Monday, March 1, 2010

Recognizing and Minimizing Tort and Regulatory Risk

It is extremely important to identify and manage possible tort liabilities for a company. There are ways to manage risks effectively but there must be proactive methods taken by the company. Common torts that were covered in our collaboration that could have been prevented or minimized will be addressed below.

The textbook describes a company that disposed of radioactive waste (radium) that was left over from its manufacturing process in an urban area (Jennings, 2006, p. 458). Knowing that radium was a potentially dangerous product, the company continued to dispose of it in an urban area. The company was negligent in the handling of the product. They knew that the product was dangerous. One scientist went so far as to cut off the end of a finger when a piece was lodged in his finger because of the possible contamination. Research should have been performed to see about a more responsible method of discarding the hazardous materials.

Direct causation in the simulation is due to the fact that the company had contaminated the waters of the lake. The contamination caused contaminates to infiltrate the local water supply and a 10 year old girl contracted leukemia. The company knew it was using toxic chemicals and the leak of materials should have been discovered before it had the opportunity to enter the water supply. The company did what it could once the leak was discovered, but there should have been more preventative measures in place. Inspections of the water lines and the plumbing and holding tanks should be performed more often to catch possible leaks.

Violation of environmental regulation due to the water contamination found during a routine EPA inspection. The company was well aware of the prescribed limits of PAH that can be discharged into the environment. The company was not making inspections and self testing itself often enough to ensure that their output was within regulatory limits. While to company complied promptly and cleaned up their discharge. The next inspection showed that the company was in compliance. Regular and frequent tests need to be made of all discharges coming out of the plant. All testing must be documented to prove the company being proactive.

Approaching Kelly Bates to test her resolve would be characterized as an intentional infliction of emotional distress. The company knows that her daughter has leukemia. Approaching Kelly Bates regarding these issues personally would not be in the company's best interest. The emotional stress inflicted on her would cause the courts to be sympathetic to Kelly Bates and could be devastating to the company. It is very important for the company to not stir up animosity for itself by antagonizing the plaintiff. Use lawyers to approach the plaintiff through her lawyers for any information you need regarding Kelly Bates.

Running a private investigation of Kelly Bates would be a violation of her privacy as well as a violation of her constitutional rights. This action would also cause a jury to be sympathetic to Kelly Bates. Having a big company coming at her personally would look like she was being attacked for trying to protect her daughter. The company needs to tread lightly. Stick with the facts of the case. No investigations into backgrounds of the plaintiff could come to any good and would be a public relations nightmare for the company.

The local newspaper printed allegations that the company was being defensive and must be hiding something. This is a tort of defamation. The newspaper reported on something blatantly not true to bring public confidence of the company in question. The defamation would have serious consequences on the business being able to continue its business practices in the future. Releasing information that is being requested is what is needed to give the public confidence that the company is being upfront and honest with any investigation. The company needs to be proactive and work with the public and avenues of information dispersion like the newspaper, radio, and television. Do not give the impression that pertinent information is being withheld or covered up.

Proximate causation is another tort that has been brought to bear in the simulation. Injury was caused due to the company allowing contaminates into the water supply and Kelly Bates' daughter ingesting the water. This is the proximate cause of the injury. There may be a "substantial factor" to see if the injury was directly caused by the contaminated water supply. If it is determined that the leukemia was substantially caused by the water supply being contaminated, then the company can be held liable for the damages (“Proximate cause“, 2010).

The company needs to prevent future litigations by ensuring that inspections of equipment and plumbing be conducted on a regular and frequent basis. Being proactive in keeping future violations from occurring will help to keep the company from being litigated on in the future. The company should be as upfront in handling upcoming litigations needs to work with the surrounding community. Be prepared to open their inspection reports to public scrutiny. Allow copies of inspections to be public for the community to see how efforts to be compliant are being made. The company needs to show the community that it is working with them and the environment that they share. Hiding information or making it difficult to obtain information regarding business practices could cause the community to lose confidence in the company and want to know what is being hidden or omitted from public scrutiny.

References

Jennings, M. M. (2006). Business: Its legal, ethical, and global environment (7th ed.). Mason, OH: Thompson.

Proximate cause. (2010). Retrieved from http://legal-dictionary.thefreedictionary.com/proximate+cause