tort law, including the pros and cons of tort law and the importance of tort law in business environments. In addition the paper will investigate the potential effects of tort reform, and review cases related to tort law, and how it may affect American businesses and consumers. Tort law is an important issue to explore because it relates to the issues of product liability, negligence and financial gain or loss. Today businesses pay out millions of dollars in claims resulting from product liability, manufacturing problems, and losses pertaining to injuries resulting from these claims. The highest payouts typically result from claims arising from physical and emotional distress. If a company can establish a standard for evaluating the seriousness of physical and emotional injury, and limit the liability associated with such claims, they can limit the amount of economic impact associated with tort claims now and into the future.
Overview Tort Law
According to the American Law Institute a tort law is a law that addresses any type of wrong or injury that occurs between civilians; it typically involves personal injuries, or noncriminal activity involving private parties that can be addressed by awarding the wronged party damages. These cases are usually resolved in the form of compensation. There are many examples of cases of tort law. Torts are essentially seen as wrongs, injuries or errors that judicial bodies correct or remedy through lawsuits, where a wrong is defined as an injury or a harm that constitutes grounds for a financial claim by the party that has been assaulted or injured. Sometimes a tort may indeed be a crime, where imprisonment is warranted, however the goal of most tor laws are to provide a remedy for any damages or injuries caused to the injured party and to stop or prevent further damages to the injured parties.
Typically from a business perspective, the types of awards sought from tort laws include the following: losses resulting from earnings or the potential to earn, losses resulting from pain or undue sufferings, and any medical expenses incurred or expected to be incurred from the damages caused by the injury. All of the mentioned include past, previous and expected losses. There are many different torts that typically are addressed, which may include the following: negligence, liability (including products liability), and assault and battery, infliction of distress including emotional distress, and trespassing. Torts include several different categories. These include intentional, where the offending party intended to inflict harm on another party; negligence, where the party inflicting harm did so because of failure to obey certain preventive measure or because they failed to follow laws or fuels; and strict liability where the business entity made or sold defective or substandard products or services. Typically product liability falls into this category.
Types of Tort Laws
Business tort law includes many other areas for analysis. These include the following: Nuisance, where a business or individual parties interfere with one's rights to peace and calm, or when one's behaviors or actions result in offense, obstruction, or dangerous activity. Nuisance may also be prosecuted in the form of public nuisance, where many people are affected, or private nuisance, where one's activities may affect only one person, or many. For example, a business many be prosecuted because one housing owner feels the business is affecting their rights to privacy or because they believe the conduction of business interferes with the homeowner's peace and quiet.
Defamation is another violation of tort law. In this case, a third party may claim a business violated their reputation; there are two categories of defamation including libel and slander. A private party may claim a business destroyed their reputation through libel and slander; to prove this a party must establish a prima facie case, where the party claims a statement was made that was (1) false, (2) a communication was made to a third party, and (3) some harm resulted to the party as a result of the communication, for example, to the individual in question's reputation. This is often the case for high-profile individuals. Very often this is the case for political candidates, who hold office. It is less likely the case for standard business persons; however they must also be certain of their reputation, so tort law is often something business people are aware of.
Invasion of privacy and economic torts are two other areas of law that are often of importance to business persons. Economic torts relate to misrepresentation involving negligence or matters of contract relations. Invasion of privacy may involve portraying someone falsely, or lack of consent when it relates to revealing the facts about a business or about the people working for a business. It may also involve negligence regarding revealing the private information about the clients of a certain business.
Benefits of Tort Law
When used correctly, tort law can help determine whether a company or business is at fault when injury, harm, or loss occurred, and help remedy a situation. This is necessary in a society where accidents, failures, and injuries occur nearly daily. Millions of dollars in damages occur every year, and typically this is the result of product liability, negligence, product failure and similar issues. When an individual experiences financial, personal, or economic loss, it is critical they receive remuneration for the present and future losses incurred. Tort law helps remedy this situation. When the law is followed properly, this helps the individual recover damages so they can continue with their life. In some instances an individual business owner may suffer losses due to a faulty business product. Tort law can help remedy this situation as well. If a family makes its livelihood from a product or service supplied from a manufacturer, and the product is defective, that business may go bankrupt if it is not provided correctly or if the manufacturer is negligent in some manner. If the company provides pharmaceuticals for example and does not provide products in time or faulty products, it is up to the justice system to ascertain who is at fault if customers become injured as a result of the problem. Is it the small business owner or the pharmaceutical company?
These are serious issues that result in millions and billions of dollars of lawsuits each and every year. Tort law is structured so that it helps resolve these issues, but only when it is used correctly. There are some lawyers and legal representatives that try to use tort law in a way that allows them advantages, or in a way that will allow them to gain funds in a wrongful manner. Fortunately tort law is frequently revised so that the judicial system can attempt to prevent abuse of the system. However, it takes a careful reading of tort law to understand the subtle nuances of the system to help prevent these abuses.
A good lawyer and a knowledgeable judicial body will have to use many methods to determine whether or not a defendant is indeed liable in a case where liability or injury has resulted. This is especially the case in an event where negligence has resulted in injury to a third party. Negligence is the most frequent cause of physical and emotional damages, where larger claims are awarded to a plaintiff and where businesses have to work most diligently to help prevent huge business losses that can lead to financial ruin. This is why so much emphasis on tort law reform is addressed in this area, and on risk management prevention so that loss may be prevented.
Negligence is a particularly sensitive issue particularly when it comes to economics. Most businesses would prefer to secure an optimal level of assurance to limit liability, meaning they would like to limit the administrative costs associated with risk. There are two standards; negligence rules, where defendants pay for the harms they caused by unreasonable activity and the strict liability rule where they pay for all harms caused by their activity; which is a better deterrent? In the case of U.S. v Carroll Towing Co., 159 F.2d 169, 174 (2nd Circuit 1947), there were several barges owned by a Marine company tied together off of a pier; the defendants tug boat removed one of the lines connecting the boats to the pier (Giampapa, 2010). A remaining line broke causing the barges to wash away and sink. No one was aboard, but the evidence suggested had someone been there, they might have not sunk. So, the court had to determine if the Marine Company was liable given they could have had someone aboard. This would have depended on whether they could have determined the probability that the line would break, and if they had taken proper precautions to prevent the line from breaking, and many other factors including the weather, and how often these types of accidents happened (Giampapa, 2010). As you can see, determining negligence is a difficult practice (Giampapa, 2010). In this case the Marine Company was held liable.