The Legal Environment of Business

A Critical Thinking Approach 6th Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne

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CHAPTER 12

The Law of Torts

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Features of Tort Law

Definition: an injury to anothers person or property
Some wrongful acts may constitute both a tort and a crime

Since tort law is mostly state law, it can vary from one state to another.
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Goals of Tort Law

Primary Goal: to compensate innocent persons who are injured by wrongful acts of others Other Goals: Discourage private retaliation Promote civility Deter wrongful actions
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Damages in Tort Cases

COMPENSATORY NOMINAL PUNITIVE

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Compensatory Damages
Object: To restore plaintiff to the same position before the tort
Includes: Special and general damages

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Special Damages
Definition: Demonstrable out-of-pocket costs Examples:
Doctor bills Medication Therapy Lost wages Property damage
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General Damages
Compensation for pain and suffering Calculated by the jury or trier of fact based upon the severity of the injuries and the amount of the special damages.

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Nominal Damages
Awarded for technical victory Recognition that defendants acts were wrong Plaintiff, however, has suffered little, if any, real damage

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Punitive Damages
Go beyond compensating plaintiff
Intended to inflict punishment on defendant Usually allowed in cases where defendant acted willfully and injuries are severe The punitive amount is paid to plaintiff
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Problems with Punitive Damages

Not available in some states! Theory of punitive damages is frequently under attack Inconsistently appliedoften reduced on appeal

No generally accepted appellate court standards for review

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Public Perception of Punitive Damages

Press usually reports the sensational jury verdict, but rarely reports the subsequent outcome, after appeals.

Public is left with impression, supported by insurance industry propaganda, that courts and juries are out of control.

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Widely Reported Cases

McDonalds hot coffee BMW v. Gore Exxon Valdez case

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Tort Reform
Politicians, federal and state, have played to the public perception that tort law is an uncontrolled giveaway of millions of dollars to undeserving plaintiffs by introducing tort reform legislation.

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Tort Reform
Features: Limitations on punitive damages Caps on all damages Changing the standard of proof More effort at state level Vetoed at federal level
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Classifications of Torts
Intentional

Negligent Strict Liability

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Intentional Torts
Zones of legal right to recover for harms against

Person

Property

Economic Interest
(including harm to reputation)
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Intentional Torts Against Person

Assault Battery Defamation Invasion of privacy False imprisonment Intentional infliction of emotional distress
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Intentional Torts - Assault

Zones of legal right to recover for harms against persons Elements: Intentionally placing another in fear or apprehension of immediate, offensive contact

Defenses: Joking, future threats, lack of capacity to generate fear

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Intentional Torts - Battery

Zones of legal right to recover for harms against persons

Elements: Intentional, unwanted, offensive contact Defenses: Self-defense, defense of others, defense of property

Limits: Use of force must be reasonable

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Intentional Torts - Defamation

Zones of legal right to recover for harms against persons

Elements: Publication of false, negative information about another that harms reputation

Libel: written defamation Slander: oral defamation

Defenses: truth, opinion, lack of publication, privilege, public figures

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Intentional Torts Invasion of Privacy

Zones of legal right to recover for harms against persons

Types:
Public disclosure of private facts False light Appropriation Invasion of privacy
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Intentional Torts False Imprisonment

Zones of legal right to recover for harms against persons

Definition: Restraint or confinement of person, without consent or justification Elements: Physical force or threat thereof Usual Context: Suspected shoplifter cases
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Intentional Torts False Imprisonment

Zones of legal right to recover for harms against persons

Defenses: Statutory shield for retailers who show reasonable use of force and basis for action
Damages: Usually no physical harm, little or no damages

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Intentional Torts Intentional Infliction of Emotional Distress

Zones of legal right to recover for harms against persons

Elements: Defendants intentional conduct toward plaintiff is outrageous and likely to cause extreme emotional distress

Note: Relatively new cause of action Some states also require a showing of physical manifestation of emotion
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Intentional Torts
Zones of legal right to recover for harms against property Trespass
To realty To personalty

Conversion
Disparagement
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Intentional Torts
Zones of legal right to recover for harms against economic interest (including harm to reputation)
Disparagement
Interference with contract Unfair competition Misappropriation
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Negligence
Definition: Careless or reckless acts that result in injury Elements:
1.
2. 3. 4.

Duty
Breach Causation Damages

Cause-in-Fact Proximate Cause

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Negligent Torts - Duty

Definition: the standard of care that defendant owes to plaintiff
Example: Shopkeeper - customer Test: Did defendant exercise the degree of skill and care of a reasonable person?

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Negligent Torts - Breach

Burden is on the plaintiff to show that the defendants actions, or lack of action, breached the duty of care.

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Negligent Torts - Causation

Cause-in-Fact: But for defendants action, or lack thereof, the injury would not have happened

Proximate Cause: Relates to the degree of directness or indirectness of the chain of events beginning with defendants act and ending with the injury to plaintiff often called Foreseeability.
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Negligent Torts - Damages

Plaintiff must be able to show injury, physical, mental, or economic, which leads to some actual damages
The usual measure of damages in tort cases
that amount which restores plaintiff to the same position he was in prior to the injury
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Negligent Torts
Special Theories:
Res ispa loquitor: The thing speaks for itself
Examples: Exploding bottles Falling elevators

Negligence per se: Plaintiff is in the statutory zone of protection when the negligence occurs; defendants action also violates the same statute Effect: Assists plaintiff in proving case
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Defenses to Negligence
Contributory negligence
Comparative negligence
Pure
Modified

Assumption of risk

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Strict Liability Torts

No matter how careful defendant may be, the law imposes liability anyway.
Theory: NOT based on defendants culpable actions:

Some social utility is generated by inherently dangerous activity.

Some will be injured, despite precautions. If this occurs, it is appropriate to shift the loss to the manufacturer, because manufacturer is in a position to better absorb the loss by spreading it to all customers via small price increase.
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Global Dimensions of Tort Law

International business increasingly faces possible tort actions at home and abroad.
Enforcing judgments in foreign courts is difficult and the outcome is uncertain. Treaties may provide reciprocal recognition of judgments, but few are in force. Some jurisdictions choose not to recognize U.S. legal practices, (i.e., punitive damages).
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Summary
Tort law is intended to provide compensation to injured party. Damages are compensatory, nominal, or punitive. Torts are intentional, negligent, or strict liability. U.S. tort law is significantly different from that of most other countries.
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All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

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