Torts and Professional Liability in Canada

1. 4-1 Business Law in Canada, 7/e Chapter 4 Torts and Professional Liability

2. 4-2 What Is a Tort? • A social wrong (not necessarily a crime) • A civil wrong (between individuals) • When an intentional or careless act harms another • Injured party usually sues for monetary compensation Continued on 4-3

3. 4-3 What Is a Tort?/2 • Crimes are social wrongs that affect society as a whole • Some crimes are also torts • A tort is an inherently wrongful act that causes injury to another

4. 4-4 Question for Discussion • It is possible for wrongful conduct to be both a tort and a crime. • Is it appropriate for a person who engaged in wrongful conduct to be prosecuted criminally and then to be subject to a civil law suit to compensate the victim for the injuries suffered?

5. Intentional or deliberate acts that cause injury or loss Careless or negligent acts that cause injury or loss 4-5 Categories of Tort

6. 4-6 Intentional Torts • Intentional conduct that causes injury • Examples • Assault and Battery • Trespass to Land • False Imprisonment • Nuisance • Defamation • Courts may award punitive damages

7. 4-7 Intentional Torts • Assault and Battery • Assault - where there is fear of contact • Battery – the least touching of another in anger • Defences • 1. Accident not mistake • 2. Consent (informed) • 3. Self-defence (reasonable force)

8. 4-8 Trespass to Land • Being on another’s land without authority • permission implied for business offering public services • Occupier owes only minimal duty to trespasser • Continuing trespass remedied by injunction

9. The unlawful and intentional restraint of a person against his/her will Restraint must be total Victim must submit or be forced to comply Restraint may be justified if the person has done something s/he can be arrested for. Remedies: special, general and punitive damages 4-9 False Imprisonment

10. 4-10 Private Nuisance • Public nuisance affects public in general • Private nuisance interferes with another’s use of his/her property • Strict Liability for inherently dangerous situations or products

11. 4-11 Defamation • A false statement about someone to his or her detriment - must be published or broadcast • Slander - spoken defamation • Libel - written defamation Continued on 4-12

12. 4-12 Defamation/2 • Defences • 1. Truth • 2. Absolute Privilege • 3. Qualified Privilege • 4. Fair Comment

13. 4-13 Privacy • Privacy protection provided by statute law • Personal Information Protection and Electronic Documents Act • Regulates collection and use of private information • Provides a model code

14. 4-14 Question for Discussion • Tort law is designed to provide compensation for injury or damages suffered. • Is it appropriate for the civil court to award damages where no loss has been suffered by the person suing? For example, in a case of trespass.

15. 4-15 Negligence • Inadvertent, careless conduct that causes injury to another • Important area of tort liability for professionals

16. 4-16 Negligence A - D Essential Elements: • A: A duty to exercise care • B: Breach of the standard of care • C: Causation – The act caused the injury • D: Damages -Victim suffered a loss

17. 4-17 Reasonable Person Test • Reasonable person is a prudent person exercising care • conduct falling between average and perfect

18. 4-18 Is a Duty Owed? • Reasonable Foreseeability Test • If it would be apparent to a prudent person that the conduct was likely to cause injury - duty is owed. • We owe a duty to anyone we can reasonably anticipate might be harmed by our conduct • Is there any reason to reduce or eliminate this duty? (Anns case)

19. 4-19 Case Summary • Donoghue v Stevenson set several precedents in the law of negligence • the test to determine the existence of a duty • product liability - manufacturer owes a duty to customer • privity of contract will not defeat an action for negligence in product liability cases

20. 4-20 A - Duty of Care • Misfeasance • an act that causes harm to another • court will provide remedy • Nonfeasance • a failure to prevent an injury • courts reluctant to provide remedy • If a person attempts to help there is a duty to exercise reasonable care • Courts reluctant to provide remedy without special relationship

21. 4-21 B – Breach of a Standard of Conduct • What would a reasonable person have done in the circumstances? • Actions that fall below socially acceptable standards create liability for damages • Risk - The greater the risk of injury the higher the standard

22. 4-22 Liability of Children Children liable for their torts • standard is that of a reasonable child of that age Parents not generally responsible for their children’s torts • except where there is obvious failure to control, instruct or supervise or a statute imposed duty

23. 4-23 C - Causation • The injury must be a direct result of the careless conduct • But for test - but for the conduct of the plaintiff no injury would have resulted

24. 4-24 D – Damages • Plaintiff must show injury to self or loss of property as a result of defendant’s negligence – Physical Causation • Remoteness Test • Whether the specific type of injury suffered was reasonably foreseeable - Legal Causation

25. 4-25 Judicial Remedies • Courts will compensate for: • Mental disorder, but not simply mental distress • Economic loss • Court attempts to restore victim to original position

26. 4-26 Defences • Contributory negligence • plaintiff partially responsible for own loss • last clear chance doctrine • Negligence Act now allows court to apportion responsibility Continued on 4-27

27. 4-27 Defences/2 • Voluntarily assuming the risk • a person who volunteers to enter a situation where the risk of injury is obvious cannot recover damages

28. 4-28 Special Situations • An occupier of property owes a duty to people who come onto the property as • licensees • trespassers • invitees • The obligation is on the tenant not the landlord • Occupiers Liability Act Continued on 4-29

29. 4-29 Special Situations/2 Duties of Innkeepers • safeguard property of guests • post appropriate section of Innkeepers Act • prevent guests from becoming intoxicated

30. 4-30 Question For Discussion • Social Host Liability • The courts have found both commercial establishments and private hosts liable for injuries sustained by their guests when they have consumed alcohol on their premises. • What is the standard of care expected of a social host and do you think the courts have gone too far in assessing this kind of liability?

31. 4-31 Modification by Statute • Motor Vehicle Legislation • Insurance is compulsory in most jurisdictions • No-fault insurance schemes help to distribute risk • Vicarious liability of owner

32. 4-32 Negligent Misstatement • People who suffer economic loss because of a professional’s negligent statements may recover damages • Whether a duty was owed is determined by reasonable foreseeability test • This test has been modified by the Anns Case

33. 4-33 Case for Discussion • Haig v. Bamford • This case established the legal principle that:Liability is restricted to situations where the plaintiff knew or should have known that the information provided would be relied on by a limited group. Is this restriction appropriate?

34. 4-34 Strict Liability • Liability when there is no fault • When a dangerous situation is created by an unusual use of property, the owner/occupier is liable for all damages when it escapes • E.g., water, animals

35. 4-35 Vicarious Liability • A form of strict liability—or liability without fault—is imposed on employers when they are held liable for torts committed by employees during the course of their employment.

36. 4-36 Product Liability • Manufacturers are liable for injuries caused by defective products • Plaintiff must establish that the manufacturer was negligent • Breach of manufacturer’s duty can be implied from circumstances • Manufacturers must warn of dangers associated with product

37. 4-37 Liability of Experts • Professionals and experts held to a high standard • require skills and abilities expected of a professional in that field • must exercise skill with degree of care expected from a reasonable person in that profession • inexperience does not excuse incompetence • common practice that is dangerous or careless is not an excuse.

38. 4-38 Professional Liability • Duty often set out in contract • But tort liability requires adherence to a reasonable standard of performance • Courts may extend liability to parties outside of the contract

39. 4-39 Negligence • Standard of care expected of professionals • Reasonable member of the profession • Common practice may not measure up to reasonable standard • Courts will examine the circumstances to determine if the conduct was reasonable

40. 4-40 Case for Discussion • The Hercules Case • In Haig v Bamford, the SCC determined that accountants owed a duty of care to those they knew would rely on the statements they prepared. • In the Hercules case the SCC applied the Anns test and limited the range of liability to only those they knew would rely on the statements they prepared and who used them as intended.

41. 4-41 Risk Avoidance • Professionals should be aware of the standard of care expected of them • Adapt practices to avoid risk • Professionals owe a fiduciary duty to clients • Must act with loyalty and good faith • Must disclose pertinent information • Must use extreme care with funds entrusted to them

42. 4-42 Insurance • Often a condition of practice for professionals • Protects against damages resulting from errors and omissions • Premiums can be a significant business expense • May cover legal costs when professional is sued

43. 4-43 Professional Disciplinary Bodies • Some exercise significant control over their members • With membership required • With power to levy penalties and suspend • Activities regulated by administrative law • Charter rights may apply • Compliance with human rights legislation required

44. 4-44 Other Business Torts • Inducing breach of contract • Deceit • Conversion • Passing off action • Injurious falsehood

45. 4-45 Privacy • Current business concern because access to information has been facilitated by data storage and retrieval systems and by the Internet • Legislation protects private information