Compensation Discussion

1. Although tort law is generally concerned with striking a balance between the desire to provide compensation and the desire to protect socially useful activities from liability, that issue is particularly important in the context of the tort of negligence. Why?

2. How will a court decide whether or not a duty of care will exist in a particular case?

Managing the Law: The Legal Aspects of Doing Business
Fifth Revel Edition
Chapter 6
Negligence
Copyright © 2020 Pearson Canada Inc.
6-1
Chapter 6 Overview
• General
• Defences
• Elements
– Duty of care
– Breach of the
Standard of Care
▪ Professional negligence
▪ Product liability
– Contributory
negligence
– Voluntary assumption
of risk
– Illegality
– Causation of Harm
Copyright © 2020 Pearson Canada Inc.
6-2
GENERAL
Copyright © 2020 Pearson Canada Inc.
6-3
Tort of Negligence
• Definition
– Carelessness or recklessness causing of injury to
the plaintiff
• Most important or ubiquitous tort of all
• Most plastic tort encompassing new technological
activities and human developments
Copyright © 2020 Pearson Canada Inc.
6-4
Negligence and Society
• Negligence requires a balancing of social values,
or else individuals would not engage in useful but
risky activity
– Compensation for carelessly caused harm
– Encouragement of socially useful activities
– Flexibility arises at each stage of analysis
Copyright © 2020 Pearson Canada Inc.
6-5
Elements of Negligence
• To succeed with negligence claim, plaintiff must
prove
– Duty of care was owed to plaintiff
– Tortfeasor breached of standard of care
– Breach of standard caused harm to plaintiff
• Defendant may then avoid liability by proving
– Contributory negligence
– Voluntary assumption of risk or
– Plaintiff injured during illegal behaviour
Copyright © 2020 Pearson Canada Inc.
6-6
Elements Schematic
Copyright © 2020 Pearson Canada Inc.
6-7
ELEMENTS – DUTY OF CARE
Copyright © 2020 Pearson Canada Inc.
6-8
Duty of Care
• A duty of care exists if defendant is required to
use reasonable care to avoid injuring plaintiff
– Duty of care exists: defendant may be liable
▪ e.g. drivers owe a duty of care to other users of the road and
pedestrians
– no duty of care: defendant not liable for negligence
▪ e.g. registrar of investment brokers not responsible to he
clients of the brokers for the investment decisions made by
brokers
Copyright © 2020 Pearson Canada Inc.
6-9
Determining Existence of Duty of Care
1) Precedent, the Common Law
2) If no precedent, then apply following test:
a) Was it reasonably foreseeable that plaintiff could
be injured by defendant’s action?
b) Was there sufficient proximity between parties?
i. Special rules apply to careless statements
c) If yes to first two questions, should duty be denied
for policy reason?
Copyright © 2020 Pearson Canada Inc.
6 – 10
Reasonable Foreseeability
• Objective test
– “Would reasonable person have foreseen risk of loss?”
▪ Sufficient if not far-fetched (even if not probable)
▪ Car accidents are foreseeable
• Purpose of requirement: fairness
– Unfair to hold defendant liable for every loss
▪ Impossible to prevent unforeseeable event
– Unfair to deny liability for subjective deficiencies
▪ Plaintiff entitled to expect reasonable conduct
Copyright © 2020 Pearson Canada Inc.
6 – 11
Proximity
• Proximity means close and direct connection,
including
– Physical:
e.g. hit by swung baseball bat
– Social:
e.g. bond between parent and child
– Commercial: e.g. alcohol sold to driver
– Direct causal connection: e.g. loss occurred directly
related to careless activity
– Reliance:
e.g. continuing an initial voluntary activity
that people have come to rely on
Copyright © 2020 Pearson Canada Inc.
6 – 12
Proximity and Careless Statements
• Negligent statement: common business risk
– Economy increasingly based on information
• Careless statements differ from careless actions:
– Need for precaution less clear with words
▪ “Words are more volatile than deeds”
▪ Words more likely to cause pure economic loss
• Courts apply special rules when determining
existence of duty of care related to statements
Copyright © 2020 Pearson Canada Inc.
6 – 13
Careless Statements (1 of 2)
• Liability more likely if
– Defendant claimed special knowledge
– Statement communicated on serious occasion
– Statement made in response to inquiry
– Defendant received financial benefit
– Statement of fact rather than pure opinion
• Liability less likely if
– Statement accompanied by disclaimer
• Classic scenarios: expert opinions
(e.g. engineering, legal)
Copyright © 2020 Pearson Canada Inc.
6 – 14
Careless Statements (2 of 2)
• Test for duty of care existing for statements
– Defendant knew that plaintiff, either individually or as
member of defined group, might rely on statement, and
– Plaintiff relied on the statement for its intended purpose
• Risk management
– Be careful about providing information and advice
– Be explicit on the factual basis and any limitations
– Use disclaimers
– Be careful relying on statements made by others
Copyright © 2020 Pearson Canada Inc.
6 – 15
Duty of Care and Policy
• Sometimes hard to distinguish proximity from
policy
– Proximity: focus on parties’ relationship
– Policy: focus on effect existence of duty would have
on society and legal system.
– Courts ask if recognition of duty would:
▪ Open the floodgates
▪ Interfere with political decisions
▪ Hurt a valuable type of relationship
Copyright © 2020 Pearson Canada Inc.
6 – 16
Examples of Policy’s Effect on Duty
• No duty of care on mother to unborn child
– Fear of intolerable burden on pregnant women
• No duty on employer for carelessly causing
employee mental distress on the job
– Would be a considerable intrusion into the workplace
• No duty on regulatory bodies for careless
professionals
– Floodgates would open, and political and judicial
interference
Copyright © 2020 Pearson Canada Inc.
6 – 17
ELEMENTS – STANDARD OF CARE
Copyright © 2020 Pearson Canada Inc.
6 – 18
Breach of Standard of Care
• Standard of care: how defendant with duty
must act
– Liability possible only if standard of care breached
• Standard of care based on reasonable person
test
– “How would a reasonable person act in this situation?”
– Objective test
▪ Defendant cannot hide behind own deficiencies
▪ Plaintiff entitled to expect reasonable conduct
▪ Standard applied at time of alleged breach (no hindsight)
Copyright © 2020 Pearson Canada Inc.
6 – 19
Formulation of Standard of Care
• Reasonable person adjusts conduct to situation
– reasonable foreseeability of risk:
▪ any realistic risk may require precaution
Situation
Adjustment
likelihood and severity of
harm
more care if great danger plane crash
of great harm
affordability
more care if inexpensive
precaution
cab door locks
social utility
less care if socially
valuable activity
ambulance
sudden peril doctrine
less care if emergency
rescue from fire
Copyright © 2020 Pearson Canada Inc.
Example
6 – 20
Standard of Care for Professionals
• Standard is higher than mere reasonable person
– Must act as reasonable professional
▪ No allowance for inexperience
▪ No allowance for exaggerated credentials
– Standard may be higher still for specialist or expert
▪ e.g. must act as a reasonable expert would act
▪ Family doctor held to one standard for a patient’s cardiac
situation, a cardiologist held to another higher standard of an
expert
Copyright © 2020 Pearson Canada Inc.
6 – 21
Limits To Professional Standard
• Unfair to judge reasonableness using hindsight
• Errors of judgment are different than carelessness
– e.g. two or more legitimate courses of conduct at the
time of the injury, defendant made a reasonable choice
• Compliance with approved practice may remove
liability (unless approved practice itself is
careless)
• Compliance with a statutory standard may also
protect a defendant
Copyright © 2020 Pearson Canada Inc.
6 – 22
Standard of Care: Product Liability
• Injury caused by manufactured products
– American courts, product liability uses strict liability
▪ Manufacturer liable for any defects
– Canadian courts use negligence
▪ Manufacturer liable only for careless defects
• In product liability actions, easy to prove duty is
owed, so case usually turn on whether standard
was breached
Copyright © 2020 Pearson Canada Inc.
6 – 23
Product Liability Issues
• Manufacture
• Failure to Warn
– Careless, reckless
manufacturing
– Idiosyncratic, not
systemic so fewer at risk
• Design
– Design fails to meet the
standard of care
– Systemic so more at risk
– What is reasonable in
the circumstances
– Foreseeable use
– Subsequent Warning
– Distribution
– Learned Intermediary
Copyright © 2020 Pearson Canada Inc.
6 – 24
Standard: Product Liability
• Types of product liability
– Careless manufacture of specific item
▪ Liability is likely to be imposed
– Careless design of product line
▪ Widespread issue: narrower scope of liability based on
balancing
– Careless failure to warn of risk of harm
▪ Specific requirement reflects circumstances
▪ Manufacturer, seller, or installer may be liable
▪ “Learned intermediary rule” in appropriate situations
Copyright © 2020 Pearson Canada Inc.
6 – 25
ELEMENTS – CAUSATION
Copyright © 2020 Pearson Canada Inc.
6 – 26
Causation of Harm
• Liability
– There is a duty of care
– There is a breach of the standard of care within
that duty
– Did that breach of the standard cause the damage,
i.e. causation
Copyright © 2020 Pearson Canada Inc.
6 – 27
Causation Elements
• Causation involved a two-step inquiry
– Step 1: factual causation, primarily question of fact
▪ The but-for test
– Step 2: legal causation, primarily question of fairness
▪ The remoteness principle
– No liability – even if factual causation – if unfair
Copyright © 2020 Pearson Canada Inc.
6 – 28
Causation: Step 1 (1 of 2)
• General approach: but-for test
– If the defendant had not acted carelessly, would the
plaintiff still have suffered the same loss?
▪ If yes: defendant did not cause loss, so not liable
▪ If no: defendant did cause loss, so may be liable
Copyright © 2020 Pearson Canada Inc.
6 – 29
Causation: Step 1 (2 of 2)
Concept Summary 6.1: The But-For Test
Question
Answer
Result in Fact
But for the
defendant’s
carelessness, would
the plaintiff have
suffered the same
loss?
Yes—the plaintiff
The defendant did
would have suffered not cause the
the same loss even if plaintiff’s loss.
the defendant had
not acted carelessly.
The defendant
cannot be held
liable.
Blank
No—the plaintiff
would not have
suffered the same
loss if the defendant
had not acted
carelessly.
The defendant may
be held liable.
The defendant did
cause the plaintiff’s
loss.
Copyright © 2020 Pearson Canada Inc.
Result in Law
6 – 30
Causation: Step 1 Rules
• Proof on balance of probabilities (at least 51%)
• All-or-nothing approach: full compensation if
probable causal connection, none if not
• Breach was a cause – not necessarily only cause
• Several defendants may cause single injury
– Joint and several liability to plaintiff
– Proportionate contribution between defendants
• Alternative test if but-for test creates injustice
Copyright © 2020 Pearson Canada Inc.
6 – 31
Examples
• A driver hitting a pedestrian who had just died of a
heart attack and fell dead into traffic
• A doctor failing to save a person who was fatally
poisoned
Copyright © 2020 Pearson Canada Inc.
6 – 32
Causation: Step 2 Remoteness
• Even if defendant caused harm, no liability if loss
was too remote
– Reasonable foreseeability of harm
▪ Sufficient if not far-fetched (even if not probable)
– Reasonable foreseeability to type of harm is relevant
▪ Not whether the manner in which harm occurred was not
reasonably foreseeable
Copyright © 2020 Pearson Canada Inc.
6 – 33
Example
• A car hits a hydro pole resulting in a blackout as a
nearby university during exams. Damage suffered
by students too remote
• A ship hits a bridge and traffic must be re-routed
and a business person misses an important
meeting. Business losses too remote
Copyright © 2020 Pearson Canada Inc.
6 – 34
Thin Skull Principle
• Thin skull refers to those unusually vulnerable
to loss
• The rule: if some harm reasonably foreseeable
to normal person, thin skull person entitled to
full recovery
– If some harm reasonably foreseeable
▪ Plaintiff can recover for entire injury
– If no harm reasonably foreseeable
▪ Plaintiff cannot recover for any part of injury
Copyright © 2020 Pearson Canada Inc.
6 – 35
Remoteness and Intervening Acts
• Intervening act is an event occurring after
defendant’s carelessness that causes subsequent
harm
• The rule: liable if foreseeable chain of events
– e.g. patient infected while in hospital for surgery
▪ Defendant liable for injury requiring surgery
▪ Defendant also liable for foreseeable infection
– e.g. patient struck by lightning in hospital parking lot
▪ Defendant liable for injury requiring hospitalization
▪ Defendant not liable for unforeseeable accident
Copyright © 2020 Pearson Canada Inc.
6 – 36
DEFENCES
Copyright © 2020 Pearson Canada Inc.
6 – 37
Defences
• Duty + breach of standard + causation of loss =
presume liability
• Defendant may limit or avoid liability through
defence
• Most important negligence defences
– Contributory negligence
– Voluntary assumption of risk
– Illegality
Copyright © 2020 Pearson Canada Inc.
6 – 38
Defences Schematic
Concept Summary 6.2: Defences to Negligence
Defence
Basis
Effect
contributory
negligence
loss is caused partly by
the defendant’s
carelessness and partly
by the plaintiff’s
carelessness
apportionment—damages
reduced to extent of
contributory negligence
voluntary assumption plaintiff freely agreed to
of risk
accept the factual and
legal risk of injury
complete—defendant not
liable
Illegality
complete—defendant not
liable
plaintiff suffered a loss
while participating in an
illegal act
Copyright © 2020 Pearson Canada Inc.
6 – 39
Contributory Negligence
• Basis: loss is caused partly by defendant and
partly by plaintiff’s own carelessness
– Forms of contributory negligence include unreasonably
entering into dangerous situation, contributing to
creation of accident, or contributing to extent of injury,
e.g. not wearing a seatbelt
• Effect of defence
– Apportionment of responsibility
– Damages reduced to reflect plaintiff’s contribution
Copyright © 2020 Pearson Canada Inc.
6 – 40
Voluntary Assumption of Risk
• Basis: plaintiff freely accepted both physical and
legal risk of injury (gave up right to sue for injury)
– e.g. sports such as skiing, sky-diving, scuba
• Effect of defence
– Complete defence (not merely apportionment)
– Courts interpret this narrowly because of harsh result
• Risk management
– Consider proper use of effective exclusion clauses
(see chapter 9)
Copyright © 2020 Pearson Canada Inc.
6 – 41
Illegality
• Basis: plaintiff injured while engaged in illegal
activity
• Defence applies only when plaintiff’s claim
undermines integrity of legal system, which
occurs when
▪ Plaintiff tries to profit from wrongdoing
▪ Plaintiff tries to escape criminal penalty
• Effect of defence
– Complete defence (not merely apportionment)
– Courts interpret narrowly because of harsh result
Copyright © 2020 Pearson Canada Inc.
6 – 42
TAKE AWAYS
What surprised you?
Why is negligence the most plastic of all the torts?
Copyright © 2020 Pearson Canada Inc.
6 – 43