Chapter 10-12 Business Law PDF

14\ Damages in Tort\ The primary goal of a tort remedy is to compensate the victim, usually with a\ money judgment.\ o The plaintiff is entitled to be put into the position they were in before the\ tort was committed.\ There are less common alternatives are equitable remedies, such as an\ injunc...

14\ Damages in Tort\ The primary goal of a tort remedy is to compensate the victim, usually with a\ money judgment.\ o The plaintiff is entitled to be put into the position they were in before the\ tort was committed.\ There are less common alternatives are equitable remedies, such as an\ injunction---a court order requiring or prohibiting certain conduct.\ o For example, an injunction would be ordered if money would not suffice,\ such as a recurring trespass where there is little economic harm, but the\ plaintiff wants the trespasser to stop. 15\ Business and Legislation 10.1\ Workers' Compensation\ workers' compensation legislation: Legislation that provides no-fault\ compensation for injured employees in lieu of their right to sue in tort. 16\ Pecuniary and Non-Pecuniary Damages\ (1)\ non-pecuniary damages: Compensation for pain and suffering, loss of\ enjoyment of life, and loss of life expectancy. Also called general damages.\ o Currently (2023), the ceiling for damages for general pain and suffering is\ approximately \$445 000. 17\ Pecuniary and Non-Pecuniary Damages\ (2)\ pecuniary damages: Compensation for out-of-pocket expenses, loss of future\ income, and cost of future care.\ o An injured person is entitled to an award sufficient to provide them with all\ the care and assistance their injury will necessitate.\ o A court may award past loss of income up to the date of trial and will also\ value the diminished earning capacity, usually with input of experts such as\ vocational experts and labour economists. 18\ Pecuniary and Non-Pecuniary Damages\ (3)\ Special damages refer to out-of-pocket expenses resulting from the injury-\ causing event, such as ambulance costs and medication costs. Some of these\ damages may be repaid to the provincial health insurer under the principle of\ subrogation.\ o Not all torts cause personal injury, and other types of losses are also\ compensable.\ ♣ For example, if a truck driver damages a parked car, the losses are\ compensable. 19\ Punitive or Exemplary Damages\ Punitive damages---also known as exemplary damages---are much like a fine\ and are intended punish the defendant for outrageous, antisocial, or illegal\ behaviour.\ For example, the intentional act of defacing someone's property may attract\ punitive damages. 20\ Business Application of the Law 10.1\ Punitive Damages in the United States and Canada\ There have been news reports of high punitive damage awards in the United\ States.\ Usually, such awards have been made by juries, who may be more easily\ influenced to make large awards than judges.\ The Supreme Court of Canada has expressed concern about uncontrollable\ awards of punitive damages and has insisted that such damages be\ exceptional, rationally related to the incident, and be no greater than\ necessary to punish, deter, and denounce the defendant's behaviour.\ Extreme punitive awards have also been scrutinized by American courts such\ as in a notorious maritime case, holding that such damages should be no\ greater than the compensatory damages. 21\ Aggravated Damages\ aggravated damages: Compensation for intangible injuries such as distress\ and humiliation caused by the defendant's reprehensible conduct.\ o Unlike punitive damages, they seek to compensate the plaintiff for the\ emotional consequences of the defendant's poor behaviour. 22\ Business Application of the Law 10.2\ Steve Moore's Tort Action Against Todd Bertuzzi\ Moore was sucker-punched by Bertuzzi during an NHL game.\ The injuries ended Moore's NHL career.\ Bertuzzi pleaded guilty to assault.\ Moore sued Bertuzzi, and also sued Bertuzzi's hockey team for vicarious\ liability and for allegedly encouraging the attack for \$35M pecuniary damages,\ \$1M for aggravated damages, and \$2M for punitive damages.\ The lawsuit was eventually settled for an undisclosed sum. 23\ Tort Law and Contract\ Sometimes the same set of facts can give rise to liability in tort and in contract.\ o For example, a lawyer is hired to give advice and is negligent, causing a\ loss to the client.\ Whether the plaintiff recovers their loss in contract or in tort should not make\ any difference but where there is a difference, the plaintiff may choose\ whichever claim provides the higher payout. 24\ Business Application of the Law 11.1 (1)\ Negligent Misrepresentation and Auditors\ Accountants are often retained by corporations to perform a statutory audit,\ the primary purpose of which is to allow shareholders to evaluate the\ performance of management.\ However, the audit may also end up being relied upon for secondary or\ extraneous reasons, such as to attract new investors or get a loan, and current\ or prospective investors may make personal investment decisions based on\ them.\ Should auditors be liable for losses arising from such secondary uses of the\ audit?\ This question was addressed by the Supreme Court of Canada in Deloitte &\ Touche v Livent Inc (Receiver of), 2017 SCC 63 \[Livent\]. 25\ Business Application of the Law 11.1 (2)\ Negligent Misrepresentation and Auditors\ The auditors in Livent failed to detect a massive financial fraud being\ perpetrated on Livent, its client, by two of Livent's directors and their\ associates.\ To its detriment, Livent relied on the audit to assess management and,\ additionally or secondarily, to solicit investment in Livent.\ Livent ultimately went bankrupt, leading the receivers to sue the auditor\ because Livent continued to operate with fraudsters at the helm, thereby\ growing its liquidation deficit. 26\ Business Application of the Law 11.1 (3)\ Negligent Misrepresentation and Auditors\ Resolution:\ o The Supreme Court ruled that the duty of care assessment is essentially the\ same whether the loss in question is caused by negligent words or\ negligent actions.\ o In applying the first stage, the court emphasized that proximity and\ reasonable foreseeability are determined strictly in relation to what the\ auditor has undertaken to do.\ o The auditor will not be liable for the use of the audit beyond that scope.\ o The auditor was liable for losses when the statutory audit was used for its\ intended purpose, namely to oversee and evaluate management\ performance. In that context, the auditor and Livent were in a proximate\ relationship, and Livent's financial losses attributed to the faulty audit to 27\ Business Application of the Law 11.1 (4)\ Negligent Misrepresentation and Auditors\ Resolution:\ o In contrast, Livent's losses related to using the audit to solicit investment\ were not recoverable. The audit was not prepared for that purpose, and the\ auditors were able to escape liability to this extent.\ o Livent also confirmed that auditors are not generally liable to a third party,\ like current shareholders or new investors, who rely on the audit to make\ personal investment decisions. 28\ Negligence and Product Liability\ product liability: Liability relating to the design, manufacture, or sale of the\ product.\ The same elements of proving negligence apply to negligence claims against a\ manufacturer. 29\ Negligence and the Service of Alcohol\ Commercial establishments serving alcohol owe a duty of care to impaired\ patrons to assist them or prevent them from being injured and to members of\ the public who are injured by the conduct of their drunken customers.\ The economic relationship between the commercial host and patron provides\ an important rationale for extending the law of negligence in this way. 30\ Case 11.5 (1)\ McIntyre v Grigg, 2006 CanLII 37326 (ONCA)\ McIntyre, a McMaster University student, was walking with several friends, on\ her way back home from The Downstairs John, operated by the McMaster\ Students Union.\ As McIntyre was walking along the side of the curb, she was struck by Grigg's\ vehicle. Grigg had also been drinking at The Downstairs John and other venues\ earlier.\ Grigg's blood alcohol level two hours after the accident was three times the\ legal limit, suggesting he was served 18 drinks. Some but not all patrons\ observed signs of intoxication at the club ,and the court concluded there were\ visible signs.\ McIntyre sued Grigg as well as the McMaster Students Union. 31\ Case 11.5 (2)\ McIntyre v Grigg, 2006 CanLII 37326 (ONCA)\ Resolution:\ o Commercial vendors of alcohol owe a duty of care to persons who might\ reasonably be expected to come into contact with an intoxicated person\ and do not escape liability simply because a patron does not exhibit any\ visible signs of intoxication if in the circumstances the tavern knew or ought\ to have known that the patron was becoming intoxicated.\ o Grigg was found 70 percent liable and the Student's Union was found 30\ percent at fault. Grigg was also ordered to pay punitive damages. 32\ The Negligence Standard versus Strict\ Liability\ strict liability: The principle that liability will be imposed irrespective of proof\ of negligence.\ The scope of strict liability is limited.\ o Strict liability is largely confined to vicarious liability as well as liability for\ fires, dangerous animals, and the escape of dangerous substances.\ o Liability in contract is also strict liability. 33\ International Perspective 11.1\ Strict Liability\ Members of the European Union (EU) and areas in the United States use a\ strict liability rather than a fault-based standard in defective-product liability\ cases, meaning that manufacturers can be held liable for unsafe products even\ if they were not negligent in any way and exercised due care.\ In the EU:\ o A product is defective when it does not provide the safety that a person is\ entitled to expect, taking into consideration all the circumstances.\ o Relevant considerations include the presentation of the product,\ expectation of use, and the time the product was put into circulation. 21\ Torts from Business Operations (2)\ false imprisonment: Unlawful detention or physical restraint or coercion by\ psychological means.\ legal authority: The authority by law to detain under section 494 of the\ Criminal Code.\ To defend against the tort of false imprisonment if detaining a suspected\ shoplifter, the retailer and/or its employees must show legal authority to detain\ under section 494 of Canada's Criminal Code.\ o The arrest can happen at the time of the offence or "within a reasonable\ time after the offence is committed and they believe on reasonable grounds\ that it is not feasible in the circumstances for a peace officer to make the\ arrest."\ o If store personnel detain a suspected shoplifter, they must immediately call\ the police. 22\ Torts from Business Operations (3)\ deceit or fraud: A false representation intentionally or recklessly made by\ one person to another that causes damage.\ o In contract law, the victim is also entitled to be released from the contract.\ passing off: Presenting another's goods or services as one's own.\ o This tort can be intentional or even accidental.\ o Damages and/or an injunction may be sought.\ Note: The Trademarks Act also contains a statutory form of action that bears a\ strong resemblance to the tort of passing off. 23\ Case 12.4 (1)\ Ciba-Geigy Canada Ltd v Apotex Inc, 1992 CanLII 33 (SCC)\ Ciba-Geigy Canada Ltd manufactured and sold the drug metoprolol tartrate in\ Canada.\ Apotex began to manufacture and sell the same drug in Canada.\ The products were officially designated as "interchangeable," meaning that the\ pharmacist could, in filling a prescription, give the defendant's product in place\ of the plaintiff's product provided the prescription did not contain a "no\ substitution" notation.\ The plaintiff sued for passing off on the basis that the defendants were copying\ the plaintiff's "getup" in relation to the size, shape, and colour of the pills,\ claiming this was confusing consumers. 24\ Case 12.4 (2)\ Ciba-Geigy Canada Ltd v Apotex Inc, 1992 CanLII 33 (SCC)\ Resolution:\ o The Supreme Court of Canada confirmed that competing laboratories must\ avoid manufacturing and marketing drugs with such a similar getup that it\ sows confusion in the customer's mind. It outlined three steps to proving\ the tort of passing off:\ ♣ The existence of goodwill.\ ♣ Deception of the public or likely creation of confusion in the public mind.\ ♣ Actual or potential damage to the plaintiff. 25\ Torts from Business Operations (4)\ interference with contractual relations: Inducing someone to break a\ contractual obligation owed to another.\ o For example, poaching an employee and enticing them to breach their\ contract with their existing employer.\ defamation: The public utterance of a false statement of fact or opinion that\ harms another's reputation.\ o The key ingredients to this tort:\ ♣ The defendant's words would "tend to lower the plaintiff's reputation in\ the eyes of a reasonable person."\ ♣ The statement did in fact refer to the plaintiff.\ ♣ The words were communicated to at least one other person beyond the\ plaintiff. 26\ Torts from Business Operations (5)\ Defences to defamation:\ o justification: A defence to defamation based on the defamatory statement\ being substantially true.\ o qualified privilege: A defence to defamation based on the defamatory\ statement being relevant, without malice, and communicated only to a\ party who has a legitimate interest in receiving it. 27\ Torts from Business Operations (6)\ Defences to defamation:\ o fair comment: A defence to defamation that is established when the\ plaintiff cannot show malice and the defendant can show that the comment\ concerned a matter of public interest, was factually based, and expressed a\ view that could honestly be held by anyone.\ o absolute privilege: A defence to defamation in relation to parliamentary\ or judicial proceedings. 28\ Technology and the Law 12.1\ E-Torts: Defamation on the Internet\ Negative reviews can have a devastating consequence for the business\ involved.\ At the same time, however, customers have the right to raise concerns about\ the quality of goods or service received.\ In Premier Finance Ltd v Ginther, an individual who made untrue statements in\ an online review that accused a business of deceit and fraud was ordered to\ pay \$90 000 in damages. 29\ Torts from Business Operations (7)\ injurious or malicious falsehood: A statement about another's goods or\ services that is false and harmful to the reputation of those goods or services.\ o Injurious falsehood requires the plaintiff to establish that the statement\ about the goods or services was false and was published (or uttered) with\ malice or improper motive.\ o Malice includes publishing material one knows is false or with a reckless\ disregard as to its truth or falsity. 30\ Business Application of the Law 12.1\ Protection of Privacy\ The common law has historically protected privacy interests through the torts\ of defamation trespass, nuisance, assault, battery, and false imprisonment.\ In 2012, the Ontario Court of Appeal recognized a tort, intrusion upon\ seclusion, which permits a person to sue for invasion of privacy and suggested\ a \$20 000 ceiling for damages.\ intrusion upon seclusion: Intentional, offensive invasion of another's\ personal affairs without lawful justification.\ Government protects privacy through legislation that deals with the collection,\ use, and disclosure of personal information by organizations in the course of\ commercial activities, and some provinces have passed legislation that creates\ the tort of breach of privacy. KEY ELEMENTS OF A NEGLIGENCE ACTION\ Did the Defendant owe the Plaintiff a duty\ of care?\ A duty is owed to anyone who might\ reasonably be affected by your actions\ (\"neighbor principle\" - Donoghue v. Stevenson)\ Did the Defendant\'s behaviour breach the\ standard of care?\ Examine the Defendant\'s conduct; did the conduct\ create an unreasonable risk of harm?\ Defendant\'s conduct is compared to a reasonable\ person\'s in similar circumstances\ Did the Plaintiff sustain damage?\ Has the Plaintiff suffered personal injury (physical\ or mental) or financial loss?\ Was the Plaintiff\'s damage caused (in fact and\ in law) by the Defendant\'s breach?\ Causation in fact: Is there a direct connection\ between the Defendant\'s actions and the\ Plaintiff\'s damage? (\"But for\" test: but for the\ Defendant\'s actions, would the Plaintiff\'s damage\ have occurred?)\ Causation in law: Was the type of injury\ reasonably foreseeable? (If the type of injury was\ reasonably foreseeable,the Defendant will be\ responsible for the full extent of injuries: thin-\ skull rule)\ If yes,\ If yes,\ Plaintiff has established negligence\ If yes,\ If yes,