Regulatory_Risk_Plan

Recognizing and Minimizing Tort and Regulatory Risk Plan Brittny Iman Gill University of Phoenix Organizational Leardership LAW 531 Mark A. Addington June 10, 2010 Recognizing and Minimizing Tort and Regulatory Risk Plan This week in LAW 531 the class learned about intentional torts and negligence. According to the textbook a “tort” is basically a legal wrongdoing in which one party or a party’s property is damaged and another party is at fault. If a court finds the damaging party at fault then they are required at times to pay punitive damages to the injured party. Some common torts are: disparagement or trade libel, intentional misrepresentation, malicious prosecution, and negligence. As part of our assignment for this week the class participated in a simulation for the fictional company Alumina Incorporated. In the simulation Alumina Incorporated was being accused of contaminating the waters of Lake Dira. This contamination of the water allegedly led to the illness of Kathy Bates, a local resident’s daughter. Although Alumina has had a clean tract record, there was one “blemish” on their record five years prior. Five years ago, Alumina was found to be in violation of environmental discharge norms by the EPA. The EPA ordered Alumina to clean up, and Alumina immediately complied. An environmental audit was conducted and the problem was reported as corrected. Kathy Bates claim states that her daughter’s illness can be back to that incident. She goes on to claim that Alumina Incorporated has been contaminating the water for years. Kathy Bates’ claim according to our reading is that Alumina has committed a breach of duty and that their negligence has caused injury to her daughter. In our reading Alumina had a duty of care to make sure that their discharge level was below the norms allowed by the EPA. If Alumina was found to be in continuous violation for the last five years then Kathy Bates’ claim would have merit. For a company such as Alumina to prevent such claims, they would need to be sure that they were doing everything possible on their end to prevent such occurrences. Putting in place regulations and practices to ensure the minimization of contaminates discharged, and the proper procedures to handle cleanup ensure that legally the company has everything in place to prevent such incidents. This prevention plan should include regular checks of PAH levels so that there is record of how much contaminates are released and what was done to control them. Developing a system that regularly checks itself place ensures that the company is actively preventing contamination and detecting any possible risks as they arrive. When claims of contamination hit the media Alumina voluntarily did an independent site study and found that their PAH levels were below the required levels. Doing so blunted Kathy Bates’ argument of continuous contamination, but the illness could have been caused by the violation from five years ago she still had legal grounds to sue for damages. To handle cases like Kathy Bates were litigation is filed against a company one way to expedite proceedings, and minimize expense is to seek alternative arbitration to resolve the issue. Alumina sought intervention from the American Arbitration Association (AAA). Through AAA’s assistance they were able to mediate a settlement with Kathy Bates that worked for both sides at a fraction of the cost of a large and lengthy, public trial. Companies, especially large ones, are usually easy to target. They have large amounts of money and can pay large settlements. By recognizing possible torts, and minimizing the possibility of them occurring, companies can take a proactive approach in minimizing the risk of litigation. Although ADR is not always the most applicable means of settling disputes it should be used whenever possible. With ADR the company can avoid a long trial in the public eye, bad publicity, and can settle the dispute in an expeditious and less expensive manner. References Cheeseman, H. R. (2010). Business law. Environmental, online commerce, business ethics, and international issues, seveth edition. Retrieved from University of Phoenix eBook Collection database.