Business Law - Risk Management and Sources of Law

Flashcards on Risk Management, Sources of Law, Litigation, and Alternative Dispute Resolution

Why Study Law?

The process by which businesses analyze risks, assess risk management strategies, and use legal techniques to deal with those risks.

Identification (Risk Management)

Recognize legal risks (Can we be held liable for this?).

Evaluation (Risk Management)

Assessment of legal risks. (What are the chances of something going wrong?).

Response (Risk Management)

Reaction to legal risks. (What are we going to do about it?).

Risk Avoidance

Eliminate risk; withdraw dangerous product from the market

Risk Reduction

Minimize risk; modify product to reduce danger.

Risk Shifting

Make risk someone else’s problem; buy liability insurance for losses caused by danger.

Risk Acceptance

Live with the risk; do nothing.

Exclusion and Limitation Clauses

Contractual terms that exclude liability for some acts/losses, or limit compensation available.

Incorporation (Limited Liability)

Shareholders not usually liable for company debts.

Laws

Rules that can be enforced by courts

Jurisdiction

A geographical area that applies and enforces a certain set of laws or uses the same legal system.

Civil Law Jurisdictions

Originated in ancient Rome (Augustus Code); e.g., France and most of Europe, Louisiana, and Quebec.

Common Law Jurisdictions

Originated in England; e.g., England, Australia, New Zealand, most of Canada.

Constitutional Law

Rules governing basic operation of law and politics.

Administrative Law

Rules governing creation and operation of agencies, boards, tribunals, and commissions that exercise delegated authority.

Tax Law

Rules regarding collection of money for public spending.

Regulatory Law

Rules governing operation of societal activities: food, pharmaceuticals, trade, environment, transportation modes, telecommunications, broadcasting.

Criminal Law

Rules governing wrongs against society.

White Collar Crimes

Committed by 'people in suits'.

Corporate Crimes

Committed by a company itself

Tort law

Involuntary rules governing wrongs against persons.

Contract Law

Voluntary rules governing creation and enforcement of agreements.

Property Law

Involuntary rules governing voluntary acquisition, use, and disposition of property.

Constitutional Law

Outlines structure and powers of government

Statute Law

Laws or acts passed by the government; also known as legislation.

Common Law

Decisions made by judges in previous cases.

Constitution Act, 1867

Establishes that the constitution rules over other laws and divides powers between Provinces and Federal Government; a law outside of its jurisdiction is ultra vires.

Ultra Vires

Means 'beyond the power'; created by a government acting outside its area of authority.

Federal Government

Represents entire country; Parliament, made up of Senate (appointed) and House of Commons (elected), lead by Prime Minister.

Provincial (Territorial) Government

Represents province (territory), called the Legislature (elected), lead by Premier.

Doctrine of Federal Paramountcy

Determines which law trumps when federal and provincial statutes conflict.

Charter of Rights and Freedoms

Sets out basic freedoms and liberties owned by every Canadian.

Charter of Rights and Freedoms

Rights and freedoms commonly affecting business, but does not protect economic and property rights.

Effective Control test

A government actor consists of institutions for which the government has statutory authority to exercise (a) substantial control over the day-to-day operations, (b) control over policy-making, and (c) provide substantial funding for the institution.

Charter Section 1

Guarantees the rights and freedoms subject only to such reasonable limits prescribed by law as can be demonstrably justified in a free and democratic society.

Fundamental Freedoms

Freedom of religion, expression, peaceful assembly, and association

Democratic Rights

Right to vote in House of Commons and Legislative Assembly elections.

Mobility Rights

Right to leave and enter Canada; right to live and work in any province.

Legal Rights

Guarantees: 'right to life, liberty and security of the person'; 'right to be secure against unreasonable search or seizure'

Equality Rights

Protects individuals from discrimination.

Official Languages

English and French are the official languages of Canada

Minority Language Education

Limited right to have children educated in either official language.

Enforcement

A court may respond to a Charter violation with any remedy it considers appropriate and just in the circumstances.

General Power

Federal government retains the right to make laws for the peace, order and good government of Canada.

Application

Charter applies to federal and provincial governments.

Reasonable Limits Cause

Means that no individual right or freedom can be absolute. There must be limits on individual rights. Government can defend infringing rights by showing it is reasonable and justified.

Notwithstanding Clause

Permits governments to declare any statute valid notwithstanding that it may violate a Charter right; however, law will automatically expire after 5 years.

Parliamentary Supremacy

Ultimate authority rests with governments (elected and accountable), not judges (appointed in Canada).

Charter Dialogue

Government creates laws through legislation; Courts identify charter violations; Government may respond by amending or enacting laws to conform with charter.

Section 35: Indigenous Rights

Provides the basis for recognition and enforcement of Indigenous and treaty rights.

Duty to consult

Requires the Crown to consult with Indigenous Peoples whenever it intends to act in a way that may adversely affect Indigenous rights

Accommodations

Occur when proposed project is adjusted or modified in respond to Indigenous concerns.

Legislation

Two categories: statutes and subordinate legislation. Introduced as “bill”, finalized by “royal assent”.

Regulations

Address the details of the act

Subordinate Legislation

Regulations address the details of the act, Aviation Act regulations address the details airplane maintenance

Function of Courts

Interpret and apply constitution, interpret and apply legislation, create and apply “common law” (judge-made law).

Nature of Equity

Law has formal limitation periods, typically 1-2 years, whereas equity requires speed, i.e. injunctions must be sought as soon as practicable.

Express Trust

Settlor transfers property to the trustee to hold for the beneficiary.

Litigation

Dispute resolution in court; rare, slow, expensive, unpredictable, adversarial, and public.

Regulated Paralegals

Legal Professions Act designated such professionals

Pleadings

Documents used to clarify the nature of a dispute

Plaintiff/Claimant

Person who is making the complaint/claim

Defendant

Person about whom the complaint/claim is being made

Notice of Civil Claim / Notice of Claim

Plaintiff uses to start claim

Response/Reply

Defendant uses to deny facts or liability

Counterclaim

Defendant uses if they want to claim against the plaintiff in the same proceedings

Discovery of Documents

Right to inspect documents in possession of other party that may be evidence

Examinations for Discovery

Process in which the parties ask each other questions to obtain information about their case

Pre-Trial Conference

Meeting that occurs between the parties and a judge where parties outline position in front of independent judge

Mediation

Process in which a neutral person (mediator) helps the parties reach an agreement

Costs

Expenses that a party incurred during litigation

Balance of Probabilities

Means that something has to be more than 50% likely

Class Actions

Allows a single person or small group to sue on behalf of a larger group of claimants

Appellant

Party disputing lower court decision and appealing

Respondent

Party supporting lower court decision

Contingency Fees

Client pas lawyer only if lawsuit is successful, lawyer paid from judgement proceeds

Court Hierarchy and Vertical Precedent

Understanding the court hierarchy is key because stare decisis also works vertically. Courts must follow the decisions of courts above it (but not necessarily below it or beside it).

BC Court of Appeal

Reviews decisions from the Superior/Supreme courts

BC Supreme Court

Can hear any type of case, civil or criminal, hears serious criminal trials in the province, hears serious civil cases (above $35,000), and judicial review applications

BC Provincial Courts Small Claims

Deals with disputes between $5,000 and $35,000 at Small Claims Court, offering quicker, less expensive, informal proceedings with some limitations on claim types and remedies

BC Civil Resolution Tribunal (“BCCRT”)

Tribunal has jurisdiction to deal with non-consensual sharing of intimate images, small claims disputes under $5,000, and many disputes about vehicle accidents, stratas, societies and cooperative associations, which lawyers have limited appearances options, focusing on online resources, communication, and flexible dispute resolution

Administrative Tribunals

Body that resolves issue and disputes somewhere between the government and a court

Reasonableness Standard

Court defers to tribunal’s expertise, only overturns unreasonable decisions

Correctness Standard

Court may overturn any error.

Negotiation

Discussion aimed at settling a dispute

Mediation

Aids with discussions aimed at settling dispute, mediators decisions are non binding

Arbitration

Dispute resolved by an arbitrator, Arbitrators decision is binding on parties