Advice for Negligence and Insurance Case - Essay Example

Negligence and Insurance Advise Mulder of any action he may take, against whom he should take it, why he may take it and any consequences ofthat action. The law has stated that the occupier of the land has a duty of care to protect visitors on that land from harm or material injuries. When this duty of care is not enforced, it is possible that a breach of duty has occurred. It is first of all necessary to establish the standard of care that should have been established by the occupier, compare it with the actual degree of care that transpired, thus establish whether deficiency of service is evident, by also consider the test of foresee ability and vulnerability/control tests. The degree of care should not only be subjective, it also needs to be enforced. In the landmark case of Donohue v. Stevenson (1932 ) AC 562, where the question arouse whether a manufacturer of soft drinks could be held liable for negligence by consumer, Lord Aktins ruled, “You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbor.” (Donoghue v. Stevenson (1932). 2006) In the case of physical injuries caused to the applicant by the broken stage, it could be said that Mulder could take action for negligence against Dana, the occupier and owner of the hotel. It is incumbent that Dana should have, with reasonable care and prudence, realized that the floor of the stage should be of strong construction to withstand heavy weight. Mulder could claim for compensatory damages for his injuries, also punitive damages & claims for loss of income for several months due to serious injuries to both his feet. However, in the case of injuries suffered due to lack of care of his friend, Skimmer, the test of vulnerability and control test needs to be applied. In this case, the defendant, Dana had no possible means of controlling Skinner’s entry, although she had taken the degree of care expected during such a situation. This being a case of Res Ipsa Loquitur (the truth speaks for itself), it is seen that Dana’s involvement would be limited to the stage accident and for the second accident, Mulder would have to bring action against Skinner, should he think it necessary to do so, for injuries sustained during to negligence and lack of care by Skinner. 2. Advise Skinner of any action he may take, against whom he should take it, why he may take it And any consequences of that action. Not all cases of negligence evoke compensatory or other damages to the claimants. In order for negligence to be established it is necessary to conform to these facts: Do the owners of the hotel owe Skinner a duty of care? Has there been a resultant breach of care? Was Skinner’s injury a direct result of the breach of care on the part of the owners? When Skinner entered the movie hall, he had entered a tacit contract with the owners. The injury caused to Skinner was not due to the lack of care, or negligence of the hotel authorities, since it was a stray incident, and unbiased research testified to the fact that there were no earlier records of such kind. Moreover, it was also outside the control of hotel authorities. In this case the question of foresee ability also comes to the forefront. The hotel owner, Dana, by any stretch of imagination, could have possibly imagined that Skinner would be bitten by a stray bee and suffer injuries. In the case of Overseas Tankship (UK) Ltd v. Mort’s Dock and Engineering Co. Ltd (1961) AC 388 it was held that, to qualify for compensatory damages, the results of negligence alleged by the applicant must have been one that could have been reasonably foreseen by the defendants. (Overseas Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., Ltd. 1961). 4. What is the purpose of an insurance contract? Explain the differences between an indemnity contract and a compensation/contingency contract? What is the importance and function of the duty of disclosure? The purpose of an insurance contract is to provide financial succor or indemnity to people or institutions that have undergone losses which has been the main purpose of insurance. In a contract of insurance under indemnity contract, the indemnity to be provided in the event of the occurrence of the risk would be restricted to the actual losses suffered, and thus, the insurer cannot make a profit out of insurance losses. The objective behind indemnity contract is to restore the insurer to a financial position had the risk not taken place. However, in the case of compensation or contingency contract, which relates to life insurance and other contingencies, there is an attempt to restore financial parity but it may not be fully commensurable for the loss suffered. All contracts of insurance are Uberrimae fidei contracts, or in other words, contracts bound by honesty, good faith and trust on contracting parties. There is a need for complete disclosures both during the negotiating stages of the contract, during the renewal or variation/reinstatement of the contract. In the event this aspect is not maintained, the contract may be voidable at the option of the party under Section 28 of the Insurance Act. The function of the utmost good faith ensures that insurance contracts are carried out within the ambit of relevant laws and regulations. 5. Would Dana be entitled to keep the proceeds of the sale? Explain your answer. Dana would not be able to keep the proceeds of the sale because with the full settlement of her claim she has been compensated to the full extent of her losses. If she conducted a sale and received money, she would be making profits on an insurance deal which is illegal, ab initio. It is also seen that the insurance company could consider the sale as a fraudulent transaction, and proceed legally against Dana. 6. Dana is upset and seeks your advice as to whether the insurance company is entitled to deny the claim. Would your advice be different if she had informed her broker of the first attack? The concepts of good faith, trust, honesty underpins insurance contracts. There is also need for material disclosure which was not done by Dana, after the first attack was carried out. Thus, the uberramie fidei aspect, or good faith has been vitiated by Dana in the first instance itself, when she did not mention about the material losses at the time of renewing the insurance contract. Thus the insurance company is well within its legal rights to refuse the claim. “The duty of disclosure, including the duty to disclose changes of circumstances, also applies upon renewal of an insurance contract and, to a more limited extent upon variation.” (Report 34 (1983): Community law reform program: Second report: Insurance Contracts: Non-disclosure and misrepresentation. 1998). In case the insurance company had been informed about the first attack, Dana would have acted in conformity with the rules of insurance, and had the company had not entertained her claims, it would be possibly to bring a suit against the insurance company for breach of contract. Bibliography Donoghue v. Stevenson (1932). (2006). [online]. The K-Zone AC 562. Last accessed 9 March 2008 at: http://www.kevinboone.com/lawglos_DonoghueVStevenson1932.html Report 34 (1983): Community law reform program: Second report: Insurance Contracts: Non-disclosure and misrepresentation. (1998). Chapter 3: The Source of the problem: Common Law: The duty of disclosure and materiality. [online]. Law link, Law Reform Commission. Last accessed 9 March 2008 at: http://www.lawlink.nsw.gov.au/lrc.nsf/pages/R34CHP3 Overseas Tankship (U.K.) Ltd. v. Morts Dock & Engineering Co., Ltd. Privy Council, 1961, AC 388. [online]. AudioCaseFiles. Last accessed 9 March 2008 at: http://www.audiocasefiles.com/cases/detail/case/9065/ Read More