RMI 4224 Chapter 3 Legal Liability 1 One party has committed a tort a Tort civil wrong opposed to criminal other than breach of contract committed by one party against another party i Classified as either intentional or unintentional ii Negligence is the most common unintentional tort causing injury and or damage 2 Person violates a statute or law a Mere violation of a statute may make the person responsible 3 Person or organization assumes the responsibility of another through contract a Referred to as Contractual Liability Legal Obligation the requirement in order for liability policy to pay Unintentional Tort The Concept of Negligence Negligence failure to exercise that amount of care an ordinary reasonable prudent person is required to use to protect others from unreasonable risk of harm or injury Measures of Negligence 1 Prudent person concept a Less formal and more intuitive b Examines care used by a person who allegedly commits negligence and compares that care to with what is reasonably expected 2 Step by step approach a More formal b Used by a claims representative jury or judge to determine negligence c Identifies elements of negligence and determines their presence Elements of Negligence 1 Legal Duty Standard of Care a Must be legal duty between the party who allegedly commits the harm and the party who claims to be harmed 2 Breach of Duty a Must be a breach of duty described above 3 Proximate Cause 4 Actual Loss or Damages a Proximate cause unbroken chain of events leading to the damages a Damages sum of money that as far as possible compensates for a loss b Payment of damages attempts to put the person back in the same financial position as they were before the damages occurred If there are no damages then there is no negligence c Defenses Assumption of risk o Used by people who have allegedly committed negligence o Assumption of risk when one knowingly and voluntarily exposes himself herself to a known danger o Conditions Person must have knowledge of the potential danger and with this knowledge has voluntary exposure to the danger Contributory negligence barred from recovery o Contributory negligence a person adds in any way to his her own injury and is o Used in an accident involving multiple parties o Person must take steps to avoid injury and if he she contributed to his her own injury by not taking these steps then he she is not entitled to collect damages from another party Comparative negligence o Statutory modification to contributory negligence parties are apportioned according to their comparative degrees of negligence o Depending on the state if more than a stated percentage then barred from recovery o Victim s contribution of negligence is considered in reduction of the amount of payment rather than completely barring from recovery o Act of god or nature event produced by a physical cause of nature and not within human control or intervention o If circumstances indicate act of god or nature is the proximate cause then this Act of god or nature defense is used Intervening cause o Person initially thought to be negligent is not truly at fault because of some intervening cause that is the ultimate reason damages occur Statues of limitations o Limits the time in which legal action can be brought o If legal action is brought after the time limit allowed then they are barred from recovery Statutes of repose o Bars an action after a specified time period has run from the occurrence of some event other than the injury or damage o Stricter deadline than statute of limitations Intentional Tort Liability To have a claim the injured party plaintiff must be able to prove Intent 1 2 Act 3 Causation Strict Tort Liability products Absolute Liability Intentional tort liability arises when a person intends to bring about physical or mental harm to another person and that person experiences physical or mental harm as a result of the accused s actions Examples assault battery libel slander invasion of privacy wrongful detention trespass Applied by courts in product liability cases Reduces defense available to manufacturer distributor or seller in the event of defective Absolute liability responsibility without regard to fault or negligence o Explosive or highly flammable material Anyone who possesses stores maintains or transports an explosive or inherently dangerous material is absolutely liable for injury or damage caused by the material regardless of the presence of due care o Firearms o Animals Dangerous animals animals are not considered to be dangerous and so require ordinary care dangerous animals impose absolute liability Examples lions bears pit bulls rottweilers Concept of who can be Held Responsible Vicarious Liability occasions when a person is held responsible for the acts of others Can include negligence and intentional torts Example is agency relationship or general partnership o One person agent acts on behalf of another principal Joint and Several Liability Used when 2 or more parties are found liable for damages o If any of the defendants doesn t have enough money or assets to pay an equal share of the award the other defendants must make up the difference Concept of Responsibility Assumed by Contract Contractual Liability liability that does not arise by way of negligence but by assumption under contract or agreement or as a result of a statute or ordinance Common for one party to assume responsibility for the liability for the other o Referred to as the hold harmless agreement and or and indemnification agreement o Responsibility for the liability of another is risky and increases exposure to loss Indemnification under this arrangement is when one party pays another a sum of money by way of compensation for a particular loss suffered by the latter party o Indemnitor indemnifies o Indemnitee one who is indemnified Concept of Damages 1 Compensatory a Compensates injured parties for damages incurred i Assess damages in terms of money and attempt to restore the party to the same financial condition existing prior to the loss as well as compensating the party for non economic damages 1 Special Damages measurable dollar amounts of an actual loss a Out of pocket costs b Include medical expenses loss of earnings rehabilitation expenses direct damage to tangible property and loss of damaged property 2 General Damages award based on measure of intangible damages incurred from the special damages as well as other facts and circumstances a Intangible property that