Liability for Economic Loss - Essay Example

?Liability for Economic Loss Contents Introduction………………………………………………………………………………………..3 Contents Cullen I. & NSW Young Lawyers. “Civil Liability Act 2002” (2002) New York: NSW Young Lawyers 3 Donoghue v. Stevenson 4 Rylands vs. Fletcher (1868) 5 Ben, Mark, Peter and Amy Case Study 5 M. Shanley “Comparative negligence and jury behavior” New York: Rand Corp. 7 Negligent Hiring 8 M. Schneier & American Bar Association. “Construction accident law: A comprehensive guide to legal liability and insurance claim.” Boston: American Bar Association 8 Negligent Supervision 10 References 12 C. Bar, U. Drobnig & Guido Alpa. “The Interaction of Contract Law and Tort and Property Law in Europe: A Comparative Study.” (2004). Rome: Guido Alpa 12 M. Schneier & American Bar Association. “Construction accident law: A comprehensive guide to legal liability and insurance claim.” (1999) Boston: American Bar Association 12 Shanley “Comparative negligence and jury behavior” New York: Rand Corp 12 L. McDougal, R. Felix & R. Whitten. “American Conflicts Law: cases and material” (2004) New Jersey: LexisNexis 12 Cullen I. & NSW Young Lawyers. “Civil Liability Act 2002” (2002) New York: NSW Young Lawyers 13 M. Drury. “ Clinical Negligence in General Practice” (2000). Houston: Radcliffe Publishing 13 Todd A. DeMitchell “Negligence: What Principals Need to Know about Avoiding Liability” (2007). Washington: Rowman & Littlefield Education 13 Arthur Martin C. “Negligence: Instruction Paper” (2010). New York: BiblioBazaar 13 Bob P. “Professional Negligence in Construction” (2003). New York: Taylor & Francis 13 Schrage E. J. H. “Negligence: The Comparative Legal History of the Law of Torts” (2001) Detroit: Duncker & Humblot 13 Lewis K., Linda D. “Negligence” (1995) Texas: Carswell 13 Tony K. “Negligence: Origins” (2009). Massachusetts: Wasteland Press 13  Francis M. “Criminal Negligence” (2011) London: Aegypan 13 Roy M. “A Rationale of Criminal Negligence” (1944) Kentucky: Kentucky Press. 13 Negligence Introduction According to the Civil Liability Act, liability for economic loss occurs when a case arises pertaining to failure by a party to “exercise reasonable care and skill”1 Further guidelines stipulate that harm is any kind of harm laid upon damage of property or any harm that is inflicted upon damage of property. Therefore, liability for economic loss seeks to make judgment on the party that is to endure losses occurring from the loss suffered. Tort law assigns the liability for economic loss to either parties of the case, in accordance to the law guidelines and according to the damage suffered by either party. Cases arising from economic losses are far-reaching and go beyond a certain limit, regarding many entailments. A scenario example would arise due to a contractual obligation, a construction concern or negligence in meeting the requirements of guide. Construction defects arising from defective installation or derisory material will normally amount to breach of contract, and the economic liability will lie towards the contractor. Tort law however makes exceptions for certain cases arising from negligence by the owner of the property to fulfill their obligation as a result of negligence. If the contractor made it known that the materials used by the contractor were faulty and that the owner submitted to the allegations, then the liability for economic loss will be awarded to the owner. Another attribute of the tort law is that a contractor may suffer liability for economic loss if the contractor makes appropriations limiting certain actions allocated by the contractual agreement. Cases relating to liability for economic loss are dynamic. They rely on a set of tort law, common law and case law. Case law answers the question of how it is applied mostly. Cases arising from prior disagreements suit a large part of the case law aspects regarding liability for economic loss, but they do not limit them. Judges will usually make rulings particularly looking at the sense in the course of action, but will also rely on precedence to some extent. A large part of these cases will normally lead to additional provisions in the civil laws act. For instance, contractors acting in their capacities as such, who carry out repairs on properties, will normally be subject to their capacities as such and will be judged on tort law in case that the renovations cause adversities to the already existent building. The court has to determine the best course of action as to who bears the damages from liability from economic loss as in Donoghue v. Stevenson. Donoghue v. Stevenson As Donoghue and a friend were travelling, they stopped along the way for a drink. The friend went to the store to buy the drinks and came with ginger beers from Stevenson’s manufacturers. Donoghue found a slug in her bottle and decided to claim damages from the manufacturer for the unfolding. Ruling made decided that the manufacturer had no legal right to pay liability for economic loss to the plaintiff as there was no direct relationship between the two parties. According to Christian von Bar, there arises a distinction as to the exclusivity in determining what pure economic loss and liability for economic loss is2. Discrepancies arise between many countries like Australia, New Zealand and Canadian law, which do not fully agree on the aspects surrounding the liability economic loss issue. However, it is standard that all judgment arising from tort law and precedence, which make up case law. Conclusively, liability for economic loss has a lot of dynamic aspects and would not rely on a particular source of law, thus entails the application of case law. Negligence in laws regarding property law is the inability in practice to assign the expected caution when handling something, or property. Rylands vs. Fletcher (1868) Ryland took a step to employ Fletcher to make a construction of a reservoir on his premise. Through the work proceeding, Fletcher found wreckage on a streak of old coal faulty deposits. Not making any corrections to the already existent problem, they chose to ignore it and carry on with the set contract agreement. Nevertheless, the unattended shaft broke out and caused damages worth 937 Sterling pounds on a mine from the reservoir, suing Fletcher for damages remittances due to the mine. A decision by the House of Lords sought in favor of Rylands arguing that he had the right to enjoy his property with the reservoir and was not on the wrong by doing that3. Fletcher got to pay the damages to the mine, but there was the development to the ‘Rule in Rylands v Fletcher’ stating: “The person who for his own purpose brings on his lands and collects and keeps there anything likely to do mischief, if it escapes, must keep it in at his peril, and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape.” 4 Ben, Mark, Peter and Amy Case Study The scenario placed by Ben and Mark is contractual and they both have to meet their obligations of the contractual agreement. Additionally, Peter and Ben enter into another binding contract that entails the delivery of a service by Peter, who is a professional self employed kitchen fitter. When Peter acted in a negligent manner and burst the pipes to Ben’s rental house and it destroyed some of the applications of the house, he should reimburse Ben for the damages caused. Additionally, when the house was not ready for occupation by Mark, Ben suffers additional damages pertaining to foregone revenues. Ben therefore, has the right to claim damages against Peter from the foregone rent revenue from offering the house for rent; Rylands v Fletcher case. The case law precedence adds up to the findings of the Rylands v Fletcher case. The law established by the House of Lords after the verdict against Fletcher was submitted does not apply on these terms because the appliances do not cause any external damage to the neighbors. However, the appliances were not harmful. In conclusion, Ben has the right to sue for damages on the cause of underpayment of rent. He would have enjoyed the benefit of an additional 10 Sterling Pounds if mark would have been his tenant. He can therefore sue for additional damages for the foregone additional rent. Negligence in employment The scope as per Arthur, encompassing negligence in the liability for economic loss, provides for farther instructions especially when there is either self employment or employment by other entities5. The scope provides for direct employment and also pertains to vicarious liability and the duty of care. Vicarious Liability and Duty of Care Employer employee relationship takes an extended step in dealing with the liability for economic loss when it comes to liability for economic loss on delegating authority to a subordinate. The common law pertaining to liability obligation in case of employment stipulates the direction for the judge to take. It mostly deals with the provisions for infringement of copyright and patents regulations awarding the beneficiary, not necessary being not only the responsible party of the damages but could also include the employer, landlord or the accomplice. Shapiro, Bernstein and Co. v H.L. Green Co. The case included the breach of copyright law against a chain store owner who dealt with a concessionaire of pirated merchandise, but the chain store owner did not know of the proceedings of the concessionaire. The court ruled that the chain store owner was to bear the liability for economic damage bore from the infringement since he enjoyed financial benefits from the exercise, and since he had a direct line to stop the dealer from engaging in such. In the case that Peter had sought employment in Kitchen-quick kitchen fitters, then there are a number of changes that would apply to the judgment made against him in the Ben case. In Francis’ negligence definition, further divisions which elaborate on the considerations of different circumstances to group judgment are divided into four set-ups: negligent supervision, negligent retention, negligent training and negligent hiring6. To look at each scenario separately and explicitly, we shall look at each scenario separately. Negligent Retention Negligent retention happens where a company retains and sort of encourages a certain form of negligence to continue in its provision of services to customers7. In administering a judgment, the court will normally look at the help the employer tried to administer in order to avoid the occurrence of a negligent act from occurring. If a company retains a person who normally frequently exercises negligent acts without trying to help prevent the problem, then they are liable to the consequences of liability for economic loss. Roy’s rationale book would give an elaborate guideline on if Peter was an employee of Kitchen-quick kitchen fitters, then the verdict passed by the courts will primarily lie towards punishing the employer who stands the repeatedly occurring action of negligence from Peter8. The result of the judgment will lean on case law, and the judge will provide a stern verdict to aid in the employer being keener on negligent employees. Negligent Hiring A party that suffers damages from an employer may sue for damages based on negligent hiring by an employer. Schneiner states that this is when a party claims that an employer knew of the negligent practices of the employee before they hired him, yet they go on and encourage their practice in the field9. Some of the ways that these hiring negligence cases can be avoided is through cross checking the candidate before they are allowed into employment. In the case that Peter’s employer Kitchen-quick kitchen fitters were aware (in case he was) that he would become a liability to the company and still went ahead to incorporate him into the company’s undertakings, then Ben would be able to sue the company on negligent hiring charges. Again, if the company engages in routine negligent hiring then they would be held accountable on such charges10. In case law, the cause of being charged with negligent hiring could hold severe damage attacks by the court, and would possibly lead to hefty penalties by the court that would be detrimental to Kitchen-quick kitchen fitters. Negligent Supervision If Peter was an employee of Kitchen-quick kitchen fitters and the occurrence of the coal shaft took place with him as a subordinate under supervision, then the company may face charges of negligent supervision. In the case of delegation, then it is up to the employer to ensure that delegation is well carried out to any employee of the company. According to Schrage, delegation is termed effective delegation if the subordinate is skilled in carrying out the delegated activity, if there is effective supervision, if delegation is undertaken by a qualified person and if the delegation is for a good cause11. For instance in the case that Peter did not possess the skill to undertake the delegation, then the rule of rightful delegation was not implemented and therefore the company would suffer the consequences of being unqualified in undertaking the contract. Lisa and Lewis would define it as being an unqualified company; the company may face serious degradation procedures that may result in a suicidal outcome. The company would face the damages to Ben in violation of Negligence Act12. Additionally, Peter would face charges of carrying out professional work without the right license. Negligent Training This is a case where the employer fails to provide adequate skill or knowhow to the employee in the circumstance of rendering employment, or when the employee is in employment but they are not provided with the right skill and end up causing damage to a client’s property13. In the event that the client files a case for demand of damage, then the employer has the legal obligation to pay for damages to the client as well as any additional payments as directed by the court ruling14. If Peter was part of the Kitchen-quick kitchen fitters, then he would make the company endure the expense of damages to the client. Conclusion Tony notes that negligence cases fall under the case law15. Any breach of the outline of the law on negligence may result to the payment of damages and/or punitive damages. Otherwise, in the event that there involves an additional party like the employee, then he may suffer the consequence of paying damages to the victim of the negligent acts. Normally, liability for economic loss falls in the case law segment of law where the judge selects the best course of action in accordance with the situation at hand. Vicarious liability law incorporates secondary liability allocating that the beneficiary of an infringement’s individual is bound to pay damages arising from the liability for economic loss. However, vicarious liability claims encompass a wide range of copyright and patent infringement case laws. References C. Bar, U. Drobnig & Guido Alpa. “The Interaction of Contract Law and Tort and Property Law in Europe: A Comparative Study.” (2004). Rome: Guido Alpa M. Schneier & American Bar Association. “Construction accident law: A comprehensive guide to legal liability and insurance claim.” (1999) Boston: American Bar Association Shanley “Comparative negligence and jury behavior” New York: Rand Corp L. McDougal, R. Felix & R. Whitten. “American Conflicts Law: cases and material” (2004) New Jersey: LexisNexis Cullen I. & NSW Young Lawyers. “Civil Liability Act 2002” (2002) New York: NSW Young Lawyers M. Drury. “ Clinical Negligence in General Practice” (2000). Houston: Radcliffe Publishing Todd A. DeMitchell “Negligence: What Principals Need to Know about Avoiding Liability” (2007). Washington: Rowman & Littlefield Education Arthur Martin C. “Negligence: Instruction Paper” (2010). New York: BiblioBazaar Bob P. “Professional Negligence in Construction” (2003). New York: Taylor & Francis Schrage E. J. H. “Negligence: The Comparative Legal History of the Law of Torts” (2001) Detroit: Duncker & Humblot Lewis K., Linda D. “Negligence” (1995) Texas: Carswell Tony K. “Negligence: Origins” (2009). Massachusetts: Wasteland Press  Francis M. “Criminal Negligence” (2011) London: Aegypan Roy M. “A Rationale of Criminal Negligence” (1944) Kentucky: Kentucky Press. Read More