Torts and Damages

1. Torts and Damages • Up to now, everything discussed has related to contract liabilities- voluntary assumptions of obligation and risk • Tort duties are legal liabilities independent of contract standing- apply to involuntary assumption of liability and risk • Tortfeasor- party who breaches a tort duty • Victim-party suffering loss due to breach

2. Torts and Damages • Types of torts (Names differ by jurisdiction- many types not listed, all are civil matters • Negligence- unreasonable actions • Fraud- misrepresentation for value • Libel- untrue written statements causing loss • Slander- untrue spoken statements causing loss • Battery- touching without consent • Assault- threatening to touch without consent

3. Torts and Damages LAW Criminal Civil Reasonable Doubt Government prosecutes Jury system Punishment Contract Tort Preponderance of Evidence 2-Party suits Voluntary No punishment Involuntary Punishment

4. Torts and Damages • Intentional torts carry punitive damages • Intent is to make people pay for injuries resulting from their unreasonable acts • Four general categories of tort common in construction • Negligence • Intentional tort/ Fraud • Strict liability • Deceptive practices

5. Torts and Damages • Negligence- failure to act reasonably causing injury to others (most common tort) • Must prove all of the following • Existence of duty to be reasonable • Breach of that duty • Damages incurred as a result of that breach • Causation between breach and damage is direct

6. Torts and Damages • We all have a duty to act reasonably in certain situations (driving, public gatherings, professional relationships, manufacturing and selling) • Duty must be based on a specific act- can’t sue for “general unreasonableness” • Arch/Engr has no duty to contractor, can’t sue for tort (in general) except for things such as safety, injury from design flaw, etc.

7. Torts and Damages • Breach- prove that the specific act was unreasonable for the conditions (speeding, yelling fire). Harder to prove than duty • Damages- injured person must prove loss- no loss-no tort • Causation- loss caused directly by breach (aggravating condition can be included, but not original condition) can be hard to prove

8. Torts and Damages • Making a mistake is not the same as negligence. Reasonableness standard protects to some degree • Misrepresentation of fact is a special form of negligence when no reasonable grounds for believing a statement can be found • Statement issued as fact (“this drug is safe”) • Statement is false (drug causes heart problem) • No reasonable grounds for belief (drug wasn’t tested) • Party justifiably relies on statement (party takes drug) • Damages result (Party has heart damage)

9. Torts and Damages • Negligence per se- violation of statute, no proof of duty or breach required • Valid ordinance was violated • Injured party is member of protected class • Harm suffered is prevented by the ordinance • Violation of statute caused harm or damages • Party suffered loss • OSHA, ADA, EEO, building codes, etc • Currently undergoing re-interpretation

10. Torts and Damages • Liability of designers to subsequent users- duty exists to subsequent users of a product. Remodeling industrial sites • Liability of designers to subcontractors and contractor differs by jurisdiction • Majority rule- no duty exists, so no damages can be collected from designer except for personal injury

11. Torts and Damages • California Rule • Balance test under theory of negligence • Degree of certainty of harm • Foreseeability of harm • Closeness of connection between conduct and injury • Advancing policies to prevent future harm • Assignability of moral blame • Difficult to enforce

12. Torts and Damages • Intentional Tort (Fraud)- presence of intent to cause injury or harm makes tort intentional (difficult to prove intent) • Fraud (deceit, misrepresentation, false claim) is the most common intentional tort in construction

13. Torts and Damages • Fraud • False representation or nondisclosure of material fact • With intent to deceive • Misleading statement was relied on by complainant • Actual damages result

14. Torts and Damages • Deceptive practice laws- discourage fraud and make it easier to bring the case (no longer need to prove intent) • Deception is inherent in the act covered by the statute • Contorts- claiming a contract breach as a tort.

15. Torts and Damages • Contorts • Torts carry higher awards than contract cases • Lawyers “prefer” tort claims • Try to claim some specific action under contract is actually a tort • Historic reluctance by the court to allow breach of contract to be turned into a tort • Mostly for personal contracts (not construction)

16. Torts and Damages • Strict liability-only applied in very limited situations such as manufacture of defective products or practice (blasting) • Manufacturers of defective products are strictly liable for injury IF • Flaw is present at time of sale AND • Flaw causes injury OR • Manufacturer fails to warn of risk OR • Product has correctable design defect

17. Torts and Damages • Strict Liability of product manufacturers is why we have so many warning labels on products • Construction contractors are not considered manufacturers of products • Assumption of risk- common defense against tort in construction (and elsewhere) • Injured parties are responsible for their own injury if they have voluntarily assume risk inherent in the activity (sign a risk assumption to go bungie jumping)

18. Torts and Damages • Proximate cause damages- tort damages are generally greater than contract damages because they include foreseeable AND unforeseeable damages (proximate cause) • Pain and suffering- compensation for experience of pain and suffering over a specified time. Difficult to assess, usually per diem award. Includes emotional pain

19. Torts and Damages • Punitive damages- intentional torts allow exemplary awards used to “make and example” out of offender. Frequently reduced by the court • Tort cases- McDonalds coffee, Toro mowers, Philadelphia hospital • Calls for tort reform, resisted by trial lawyers. Tort does allow for eliminating the incompetent, but can be abused. Key is to find the best balance