desirability of providing compensation for the injured child and the desirability of protecting the woman’s freedom of action. • Everything a pregnant woman does can affect her unborn child; a duty of care would require her to be on guard for entire 9 months of pregnancy DUTY OF CARE TEST (Based on DONOGHUE V. STEVENSON); 1. JUDGE WILLASK: whether or not a duty of care questions has already been answered for the particular type of case that is being litigated 2. IF DUTY OF CARE QUESTION HAS NOT BEEN ANSWERED: 3 additional questions are necessary; a. Was it reasonably foreseeable that the plaintiff could be injured by the defendant’s carelessness? b. Did the parties share a relationship of sufficient proximity c. If YES to first two questions; a duty of care will presumably exist; however, judge may deny duty of care on basis of policy reasons Reasonable Foreseeability Test is objective. NOT whether a defendant personally knew that its activities might injure the plaintiff; IT IS whether a reasonable person in the defendant’s position would recognize the possibility of the plaintiff’s injury. Aimed at striking a balance; • Unfair not to compensate Plaintiff simply because they were unaware of danger • Plaintiff should not have to suffer because Defendant wasn’t paying attention HOWEVER • Unfair to hold Defendant liable for EVERY injury it creates, even those unforeseeable • Can’t take precautions against a hidden danger Other Issues: hard to arrange liability insurance for unpredictable event Proximity A duty of care will not be recognized unless there was also a relationship of proximity. CONCEPT IS BROAD. • Proximity is hard to define • Must somehow be a close and direct connection between the parties • Physical proximity; Defendant carelessly swings a baseball bat while standing next to Plaintiff • Proximity in a variety of perspectives; a. Whether parties shared social relationship – EX. Parent required to look after a child, stranger is not b. Whether parties shared a commercial relationship – EX. bar responsible if drunk customer later causes traffic accident; BUT host of a house party may not be responsible if a drunken guest injures a pedestrian on the way home c. Whether there was a direct causal connection between Defendant’s carelessness and the Plaintiff’s injury – EX. motorist who rams into a bridge will be liable for damage to the bridge, BUT probably not for the profits that were lost when customers could not reach a store located on other side of bridge d. Whether the plaintiff relied on the fact that the Defendant represented that they would act in a certain way – EX. railway company may have duty to continue operating a safety gate that it voluntarily installed that pedestrians rely on DUTY OF CARE FOR PROFESSIONAL STATEMENTS Business context: NEGLIGENT STATEMENTS • Economies based on supply of information and advice • Some statements made by professionals, (lawyers, financial advisors, stockbrokers, etc.) will be inaccurate • Consumers and clients will suffer as a results LAW OF NEGLIGENCE STRIKES A BALANCE; between need to compensate people who are hurt by negligent statements and the need to protect businesses from potentially disastrous consequences of being held liable. CARELESS STATEMENTS VS. CARELESS ACTIONS: (different in 3 ways) 1. Risks associated with statements are often hidden; need for care is less apparent – consequently; people speak loosely in social settings. 2. “Words are more volatile than deeds”. Risk created by a single action is limited in time and space; statements are not. They are subject to; “liability in an indeterminate amount for an indeterminate time to an indeterminate class”. 3. Careless statements usually result in pure economic losses – financial losses that are not tied to any property damage or personal injuries THEREFORE Special rules apply to deciding to recognize a duty of care if the defendant’s careless statement caused the plaintiff to suffer a pure economic loss. Policy *A duty of care may not necessarily exist even if there was reasonable foreseeability and proximity. COURT MAY DENY LIABILITY ON POLICY GROUNDS. PROXIMITY: deals with relationship existing between two parties VS. POLICY: concerned with effect that a duty of care would have on the legal system and society generally COURT: Does the recognition of a duty of care; 1. “Open the floodgates” – encourage a large number of people to swamp courts with lawsuits? 2. Interfere with political decisions? 3. Hurt a valuable type of relationship? Notes on policy: • Policy can affect that application of negligence action in business context • Employee can’t sue an employer for mental distress caused by job; this would be a considerable intrusion into the workplace, would limit business’ ability to increase efficient production, create a great deal of uncertainty DUTY OF CARE AND POLICY: REGULATION OF PROFESSIONS • Many professions governed by regulatory bodies • Regulatory bodies may be sued as well; Plaintiff can argue that if the body did their job properly the professional would not have been in the position to commit the tort Breach of Standard of Care nd *2 element of cause of action in negligence; Plaintiff must prove Defendant breached standard of care (first cause; Plaintiff must prove Defendant owed duty of care) Standard of Care – tells the Defendant how they should act Breached – when Defendant acts less carefully than the standard Reasonable Person Test – Defendant must act in the same way that a reasonable person would act in similar circumstances Reasonable Person is a fictional character. Reasonable Person Test – Important Factors: • Test is objective – does not allow for Defendant’s subjective or personal characteristics • A reasonable person takes precautions against reasonably foreseeable risks – test DOES NOT REFER TO “probable” or “likely” risks. A 1 in 100 or 1 in 1000 chance may be sufficient however a reasonable person does not take precaution against every risk • The reasonable person influenced by both the likelihood of harm and the potential severity of harm. Greater care is required if chance of injury is 90% opposed to 10%, and if injury is likely to be death opposed to a bruise • Reasonable person is likely to adopt affordable precautions. But they do not have to spend an enormous amount • Reasonable person may act in a way that has great social utility, even though it creates a risk; an ambulance driver can speed through a red light to save a patient’s life • Standard of care requires the Defendant to act as the reasonable person would act in similar circumstances; less care is required during emergencies *** The SUDDEN PERIL DOCTRINE States that even a reasonable person may make a mistake under difficult circumstances STANDARD OF CARE FOR PROFESSIONALS • Defines the standard of care that professionals are expected to meet • Basic Rule: professional must act as a reasonable person would in similar circumstances • Courts pay attention to 5 FACTORS WHEN DEALING WITH PROFESSIONALS; 5 Factors for Professionals; 1. A PROFESSIONAL MUST ACT AS THE REASONABLE PROFESSIONAL WOULD ACT IN SIMILAR CIRCUMSTANCES o Professional must act as a reasonable professional would act in similar circumstances o Specialist must act with more care than a generalist, even within the same profession o Special allowances ARE NOT made for beginners; even inexperienced professionals must conform to the standard of reasonably competent experienced professional 2. UNFAIR TO JUDGE DEFENDANT’S ACTIONS IN HINDSIGHT • Standard of care is limited based on the information that was reasonably availab
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