Civil Liability of Organizations in Tort Law

This presentation discusses the civil liability of organizations in tort law, including duty of care, breach of duty of care, and causation of damage. It also covers the criminal liability of organizations under the Work Health and Safety Act 2011, including the categories of offenses and penalties. The presentation concludes with a case study on the liability of Squelch Ltd for injuries sustained by an employee and their potential criminal liability.

Corporate Law
Student Name

 An organization has a civil liability of paying
compensation to the aggrieved party when such party
has been a victim of Negligence of the Organization.
 The law of Tort in Australia has been derived from
English common law.
 The Civil Liability Act 2002 also governs the law related
to Negligence and Tort in Australia.
 To prove that an organization was Negligent in its
operations, the essential elements of Negligence must
be present. The law of Tort in Australia has been
derived from English common law. The Civil Liability Act
2002 also governs the law related to Negligence and
Tort in Australia.
Civil liability of Organizations in
Tort Law

Duty of care is an essential element of Negligence. To
prove that a duty of care was owed to the aggrieved
party it is important to assess such duty by the
application of a test as held in the case Caparo
Industries plc v Dickman [1990] 2 AC 605. The test
of duty of care is a three part test which assesses:
 Whether Harm caused to the aggrieved party due to
the action of the Defendant was reasonably
foreseeable to him
 Whether a proximity existed between the parties
 Whether it is fair, reasonable and just to impose the
liability on the Defendant
Duty of Care

 The Breach of Duty of Care is the second
most essential element to prove negligence.
 In order to prove that the duty of care owed
to the plaintiff had been breached the
application of an objective test is essential as
held in the case Vaughan v Menlove (1837) 3
Bing. N.C. 467.
 Such objective test assesses whether the
defendant met the standard of a reasonable
person.
Breach of Duty of Care

 It is required by the plaintiff to demonstrate
that the loss or injury suffered by him had
been caused by the negligent action of the
defendant.
 The causation of damage is generally
assessed by the application of a ‘but for
test’ as established in the case Barnett v
Chelsea & Kensington Hospital [1969] 1 QB
428
Causation of Damage

 In Australia the legislation that governs the health
and safety standards to be maintained by the
employers is Work Health and Safety Act 2011.
 Section 19 of this legislation imposes a duty of care
on employers. In accordance with the provisions of
this legislations it can be stated that employers are
required to set standards for ensuring that the
employees are provided with a safe environment.
 Failure to comply with the provisions of the Work
Health and Safety Act 2011 can make an
organization face criminal libility.
Criminal Liability of
Organizations

 Category 1- An offense in which a duty holder
exposes a person to risk of death or serious
injury is categorized as an under category one.
 Category 2- failure to comply with the health
and safety duty as provided in the
aforementioned act due to which the a person
is exposed to illness, death or injury is
categorized as a category 2 offence
 Category 3- Failure to comply with health and
safety duty constitutes an offense under
category three
Categories of offenses under
work health and Safety Act

 Category 1- A corporation can face a penalty of 3
million dollars. An individual who is in charge of
conducting a business or undertaking can face a
penalty of 600,000 dollars and five years of
imprisonment.
 Category 2- A corporation can face a penalty of
1.5 million dollars and an individual can or Officer
can be liable to pay a maximum penalty of
300,000 dollars
 Category 3- A corporation can face a penalty of
500,000 dollars and an Individual or officer can
face a maximum penalty of 100,000 dollars.
Penalties of the three
categories of offenses

 Thus after discussing the facts of the case it
can be said that Squelch Ltd is liable for the
injuries sustained by Leonard.
 Squelch ltd had a duty of care towards
Leonard. Such duty was providing Leonard
with a safe working condition.
 However Squelch Ltd. breached such duty by
exposing him to the dangerous working
condition and starting the machine before he
could come out of such dangerous working
area.
Is Squelch Ltd liable for the
injuries sustained by Leonard

 According to the Work Health and Safety Act 2011
it can be stated that employers are required to
provide working conditions to employees.
 Failure to do so would constitute a criminal
offence.
 However, as provided in the case study Leonard
had been exposed to a dangerous working
condition due to which he sustained injuries.
 This offense can be categorized under category
one and requires the organization to pay a
penalty.
Is Squelch Ltd criminally
liable

 Work Health and Safety Act 2011
 Barnett v Chelsea & Kensington
Hospital [1969] 1 QB 428
 Vaughan v Menlove (1837) 3 Bing. N.C. 467
 Caparo Industries plc v Dickman [1990] 2
AC 605
 The Civil Liability Act 2002
Bibliography