Minimising your Litigation Risk
As a young lady choosing what to wear, when it came to exposing flesh, I was always told by my mother that “less is more.” (That and my life wouldn’t be worth living if my father ever saw me wearing that in public).
In any event, that adage holds true in litigation as well. Less really is more when it comes to exposing yourself to liability.
The reality is accidents will happen; things will go wrong; mistakes will be made, the unexpected will occur, and problems you’ve never even anticipated will crop up. Such is the nature of life.
When these things happen, people often come to their lawyers for assistance. However, lawyers don’t just need to play a role when things go wrong. According to another old adage; “forewarned is forearmed.” Effective lawyers can identify and plug the holes which may expose you to litigation before an adverse event happens.
Take, for example, the employment contract.
Do you give one to your employees? Many don’t and assume that obligations between employer and employee stem naturally or are implied by law, in the nature of fiduciary duties.
However, the employer and employee relationship is not a recognised category of fiduciary relationships. Accordingly, whether or not an employee owes a fiduciary duty to their employer turns on the facts of each case.
A recent High Court decision in Commonwealth Bank of Australia –v- Barker  HCA 32, further exemplifies the importance of an effective employment contract in protecting your rights and minimising your exposure to litigation.
In Barker the question before the court on appeal, was whether an employment contract contained an implied term of mutual trust and confidence that the parties will not, without reasonable cause, conduct themselves in a manner likely to destroy or seriously damage the relationship of trust and confidence between them.
The Court found that, in the absence of an express term in an employment contract, the Court would not imply such a term.
The lesson learned from Barker is that the employment relationship is governed by the employment contract and the terms contained within it. Employers should ensure their employment contracts and the express terms within them are comprehensive. In doing so, and in the event of an issue arising, the employment contract may very well be called upon to determine the dispute.
But what about hiring practices?
In Willmott –v- Woolworths Ltd  QCAT 601, QCAT found that Woolworths had breached anti-discrimination legislation without necessarily intending to do so. A prospective employee brought a claim against Woolworths because the on-line job application form required him to state his gender, date of birth and confirm his ability to lawfully work in Australia. The applicant claimed that the requirement to supply this information breached Queensland’s Anti-discrimination Act by unnecessarily requesting information during the recruitment process which could form the basis for discrimination.
The applicant was awarded $5,000 and highlights how easily employers can breach anti-discrimination legislation without even intending to.
In light of anti-discrimination legislation and the new Federal privacy requirements, it’s important to consider what information you’re requesting from individuals during an application process to ensure that it’s both lawful and necessary for the task at hand.
What about your property?
If you lease or rent equipment to other parties, then what protections are in place to prevent that party making off with your goods? Or selling those goods to another? Or your goods being seized to pay that person’s creditors?
The last example may occur in circumstances where you have loaned goods to a tenant who is in breach of their lease. If the landlord locks the tenant out and takes possessions of the chattels on the premises, who has a legal right to the goods? In the absence of a PPSR security interest in your favour, it may be the case that your equipment becomes the property of the landlord or someone else.
What about personal injury?
An effectively drafted waiver can provide protection from liability in the event of personal injury occurring on your property or arising from your business or conduct.
I’m not trying to scare you…
…Or make you think that the only think lawyers do is look for ways to sue people.
However, the reality is that our society is becoming increasingly litigious.
Often, being proactive in minimising your exposure to liability and litigation can save you a lot of trouble down the road. It also pays to keep up to date with changes in law. Consulting with your lawyer now may save you thousands of dollars later. We may not be able to erase all risk or exposure, but we can minimise it as much as legally possible.
Simply put, let us take the worry of the “what ifs” from you. That way, you can go about your business with confidence that, even though the vicissitudes of life will still occur, your exposure to legal risk and liability is minimised as much as possible.
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