Liability for Negligence - Assignment Example

Business Law No: Business Law Task Discuss Dappy Baking plc’s liability for negligence.  Negligence is an imprudent act of a person. It means that due care was not exercised by a person performing the assigned task. In legal terminology, negligence causes harm due to carelessness which is not intentional (Deakin, Johnston, and Markesinis, 2003).   In a case of a lawsuit known as Fletcher vs. Ryland 1866, it was held by the English Court that "those who go personally or bring property where they know or it may come into collision with the persons or property of others have by law a duty cast upon them to use reasonable care and skill to avoid such a collision” (Ames, Smith, Pound, and Beale, 1929, p. 126).  In accordance with the civil litigation, if an injured person becomes successful in proving that another person acted negligently to cause injury, he may have the right to recover damages caused by the harm done. The harm can be of body, property, mental well-being, financial status, and the relationship. Furthermore, the law of negligence under common law is one side of law of liability. A plaintiff can have compensation of damages in a proven case (Lunney and Oliphant, 2003). The case of Donoghue vs. Stevenson 1932 is the example of law of negligence that lays the foundation of fault principle in the commonwealth countries. See the case of Pursuer wherein the Donoghue drank ginger beer handed over to him by a friend, who bought it from a shop. The beer was supplied by a manufacturer. During the course of drinking, Donoghue discovered the remains of decomposed slug. She sued Stevenson, although there was no relationship or existence of a contract. Therefore, no direct action against the manufacturer was justified (Deakin, Johnston, and Markesinis, 2003). See the case of Caparo vs. Dickman1990, where a concept of threefold test for a duty of care was introduced. The guidelines were a) reasonably foreseeable; b) relationship between the plaintiff and the defendant exists; c) must be fair, just and reasonable to impose liability. The mentioned guidelines are still at the discretion of judges (Lunney and Oliphant, 2003). Task 2 – Discuss the various methods Tulisa could use to achieve compensation, i.e. litigation or a form of Alternate Dispute Resolution; what are the advantages/ disadvantages of these? Sometimes a litigant will need a solicitor to sort legal issues. In case a dispute arises with an individual, a company, or a public body, the dispute resolution or the solicitor will help to suggest legal remedy in achieving the satisfactory resolution to lodge claim for due compensation. It can be sorted out by applying the different channels from mediation and arbitration to resolve the issue out of the court jurisdiction. Of course, right action at the right time will prevent the dispute from further aggravation (FDR Solicitors, 2012). Mediation no doubt is a powerful way to resolve disputes without inviting court action. We all agreed upon that using mediation is always helpful to resolve a dispute amicably. It means one can settle the dispute with less distaste. The role of mediator is to: a) identify important issues, b) gather information, c) identify the choices, and d) negotiate together to reach acceptable solution (FDR Solicitors, 2012). Mediators have no legal authority to implement a settlement. However, they sincerely try to settle the issues amongst the stakeholders. On agreeing concerning all the terms and conditions by the stake holders, the executants of the agreement may implement it through the court of law (FDR Solicitors, 2012). Advantages of Lawsuits a) Litigation costs will be divided amongst the petitioners.  b) Allow petitioner to seek relief. c) Lawsuit is decided by single court.   d) Petitioners’ recoveries should be consistent. e) Other petitioners of the similar case may take the advantage of law of consistency. f) If a defendant is facing number of lawsuits, the defendant may not have the ability to pay the fees. (Lawinfo, 2010) Disadvantages of lawsuits a) A plaintiff who is not a representative has no right to settle or continue litigation. b) Other types of compensation can be problematic. (Lawinfo, 2010) Advantages of Alternate Dispute Resolution (ADR) ADR identifies five major outcomes: a) improved settlement b) the dispute is resolved among disputants c) reduced time in dispute d) reduced costs e) increased compliance There is a consensus amongst the stakeholders that this is an effective way to resolve the disputes within the shortest possible time. ADR practitioners are most vocal about the benefits of ADR (Ministry of Justice, 2012). Disadvantages of Alternate Dispute Resolution (ADR) Keeping in mind the cost effectiveness of ADR, the wider segment of society extended its full support to cost saving and time conserving arrangement. It has already been observed by the ADR practitioners, i.e. lawyers and disputants, that arbitration by all means is less attractive than the mediation (Ministry of Justice, 2012). Some of the ADR practitioners are of the considered view that the model in question allows disputants to be bullied. It is a model wherein someone found core philosophical values of mediation and the elements that lead to better solutions of the problems, the empowerment of the disputants, and expectation in the system, which are in vogue. The disputants should take the responsibility of putting in efforts to arrive at a mutually acceptable solution (Ministry of Justice, 2012). Task 3 - Advise Tulisa as to the advantages and disadvantages of different types of business organizations.  Two Basic Categories Entities fall into one of the two categories for income tax purposes. One is called taxable entity and the other one non-taxable. Businesses categorized as partnerships and limited liability companies are not subject to federal income taxation. The income routes through the entity to be taxed directly to the owner or owners of the business (Kostant, 1996). Sole Proprietorships A sole proprietorship is one of the simplest ways of business. If a business has no employee, then there will be no federal or state tax to be paid by the employer. In other wise scenarios, the employer is bound to pay state and federal employment taxes (Kostant, 1996). Several disadvantages with the sole proprietorships cannot be ignored. One of the major disadvantages of proprietorship is personal liability. However, unlimited business liability of sole proprietors can be mitigated with insurance. In addition to the abovementioned, sole proprietors shall pay a self-employment tax on their business revenues. Sole proprietors, however, can claim self-employment tax as income tax deduction (Kostant, 1996). Partnerships A partnership is an unincorporated entity that comes into existence by the execution of agreement between the two or more persons. It is incumbent upon partnership concern to file relevant tax return to the competent authority. All income and losses relating to partners are distributed according to their share of investment (Kostant, 1996). A good way for a business is to get investment without risking one’s personal wealth. As a separate body, the director of a limited company can be the director of a sister company. A limited liability company with solo owner can be taxed. In case of two or more owners, the owners can be taxed in the partnership capacity (Kostant, 1996). Another advantage of proprietorship is that stockholders are taxed on their earnings. In case minors are shareholders in a business, their share of dividends will be taxable. Certain fringe benefits are not available to proprietorship. However, regular corporations may have the option to deduct 100% of the premium. They can also deduct their disability insurance premiums (Kostant, 1996). Regular Corporation It is true that corporations treated as separate legal entities constituted under the state law shall be taxable. Shares of a corporation can be evidenced by its stock. Generally, shareholders in any corporation take risk up to their share of investment. In general, corporations are taxed on money not paid out in terms of expenses, bonuses, or salaries. If all the money is paid to shareholders in shape of dividends, they shall be liable for double taxation (Anon., 2012). Corporations, however, may have some advantages. The major advantage is limited liability. Corporations can have the option to deduct 100% on their health insurance premiums plus 100% of any disability insurance premiums to enjoy the tax-free benefits to the employees. Corporations have many different natures of stock, which can be utilized for estate planning and raising capital (Kostant, 1996). Reference list Ames, J. B., Smith, J., Pound, R., and Beale, J. H., 1929. A selection of cases on the law of torts, Volume 1. Ed 3. London: Harvard University Press. Deakin, S., Johnston, A., and Markesinis, B., 2003. Markesinis and Deakins Tort Law. Oxford: Oxford University Press. FDR Solicitors, 2012. Dispute Resolution and Litigation. [ONLINE] Available at: http://www.fdrlaw.co.uk/services/litigation-services. [Accessed 26 June 2012] Kostant, P. C., 1996. Business Organizations. New York: Little, Brown and Co. Lawinfo, 2010. The Advantages and Disadvantages of Class Action Lawsuits. Class Action Legal Resources. [ONLINE] Available at: http://resources.lawinfo.com/en/articles/class-action/federal/the-advantages-and-disadvantages-of-class-act.html. [Accessed 26 June 2012]. Lunney, M., and Oliphant, K., 2003. Tort Law – Texts, Cases. 2nd Ed. Oxford: Oxford University Press. Ministry of Justice, 2012. Advantages and Disadvantages of ADR. [ONLINE] Available at: http://www.justice.govt.nz/publications/global-publications/a/alternative-dispute-resolution-general-civil-cases/4-advantages-and-disadvantages-of-adr. [Accessed 26 June 2012]. Anonymous, 2012. The Advantages and Disadvantages [ONLINE] Available at: http://www.tomleggette.com/Advantages_and_Disadvantages.htm. [Accessed 26 June 2012]. Read More