Business Ethical Decision And Negligence: A Discussion

The Three Elements of Negligence

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The donoghue case had provided “three basic elements the presence of which is needed to determine negligence on the part of the defendant”. As per the case the “defendant must owe a duty of care to the plaintiff”. The defendant’s actions must be such that the duty of care has not been complied with. There must be some form of injury which has been caused to the plaintiff.

When the question in relation to ascertaining damages arise the remoteness of damages which have been incurred by the plaintiff is taken into consideration. “The damages must not be too remote for the defendant to foreseen or else they would not be liable to be compensated”. This modern approach in relation to damages in negligence had been discussed by the court in the case of D'Arcy v Corporation of the Synod of the Diocese of Brisbane [2017] QSC 103.

There are various test which needs to be applied in order to determine whether the particular element of negligence can be established or not. These tests have been provided through various landmark cases which acts as precedents for determining negligence.

One of the primary test for the purpose of determining whether the defendant owes a duty of care to the plaintiff is the known as the “caparo test”. This test is used to analyze whether a duty of care was owed in relation to a physical injury.  This test had been provided through the landmark case of Caparo Industries pIc v Dickman [1990] 2 AC 605. In this case it had been provided that the concepts of “ proximity, reasonability, foreseeability of the defendant in relation to the duty of care being present has to be established”. This means that if the defendant is able to foresee damages which may arise out of his actions to the plaintiff and the defendant is in close proximity with the plaintiff than it is deemed that the defendant owes a duty of care to the plaintiff. These principles had been discussed in the case of Corporation of the Synod of the Diocese of Brisbane v Greenway [2017] QCA 103.

When the initial element of negligence, which is the presence of a duty of care has been established then the court has to identify the presence of the next element which is the “breach of duty of care” in relation to negligence. The test which is commonly deployed to analyze the presence breach of the duty is known as the “objective test”. The test had been provided through the landmark case of Vaughan v Menlove (1837) 3 Bing. N.C. 467. The rules of the test takes into consideration of the actions of reasonable person to determine the compliance with the duty. As per this case the defendant was held liable for the breach of duty because when a reasonable person was placed in the same situation as him and would have taken additional care of the situation. Thus when the defendant fails to take action which would have been taken by a reasonable person in same circumstances, the defendant is liable for the breach of duty. The test has been applied in various cases in Australia to determine negligence such as the case of Stokes v House With No Steps [2016] QSC 79.

The Caparo Test

The third and final element of negligence is “causation” and the court determines it generally through putting into the situation the “but for” test when the issue is related to physical injury. The test has been established through the landmark case of Barnett v Chelsea & Kensington Hospital [1969].  The concept of the test is simple, negligence of the injury would not have been caused “but for” the breach of directors duties. As per the facts of the case the plaintiff was a relative of a person who is dies due to the alleged negligence by a hospital who is the defendant. In this case the plaintiff was suffering from a terminal disease and would have died even if the doctor had not violated the duty of care. Therefore in the given situation there was no negligence. Thus as per the test it can be derived that only where the injury is the result of the carelessness of the defendant towards a owed duty of care can the concept of negligence may arise.

When it comes to the remoteness of damages the court apply the forseeability test which had originated from the case of The Wagon Mound no 1 [1961] AC 388. In this situation only those damages can be recovered by the plaintiff in case negligence is determined, which can be reasonable foreseeable by a reasonable person in the same situation. The provisions of this case also have been applied in various cases across Australia such as the case of Murphy v Brentwood DC [1991] AC 398  

When the presence of negligence has been determined the defendant has the right to avail certain defenses under the provisions of common law which may reduce or abolish the liability owed by the defendant to the plaintiff. This defense of commonly called “contributory negligence” . One of the primary cases in Australia where the concept of contributory negligence had been discussed by the court is the case of Railways v Halley [1978] 20 ALR 409. In this case the presence of this defense reduced the liability of the defendant owed to the plaintiff with respect to negligence.  The process  of establishing contributory negligence is the “same which is used for establishing negligence”. In this situation the defendant has a duty of care towards himself and thus he must act as a reasonable person in same circumstances and taken the same level of care towards himself. In addition the injury would not have been caused to him if he was not himself negligent. Once the presence of contributory negligence is determined in the case the liability of the defendant may be reduced or abolished. The damage in relation to the negligent act is proportionated by the court based on the level of negligence made by the plaintiff himself. The percentage of contribution reduces the percentage of damages.

The Objective Test

The above discussed proportion has been done by the court in the case of Jackson v McDonald’s Australia Ltd [2014] NSWCA 162 where the situation involved a slip and fall case. In this case the court held that there was “30% contribution of damages in form of contributory negligence by the plaintiff himself and thus he damages were reduced by 70%”.

Thus from the above discussed provisions it is clear that a systematic approach is required for the purpose of establishing negligence. Thus establishing negligence requires a three step process. Duties of care, breach of duty and causation have to be established one after the other. In this case it has been provided that Alice is the owner of the boat in which the accident was involved. In the situation it has also been stated that Marcos was her client who met the accident. Thus here Alice would be the defendant and Marcos would be the plaintiff. In this situation while determining the presence of a duty of care the principles of the Donogue case has to be applied. In addition the caparo test also needs to be applied in the situation. While applying the test in the given situation it can be determined that Alice would have seen that her actions would have reasonably and foreseeably harm any person present on the boat. In addition the Alice was in close proximity to Marcos. Thus a duty of care is owed by Alice to Marcos. The duty of care can further be established through the application of the neighbor principle. In the given situation it is evident that negligence of Alice will harm Marcos thus a duty of are exists.

The establishment of breach of duty of care is the next process in the situation. This is done through the application of the objective test as provided through the Vaughan case. When a reasonable person is placed in the situation of Alice, she would have ensured that the floor of the boat is properly matted so that there is no accident. In addition when the accident had been caused a reasonable person would have ensured that the boat is taken back, which was not done by Alice. Thus it is clear that the objective test has not been satisfied and the duty of care has been breached by Alice.  No reasonable person would have indulged in the actions which had been indulged by Alice in the situation.

Causation and the 'But For' Test

Further the element of causation needs to be established. In this situation therefore the “but for” test has to be applied in the given situation. It has been provided in the given situation that Marcos had slipped on the wet flooring of the boat. In this situation through the application of the test it can be determined that Marcos would not have been injured in situation where the floor of the boat was not wet. Thus the application of the “but for” test in this case has been satisfied. In the same the element of causation in this situation has also been established. Thus in the given situation where all elements have been established there is negligence in the case.

A reasonable person would foresee the damages which have been caused to Marcos in the given situation. Thus Alice based on the test of remoteness of damages is liable to compensate Marcos.

However in the situation Alice has the right to take a defense under the provisions of contributory negligence. This is because Marcos was negligent himself in relation to the injury caused to him. He was supposed to wear boots which were skid proof however he was only wearing slippers in spite of being warned. Thus if he would have been wearing the boots he would not have been injured. In this case there is contributory negligence on the part of Marcos. Thus the court will proportionate the damages to be paid by Alice.

Conclusions

Thus it can be stated that although there is negligence in the part of Alice, there is also contributory negligence on the part of Marcos. Thus the damages to be paid for negligence would be reduced.

• The ethical approach in relation to the situation by Alice

In this situation it can be stated that the approach which has been used by Alice is the Utilitarian Approach as she had proceeded with the trip even in situation where there was an accident involved on the boat. When the accident had been caused she could have taken the vehicle in the direction of the harbor, however she did not do so and choose to carry on with the tour so that the other clients are able to see dolphins. This is because the clients had paid for the purpose of seeing dolphin in the tour. According to the utliltranism approach the “benefit of the majority is taken into account” (Ferrell and Fraedrich 2015). Here Alice took into consideration the happiness  of all the other people present on the boat rather than safety of Marcos. She did not consider the seriousness of the injury which had been caused to the Marcos.

• Tensions and Factors which should have been considered and balanced in the circumstances

Remoteness of Damages and the Foreseeability Test

It is evident from the situation the main factor which required attention and importance in the situation was the serious injury which had been caused to Marcos on the boat. The factor in relation to viewing of dolphins by the customers would be considered in this case as the secondary factor. This is because viewing of dolphins is a mere matter of contingency and in the situation where a person had been injured in a serious manner importance had to be provided to the injury caused to the person and the boat must have taken back to the harbor by Alice.

• The best ethical approach which would have been taken by me if I would have been in the position of Alice

In the given situation it would have used the approach provided by “deontology ethics” while making a decision to go on with the dolphin viewing tour or take the boat back to the harbor in situation of the injury (Hartman,  DesJardins and MacDonald 2014). In this situation I would have not carried on with the tour and brought the boat back to the harbor. This is because deontology ethics focuses on the consequences of the action. In this given situation where the people would not have been able to see dolphins would not have been subjected to as much detriment which Marcos would have been subjected to if he was not treated properly within time in relation to his injury. It would have been very inhuman for me to carry on with the tour when a person on my boat is injured in a serious manner. This behavior by Alice highlights her capitalistic nature where she only wants to make profit and not think about safety of others. For me the viewing of dolphins by the customers would have been far less significant than that of treating the injury of Marcos which was very serious.

References

Barnett v Chelsea & Kensington Hospital [1969]

Caparo Industries pIc v Dickman [1990] 2 AC 605

Capps v Miller [1989] 1 WLR 839 

Corporation of the Synod of the Diocese of Brisbane v Greenway [2017] QCA 103

D'Arcy v Corporation of the Synod of the Diocese of Brisbane [2017] QSC 103

Davies v Swan Motor co [1949] 2 KB 291

Donoghue vs Stevenson [1932] AC 562

Ferrell, O.C. and Fraedrich, J., 2015. Business ethics: Ethical decision making & cases. Nelson Education.

Fulbrook, J., 2017. Outdoor activities, negligence and the law. Routledge.

Grant v Australian Knitting Mills. PC 21 OCT 1935

Hartman, L.P., DesJardins, J.R. and MacDonald, C., 2014. Business ethics: Decision making for personal integrity and social responsibility. New York: McGraw-Hill.

Jackson v McDonald’s Australia Ltd [2014] NSWCA 162

Murphy v Brentwood DC [1991] AC 398

Railways v Halley [1978] 20 ALR 409

Richards, B., 2015. Negligence and tort law: the corruption myth. LexisNexis Butterworths.

Stickley, A.P., 2016. Australian torts law. LexisNexis Butterworths.

Stokes v House With No Steps [2016] QSC 79

The Wagon Mound no 1 [1961] AC 388

Vaughan v Menlove (1837) 3 Bing. N.C. 467