Identifying_Torts_&_Regulatory_Risks

Running head: IDENTIFYING TORTS AND REGULATORY RISKS Identifying Torts and Regulatory Risks University of Phoenix Identifying Torts and Regulatory Risks This paper will explain a plan I created that can be used by companies like Alumina Inc. on how to identify common torts and regulatory risks. This plan will explain how to identify tort liabilities and how to manage those liabilities are through preventive, detective, and corrective measures. A tort refers to a civil or offense by which the law can provide monetary compensation to the injured party as a remedy (Business Dictionary, 2010). This paper will break down some common torts and regulatory risks found in the Alumina simulation and outline how to manage each individual risk. Any company including Alumina can reduce torts and regulatory risks by taking the proper measures. The torts and reliability risks involved in this scenario raise several legal issues. This paper will cover invasion of privacy, disclosure of information, confidentiality of business information, defamation of character, mediation, and EPA compliance. Identified Tort Liabilities Like any company, Alumina needs to take precautions to prevent these risks and torts by staying in compliance with all federal and state regulations. This will not only keep them alive in the competitive market but also reduce the company’s liabilities and maintain the image the company wants to present to the public. Negligence Tort A negligence tort is a failure of one party to exercise the standard of care required by law that results in damage to that party to whom the duty was owed (Jennings, 2006). For Alumina, legal issues started with the direct pollutant of the water. This is a negligence tort because they did not pollute the water intentionally but did not take all the proper measures to ensure that it did not happen. The company could manage this risk could have been managed by testing the water and staying in compliance with the EPA standards. Another measure would be to change the companies regulations and procedures to make sure employees are doing all they can to ensure they are working within regulations. Identified Intentional Torts Intentional torts occur when someone deliberately comes into contact with another person or his or her property to the point in which damage is done. Invasion of Privacy An invasion of privacy takes place when offensive or unjustifiable access is obtained to someone's personality or personal affairs without his or her permission and knowledge (Business Directory, 2010). Alumina wanted to do a private investigation into Bates personal history to build them a stronger case. This brings in the liability of invasion of privacy. By digging into Bates past this makes Alumina liable for an intentional tort. The best way to manage this risk is to make sure that they are using the company’s legal representation. Companies should get proper legal counseling in an area in which the company brings the risk on intentionally, this can stop this type of tort from happening. Defamation of Character Defamation occurs when a statement is made by one party to another part about a third person which is untrue. Bates wanted to commit slander and make Alumina appear as they had been negligent again without any facts or test to back this statement up. In this situation Alumina would have been able to sue had she gone through with this plan. The best measure for Alumina was to do just as they did and test the waters. In doing so they proved the water levels were below the levels to be in EPA compliance. Regulatory Risks Defamation of Character The FOIA allows citizens to request information from government agencies under certain condition. Bates choose to have the past records brought forth to look into the specifics of the incident Alumina had five years previously. Alumina not wanting to disclose all the information in the report chose to use FOIA exemption four, which allows confidentiality of certain business information to be withheld from the public because of dissemination. In this case the company released the records but was able to withhold some of the information. This is another example in which legal counsel steps in and takes measures to provide only what the law requires. Proper management, legal counsel, and sound decision making is the only way to manage these types of decisions. Mediation Mediation occurs when the two parties involved in a conflict allow a third neutral party to help them come to an agreeable decision without going to court. The Alumina/Bates case went through mediation before stepping into litigation. By settling out of court both the Bates family and Alumina were able to come to an agreement that worked well for both parties. By choosing an ADR (Alternative Dispute Resolution) the company saves themselves the embarrassment of a trial, and the Bates family is awarded money to pay bills and to help with the family’s damages. This was a sound corrective measure for Alumina. Conclusion Alumina was a company with a good public reputation and even though they had an incident not meeting EPA regulations, the company has otherwise operated according to all compliances. This still leaves the door open for tort liabilities, so preventing accidents like this from damaging the company again, implementing proper operating standards into the training of employees and as laws change and regulations change, this needs to be added into retraining. Keeping employees current on his or her jobs is imperative to managing regulatory risks. Another preventive measure for Alumina would be to follow EPA compliances and make sure testing is done so the company is always in compliance. By taking additional operating measures Alumina will put a limit to the amount of torts filed against the company. By settling out of court and using mediation Alumina, was able to maintain the company’s image in the public eye and stay out of a long expensive legal battle. The company chose a settlement offer to pay Bates medical expenses and damages and hold themselves responsible for the sickness of Bates daughter. Had the proper measures been taken none of the legal issues would have existed in the scenario because they would not have been a case. By taking responsibility for a past non-compliance issue Alumina was able to admit to the company’s part in the unintentional tort and by using mediation to correct the issue they were able to remain out of a long court battle. References Business Dictionary. (2010). Retrieved on February 27, 2010 from http://www.businessdictionary.com/ Jennings, M. (2006). Business: It's legal, ethical, and global environment (7th ed.). Mason, OH: Thompson.