...Tort Risk Prevention through ERM Jaime Rodriguez LAWP/531 May 25, 2013 Gregory Martin Tort Risk Prevention through ERM The business regulation simulation proved to have a variety of potential tort risks in the exercise. Alumina Inc. had the misfortune of being caught with a violation by the EPA and failure to have appropriate measures in place led to the allegations from Kelly Bates. Although the company corrected the problem, it was not clear what steps Alumina Inc. continued to take after the incident occurred. Following the seven steps as defined by Tony Harb would provide Alumina Inc with a structured model to follow and to manage their risk with greater efficiency. Tort Violations The initial violation that Alumina Inc. was found guilty of was having a discharge that was above the standards set by the Environmental Protection Agency (EPA). With Alumina Inc. being situated in proximity to Lake Dira, they need to have stringent policies in place to ensure that any discharge from their plant would not exceed the maximum amount allowed by the EPA. Failing to maintain this standard has resulted in negligence on their part regardless of whether or not they addressed the problem in a prompt manner. Although the issue was corrected quickly, the damages continued further down the road and exposed the corporation to the potential for lawsuits against...
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...ERM Paper LAW/531 ERM Paper The business regulation simulation presented involves Alumina Inc., a United States based aluminum manufacturing corporation located on the fringes of Lake Dira. Alumina was discovered to be in violation of environmental discharge norms following a routine EPA compliance evaluation inspection five years ago. The company subsequently corrected this violation and has since enjoyed a good overall environmental compliance record. This paper will identify potential tort risks resulting from this violation and utilize the seven-step Harb process to mitigate associated business risks. Torts Alumina Inc. is considered one of the largest aluminum makers in the world. The company operates in Erehwon and is under the EPS’s jurisdiction in region 6. The first tort against Alumina was found to be negligence. Five years ago, Alumina failed to follow the environmental discharge norms set by the EPA that resulted in high levels of PAH in the samples. Polycyclic aromatic hydrocarbons (PAH) are a family of chemicals primarily derived from oil and coal but also produced as byproducts from burning of a variety of materials (Nevison, 2008). The EPA demanded a clean-up in which Alumina quickly complied and rectified the negligence allegation. Alumina was allowed to continue business without prosecution and complied with all regulation following the incident. However, Kelly Bates, a resident of the community where Alumina operates, is claiming that her 10-year-old...
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...A tort is a civil violation that causes injury or harm to a party, which tort law seeks to provide relief for those damages (Tort Law Overview, 2010). There are several main categories of tort law that are “intentional torts, negligent torts, and strict product liability torts” (Tort Law Overview, 2010, para. 4). We will use the above-mentioned categories to discuss the tortious acts caused by Nonlinear Pro against Quick Takes Video. We will identify potential tort risks, apply Harb’s 7-step risk management process to the main tort violation to mitigate the risk, and discuss when it is time to involve legal counsel. Potential Tort Risks After reviewing the product liability video Team A found there were a number of torts violations, we will discuss intentional torts, negligence, product liability. Intentional Torts According to Cheeseman (2010) an intentional tort is, “a category of torts that requires the defendant possessed the intent to do the act that caused the plaintiffs injuries” (p. 75). Here, we will discuss how Nonlinear Pro intentional misrepresented the product to Quick Takes Video. Intentional Misrepresentation. Intentional Misrepresentation is, false representation of material facts with the scienter, the innocent party must rely on the misrepresentation, and there is an injury (Chesseman, 2010). Nonlinear Pro promises Quick Takes Video a superior product that will meet their needs and cut project time in half. These benefits came at a lower cost than their...
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...9 March 2013 ERM PAPER: ASSIGNMENT 2: Identify potential tort risks that were addressed the simulation .Classify the type of each of these torts, such as negligence, strict liability, and so on. Identify a tort violation from the simulation. Then use the 7- step process as defined in the Harb article to apply the risk management to mitigate the business risk associated with that violation. The business regulation simulation presented involves Alumina Inc. aluminum maker, operating in 8 countries. Alumina was reported to be in violation of environmental discharge norms in a routine EPA compliance evaluation inspection 5 years ago. The company corrected the violation and has enjoyed overall environmental regulation compliance record. This paper will identify potential torts resulting from this violation and utilizing the 7 Step Process. Torts: Negligence: The Company failed to follow the environmental discharge. Another tort that would have resulted in litigation would be liability with Alumina, Inc. The managers trying to handle the situation may decide to test for further PAH violations. With a liability tort management should seek some kind of mediation for damages toward the Bates family through AAA (American Arbitration Association). Harb Process: 1. Management Commitment- Risk Management effectiveness: The Company (ALUMINA) must commit in developing and managing the ERM process. Promoting and integrating the benefits of ERM can be beneficial to Alumina as first step...
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...Enterprise Risk Management William Briggs, D. Scott Forman, Benecia Richardson LAW/531 July 16, 2012 Sonja Dickens, Esquire Enterprise Risk Management Enterprise risk management may be defined as “people, systems, and processes working together across the organisation to systematically think about managing a wide range of risks that could impede achieving organisational objectives/opportunity” (Harb. 2008, slide 4). The student writers were asked to watch a video in which product liability was an issue. In the video, Non-Linear Pro sold an underperforming editing system to Quick Takes Video. The students were asked to identify potential tort risks in the video, to use the seven key elements of successful enterprise risk management to help mitigate associated risks, and to determine the criteria of involving legal counsel in product liability disputes. Potential Tort Risks Business-to-business sales are an important aspect of a supply and demand economy. In the video case study Product Liability the transaction demonstrated highlights some of the tort scenarios a business manager may encounter during the course of business. The torts risks in the video are classified in three categories. Although not all the tort risks are appropriate for follow up action, one tort risk is a clear violation. Through a process of analysis, the determination of the business manager may be to involve legal counsel to recover damages for the tort. There...
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...ERM Paper Effective business management requires that organizational leaders balance risks with outcomes. This is necessary as without taking some risks, organizations will never be able to expand and grow in their industries. Unfortunately for many organizations, this balancing act is not strategized and as a result risks control the organization instead of the organization controlling the risks. To prevent this from happening it is necessary to engage what is known as Enterprise Risk Management (ERM) (Cheeseman, 2010). This essay will examine how ERM strategies can be used to mediate the effects of tort risks and violations. Potential Tort Risk The type of tort risk that was addressed in the simulation was injury to plaintiff, personal injury. Actual cause: Ms. Bates was claiming that if the Alumina Inc. situation had not occurred five years ago, then her daughter would not have leukemia. Special negligence doctrine: a tort that permits a person to recover for emotional distress caused by the defendant’s negligent conduct. Negligence Per Se: Violation of a statue that causes an injury, statue was enacted to prevent injury. Strict Liability (Rationale): The activities of Alumina Inc. five years ago did place the public at risk, even though reasonable care was taken. These tort risks would be classified as Unintentional Torts (Cheeseman, H. R., 20120). The simulation also presented some other tort risk. The tort risk would have been a result of Alumina Inc., counter...
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...ERM Paper Atul Govande, Kyle Cashulin, K.Yamada-Yuge, Miguel Montano LAW 531 April 2, 2012 JAMES EISENMAN ERM Paper Our Team selected option-2 part of the assignment. We watched the Product reliability video. During the video presentation, Quick Take Video, a video editing company, purchased the video editing software from Non-Linear Pro. They purchased this software hoping to reduce their existing video editing time. They selected this software because the sales person from the Non-Linear Pro Company assured Quick Take Video that the software would accomplish their needs to cut the video editing production times in half. The day software was delivered to the company, employee Janet and her associate quickly started working on it. After completing the training and going through the manuals, they were unable to make the software perform as assured by the Non-Linear Pro. They were unable to get the software functioning more than five minutes because of software crashes and lock-ups. Their supervisor questioned their findings about the software. Janet and her associate explained to the supervisor that the entire company took one day training and read the manual but still could not get software working. No-Linear Pro suggested that product training will help the software to be up and running in a day and will be twice as fast reducing the production time in half. To make thing worse Janet cut her finger on a sharp flange from the CD drive. The packaging was very poor...
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...Enterprise Risk Management Lori Abbott Law 531 September 24, 2012 Charles Burr Enterprise Risk Management Enterprise risk management (ERM) is the latest name for a risk management approach to business risks. Forerunners of this term include corporate risk management, business risk management, strategic risk management, integrated risk management, and holistic risk management (D'Arcy, 2001). Implementing the techniques of ERM will allow businesses to manage any potential tort issues and manage any potential civil suit cases. Tort is defined as a wrongful act or damage done willfully or negligently. The circumstances involving a tort can be strict liability or breach of contract that can bring about a civil suit (Cheeseman, 2010). This paper will provide potential tort risks that arose in the product liability video between Non-Linear Pro (NLP) and Quick Takes Video (QTV), identify a tort violation, and apply the 7-step process of enterprise risk management to mitigate the business risk associated with the violation. Potential Risks Some of the potential risks for NLP are the editing system has taken longer to set up, it has defects in manufacture and design, and it is an inferior product that did not meet the expectations of QTV. QTV leased the editing system from NLP with the understanding the new editing system would save QTV a substantial amount of time. The fact the videos had to be digitalized before the editing system could used was not mentioned...
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...ERM Team Paper Whenever an individual purchases a product he or she has certain expectations. One expectation may be that the product works the way it is advertised. Quick Take Video is in dispute with Non-Linear Pro for an alleged faulty video editing program. Team B will identify the potential risks that arose in the product liability dispute, identify the tort violations, and use the seven-steps process to apply the risk management process mitigating the business risks associated with the violations. Identification of the Potential Risks that Arose in the Product Liability Video Entering into a contact creates the potential for tort risks and violations. Regardless of the type of contract that we enter when purchasing a product, when one expects the product to work for the purpose in which it was intended. In the product liability video that Team B viewed, Non-Linear Pro implied that their video editing system was an easy to learn, top-of-the- line video editing system. After putting the equipment to use, employees began to realize that the top-of-the-line system was everything but top of the line. Inadequate memory, the Non-Linear Pro’s editing system could not keep up with the high-resolution and crashed constantly. Employees had each taken a one-day course with their trainer, reviewed the video tutorial and read the manual, without any positive results. It is very clear that the Non-Linear Pro misrepresented the quality of their product to Quick Takes Video....
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...Business Regulation and Essential Risk Management Lamont Clark, Cristina Mancha, Bobby Jo Sonon, Gwendolyn Wilson, Arnie Zhang, Business Law/531 22 April 2012 John Fossum Business Regulation and Essential Risk Management Common law placed the risk of loss to goods on the party who held title to the goods. Article 2 of the Uniform Commercial Code (UCC) rejects this notion and adopts concise rules for risk of loss that are not tied to title. It also gives the parties to a sales contract the right to insure the goods against loss if they have an “insurable interest” in the goods (Cheeseman, 2010 p.296). Enterprise risk management is processes to achieve future strategic objectives try to control the results that uncertain factors cause, which are expected acceptable ranges that ensure and promote the realization of the overall interests of the organization. Enterprise risk management (ERM) framework is the integration concept on the basis of the internal control framework of Fraudulent Financial Reporting National Committee of Sponsoring Organizations Commission (COSO) belonging to the Treadway Commission in September 2004. ERM is participated by the Board of Directors, management and other employees, which uses in Strategy formulation and identifies possible potential impacts on matters of the enterprise. It also manages risks within the scope of its risk appetite. ERM provides reasonable protection for the enterprise to achieve the objective. ...
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...Enterprise Risk Management The Non-Linear Pro salesman told the manager of Quick Takes Video that the editing system leased would allow the employees to edit material twice as fast after only a day and a half of set up and training. After all employees received the one-day training course, completed the video tutorial, and read the manual, problems with the equipment stopped production of a Quick Takes Video project. During an attempt to insert a CD, an employee cut her finger on a sharp edge of the poorly designed equipment. Two different types of torts arose in the Product Liability Video. One type, an intentional tort occurred as a result of the implied warrantee when the salesman described the benefits of the editing system. The employee’s cut finger could result in an unintentional tort because the manufacturer has the requirement of selling a safe product but did not intend to harm the employee. The main tort violation from the video involves the implied warrantee given by the Non-Linear Pro salesman. The manager of Quick Takes Video perceived the quote taken from the video Cheeseman (2010), “Any of your editors, if they’re computer savvy, they’re going to pick this up in a day, day and a half tops” (video, 02:79), as an expressed warrantee. This perception persuaded the manager to lease the equipment. Team A used enterprise risk management (ERM) to analyze the business risk associated with the violation (Harb, 2008). Adequate Compliance Standards and Procedures...
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...Enterprise Risk Management (ERM) provides a framework of planning, organizing and controlling activities that made by organizations in order to manage and minimize the effects or risk on the organization’s capital and earnings. ERM is also associated with accidental losses, which include financial, strategic, operational, and other risks. Every organization must follow all the local, state, and federal laws they must also comply with Environmental Procreation Agency (EPA). Alumina Incorporation is an international organization that operates in more than eight countries, which operates out of the United States. In the years Alumina Inc. has maintained a good environmental regulation with only one violation in recorded five years ago. A lawsuit involving Alumina Inc. which claims that the EPA violation from years ago was the cause of a 10-year-old girl’s diagnosis with leukemia. This paper will discuss the potential tort cases that could transpire from the Alumina Business Regulation simulation and the seven-step process of Enterprise Risk Management (ERM) dealing with the potential negligence case against Alumina Inc. The tort case involving negligence by Alumina Inc. would be the most obvious tort because of the claim made by the mother of the 10-year-old with leukemia. This would be a negligence case involving a violation of a statute making this a case of negligence. Policies and Procedures Policies and procedures are the guidelines and rules that are adopted by a company;...
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...ERM 7-Step Process ERM 7-Step Process According to Harb, Enterprise Risk Management is people, systems and processes working together across the organizations to systematically think about and manage a wide range of risks that could impede achieving organizational objectives/opportunities. In this paper we will discuss the potential tort risk that arose as a result of Non-Linear Pro leasing unsatisfactory equipment to Quick Takes, and how to effectively apply the 7-Step Enterprise Risk Management process in evaluating the violation that was imposed upon Quick Takes by Non-Linear Pro, when they failed to supply equipment that performed as advertised it to perform. In the Product Liability Video, Non-Linear Pro leased hardware to Quick Takes. The equipment was leased to Quick Takes with the understanding that it would speed up editing time. Quick Takes soon discovered that the equipment did not have enough memory to get the job done, which caused their competent editors to work tirelessly for two weeks with little results. From the video we gather that Non Linear Pro has committed several tort violations in the dealings with Quick Takes such as: 1. Misrepresenting the quality of the product. 2. Express Warranties – Non Linear Pro made the express warranty as to the way a product would perform, guaranteeing the product would in fact perform that way. 3. Breach of Contract – Product did not perform the way it is intended to. 4. Damages: Benefit of the Bargain- Employees...
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...ERM Paper - Learning Team D ERM Paper - Learning Team D Maintaining effective and compliant business practices is an important part of any management strategy. As shown in the Business Regulation simulation; even one instance of increased liability can cause long-term concerns for a business. Each violation or perceived violation can open the business to questions of negligence and both legal and financial responsibility. To minimize these instances and create a business that has limited liability concerns it is important that management creates and maintains an effective risk management model for the business. Using the simulation provided, our team has identified legal issues and tort violations presented in this scenario, defined a process for managing risk factors, and identified relevant factors in determining what steps to take after a violation occurred. Legal Issues and Principles In the scenario presented Alumina had one Environmental Protection Agency (EPA) violation five years earlier for unacceptable levels of polycyclic aromatic hydrocarbons (PAHs) found in nearby Lake Dira. This contamination was found to have occurred as a direct effect of Alumina’s refining operations. PAHs are carcinogenic chemicals released during refining activities as “suspended particulate matter in the air” (Breast Cancer Fund, n.d.). The company complied fully with the EPA’s order to clean up the contamination as evidenced by a subsequent agency audit. As stated...
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...legal issues that will be presented within this paper. In addition, the legal principles that apply to each of the issues will be discussed. Product Liability is the type of law that holds manufacturers, distributors, suppliers, retailers, and others involved with the product reponsible “for any damage caused by that product (Products Liability Law). This paper will contain important factors about the Product Liability video. For example, Potential tort risks that were addressed within the video will be identified. In addition, a tort violation from the video will be identified. This, in turn, will provide the 7-step process to be applied to the risk management process to mitigate the business risk associated with that violation. Lastly, the criterion in determining if it is an appropriate situation to involve legal counsel in regards to the breach of warranty occurrence will be evaluated. Potential Tort Risks First of all, there are several potential tort risks that are addressed within the Product Liability video. Tort law basically protects individuals from various enterprises and other parties from injuring the innocent either recklessly or negligently. For example, the video explains how the product quality was not represented properly. The company is at fault because they really misrepresented their product for consumers to pay. When the manufacturer expressed that the equipment would do what the consumer expects and it doesn’t live up to...
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