Tort Risk And Business Regulation Simulation Case Study

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Register to read the introduction… As Cheeseman states “Tort is the French word for wrong.” When the EPA notified Alumina that they had exceeded the safety levels of PAH, they immediately took corrective action and rectified the problem. They realized the importance of maintaining a positive public image and the need to comply with all regulatory guidelines. Upon hearing of the lawsuit Alumina decided to have an independent site study conducted to ensure there were no new environmental violations. If violations were identified they would be able to take advantage of the self-policing incentive the federal government offers. In doing their own independent study, they relayed the message to the community that Ms. Bates accusations that they continued to contaminate the waters of Lake Dira were unfounded. An additional source of the pollution was also identified by an independent scientific journal. They found that mobile sources of air pollution, the increase of traffic was the cause of increased PAH levels. This could pose a threat to human, aquatic, and animal life. The other option discussed was to release a public statement immediately denying the allegations before doing the independent study. This decision would have created more issues and questions for Alumina. The decision to do an investigation into Ms. Bates background is an invasion of privacy. If Alumina decided to use the information publicly they could find themselves in legal …show more content…
decided to settle the dispute by alternative dispute resolution (ADR). This process allows both parties to come together and discuss the issues with a neutral third party. The mediator was successful in coming to a win-win outcome between both parties. The confidential settlement awarded Ms. Bates compensation and punitive damages. It included reimbursement of past medical expenses, a lump sum for future medical needs, and an education fund set aside so the child may attend college in future. In return, Ms. Bates signed a strict confidentiality agreement and a release of all future claims. Alumina is pleased because the cost of ADR is a fraction of what it would have cost to see this case go to litigation. It could have taken years of paying an expensive law firm as well as high paid expert witness testimony. Alumina also needs to consider that if the case went before a jury they would likely side with a ten year-old child suffering from leukemia as opposed to a multibillion dollar company who violated the Clean Water Act and Safe Drinking

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