Pest Control: Liabilities & Risk Mgmt.- Increase in Lawsuits

1. Fourth Heat Treatment WorkshopPest Control:Liabilities and Risk Management August 5, 2003 by Michael T. Olexa Food and Resource Economics Department

2. This is a Teaching Lecture Based on Hypotheticals and Actual Case Law and is Not an Offering of Legal Advice or Opinion.

3. Pest Control: Liabilities & Risk Mgmt. -- The Playing Field • Increase in Lawsuits • Increase in Regulations

4. Pest Control: Liabilities & Risk Mgmt. -- Increase in Lawsuits

5. Pest Control: Liabilities & Risk Mgmt. -- Increase in Lawsuits Jackpot Justice!

6. Pest Control: Liabilities & Risk Mgmt. -- Increase in Lawsuits Disclaimers

7. Pest Control: Liabilities & Risk Mgmt. -- Increase in Lawsuits On bread pudding: • “Product will be hot after heating”.

8. Pest Control: Liabilities & Risk Mgmt. -- Increase in Lawsuits On clothes iron: • “Do not iron clothes on body”.

9. Pest Control: Liabilities & Risk Mgmt. -- Increase in Lawsuits On a sleep aid: • “Warning...may cause drowsiness”.

10. Pest Control: Liabilities & Risk Mgmt. -- Increase in Lawsuits On a chainsaw: • “Do not attempt to stop chain with your hands or genitals”.

11. Pest Control: Liabilities & Risk Mgmt.-- Increase in Regulations Branches of government

12. Pest Control: Liabilities & Risk Mgmt.-- Administrative Agencies Fourth Branch of Government

13. Pest Control: Liabilities & Risk Mgmt.-- Administrative Agencies • Pythagorean theorem: • 24 words • The Ten Commandments: • 179 words • The Gettysburg Address: • 286 words • The Declaration of Independence: • 1,300 words

14. Pest Control: Liabilities & Risk Mgmt.-- Administrative Agencies • U.S. Government regulations on the sale of cabbage: • 26,911 words

15. Pest Control: Liabilities & Risk Mgmt.-- The Game Plan • Risk Management • Liability Awareness

16. Pest Control: Liabilities & Risk Mgmt.-- Common Denominator EDUCATION Training Training Training

17. Pest Control: Liabilities & Risk Mgmt. -- Outline: • Risk Management • Assessment • Communication • Take Action

18. Pest Control: Liabilities & Risk Mgmt. -- Outline: • Risk Management • Case Study One: Negligence/Workplace Fatality • Case Study Two: Pest Control/Independent Contractors • Case Study Three: Employer/Employee-Vicarious Liability

19. Pest Control: Liabilities & Risk Mgmt.-- Risk Management Assessment Communication Take Action

20. Pest Control: Liabilities & Risk Mgmt.-- Risk Management/Assessment • Risk Management • Assessment • Hazard Identification • Established by law and experience Example: • Law-Pesticide label • Experience-Safe application

21. Pest Control: Liabilities & Risk Mgmt.-- Risk Management/Assessment • Hazard Characterization • Consider potential hazards in different situations • Example: • Fumigation versus Heat Treatment

22. Pest Control: Liabilities & Risk Mgmt.-- Risk Management/Communication • Communication • Important during risk assessment and taking action phase Example: • Providing Information Education Training, Training, Training

23. Pest Control: Liabilities & Risk Mgmt.-- Risk Management/ Take Action • Take Action • Objective: Reduce risk to the lowest practical or achievable level Example: • Once risk is identified, follow through with recommended procedures to handle the risk. • If recommended alternatives exist, select the best alternative. • Implement, and • Keep informed, evaluate, and review.

24. Pest Control: Liabilities & Risk Mgmt.-- A C T

25. Pest Control: Liabilities & Risk Mgmt.-- Risk Management Structured Common Sense

26. Pest Control: Liabilities & Risk Mgmt.-- Case Studies

27. Pest Control: Liabilities & Risk Mgmt. -- Liability Exposure • Cost of doing business.

28. Pest Control: Liabilities & Risk Mgmt. -- Fumigation or Heat Treatment • Both carry inherent liability risks.

29. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics Negligence

30. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Negligence • Omitting to do something that a reasonable person would do under “ like circumstances” or the doing of something which a reasonable person would not do. • Point: Foreseeability

31. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Negligence • Elements of: • Duty • Breach of duty • Causation • Damages or injury

32. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Cause

34. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study One -Negligence/Workplace Fatality Summary of Facts: Victim, a 55 year old male, died of suffocation after becoming engulfed in soybean hulls in a storage bin. Deceased and his co-workers attempted to unload a bin’s compartment containing 18.6 tons of soybean hulls by opening the side gate under the compartment hopper and pounding on the hopper sides to dislodge the hulls. The effort failed to dislodge the hulls. Victim entered the bin to dislodge bridged material with a metal rod. Grain began to flow. When victim failed to join co-workers at lunch, the co-workers decided to look for the victim.

35. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study One - Negligence/Workplace Fatality Results: Defendant employer liable. Legal Cause: Negligence

36. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study One - Negligence/Workplace Fatality Negligence • Duty • Breach of Duty • Caused • Victim’s death

37. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study One - Negligence/Workplace Fatality Rationale • Duty • To protect employees from injury.

38. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study One - Negligence/Workplace Fatality Rationale • Breach of duty • FAILED to develop, implement and enforce a written safety program. • FAILED to ensure that workers entering storage areas wear safety belts or harnesses equipped and properly fastened life lines. • FAILED to ensure that safety signs were posted to warn of workplace hazards • Caused • Victim’s death

39. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Importance of Risk Management

40. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study Two - Pest Control/Independent Contractors Summary of Facts: Defendant, owner of milling complex, hired a fumigator to treat the complex. Shortly after the fumigation, several students visiting the complex became ill. The students sued the owner. Defendant owner argues protection from liability because injury caused by hired independent contractor.

41. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study Two - Pest Control/Independent Contractor Results: Defendant owner liable

42. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study Two - Pest Control/Independent Contractor Rationale: Nondelegation Rule • In general, a party is not liable for the negligent act of an independent contractor • Exception generally recognized: • When party employs a contractor to carry on an inherently dangerous activity, that party cannot insulate themselves from liability.

43. Fumigation Defendant-Milling Complex Owner Fumigator/Independent Contractor Plaintiff-Injured Parties Heat Treatment Defendant-Milling Complex Owner Heat Applicator/Independent Contractor Plaintiff-Injured Parties Pest Control: Liabilities & Risk Mgmt. -- Legal Basics/Negligence Case Study Two - Pest Control/Independent Contractor

44. Pest Control: Liabilities & Risk Mgmt. -- Legal Basics Legal Basics Vicarious Liability

45. Pest Control: Liabilities & Risk Mgmt. -- Employer/Employee--Vicarious Liability Case Study Three - Employer/Employee Summary of Facts: At 8:30am in August of 1996, plaintiff placed her pet snakes on the outdoor deck of her house. All snakes were healthy when placed on the deck. At noon, the defendant’s employee arrived and sprayed the home and a portion of the deck. When the plaintiff arrived home, all the reptiles were dead. The pesticide used was toxic to reptiles. Plaintiff sued. Defendant employer found vicariously liable for the actions of its employee.

46. Pest Control: Liabilities & Risk Mgmt. -- Employer/Employee--Vicarious Liability Case Study Three - Employer/Employee Vicarious Liability: Defined • Employer is held liable to a third party for the civil wrong of the employee for no other reason than the fact that their exists a job relationship between the employer and employee and that the employee was acting within the scope of that relationship when she committed the civil wrong.

47. Pest Control: Liabilities & Risk Mgmt. -- Employer/Employee--Vicarious Liability Case Study Three - Employer/Employee A Form of Strict Liability • Employer may be sued for injuries caused by the employee to a third party even though the employer was totally innocent of personal fault in the third party’s injuries.

48. Pest Control: Liabilities & Risk Mgmt. -- Employer/Employee--Vicarious Liability Case Study Three - Employer/Employee Justification • Employer has some control over the employee’s conduct • Employer started the activity from which the civil wrong happened • Employer selected the employee • Vicarious liability comes with the privilege of employing someone • Employer likely to have more money than employee

49. Pest Control: Liabilities & Risk Mgmt. -- Employer/Employee--Vicarious Liability Employer Case Study Three - Employer/Employee Employee Third Party

50. Conclusion