Departmental Potential Liability Reduction Report: Finance Focus

This Departmental Potential Liability Reduction Report, prepared by the head of the Finance department, aims to provide information and associated legal concepts crucial for effective functioning, emphasizing the connection between these concepts and the department's liability. It covers sources of law, highlighting legislation like the Insurance Companies Act 1982, and suggests training and internal auditing to ensure compliance. The report also addresses dispute resolution methods, advocating for Alternative Dispute Resolution (ADR) techniques like mediation and arbitration to resolve conflicts cost-effectively, with specified organizational protocols and HR interaction to minimize liabilities. Furthermore, it examines contract creation through offer and acceptance, emphasizing the 'mirror image rule' and recommending workshops and skills evaluations to ensure legally binding contracts are formed, thereby reducing potential liabilities. The report concludes with suggested protocols and training methods to minimize potential liability within the finance department.

DEPARTMENTAL POTENTIAL LIABILITY REDUCTION REPORT
Assumptions of Report: This Departmental Potential Liability Reduction Report (DPLRR) is
prepared by the head of Finance department.
Purpose of the Report/Assignment: Propose of the report is to provide with information and
associated legal concepts that are integral for effective functioning of the finance department.
Essentially, understanding of these concepts would help in gaining knowledge on the association
of the discussed legal concepts with liability of the department’s activities.
WEEK ONE MATERIAL:
Sources of Law:
A. Definitions/Descriptions: Source of law, can be defined as the source of
origin of the laws that governs the nation. The main sources of law in this
regards are, common law that has been developed from the past traditions and
customs of the land, legislation that are the acts of the parliament, European
Union law that came into place due to the association with European Union
and had major impact on the internal laws and European convention on
Human Rights (DiMatteo, 2010).
B. Identification of Sources of Law Relevant to Department: In case of the
finance department and companies that operate in the insurance sector, as
observed in this case, legislation is the most relevant sources of law for the
finance department. The reason being it is governed by acts like Insurance
companies Act 1982. In case the legislations that governs the department is
not abided, it would result in litigation against the department and liability
associated with fines may be imposed on them.
C. Training Methods Suggested to Reduce Behavior That Might Create
Liability: In order to keep the members of the finance department updated
about the legislations and acts that governs the department, training sessions
would be conducted in which seminars would be held to aware them about the
updated legislations and conduct group discussions for ascertaining that
effective understanding of the acts (Phillips, 2012).

D. Suggested Protocols to Minimize Potential Liability: In order to ascertain
that members of the finance department abide to the legislations that govern
the department and there remains minimized liability, internal auditing would
be conducted (Pickett, 2010). This would help in ascertaining that the entire
team member who is not abiding to the acts gets identified and necessary
actions are taken against them.
II. Dispute Resolution Methods:
A. Definitions/Descriptions: One of the most effective and cost effective dispute
resolution method that is beneficial for commercial insurance disputes is
Alternative Dispute resolution [ADR] which may be defined as the method of
dispute resolution without the involvement of litigation. Herein methods like
arbitration and mediation can be useful for finance department (Blake,
Browne & Sime, 2016). In case of arbitration, an arbitrator is incorporated in
order to bring the involved parties to an agreement. In case of mediation, joint
sessions are conducted with the involved parties, determine the ground rules
and identify the issue for its resolution.
B. Identification of Dispute Resolution Methods Relevant to Department:
For the finance department, within ADR mediation and arbitration would be
the most relevant dispute resolution method for the department. The reason
being, the department can resolve associated conflicts in a cost effective
manner and it would require less time as compared to court proceedings. In
this method, the liability is associated with the ways and terms based on which
disputes in regards to resolving claims and contractual issues are to be
resolved.
C. Training Methods Suggested to Reduce Behavior That Might Create
Liability: In order to educate the team members about different dispute
resolution methods and initiatives that are needed to be taken in such
situation, training would be conducted that would primarily involve group
discussions in order to aware them about the different ADR methods (Pollock,
Hamann & Wilson, 2011). In order to help them understand the ways they are
needed to act in each situation, role playing would be conducted, this would

help the in understanding in their responsibility in the dispute resolution
methods.
D. Suggested Protocols to Minimize Potential Liability: In this context, in
order to minimize the liabilities associated with dispute resolution,
organizational protocols in regards to the terms and conditions which opting
for ADR would be specified. In order to ensure that team members are aware
of the protocols to be followed when opting for ADR, one to one interaction
with HR prior conducting ADR sessions would be held (Fiadjoe, 2013).
III. Creation of Contract Through Offer and Acceptance:
A. Definitions/Descriptions: In order to form a valid contract, offer and
acceptance plays an integral role. It is with the help of offer, an open call for
the terms and conditions of a contract is given. Acceptance is another integral
element for forming a valid contract, as it with the help of acceptance, an
offeree conveys that he/she is willing to accept the terms and conditions of a
contract (McKendrick, 2014). For forming a valid contract necessary elements
of offer and acceptance are consideration, that is exchange of an element of
value for another, competency which is ability to form a legally binding
contract, mutuality of obligation i.e. both the parties mutually agree with the
contractual terms and written instrument.
B. Identification of Means of Establishing Offer an Acceptance Relevant to
Department: In case of the finance department, considering its operation and
functioning, it is with the help of ‘mirror image rule’ the occurrence of a
contract through offer and acceptance can be established. In this context forms
exchanged on the part of the involved parties are needed to comprise of same
terms and conditions in order to establish that a contract has been formed. In
context to the operation of the finance team, definite and seasonable
expression of acceptance is tricking and may cause potential liability as terms
addition terms provided by clients may not be aligned to organizational
policies and it may result in liability on the part of the department.

C. Training Methods Suggested to Reduce Behavior That Might Create
Liability: In order to create awareness among team members about the ways
of forming legally binding contract workshops and training would be
conducted wherein information about forming valid contract would be given
and with the help of workshops practical knowledge and expertise associated
with it , would be imparted (Davis, 2015).
D. Suggested Protocols to Minimize Potential Liability: In order to minimize
the liability associated with formulation of an inappropriate contract, skills
evaluation, post-training test would be conducted that would help in ensuring
that the team members have necessary skills or not (Noe, Hollenbeck, Gerhart,
& Wright, 2017).

References
Blake, S. H., Browne, J., & Sime, S. (2016). A practical approach to alternative dispute
resolution. Oxford University Press.
Davis, P. J. (2015). Implementing an employee career-development strategy: How to build
commitment and retain employees. Human Resource Management International
Digest, 23(4), 28-32.
DiMatteo, L. A. (2010). Strategic contracting: contract law as a source of competitive
advantage. American Business Law Journal, 47(4), 727-794.
Fiadjoe, A. (2013). Alternative dispute resolution: a developing world perspective. Routledge-
Cavendish.
McKendrick, E. (2014). Contract law: text, cases, and materials. Oxford University Press (UK).
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage. New York, NY: McGraw-Hill
Education.
Phillips, J. J. (2012). Return on investment in training and performance improvement programs.
Routledge.
Pickett, K. S. (2010). The internal auditing handbook. John Wiley & Sons.
Pollock, P. H., Hamann, K., & Wilson, B. M. (2011). Learning through discussions: Comparing
the benefits of small-group and large-class settings. Journal of Political Science
Education, 7(1), 48-64.