Tort and Negligence of Company - Research Paper Example

The issue in this particular case study is that Kids Pty Ltd wishes to sue Dan and Bull Pty Ltd for the loss of $80,000 profit on the Toys Club contract after loosing a lucrative contract to supply toys as a result of negligent driving by Dan who apparently blocks the only entrance to Kids Pty Ltd with his lorry which got stuck there resulting in Kids Pty failing to make the delivery on time. Based on the tort of negligence, this essay seeks to advise Kids Pty Ltd on the chances of success in suing Bull Pty Ltd. In order, to get a clear understanding of what the claimant would need to prove when making a claim under the tort of negligence, it is important to explain the meaning of the law. A tort law can be described as a civil wrong not arising from a contract and in the case of negligence, one should owe due consideration to one’s neighbour (Capiro Industries vs. Dickman 1990). Negligence therefore, can be described as the act of doing something a reasonable man would not do and a plaintiff must prove in such a case that the defendant owes a duty of care (Donoghue V. Stevenson 1932). In this case, it is of paramount importance for the claimant to be able to prove that the negligent behaviour of the defendant which is Bull Pty Ltd would have caused the loss of the lucrative contract to supply the toys in order to win the claim that the subsequent loss after the action of the Dan could have been avoided in the event that he would have acted within reasonable limits. There are traditionally four elements of the tort of negligence which the plaintiff has to prove in order to be successful in winning the claim. There is need to prove that the defendant owed the plaintiff a duty of care, the defendant breached that duty by falling below expected standards, the defendant’s conduct caused the plaintiff to suffer physical or economic harm and the harm suffered by the plaintiff was reasonably foreseeable (Name of author and year). The four stage test has been reformed by statutory civil liability reforms in all States and Territories where recovery for loss in that situation must not be excluded by the statute. As going to be discussed in detail below, Kids P/L can establish the four elements of negligence. The House of Lords in the case of Capiro Industries vs. Dickman (1990), proposed the adoption of the following conditions where the three stages should be taken into consideration which include; foreseeability, proximity as well as reasonability. In some cases it may not always follow that a duty of care exists but common sense ought to prevail to avoid an otherwise serious injury to another person or loss of business or profit. Due to the fact that a person may deliberately expose someone to danger or a situation which can cause losses leaves him liable to negligent behaviour where he is expected to have foreseen the imminent consequences of that action. Any reasonable person in this case could see that parking a big truck like a lorry would block the way for the other traffic. It should always follow that some actions are prohibited when driving such as parking at undesignated places. Common sense should prevail that parking in front of other people’s premises thereby blocking their way is not allowed. Dan could have fore seen the consequences of his actions given that he already has broken his company rules by deviating from the route. Given that a sign is in place indicating that parking is prohibited, Kids Pty Ltd can succeed in its claim given that there will be abundant evidence to show that the negligent action by Dan would have resulted in the economic loss of failing to grab the contract to supply the toys. Compensation for non-intentional pure economic loss has been traditionally the function of contract law and recently the Trade Practices Act of 1974. According to this act, it is possible for the plaintiff to successfully claim for compensation in such a case where Dan’s negligent behaviour has caused pure economic loss to Kids P/L. in some cases, it may be difficult to make a claim owing to contributory negligence. The plaintiff also contributes to negligence which has resulted in loss of something, then it may be difficult to get the compensation. In this case, the plaintiff does not contribute anything towards the pure economic loss. In the case of Donoghue V. Stevenson (1932) proximity is described as a situation where a neighbour is a person who is closely and directly affected by somebody’s actions and ought to reasonably take that fact into account. Simply put, the aspect of proximity loosely refers to closeness to somebody which should be taken into consideration to ensure that somebody’s actions should not infringe on another person’s right to enjoy life or to pursue business. In such a situation, every person is obliged to ensure that they do not harm or cause economic losses to the persons close to them by their unprecedented actions which can be detrimental. As far as negligence is concerned, the element of proximity plays a crucial role as it would seek to establish the extent to which the claimant can prove and justify his wishes for a claim by arguing that the resultant loss to Kids Pty Ltd in this case would have been a result of negligent behaviour by the defendant who has wrongfully parked his lorry in close proximity to its premises. In this particular case, there is need to establish the standard expectations of a reasonable man in order to establish if the claimant can succeed in making a claim against the defendant. Indeed, it can be noted that it does not require great skill or vice versa to observe the negligent behaviour by Dan towards the duty of care. There are mainly two factors which ought to be considered by Kids Pty Ltd in order to successfully sue Bull Pty Ltd. The likelihood and seriousness of risk of loss of business ought to be taken into consideration when attempting to measure the defendant’s behaviour against the risk he would have exposed the claimant to. By any standard, wrongfully parking a lorry in front of the only entrance to the premises belonging to Kids Pty Ltd is negligent behaviour by Dan which exposes the organisation to risk as is the case since they fail to deliver the toys on time. There is also need for the claimant to show that he has suffered an economic loss as a result of the breach of duty care by Dan which can be proved beyond any reasonable doubt. The tender papers can be presented to the court so as to show that Kids Pty Ltd was supposed to deliver a consignment of toys at a certain particular time but was blocked by Dan’s lorry. Whilst in some cases a duty of care can be established and a breach of it as well, it may not be enough to prove a case of negligence unless some form of damage or economic loss can be identified which would give authenticity to Kids Pty Ltd’s case. There is also need for Kids Pty Ltd to show that it has suffered a loss in profits as a result of the breach of duty care by Dan which states that ones actions should not negatively impact on the next person who is regarded as a neighbor. Whilst in some cases a duty of care can be established and a breach of it as well, it may not be enough to prove a case of negligence unless some form of damage or loss can be identified. Damages in the form of loss of business as a result of negligent behavior can be cited in this case as proof that the claimant deserves some form of compensation as a result of the loss that would have resulted in the unprecedented behavior of the defendant. Basically, tortuous behavior may entitle a ‘victim’ to compensation or some other remedy since the damages caused would be a result of negligent behavior as can be noted in the given case study. According to the Australian law, there is stipulated period that is enshrined in the law that can be inferred to as a way of ascertaining economic loss as well as damages caused as result of negligent behavior. According to information Spigleman (2004), there is need to amend the law in order to fine tune it so that a clear distinction on other aspects such as common sense can be clarified for understanding between the parties involved. Dan is an employee of Bull Pty Ltd which strongly prohibits the drivers to divert from their routes and his conduct in this case is against the course of his employment code. Against this background, Bull Pty Ltd cannot be vicariously held liable for Dan’s conduct. The aims of tort laws are specifically designed to compensate the plaintiff who has suffered a wrong resulting in loss of business as is the case of Kids Pty Ltd as a result of negligent behaviour of the defendant and to deter persons from acting in such a way that would infringe on another people’s rights. However, Bull PTY Ltd can argue that Dan has breached his employment contract therefore cannot be held vicariously liable for such behavior since he has diverted from his route. As noted from the above discussion, the character of duty owed mainly defines the tort law. In tort law, specific duties are imposed by the law and are applicable to everyone hence it is advisable to Kids Pty Ltd to sue Bull Pty Ltd as a result of loss of business caused by Dan’s negligent behaviour. In this case, Kids Pty Ltd has to compile all the evidence which suggests that they could not make their delivery in time as a result of the blockade caused by Dan’s truck which got stuck on the only entrance to the premises. This should also be supported by evidence that parking is prohibited where Dan parked his lorry. With enough evidence as suggested in the discussion above, Kids Pty Ltd stands better chances of winning the case against Bulls Pty Ltd as there is an enforceable tort law in Australia that is meant to protect individuals and companies from unprecedented losses caused by other people’s negligent behaviour. Bibliography Capiro Industries V. Dickman (1990) Retrieved 0n 21 March 2010 from: http://oxcheps.new.ox.ac.uk/casebook/Resources/CAPARO_1.pdf Donoghue v. Stevenson [1932] All ER Rep 1; [1932] AC 562; House of Lords. Available at: http://www.safetyphoto.co.uk/subsite/case%20abcd/donoghue_v_Stevenson.htm Accessed on 21March 2010 James (2010). Business law. Wiley Koffman L & McDonald E. (2007), The Law of Contract, 6th Edition, Oxford University Press, Retrieved on 21 March 21, 2010 from: http://books.google.co.za/books?id=8JtwkQrAC_kC Negligence: duty of care and breach of duty, accessed on 21 March 2010, from: http://www.londonexternal.ac.uk/current_students/programme_resources/laws/subject_guides/tort/tort_ch3.pdf Paris v Stepney Borough Council [1951] AC 367 13 December 1950, Retrieved on 02. 09. 09, From: http://www.a-level-law.com/caselibrary/PARIS%20v%20STEPNEY%20BOROUGH%20COUNCIL%20%5B1951%5D%20AC%20367%20-%20HL.doc Negligence: duty of care and breach of duty, accessed on 21 March 2010, from: http://www.londonexternal.ac.uk/current_students/programme_resources/laws/subject_guides/tort/tort_ch3.pdf Richards, Ludlow & Gibson (2009). Tort Law in Principle. 2nd Edition. LBC Spigelman J.J ( 16 June 2004) Tort law reform in Australia- Address to the London Market at Lloyd’s, available at: http://www.lawlink.nsw.gov.au/lawlink/supreme_court/ll_sc.nsf/pages/SCO_speech_spigelman Accessed on 21 March 21, 2010 Terry & Giugni (2009), Business and the law. Cengage. The Australian Competition and Consumer Commission (nd) Accessed on 21 march 2010 from: www.accc.gov.au Read More