Property Law Chapter 6 Property and Managing Risk

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Property Law Chapter 6 Property and Managing Risk www. learnnowbiz. com Property Law

Property Law Chapter 6 Property and Managing Risk www. learnnowbiz. com Property Law

6. 1 Tort DEFINITION TORT - a wrong by an individual against another. •

6. 1 Tort DEFINITION TORT - a wrong by an individual against another. • • - The law of tort protects individuals against infringements of their rights against person, property or reputation. There are many different torts including : trespass defamation nuisance negligence. BASIC PRINCIPLE - members of society we all have a legal obligation to avoid causing injury to others by our actions or lack of action (carelessness). • The law states that if an injury is caused to another by a person failing to take care, the wrongdoer should provide a remedy to the injured party, usually monetary compensation. www. learnnowbiz. com Property Law

6. 2 What Law Applies to Negligence? • The law of torts has historically

6. 2 What Law Applies to Negligence? • The law of torts has historically evolved through the common law. • ‘Tort law crisis’ of the early 2000’s was a result of a huge increase in litigation and an inevitable rise in the cost of insurance premiums. • This ‘crisis’ saw many businesses and some non- profit organizations forced to close because they were unable to afford insurance. EXAMPLES - Horse riding venues, Go- Kart racing www. learnnowbiz. com Property Law

Law Applicable to Negligence www. learnnowbiz. com Property Law

Law Applicable to Negligence www. learnnowbiz. com Property Law

6. 3 Common Law Basics of Negligence To establish the tort of negligence, there

6. 3 Common Law Basics of Negligence To establish the tort of negligence, there are three prerequisites: - 1. 2. 3. A duty of care must be owed by one person to another. There must be a breach of that duty. Loss, injury or damage must have resulted as a result of that breach. www. learnnowbiz. com Property Law

Common Law Basics of Negligence 1. Duty of Care- The Good Neighbour Principle, Foreseeability,

Common Law Basics of Negligence 1. Duty of Care- The Good Neighbour Principle, Foreseeability, Proximity, The ‘Vulnerability and Control’ Test 2. Breach of Duty of Care- QUESTION - Has there been a breach of duty? 3. Loss, injury or damage must have resulted as a result of that breach- Causation, Remoteness of Damage, Eggshell Skull Rule www. learnnowbiz. com Property Law

6. 4 Civil Liability Acts and Negligence Duty of Care • The common law

6. 4 Civil Liability Acts and Negligence Duty of Care • The common law position with respect to duty of care did not change under the civil liability reforms. • The various pieces of legislation simply try to clarify what amounts to a duty of care and reiterate that negligence does not arise in every case where a foreseeable risk occurs. • Defendants are entitled to disregard some risks as insignificant and then consider whether a reasonable person would have taken action to avoid or reduce the risk. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Breach of Duty of Care Standard of Care •

Civil Liability Acts and Negligence Breach of Duty of Care Standard of Care • Once it has been established that a duty of care is owed by the defendant to the plaintiff, the plaintiff must then establish the standard of care that applies in the circumstances and whether that standard has been breached. • Civil liability legislation uniformly sets out factors which should be considered by the court in deciding whether a reasonable person would have taken precautions against the identified risk. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Civil Liability Act 2002 (NSW) – s 5 B

Civil Liability Acts and Negligence Civil Liability Act 2002 (NSW) – s 5 B 5 B General Principles (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things): (a) The probability that the harm would occur if care were not taken. (b) The likely seriousness of the harm. (c) The burden of taking precautions to avoid the risk of harm. (d) The social utility of the activity that creates the risk of harm. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence (a) The probability that the harm would occur if

Civil Liability Acts and Negligence (a) The probability that the harm would occur if care were not taken. (b) The likely seriousness of the harm. • This is essentially a restatement of the ‘gravity of harm’ concept. • The more serious the harm is likely to be, the more likely a reasonable person would have taken precautions against the risk of the harm occurring. • If the activity in which the plaintiff is concerned is particularly hazardous, a warning should be given. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence c) The burden of taking precautions to avoid the

Civil Liability Acts and Negligence c) The burden of taking precautions to avoid the risk of harm. • The plaintiff must identify the precautions the defendant should have taken, and then show, on the balance of probabilities, that the burden of cost, difficulty and inconvenience to the defendant was not unreasonable in the circumstances. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence (d) The social utility of the activity that creates

Civil Liability Acts and Negligence (d) The social utility of the activity that creates the risk of harm. • The social utility of the defendant’s conduct must be assessed as against the seriousness of the risk of injury. • In some situations, the benefit of the conduct may outweigh the risk of injury and may change the duty of care ascribed to the person involved. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Wrongs Act 1958 (Vic) - s 49 Other Principles

Civil Liability Acts and Negligence Wrongs Act 1958 (Vic) - s 49 Other Principles In a proceeding relating to liability for negligence: (a) The burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible. (b) The fact that a risk of harm could have been avoided by doing something in a different way, does not of itself, give rise to, or affect liability for the way in which the thing was done. (c) The subsequent taking of action that would, (had the action been taken earlier), have avoided a risk of harm, does not of itself give rise to or affect liability in respect of the risk, and does not of itself constitute an admission of liability in connection with the risk. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Res ipsa loquitur – ‘The Facts Speak for Themselves’

Civil Liability Acts and Negligence Res ipsa loquitur – ‘The Facts Speak for Themselves’ • This is a rule of evidence that allows the plaintiff to treat the actual facts of the case as evidence of the defendant’s negligence – i. e. ‘the facts speak for themselves’. For res ipsa loquitur to apply, the following conditions must be present: 1. The injury suffered by the plaintiff would ordinarily not have happened if proper care had been taken. 2. The plaintiff was injured by an act or omission exclusively within the control of the defendant. 3. There is an absence of any other explanation and no room for interference. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Standard of Care for Professionals – Civil Liability Acts

Civil Liability Acts and Negligence Standard of Care for Professionals – Civil Liability Acts • The state legislation addresses both the standard of care required of professionals and a defence for professionals if accused of breaching that standard of care. • Essentially, a ‘professional’ refers to a person practicing a certain profession and includes doctors. • The standard of care required of persons professing a particular skill is to be determined by the court as that reasonably expected of a person professing that skill, in the circumstances at that time. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Civil Liability Act 2002 (NSW) – s 5 O

Civil Liability Acts and Negligence Civil Liability Act 2002 (NSW) – s 5 O S 50 Professional Duty of Care (1) A person practicing a profession (‘a professional’) does not incur a liability in negligence from the provision of a professional service if it is established that the professional acted in a manner that (at the time the service was provided) was widely accepted in Australia by peer professional opinion, as competent professional practice. (2) However, peer professional opinion cannot be relied on for the purposes of this section if the court considers that the opinion is irrational. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Civil Liability Act 2002 (NSW) – s 5 O

Civil Liability Acts and Negligence Civil Liability Act 2002 (NSW) – s 5 O S 50 Professional Duty of Care (3) The fact that there are differing peer professional opinions widely accepted in Australia concerning a matter does not prevent any one or more (or all) of those opinions being relied on for the purposes of this section. (4) Peer professional opinion does not have to be universally accepted to be considered widely accepted. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Establishing Causation As under common law principles, establishing causation

Civil Liability Acts and Negligence Establishing Causation As under common law principles, establishing causation between the breach of a duty of care and the loss or harm suffered by the plaintiff, is central to proving a claim in negligence. The civil liability acts provide definitions of harm and all include the following: • • • Damage to property. Economic loss. Personal injury, including: Loss of life. Physical injury – e. g. broken leg, disfigurement or disease. Psychological injury. www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Establishing Causation Two elements must be established by the

Civil Liability Acts and Negligence Establishing Causation Two elements must be established by the plaintiff: - 1. That the negligence was a necessary condition of the occurrence of the harm (factual causation). 2. That it is appropriate for the scope of the negligent person’s liability to extend to the harm so caused (scope of liability). www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Civil Liability Act 2002 (WA) – s 5 C

Civil Liability Acts and Negligence Civil Liability Act 2002 (WA) – s 5 C 5 C General Principles (1) A determination that the fault of a person (the tortfeasor) caused particular harm comprises the following elements(a) That the fault was a necessary condition of the occurrence of the harm (factual causation). (b) That it is appropriate for the scope of the tortfeasor’s liability to extend to the harm so caused (scope of liability). www. learnnowbiz. com Property Law

Civil Liability Acts and Negligence Factual causation – This is essentially the ‘but for’

Civil Liability Acts and Negligence Factual causation – This is essentially the ‘but for’ test. If the defendant has acted carefully would the plaintiff still have suffered the damage? This question focuses on conduct. Scope of liability – This is essentially the ‘remoteness’ test. Is it appropriate for the liability of the negligent person to stretch as far as the particular harm suffered? This question focuses on outcomes and consequences. What is considered foreseeable should be based on the type of injury suffered. www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Product Liability Negligence • Omissions or

Specific Applications of Negligence in the Business Environment Product Liability Negligence • Omissions or defects in the production process that result in the product being faulty or causing harm are one of the most common forms of negligence in the marketplace. • This includes the form and design of a product and component parts A manufacturer will be liable in negligence if: • The manufacturer knows of the defect and still releases the product. • The manufacturer produces a product that is inherently dangerous and does not give an adequate warning. • The manufacturer owes a duty of care to the user, breaches its duty of care and the user consequently sufferers damage. www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Matters that must be considered in

Specific Applications of Negligence in the Business Environment Matters that must be considered in making out product liability negligence: 1. Were the goods intended to reach the consumer in the same form? REFER TO CASE - Grant v Australian Knitting Mills (1933) 50 CLR 387 pg. 2. Was There an Opportunity for Intermediate Examination? 3. Standard of Care. 4. Avoidance of Liability and Contributory Negligence. www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Occupier’s Liability • Occupiers of premises

Specific Applications of Negligence in the Business Environment Occupier’s Liability • Occupiers of premises owe a duty of care to all who come on to or in to those premises, to ensure they are not dangerous. • This duty arises because of the fact that the occupier has control over the premises. • The standard of care owed by the occupier to an entrant is simply the ordinary common law duty to take reasonable care. • This is a frequently occurring action under the law of negligence and is one of the main reasons why a business takes out public liability insurance. www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Civil Liability Acts and Occupier’s Liability

Specific Applications of Negligence in the Business Environment Civil Liability Acts and Occupier’s Liability • There is no uniform approach to legislative reform in this area. • Broadly, an occupier of premises owes a duty to take reasonable care to ensure that anyone on the premises does not suffer injury or damage because of the state of the premises or things done, or omitted to be done, about the state or the premises. www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Civil Liability Acts and Occupier’s Liability

Specific Applications of Negligence in the Business Environment Civil Liability Acts and Occupier’s Liability In deciding whether the occupier has discharged their duty of care a court must consider: • The nature of the premises; • The circumstances of the entry on the premises; • The gravity and likelihood of the probable injury; • The knowledge that the occupier of premises has, or ought to have, of the likelihood of persons or property being on the premises; • The age of the person entering the premises; • The ability of the person entering the premises to appreciate the danger; • The burden on the occupier of eliminating the danger or protecting the person entering the premises from the danger as compared to the risk of the danger to the person; www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Civil Liability Acts and Occupier’s Liability

Specific Applications of Negligence in the Business Environment Civil Liability Acts and Occupier’s Liability Example Legislation Civil Liability Act 1936 (SA) -s 20 Occupier's Duty of Care (1) Subject to this Part, the liability of the occupier of premises for injury, damage or loss attributable to the dangerous state or condition of the premises shall be determined in accordance with the principles of the law of negligence. (2) In determining the standard of care to be exercised by the occupier of premises, a court shall take into account— (a) The nature and extent of the premises; and (b) The nature and extent of the danger arising from the state or condition of the premises; and (c) The circumstances in which the person alleged to have suffered injury, damage or loss, or the property of that person, became exposed to that danger; and www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Negligent Misstatement • If a person

Specific Applications of Negligence in the Business Environment Negligent Misstatement • If a person is giving advice in a professional capacity or holding themselves out as an expert, they owe a duty of care to the person they are advising. • This clearly applies to doctors, lawyers, accountants, auditors, engineers etc. • Being aware of this serious legal responsibility is of utmost importance in the professional and financial services world. • As such, any client seeking tax, financial or business advice from financial service professionals is clearly owed a duty of care that the advice they receive is accurate, current, appropriately researched and reliable. • To protect against the potential consequences many professionals obtain professional indemnity insurance policies. www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Negligent Misstatement www. learnnowbiz. com Property

Specific Applications of Negligence in the Business Environment Negligent Misstatement www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Pure Economic Loss • In some

Specific Applications of Negligence in the Business Environment Pure Economic Loss • In some situations the defendant’s negligence will cause no physical injury or damage directly to the plaintiff or the plaintiff’s property, but the plaintiff will incur financial loss as a result of the defendant’s acts or omissions. • Over time, the courts have allowed plaintiffs to recover pure economic loss in certain limited circumstances: 1. Loss to the Plaintiff as a Consequence of Damage Suffered by a Third Party. www. learnnowbiz. com Property Law

Specific Applications of Negligence in the Business Environment Pure Economic Loss 2. Loss as

Specific Applications of Negligence in the Business Environment Pure Economic Loss 2. Loss as a Result of a Defective Product or Structure • A plaintiff can recover pure economic loss if the loss suffered was a result of defective goods or substandard services. www. learnnowbiz. com Property Law

Defences to Negligence Contributory Negligence • Is only a partial defence to a claim

Defences to Negligence Contributory Negligence • Is only a partial defence to a claim of negligence. • Once negligence by the defendant is established, they may argue that the harm caused to the plaintiff was partly their own fault. • To succeed in this argument, the defendant must establish that the plaintiff failed to take reasonable care for their own safety, or their own property, and that the failure to take care contributed to the damage suffered. • The burden of proof falls upon the defendant, and the court apportions the damages awarded to the plaintiff based on comparing the plaintiff’s apparent lack of care to the standard expected of the reasonable person. www. learnnowbiz. com Property Law

Defences to Negligence Volenti non fit injuria - Voluntary Assumption of Risk • This

Defences to Negligence Volenti non fit injuria - Voluntary Assumption of Risk • This is a particularly difficult defence to establish, however, at common law it is a complete defence. • The defendant must prove that the plaintiff has voluntarily assumed the risk of negligence- that the plaintiff was specifically aware of the risk and danger of injury of the defendant’s conduct and accepted that risk. • If this is proved, the defendant is not liable in negligence. “No wrong is done to the person who consents”. Where activities carry inherent risk, the parties involved assume the risks associated with the normal pursuit of that activity only. www. learnnowbiz. com Property Law

Defences to Negligence Vicarious Liability • Vicarious liability is where one party is liable

Defences to Negligence Vicarious Liability • Vicarious liability is where one party is liable for the actions of another, because of the relationship between the wrongdoer and the person held responsible. • For example, an employer will be responsible for an employee’s acts and omissions that occur within the employee’s normal employment. www. learnnowbiz. com Property Law

Assessment of Damages In the law of torts, the aim of damages is to

Assessment of Damages In the law of torts, the aim of damages is to place the plaintiff in the position they would have been in had the tort not occurred. • However, the plaintiff is under a duty to mitigate or reduce the amount of monetary compensation as much as is reasonably possible in the circumstances. • Damages can be awarded for ‘injuries’ such as nervous shock, anxiety, economic loss, pain and suffering and more. • One of the major effects of the civil liability acts across the jurisdictions is to limit the amount of damages that may be claimed for ‘general damages’ or pain and suffering • www. learnnowbiz. com Property Law

Risk Management and the Importance of Insurance It is obviously sensible commercial practice to

Risk Management and the Importance of Insurance It is obviously sensible commercial practice to put in place, monitor and review practices that ensure that a business is always aware of fulfilling its duty of care. It is also sound commercial practice to insure against the consequences should that duty be breached and the business being found liable. TYPES OF INSURANCE: - 1. Public Liability Insurance 2. Product Liability Insurance 3. Professional Indemnity Insurance www. learnnowbiz. com Property Law