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Liability Risk

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A tort is a legal wrong for which the law allows a remedy in the form of money damages. ... Examples: assault, trespass, fraud, libel and slander. Strict Liability ... – PowerPoint PPT presentation

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Title: Liability Risk


1
Liability Risk
  • RMI 3500
  • Intro. to Risk Mang. Ins.
  • Robert Klein

Revised 9/24/07
2
Topic Objectives
  • Types of Torts
  • Defenses Against Negligence
  • Liability and Risk
  • Tort Liability Trends
  • Tort Limitations

3
What is a Tort?
  • A tort is a legal wrong for which the law allows
    a remedy in the form of money damages.
  • Person harmed plaintiff or claimant.
  • Person alleged to cause the harm defendant or
    tortfeasor.

4
Types of Torts
  • Intentional Torts
  • Intentional act or omission that causes harm
  • Examples assault, trespass, fraud, libel and
    slander.
  • Strict Liability
  • Injurer liable for damages, regardless of
    negligence.
  • Examples Work injuries, blasting, explosives,
    wild animals.

5
Types of Torts (cont.)
  • Negligence
  • Injurer is liable for damages to the injured when
    he fails to exercise the proper standard of
    care.
  • Criteria
  • Legal duty existed.
  • Duty not performed.
  • Damages were incurred.
  • Failure to perform duty proximate cause of
    damages.

6
Types of Damages
  • Special Damages
  • can be determined documented
  • e.g., wage loss, medical expense, property damage
  • General Damages (Non-Economic)
  • cannot be measured directly
  • e.g., pain and suffering
  • Punitive Damages
  • intended to punish and discourage others from
    committing the same wrongful act

7
Defenses Against Negligence
  • Contributory Negligence
  • No damages if person hurt contributed to injury.
  • Comparative Negligence
  • Financial burden shared according to relative
    fault.
  • Last clear chance rule
  • Assumption of risk
  • Injured person recognized risk inherent in
    activity.

8
Other Types of Torts
  • Imputed Negligence
  • Employer-Employee
  • Vicarious Liability
  • Family Purpose Doctrine
  • Joint Business Ventures
  • Dram Shop Laws
  • Res Ipsa Loquitur
  • The things speaks for itself
  • presumption of negligence
  • e.g., doctor amputates wrong leg

9
Potential Tort Situations
  • Property Owners
  • Attractive Nuisance Doctrine
  • Owners/Operators of Autos
  • Governmental Liability
  • erosion of sovereign immunity
  • Charitable Institutions
  • Employer and Employee Relationship
  • Parents and Children
  • Animals

10
Liability and Risk
  • What is the traditional purpose of tort law?
  • Liability, compensation deterrence
  • Tort law and insurance.
  • Moral Hazard?
  • Adverse Selection?
  • Principle of Indemnity?

11
Trends in Tort Law
  • Recent expansion of liability, i.e. increased
    willingness of courts to find one party liable
    for damages.
  • Products Liability Professional Liability have
    become problems

12
More Trends
  • Traditional standard contributory negligence
  • Many states have moved to comparative negligence
    standard.
  • Assumption of risk defense has weakened over
    time.
  • Expansion of liability for product defects
  • Demise of Privity of Contract principle.
  • Expansion of defects to include design defects.
  • Extension of defects to include failure to
    adequately warn of dangers.

13
and More Trends
  • Increased general damage awards
  • Evidence suggests it is faster than the inflation
    rate.
  • Total damage amounts vary more.

At this time the family is grieving and suing.
14
Implications
  • Greater safety?
  • Avoidance of activities
  • Higher insurance rates
  • Higher consumer prices, diminished product choice

I liked recess a lot better before the safety
helmets.
15
Controlling Liability Costs
  • Limits on pain and suffering
  • Limits on joint and several liability
  • Encourage dispute resolution
  • No-fault insurance

Thank you for not suing
  • Pros and Cons of Tort Limits
  • How are different interests affected?
  • Moral hazard and deterrence?
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