UNIT_11_The_Liability_Risk_09

UNIT_11_The_Liability_Risk_09 - UNIVERSITY OF TECHNOLOGY,...

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UNIVERSITY OF TECHNOLOGY, JAMAICA FACULTY OF BUSINESS AND MANAGEMENT SCHOOL OF BUSINESS ADMINISTRATION INSURANCE UNIT 11 - THE LIABILITY RISK I. THE LIABILITY RISK OBJECTIVES 1. Define negligence and explain the elements of a negligent act. 2. Explain the following legal defenses that can be used in a lawsuit: Contributory negligence Comparative negligence Assumption of risk Last clear chance rule 3. Apply the law of negligence to specific liability situations 4. Explain the defects in the current tort liability system and the proposals for tort reform. 5. Explain the following tort liability problems: Medical malpractice crisis Corporate fraud and lax corporate governance Increase in asbestos lawsuits. Basis of Legal Liability A legal wrong is a violation of a person’s legal rights, or a failure to perform a legal duty owed to a certain person or to society as a whole Legal wrongs include: Crime Breach of contract Tort A tort is a legal wrong for which the court allows a remedy in the form of money damages 1
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The person who is injured (plaintiff ) by the action of another (tortfeasor ) can sue for damages Torts fall into three categories: Intentional, e.g., fraud, assault Strict liability : liability is imposed regardless of negligence or fault Negligence Law of Negligence Negligence is the failure to exercise the standard of care required by law to protect others from an unreasonable risk of harm The standard of care is not the same for each wrongful act. It is based on the care required of a reasonably prudent person Elements Negligence Existence of a legal duty to use reasonable care Failure to perform that duty Damage or injury to the claimant Proximate cause relationship between the negligent act and the infliction of damages A proximate cause relationship requires an unbroken chain of events The law allows for the following types of damages: Compensatory damages compensate the victim for losses actually incurred. They include: Special damages , e.g., medical expenses General damages , e.g., pain and suffering Punitive damages are designed to punish people and organizations so that others are deterred from committing the same wrongful act The ability to collect damages for negligence depends on state law Under a contributory negligence law , the injured person cannot collect damages if his or her care falls below the standard of care required for his or her protection Under strict application of common law, the injured cannot collect damages if his or her conduct contributed in any way to the injury 2
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Under a comparative negligence law , the financial burden of the injury is shared by
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This note was uploaded on 02/26/2012 for the course ECON 101 taught by Professor Adam during the Three '11 term at University of Technology, Sydney.

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UNIT_11_The_Liability_Risk_09 - UNIVERSITY OF TECHNOLOGY,...

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