Bus 670 Legal Environment / Negligent Tort

Covering criminal law. There is often much publicity given to cases which involve a wrongful conviction or where a guilty party has been allowed to “walk”. However, you should consider that main objective of the U.S. criminal system is to protect the rights of the defendant against those of the larger society. One way this is demonstrated in through the standard of proof in a criminal case which is “beyond a reasonable doubt”.

A major issue you should examine here is criminal law applies to business entities and what individuals will be prosecuted for crimes. After all, a corporation cannot be imprisoned. You should also consider that constitutional safeguards may not apply to a corporation in the same manner as an individual person. In addition, this area may involve whistle-blowing which has become an important part of the corporate governance process.

The next section involves torts and related concepts. When considering torts, you should carefully examine the different classifications in Chapters Seven and Eight. Similar to criminal law, torts contain elements which must be proven in order to the defendant liable for their actions (or lack thereof). The award or damages that are sought are usually monetary are determined on case-by-case basis. In some situations punitive damages can be pursued. If so, the amount of the judgment can be very large and often these cases generate a great deal of media attention.

Most lawsuits involving a tort are settled “out-of-court”. These settlements usually occur right before a scheduled trail and the parties enter into legally binding agreement. Sometimes these are confidential and the defendant (individual or a business) may not actually admit liability. The documents are “sealed” and if either party violates the confidentiality clause it may revoke the agreement. This is sometimes done to protect the image of the plaintiff, the defendant or both.

An area of great importance to business is that of product liability. Before the start of the industrial revolution, the doctrine of “caveat emptor” (“buyer beware”) was the expectation of protection that a buyer had when dealing with injuries caused by a defective product. However, as the business world became more complex and mass production became more commonplace, the law began to change and the field of product liability was born.

In general, there are two ways for an injured party to seek damages in a product liability case. The first is through the traditional use of proving negligence. This requires providing sufficient evidence that each of the four elements exists: 1) that a duty was owed to the plaintiff; 2) that a breach of this duty by the defendant occurred; 3) that the breach was the proximate cause of the plaintiff’s injuries; and 4) that there was actual injury suffered by the plaintiff. Furthermore, the plaintiff may assert a negligence claim against all parties in the distribution chain (manufacturer, distributors, wholesalers, retailers, etc.). However, a this claim must be against each defendant individually.

The other legal approach in product liability cases is the doctrine of strict liability. This mean liability without fault and that the plaintiff must only prove proximate cause and injuries/damages. Although not recognized in all states, attorneys seek to file product liability litigation in jurisdictions where it exists because the case is easier to prove than negligence. In addition, strict liability applies to all parties in the distribution chain (manufacturer, distributors, wholesalers, retailers, etc.). Only the amount of damages of each party may differ based on their involvement with the product.

The use of strict liability in product liability is controversial. Those in favor of its use point to the fact that negligence can be difficult to prove in these cases. Also, the manufacturer is in the best position to prevent defects. On the other side of the argument, is the fact the cost of these lawsuits is often absorbed by raising prices to the consumer. In addition, strict liability often leads to increased number of lawsuits. Finally, products should not be expected to be perfect.

Hopefully, this information will provide you some guidance in addressing the assignments this week. Good luck!