Law10004 week 5 study guide PDF

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LAW10004 Introduction to Business Law Week 5 Study Guide: Causing Harm – Part 2

Overview This week we consider: 1.

Introduction – Causing Harm Part 2.

2.

Overview of Negligence.

3.

Essential element 1 – Duty of care.

4.

Essential element 2 – Standard of care.

5.

Essential element 3 – Damage or Harm caused by the breach.

6.

Vicarious liability and negligence.

7.

Defences to negligence.

8.

Occupier’s liability.

9.

Negligent Misstatement.

By the end of this week, you should be able to: 1. Understand how the law of negligence works. 2. Identify the three essential elements of negligence including a duty of care, a breach of

the standard of care and damage caused due to the breach. 3. Explain the requirements of each of the essential elements 4. Understand when there may be vicarious liability for negligent actions or advice 5. Identify and explain the different defences to negligence and how they may be applied

including voluntary assumption of risk and contributory. 6. Understand the basics of occupier’s liability and negligence 7. Discuss the general concept of Negligent Misstatement and how professionals may

even be liable for negligence in this area to third parties in some instances. 1. Introduction – Causing Harm Part 2 

This is when harm has been caused carelessly and/or unintentionally but there’s still legal liability despite the lack of intention (harm to person and/or economically)



Remember torts (including Negligence) is a State matter- a Residual State power. Therefore legal action is in State courts.



Tort law comes primarily from common law… But there is now some legislation that influences how and when negligence applies. The cases/common law still define what is meant by negligence – which is our main focus today on cases. 1

2. Overview of Negligence In every case of negligence, the plaintiff in their civil case must establish the following elements on the balance of probabilities: 

A person commits the tort of negligence if: 1. they owe the other person a duty of care; and 2. they breach the duty of care; and 3. their breach causes the other person to suffer reasonably foreseeable harm.



Is there vicarious liability (ie. can anyone else also be liable for the tort)?



Are there any defences available?



And finally, if there’s negligence, what are the consequences?

3. Essential element 1 – Duty of care 

The general legal rule with negligence is that you must take care to avoid unreasonable harm to others: Donoghue v Stevenson.



In most situations/problems the establishment of the existence of a duty of care will be relatively straightforward, provided that the relationship between the parties falls within the established categories of duty of care.



See cases in text (see list p 220) for example: o

Motorists owe a duty of care to other road users: Imbree v McNeilly.

o

Doctors owe a duty of care to their patients: Rogers v Whitaker.

o

Manufacturers owe a duty of care to people who use their products: Donoghue v Stevenson.

o

Occupiers owe a duty of care to people who come onto their premises: Aust Safeway Stores v Zaluzna.

o

Architects own duty of care to people who occupy buildings they design: Voli v Inglewood Shire Council.

What if there’s no precedent establishing duty of care previously? If the relationship does not fall within one of the established categories (a new problem), the plaintiff must establish liability under the NEIGHBOUR PRINCIPLE – see quote p 149 text. There are two parts to this principle. Test 1 re duty of care: it must be shown that at the time of the incident it was reasonably foreseeable that the defendant’s conduct could cause harm to someone in the plaintiff’s position. –

Donoghue v Stevenson (1932) p. 220

–

Hay v Young (1943) p. 221 and

–

Chapman v Hearse (1061) p. 221 2

Test 2 re duty of care: In addition to reasonable foreseeability, the plaintiff must show that the salient features of the case are consistent with the existence of a duty of care – proximity. This means that the court will consider the relationship between the parties and other features of the case and then compare those features with the features of other cases where a duty of care has been found to exist. See case examples: –

Sullivan v Moody (2001) cf

–

Tame v NSW (2002)

–

News article re Pub drinkers pp. 224 of the text.

The following diagram shows a summary of Duty of Care:

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4. Essential element 2 – Standard of care To establish a breach of duty it must be shown that the defendant failed to do what a reasonable person would have done in the same circumstances – this is referred to as an ** OBJECTIVE TEST ** Also s 48 of the Wrongs Act (Vic) is now relevant here p. 225 text. To evaluate breach of the standard of care, the court will take into account: –

the probability of harm: Bolton v Stone (1951) cf Woods v Multi Sports (2002) p. 227

–

the likely seriousness of the harm: Paris v Stepney Borough Council (1951) p. 228

–

the burden of taking precautions: Latimer v AEC (1953) p. 228

–

the social utility of the defendant’s activity Watt v Hertfordshire County Council (1954) p. 229

See also McHale v Watson (p. 157), Cook v Cook cf. Imbree v McNeilly p. 158 and Kondis v STA p. 230 text. The following diagram shows a summary of Standard of Care:

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5. Essential element 3 – Damage or Harm caused by the breach 

Factual causation. The plaintiff must establish that the careless act caused, either directly or indirectly, the harm: Yates v Jones (1990) cf. Cook v ACT Racing Club – p. 235 It is not necessary that the plaintiff establish that the defendant’s carelessness was the sole cause of the harm. It is sufficient to show that the carelessness was a contributing cause along with other causes.



Scope of liability. The court must decide that it is appropriate for the scope of the defendant's liability to extend to the harm actually suffered by the plaintiff. This usually means that the actual harm must have been reasonably foreseeable – see Overseas Tankship (UK Ltd) v Morts Dock [1961] and Rowe v McCartney (1976) pp. 236

Note: s 51 of the Wrongs Act (Vic) p 161 and the ‘egg shell’ rule of the p. 236. The following diagram asks, was harm caused by the breach:

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6. Vicarious liability and negligence •

If there is negligence (duty of care, breach and damage), can the plaintiff claim anyone else is also responsible for the defendant’s negligence (e.g. join co-defendants into the legal action)?

•

Vicarious liability is most common in employment. If an employee is undertaking authorised work in an unauthorised or wrongful manner, then the employer will be vicariously liable for their negligent employee’s actions – pp. 181-182 of the text.

See: o

Century Insurance Co Ltd v Nth Ireland Road TB [1942] – petrol tanker case cf.

o

Deatons v Flew (1949) – bar attendant case.

7. Defences to negligence Once it is established there is negligence and/or vicarious liability, the next question is; can the defendant/s rely on any defence to absolve them from liability? Two defences include: •

Option 1: Voluntary assumption of risk - If it can be established that the plaintiff was fully aware of the risk at the time the harm was caused and they voluntarily assumed that risk, the defendant is relieved of all liability – 100% not liable. –

•

Option 2: Contributory negligence - If it can be established that the plaintiff contributed in some way to their own loss or injury, liability will be apportioned between the defendant and the plaintiff – proportionately liable e.g. 60/40 or 30/70 –

•

•

Rootes v Shelton (1967) and Agar v Hyde (2000) p. 237

Ingram v Britten (1994) and Manley v Alexander p. 238.

Other defences to negligence include: –

barristers’ immunity

–

volunteers’ immunity

–

emergency service providers’ immunity

–

compliance by professionals with standard practice – see Mercer v Commissioner for Road Transport & Tramways (1936) - See pages 239 of your text.

Note an apology does not relieve the defendant from legal liability.

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8. Occupier’s liability 



An occupier of premises owes a duty of care to all persons entering the premises to ensure that the premises are safe: -

Australian Safeway Stores Pty Ltd v Zaluzna (1987)

-

Phillips v Daly (1989)

-

Modbury Triangle Shopping Centre (2000) pp. 240-241 -169 text

Does an occupier also owe a duty of care to people who are on their premises without their permission? -

Hackshaw v Shaw (1984)

*VERY RECENT NEWS* Murder and self-defence: How far can you go to protect yourself in a home invasion?

9. Negligent Misstatement 

When a person is giving advice they owe a duty of care if: 1. the advice is of a business or serious nature; and 2. they know or should know that the other person intends to rely on the advice; and 3. it is reasonable in the circumstances for the other person to rely on the advice.



The person giving advice may owe a duty of care even if they are not a professional adviser such as a lawyer or accountant.

See Hedley Byrne & Co v Heller & Partners and Rentokil v Channon p. 246 of the text NOTE: They may even be liable if unpaid (free) advice is given in serious enough circumstances! See Shaddock & Assoc v Parramatta City Council – p. 246. The following diagram shows negligent misstatement and harm to third parties:

•

A person giving advice will owe a duty of care to a third party if: 1. they give their client business or serious advice knowing that the client will communicate that advice to the third party 2. the advice is likely to lead the third party to enter into a particular type of transaction 3. it is likely that the third party will suffer financial loss if they enter into that transaction and the advice is wrong. 7

See Esanda Finance Corp v Peat Marwick p. 247 Consequences of causing harm For civil cases, the normal consequences for torts (negligence) = damages or Injunctions/restraining orders. In any case study involving a problem of negligence, if asked to advise generally, the best answers will also consider as a final point, the potential outcomes in a case. Statutory remedies Legislation has now impacted the remedies obtainable for torts. There are many statutory provisions that provide victims with a range of remedies including: * Workers Compensation, Motor Accident Compensation laws, and Victims Compensation laws.

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