The Liability Risk

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The Liability Risk

• Examples

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Outline

• Basis of legal liability
• Law of negligence
• Imputed negligence
• Res Ipsa Loquitur
• Specific applications of the law of negligence
• Special tort liability problems
• Reforming the civil justice system

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Basis of legal liability

• Tort legal wrong money damages
• Breach of Contract civil wrong money damages,
  injunctive relief, penalties or fines, specific
  performance
• Crime penalties, fines, incarceration, death

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Torts

• Intentional tort
• Absolute (or strict) liability
• Negligence failure to exercise care required by
  law to protect others from unreasonable risk of
  harm

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The old barn aint what it used to be

• A farmer, discouraged and angry because of
  frequent break-ins into his barn, rigged up a
  shot-gun and locked the door behind him. Next
  thing he knew, the would-be burglar had suffered
  serious permanent injuries to his knees and legs.

Intentional tort
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Law of Negligence - Elements of negligent act

• Duty of care
• Failure to exercise proper degree of care (or
  failure to perform that duty)
• Damage or injury
• Causal link between failure and results, without
  intervening cause, discontinuity

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The Potato Gun

• At his sons birthday party, Dad realized that
  the potato gun was not functioning properly. He
  put it away in a closet. One of the guests found
  it, and was injured while using it.

invitee
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Law of Negligence -Proximate cause

• Unbroken chain of events
• Directly resulting in injury or damage
• No intervening cause
• (or discontinuity)

9
The hay-rack ride

• The law firm was having its annual autumn
  chili-fest. During the hay-rack ride, the tractor
  took a turn too tightly, running the wheels of
  the rack into a guy-wire, resulting in the upset
  of the rack and several prominent guests were
  dumped onto the ground. Injuries resulted.

Assumption of risk?
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Law of Negligence Defenses

• Contributory negligence
• Comparative negligence
• Last clear chance
• Assumption of risk

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Slip sliding along

• Two men were found dead at the scene of a
  snow-mobile accident. One apparently was
  operating the snowmobile, and the other was
  standing at a distance, on the iced-over lakebed,
  directly in front of the operator, in order to
  most effectively and accurately clock his
  speed.

Contributory negligence
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Imputed Negligence

• Employer-employee
• Vicarious liability
• Family purpose, joint business venture
• Dram shop

http//www.msbo.org/links/irsguidelines.shtml
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Rider mower accident

• While operating grandpas riding mower, the 12
  year old dumped his playmate off the back. Her
  legs were caught under the blades. She has
  serious permanent scars.

Family purpose
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Res Ipsa Loquitur

• The thing speaks for itself
• Wrong tooth extracted
• Sponge in patient
• Requirements
• Event doesnt normally occur in absence of
  negligence
• Defendant has exclusive control over the
  instrumentality causing the accident
• The injured party has not contributed in any way
  to the accident

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Specific Applications of the Law of Negligence

• Property Owners
• Attractive Nuisance
• Owners and Operators of Automobiles
• Governmental Liability
• Charitable Institutions
• Employer-Employee Relationships
• Parents and Children
• Animals

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Construction site

• A child was seriously injured while operating a
  bob-cat left unattended at the site of
  residential construction.

Attractive nuisance
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Security

• There had been several reports of women being
  approached in a menacing manner, over the span of
  several evenings, at an apartment complex. The
  landlord did nothing to warn its residents and
  guests. A resident was then raped in her bedroom.
  

Duty owed
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The nurse

• On the way to the grocery store for her employer,
  a private duty nurse accidentally ran a red
  light, while driving her employers auto. The
  result was damage to another car and serious
  injury to its driver.

Imputed liability
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Special Tort Liability Problems

• Products Liability
• Professional Liability
• Directors and Officers/Corporate Governance
• Employment Practices
• Other Problem Areas
• Tort Reform

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Glaucoma

• A patient loses her eyesight.
• She alleges that her optometrist should have
  caught the disease in her past visits for
  professional service.

malpractice
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Broken tooth

• The patron of a local eatery alleges that his
  crown was cracked, due to a foreign object in his
  dinner.

Products liability
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Error in design

• The second floor of a newly constructed building
  was inadequate to handle the weight of production
  machinery. It collapsed, injuring employees and
  guests.

Engineering/architectural
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Resources

• Non-profit risk management (2001)
• This electronic publication provides up-to-date
  information on state volunteer protection laws,
  as well as federal law. It will have comparison
  tables for state volunteer protection laws, an
  analysis of liability limitations for volunteers,
  and other information and features
• How the limits apply in CGL (courtesy IRMI)
• All insurance professionals need to understand
  how the limits of liability apply in the
  commercial general liability policy. Whether
  providing advice to a policyholder regarding the
  purchase of limits or in complying with the
  underlying requirements of an umbrella or excess
  liability policy, a working knowledge of how much
  will be paid is crucial.
• Legal encyclopedia
• Cars Tickets
• Buying, Leasing or Renting a Car
• Getting Your Car Repaired or Replaced
• Driving
• Traffic Tickets