Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Topic One: The Canadian
Legal System (Part 1)
Copyright © 2016 Pearson Canada Inc.
1-1
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
What is legal liability?
 Text definition: responsibility for the
consequences of breaking the law
 Better definition: responsibility for the
consequences of acting, or failing to act, as
required by established legal obligations
Copyright © 2016 Pearson Canada Inc.
1-2
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Legal Liability:
Consequences Influence Behaviour
What types of legal liability do lawmakers use to
control behaviour?
Criminal liability
Quasicriminal or
administrative
liability
Copyright © 2016 Pearson Canada Inc.
Civil liability
1-3
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Legal Liability:
Consequences Influence Behaviour
What are some examples of laws designed to change
behaviour through different types of liability?
Copyright © 2016 Pearson Canada Inc.
1-4
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Legal Risk: Ford Pinto
 Ford Pinto Case Study
 Ford Pinto Impact Video
Copyright © 2016 Pearson Canada Inc.
1-5
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Legal Risk Management Plan
1. Identify potential legal risks:

Can the business be held liable if something goes wrong?
2. Assess and prioritize each legal risk based on likelihood
and magnitude:


What are the chances of something going wrong?
How much could it cost if something goes wrong?
3. Develop a strategy to address each risk from both
proactive and reactive perspectives:


How can we prevent something from going wrong?
What should we do if something goes wrong?
4. Implement the plan
5. Regularly review and update the plan
Copyright © 2016 Pearson Canada Inc.
1-6
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Legal Risk Management
Strategies
1. Avoid the risk: discontinue the activity or find
another way to achieve the result
2. Reduce the risk: decrease the likelihood of the
risk or minimize its damage
3. Transfer the risk: transfer risk to an insurance
company or to the customer through contracts
with exemption clause
4. Absorb the risk: budget for the expenses with
remote risks or small valued risks (self-insuring)
Copyright © 2016 Pearson Canada Inc.
1-7
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Where do lawyers fit?
 Lawyers are licensed to practice law by the
provincial regulator (Law Society of British Columbia)
 Lawyers can be involved in various stages in various
capacities
 Solicitors and barristers
 Preventing legal problems/reducing risk
 Solving or resolving problems/disputes
 Lawyers can be in the organization or outside the
organization
 Lawyers can assist with an entire issue/transaction
or for part of the issue/transaction
Copyright © 2016 Pearson Canada Inc.
1-8
Smyth, Soberman, Easson, & McGill
The Law and Business Administration in Canada, 14e
Changes in the Legal Industry
 New billing methods and options
 New service offerings
 New technology making legal services more efficient and
effective
 Clio
 Icertis
 Bluejay Legal
 New players and business models
 Changes to regulation
 Legal scholarship
Copyright © 2016 Pearson Canada Inc.
1-9