MANAGING THE LAW

(4TH EDITION)

Chapter 3: Introduction to Torts

 Chapter 3 Overview

Introduction to Tort Law

Torts and crimes
Torts and contracts
General Principles of Tort Law
Liability insurance
Vicarious liability
Remedies
Alternative compensation schemes

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 Tort Law: Definition

A tort is a failure to fulfill a private obligation imposed

by law
Tortfeasor is a person who commits a tort
Tort law includes almost every sort of private law
wrong outside of breach of contract
Tort law discourages people from committing private
wrongs by requiring them to compensate victims

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 Torts and Crimes

Same event may be both a tort and a crime

eg beating is both tort of battery and crime of assault

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 Torts and Contracts

Both involve primary and secondary obligations

Breach of primary obligation creates secondary duty
Tort
Primary duty: do not harm another
Secondary duty: compensatory damages
Contract
Primary duty: fulfill your promises
Secondary duty: compensatory damages

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 Torts and Contracts (contd)

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 Types of Torts

Torts law tries to balance competing interests

Choosing between and
Freedom of choice Deterring harmful behavior
Encouraging innovation and Compensating for injury due to
efficiency manufactured goods
Controlling activities that Showing more leniency for economic
threaten physical harm risks

Tort law therefore focuses on mental culpability, on

basis of strict liability, intention, or carelessness

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 Types of Torts

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 Intentional Torts

Occur when a person intentionally acts in certain ways

Meaning of intention differs depending on tort:
Some require intention to harm plaintiff (See Chap. 5)
Protects financial interests from purposeful harm
eg inducing breach of contract, intimidation

Some require only intention to act a certain way (Chap. 4)

Protects valuable interests such as physical safety and freedom
eg battery, false imprisonment

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 Negligence Torts (Chapters 5 & 6)

Occurs when a person acts carelessly

eg negligence, product liability, professional negligence,
occupiers liability, nuisance
Activity is permitted if reasonable in circumstances
Will be dealt with in detail in Chapter 6

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 Strict Liability Torts

Liability regardless of intention or carelessness

Create special problems for risk management
Liability imposed simply because defendant responsible for
situation that cased harm
Strict liability torts are rare, limited to extraordinarily
dangerous activity
activity permitted, but liability imposed for any harm
Examples: livestock, ownership of wild animals

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 Liability Insurance

Unexpected tort liability imposes challenges for risk

management
Liability insurance can be used to manage tort liability
Contract in which insured pays insurance company to
Defend claims against insured
Indemnify insured for loss if held liable
Does not normally cover all torts of insured
Non marine underwriters, Lloyds of London v Scalera
(2000) DLR.

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 Liability Insurance (contd)

Effects of liability insurance on tort law

Enhances compensatory function
Tort victim more likely to receive compensation
Undermines deterrence function
Insured potentially less concerned about wrongdoing

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 Vicarious Liability

Being held liable for torts committed by another

Common business risk
employer often vicariously liable for employees torts
Justifications for vicarious liability
Enhances compensatory function
Enhances deterrence function
Requires businesses to bear costs of operation

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 Scope of Vicarious Liability

Vicarious liability only for employee torts committed in

course of employment:
Employee performing employer authorized actions, or acts
closely connected thereto. Eg. Bazley v Curry
Compare with Jacobi v Griffiths
Businesses not liable for torts committed by
independent contractors:
Vicarious liability risk can be shifted by hiring independent
contractors instead of employees

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 Jacobi v Griffiths

A non-profit organization employed the respondent G

as Program Director. The Club required G to
supervise volunteer staff and organize recreational
activities and the occasional outing. G was also
encouraged to form friendships and a positive rapport
with the children at the Club. G sexually assaulted a
male staff and had sexual intercourse with a female at
his home outside working hours.

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 Effects of Vicarious Liability

Victim can sue both employer and employee

Employees are directly liable for their own tort
Employers maybe vicariously liable for employees tort
Employer normally entitled to indemnity from employee, however
rarely enforced
Employer may also be directly liable if it committed a
separate and independent tort
eg careless training of careless employee

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 Vicarious Liability

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 Remedies in Tort

General remedies for torts

Damages (order for monetary payment)
Compensatory damages
Punitive damages
Nominal damages
Equitable remedy: Injunction

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 Compensatory Damages

Backward-looking
Plaintiff monetarily placed as if tort never occurred
Compare to forward-looking contractual damages
Goldstar Management v Varvis

Limitations
Remoteness: unless an intentional tort, no liability imposed if
loss not reasonably foreseeable
Mitigation: no liability for losses a plaintiff unreasonably failed
to minimize or avoid

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 Other Remedies

Punitive Damages: punish outrageous, harsh,

vindictive, malicious, or reprehensible behavior
In Canada, available only in exceptional circumstances
Nominal Damages: symbolically recognize commission
of tort, even though plaintiff suffered no damages
Injunction: order to act or refrain from acting

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 Alternative Compensation Schemes

Compensation schemes outside of tort law

Compensation based on injury rather than wrong
Paid by central fund rather than tortfeasor
Examples include:
Workers compensation schemes (all provinces)
No-fault insurance schemes (some provinces)

Do you think it is more beneficial for workers to be

compensated under the Workers Compensations scheme
such as WSIB? Why /Why not?

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 Torts vs Alternative Compensation

Tort Law Alternative Compensation Schemes

full compensation for wrongful generally less than full compensation
losses
expensive and time-consuming quicker and less expensive process
process
deterrence: misconduct identified no deterrence of blameworthy behavior
and blamed
compensation limited to wrongfully compensation available without proof of
occurring losses wrong

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 Workers Compensation

Created because job related injuries are common

Involves a series of trade-offs
Workers normally lose right to sue in tort for workplace
injuries, but may claim compensation from a fund
Employers must contribute to liability fund, but escape risk
of tort liability for workers injuries
Employers may pass liability fund costs to consumers
through product and service pricing

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 No-Fault Automobile Insurance

Compensation normally available regardless of fault

Manitoba and Quebec: No right to sue in tort, but can
claim compensation from fund
British Columbia: Right to no-fault exists alongside right to
sue in tort
Saskatchewan: Victim chooses tort or no-fault coverage
Ontario: No-fault system prevents tort action unless harm
especially serious

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 The Rule in Rylands and Fletcher

Definition
Defendant strictly liable for non-natural use of land if
something escapes their property and injures plaintiff
Plaintiff must prove
non-natural land use created special and unusual danger
escape from defendants land
loss or injury to plaintiff
No need to prove fault or carelessness

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 Defences to Rule in Rylands and
Fletcher
Plaintiff consented to non-natural land use
Unavoidable act of God or third party caused escape
Injury inevitable result of defendants exercise of
statutory authority
Risk management:
Businesses should take special precautions when engaging
in non-natural land use

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