IDIP UnitA Element8

7/23/2019 IDIP UnitA Element8

1/109

SHEilds Ltd www.sheilds.org eLearning: www.sheilds-elearning.com Tel: +44(0)148 80!80"

#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: 1

NEBOSH International Diploma in

Occupational Health & Safety

Please be advised that the course material is regularly reviewed and updated on the eLearning platform.

SHEilds would like to inform students downloading these printable notes and using these from which tostudy that we cannot ensure the accuracy subsequent to the date of printing. It is therefore important to

access the eLearning environment regularly to ensure we can track your progress and to ensure you have

the most up to date materials.

Version 1.3a (05/08/2014)


2/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age:

Element IA8 Regulating Health and Safety.

Learning Outcomes:

On completion of this element, candidates should be able to demonstrate understanding of the contentthrough the application of knowledge to familiar and unfamiliar situations and the critical analysis andevaluation of information presented in both quantitative and qualitative forms.

In particular they should be able to:

1. Describe comparative governmental and socio-legal, regulatory and corporate models.2. Explain the role and limitations of the International Labour Organisation in a global health and safety

setting.3. Explain the role non-governmental bodies and self-regulation has in securing common health and

safety standards in a global economy.

Relevant Standards:

International Labour Conference, Provisional Record 20A, Convention Concerning the. Promotional Framework for Occupational Safety and Health, International Labour. Organisation, Geneva, 2006, Article 4: International system. International Labour Standards, Occupational Safety and Health Convention, C155. International Labour Organisation, Geneva, 1981 International Labour Standards, Occupational Safety and Health Recommendation R164. International Labour Organisation, Geneva, 1981.

Minimum hours of tuition16 hours.

1.0 Introduction to Legislation.

Regulation and promotion of Health and Safety globally is variable. To this end, there are different"frameworks" used across the world when addressing the issue of regulation.

Different States therefore take different approaches to:

Legislation. Regulation. Enforcement.

In the European Union, Member States have enforcing authorities to ensure that the basic legalrequirements relating to occupational safety and health are met. In many EU countries, there is strong

cooperation between employer and worker organisations (e.g. unions) to ensure good occupational healthand safety performance as it is recognised this has benefits for both the worker (through maintenance ofhealth) and the enterprise (through improved productivity and quality). The European Agency for Safetyand Health at Work was founded in 1996 to cooperate with EU States on these issues.

Europe has incorporated another layer of legislation through the issue of Directives (see below), above theMember State's own legislation. These Directives are legally binding on each Member State and thehierarchy of implementation is similar to the United States federal and individual state system of legislation.

In the United States, the Occupational Safety and Health Administration(OSHA) has been regulatingoccupational safety and health since 1971. Regulation of a limited number of specifically defined industrieswas in place for several decades before that, and broad regulations by some of the individual states were in

place for many years prior to the establishment of OSHA.

In Canada, workers are covered by provincial or federal labour codes depending on the sector in whichthey work. Workers covered by federal legislation (including those in mining, transportation, and federal


3/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: *

1.0 Introduction to Legislation.

employment) are covered by the Canada Labour Code; all other workers are covered by the health andsafety legislation of the province in which they work. The Canadian Centre for Occupational Health andSafety (CCHOS), an agency of the Government of Canada, was created in 1978 by an Act of Parliament.The act was based on the belief that all Canadians had "...a fundamental right to a healthy and safeworking environment."CCOHS is mandated to promote safe and healthy workplaces to help prevent work-

related injuries and illnesses.

In Malaysia, the Department of Occupational Safety and Health (DOSH) under the Ministry of HumanResource is responsible to ensure that the safety, health and welfare of workers in both the public andprivate sector is upheld. DOSH is responsible to enforce the Factory and Machinery Act 1969 and theOccupational Safety and Health Act 1994.

In general, the "laws" concerning health and safety tend to derive from enacted legislation or regulations,supported by codes of practice and standards.

In some areas of the world, such as South East Asia, it is compulsory to formally adopt a recognised Healthand Safety Management system. These systems are monitored impartially by approved auditors. There arebenefits in adopting such an approach. In the United States, organisations with approved managementsystems can be exempted from normal inspections by the Occupational Safety and Health Administration.

1.1 The Typical General Hierarchy of the Health & Safety Legal Framework.

The typical general hierarchy of the health and safety legal framework can be laid out thus.

There are substantial differences in the way in which laws are made and in the mechanisms that exist toenforce or clarify any ambiguities in the law. A general outline of these differences is discussed below.

International law governs the relationships between sovereign states and other international institutionsrecognised under such rules of international law, such as the United Nations.

Only sovereign states and recognised institutions can enter into agreements in international law and any


4/109



1.1 The Typical General Hierarchy of the Health & Safety Legal Framework.

rules are only binding on these sovereign states and recognised institutions. In general, states mustincorporate such rules into their own legislation in order for the rules to become binding on other persons orbodies. The power to make law is an aspect of sovereignty, but it does not follow that the law is the samethroughout a single sovereign's territory.

Differences may arise in two ways:

As new territory is added to old, or as two countries are combined under a single sovereign (e.g.German reunification), the laws of the formerly separate units continue distinct unless and until thesovereign assimilates one into the other.

When new law is to be made, the sovereign may legislate for only part of the territories eitherbecause the territory has been divided into separate units, each with their own legislative bodies, orbecause a single legislative body limits a new law to only a portion of the territory.

Hence, the extent of territory through which a given law applies is a political rather than a legal question,more often than not the result of historical accidents involving the division or annexation of land. In the U.S.,for example, the relationship between State and federal law reflects the evolving debate between local andnational interests and their respective claims to be supreme. Conflicts in law arise if a legal right orobligation is validly created under one legal regime e.g. health and safety obligations arising under one law,when seeking to operate within another jurisdiction. This issue, along with many other potential questionscan only be answered by recognising the potential conflicts between ''State'' laws, and producing formalisedsystems to reconcile them.

Public International Law exists to provide a framework within which the relationship between sovereignnation States can be regulated. It provides a system of contract called "treaties" and offers systems toresolve disputes over territorial boundaries, access to the high seas, etc. However, it has no direct effect onthe municipal laws unless each nation waives its sovereignty. Hence, although the Hague Conference onPrivate International Law makes recommendations, it is for each ''State'' to develop its own laws to address

and resolve actual conflicts of outcome.

The municipal law systems are termed Private International Law or Conflict of Laws, and fall intofour sections:

Jurisdiction: It is necessary for litigants to demonstrate a real connection between their dispute andthe court invited to adjudicate.

Characterisation (conflict) in which the court allocates the causes of action to their appropriate legalclassification subject to any issues of public policy (law).

Choice of law: where the result will be different depending on which law is applied, clear andconsistent rules must be applied to decide which competing law(s) should be applied.

The chosen law(s) (the ''lex causae'') should be applied: this is not straightforward because the

court in one State is being asked to give extraterritorial effect to another State's laws, therebymaking its own laws inapplicable (and, arguably, breaching sovereignty).

1.2 International Treaty Law.

International treaty law is in general, by definition, written and appears in the form of the text of the Treaty.Conventions, agreements and protocols all fall under treaty law. It should be recognised that in addition toTreaty law, there are also other forms of international agreement - in particular customary international law- which do not stem from a written text. A rule can only be considered to be customary international law if itis both widespread among states in terms of its adoption and if it is adhered to out of a sense of legalobligation. However, customary international law is extremely difficult to characterise at any point in time,particularly for environmental matters. The following therefore focuses on Treaty Law.

In treaty law, the parties to a treaty make their own law and for these parties a rule of customaryinternational law can be modified or overridden by a rule of treaty law. Treaties are, however, only binding


5/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: "

1.2 International Treaty Law.

on the states, which are parties to them, and their relations with other (non-party) states continue to beregulated by customary international law.

The creation of treaty law has several important stages involving firstly the development of the text atdiplomatic conferences. Once this process is complete and the text f inalised, the treaty will be open for

signature. Signing the treaty, however, does not make it law though there are certain obligations onsignatories for example, to refrain from acts which would defeat the object and purpose of the treaty.

Each treaty will normally set out the conditions under which it will enter into effect, and these nearly alwaysrequire a specified number of states to become parties to it. This is achieved by the process of ratification(for signatory states) and accession (for non-signatory states) whereby each state will deposit a documentof ratification (or accession) with the body identified in the treaty for this purpose. By this process, statesbind themselves to the treaty and will give effect to its provisions in their own laws. The entry into force of atreaty normally occurs after a specified period following the receipt of the last of the specified number ofratifications or accessions.

There are a number of documents, issued by international conferences, which can easily be mistaken fortreaties, particularly where they are signed by the participating states. In particular, Declarations andDecisions are frequently mistaken for treaty law. These may often contain obligations which are strongerthan codes or guidance but do not necessarily have the same binding character as treaty law.

For example, the development of international treaty law for offshore oil and gas activities can be traced tothe UN Geneva Conference of 1958. This conference adopted four Conventions on the law of the sea andincluded a provision for coastal states with sovereign rights to explore and exploit the mineral resources oftheir continental shelves, thus providing for the development of the offshore oil industry.

As a result, in 1972, the UN Conference on the Human Environment (UNCHE) and its Declaration ofPrinciples laid down in general terms requirements for the protection from toxins and other wastes.

As outlined above, most legislation is the enacted will of a sovereign state, e.g. in the UK this is donethrough Acts and Regulations. However, Member States of the European Union are, in addition, subject toEuropean Union Law (EU Law).

1.3 The Treaty of Rome.

Although EU law can be considered as the next tier in the statutory regime, its basis, the Treaty of Rome(1957), which established the European Economic Community, is certainly part of international treaty law.The Treaty of Rome provided a framework for common social and economic policies between itscontracting parties or Member States and for the unified development of these within what really amountsto a supra-national rather than international institution. Accordingly, the means of creating rules and indeedof enforcing them are distinctly different within this special European legal framework.

The Treaty of Rome had nothing specific to say about health and safety. Early Directives only touched onhealth and safety under Article 100. However, Article 100A, added by the Single European Act 1986provided that:

"The Council shall, acting by a qualified majority on a proposal from the Commission in co-operation withthe European Parliament and after consulting the Economic and Social Committee, adopt the measures forthe approximation of the provisions laid down by law, regulation or administrative action in Member Stateswhich have as their object the establishment and functioning of the internal market".

This Article was intended to deal with the problem of the veto that had been built into the original framework

of the Community's decision-making.

Eventually, Article 118A, was added to the Treaty of Rome by the Single European Act. This provided that:


6/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: !

1.3 The Treaty of Rome.

"The Member States shall pay particular attention to encouraging improvements, especially in the workingenvironment, as regards the health and safety of workers, and shall set as their objective the harmonisationof conditions in this area, while maintaining the improvements.

In order to help achieve the objective laid down in the first paragraph the Council, acting by a qualified

majority on a proposal from the Commission and after consulting with the European Parliament and theEconomic and Social Committee, shall adopt - by means of Directives - minimum requirements for gradualimplementation, having regard to the conditions and technical rules obtaining in each of the MemberStates. Such Directives shall avoid imposing administrative, financial and legal constraints which wouldhold back the creation and development of small and medium-sized undertakings.

The provisions adopted pursuant to this Article shall not prevent each Member State from introducing morestringent measures for the protection of working conditions compatible with the Treaty."

1.4 European Law and Member States.

In the UK, a set of regulations known as the "Six Pack" Regulations came about as a direct result of theabove.

This term refers to the following:

The Management of Health and Safety at Work Regulations 1999 (SI 1999/3242) (EC Directive89/391/EEC).

Safe Use of Work Equipment, Provision and Use of Work Equipment Regulations 1998 (SI1998/2306) (EC Directive 89/655/EEC).

Manual Handling Operations Regulations 1992 (SI 1992/2793) (EC Directive 90/269/EEC). Workplace (Health, Safety and Welfare) Regulations 1992 (SI 1992/3004) (EC Directive

89/654/EEC). Personal Protective Equipment at Work Regulations 1992 (SI 1992/2966) (EC Directive

89/656/EEC). Health and Safety (Display Screen Equipment) Regulations 1992 (SI 1992/2792) (EC Directive

90/270/EEC).

EU Law - its development and implementation

Six bodies are involved in the process of developing EU law. The responsibility and authority of each bodyis defined in the Treaty of Rome as amended by the Single European Act 1986, the Treaty on EuropeanUnion of 1992 (adopted by the Maastricht Agreement), the Amsterdam Treaty of 1997 and the Treaty ofLisbon 2007.

These bodies are:

The European Commission. The Council of the European Ministers. The European Parliament. The European Court of Justice. The Economic and Social Committee; and The Committee of the Regions.

Of these, the European Court of Justice, the Economic and Social Committee and the Committee of theRegions are not directly involved in the preparation of legal instruments, but are involved in eitherinterpretation of the law or providing opinions on proposed measures.

On 1st December 2009, the Treaty of Lisbon came into force. This introduced a strengthened role for theEuropean Parliament: the European Parliament, directly elected by EU citizens, was provided withimportant new powers regarding EU legislation, the EU budget and international agreements. The


7/109



1.4 European Law and Member States.

Parliament was placed on an equal footing with the Council, representing Member States, for the vast bulkof EU legislation.

Simplified working methods and voting rules were introduced, along with streamlined and moderninstitutions for a EU of 27 members and an improved ability to act in areas of major priority for the Union.

Qualified majority voting in the Council was extended to new policy areas to make decision-making fasterand more efficient. From 2014 on, the calculation of qualified majority will be based on the double majorityof Member States and people. A double majority will be achieved when a decision is taken by 55% of theMember States representing at least 65% of the Union's population.

The Treaty of Lisbon also created the function of President of the European Council elected for two and ahalf years, introduced a direct link between the election of the Commission President and the results of theEuropean elections, provided for new arrangements for the future composition of the European Parliamentand included clearer rules on enhanced cooperation and financial provisions.

According to Article 249 of the Amsterdam Treaty, the Council and Commission shall make regulations,issue directives, take decisions make recommendations or deliver opinions. There are also additionalinstruments in the form of Resolution and Green and White Papers. All legal instruments are published inthe Official Journal.

These instruments have different levels and means of implementation in the Member States:

A Directiveis an instruction to the Member States to introduce legislation. It is binding only insofaras the result to be achieved by each Member State. However, each authority may choose the formand methods to achieve those results within its own constitutional and legislative framework.

A Regulationhas general application, is binding in its entirety and is directly applicable in allMember States. It is used when there is no overriding need to allow some flexibility at Member State

level and where flexibility is unacceptable. An example of this is the Council Regulation allowingvoluntary participation by companies in the industrial sector in a community eco-management andaudit scheme (EMAS) 761/2001.

A Decisionis binding in its entirety upon those to whom it is addressed. The addressees may beone or more Member States, specific commercial enterprises or social-economic groups. Decisionsmay include fines. An example of this is the European Parliament and Council Decision setting up aCommunity framework for cooperation in the field of accidental or deliberate marine pollution2850/2000/EC.

Opinions and Recommendations are not binding and are meant to encourage certain desirablebut generally unenforceable ways of behaviour in the EU.

Resolutions are issued by the Council and/or Parliament. They are intended to establish thefundamental principles on which Community Action shall be based and to determine the period of

action. They are only declarations of intention. Green Papers and White Papers are issued solely by the Commission. Both are consultative

documents. Green Papers are orientation papers whereas White Papers may lead to proposals forlegislation.

1.5 State Law v Federal Law & the Hierarchy.

The term "State" has several meanings in law:

In private international law and conflict of laws, "State" can refer to a well-defined jurisdiction, withits own set of laws and courts. This jurisdiction may either be a sovereign independent State or a

part (State, province, territory, etc.) of such a State. In public international law, "State" most commonly refers to a sovereign State which is a direct

subject of international law.


8/109



1.5 State Law v Federal Law & the Hierarchy.

For example, the United States is a State under both definitions, but California is a State only under thefirst.

For the purposes of private international law, a '''State''' is a defined group of people, living within definedterritorial boundaries and more or less subject to an autonomous legal system exercising jurisdiction

through properly constituted courts.

The usage of the term "State" rather than "nation" and "country" is to refer unambiguously to the legalgovernment of a territory, rather than to its people or culture.

In the majority of cases, countries are unitary, e.g. Italy and Sweden, which have just one legal system andtherefore, no problem arising with conflict.

In the case of countries electing to assume or retain composite or federated status, the extent to whicheach separated regional unit will constitute a ''State'' will be determined by whether that unit has asufficiently significant volume of laws distinguishable from those applied in other units.

Hence, in the territorially separated States constituting the United States, the laws are sufficiently distinctiveto elevate them to ''States'' for this purpose. However, the use of federal law-making powers means thatcountries may be single units for some purposes, and constituent States for others.

''Federal law''' is the body of law created by the federal government of a nation. A federal government isformed when a group of political units, such as a State or Province join together to form a "federation",surrendering their individual sovereignty and possibly powers to a central government while retaining orreserving other limited powers.

As a result, two or more levels of government exist within an established geographic territory. The body oflaw of the common central government is known as federal law.

Examples of federal governments include those of Australia, the United States, Canada, the former SovietUnion, India, and Germany.

1.6 A Model of State v Federal Machinery - The United States of America.

Taking the example of the United States, Federal Law is the primary Law of the land (see below). TheUnited States Constitution provides for a federal government that is superior to state governments withregard to its enumerated powers. These powers include the authority to govern international affairs, thecurrency and national defence. After the American Civil War, the Fourteenth Amendment applied theConstitution's Bill of Rights to state governments. Issues that arise under any legislation passed by UnitedStates Congress, an Executive Order of the President of the United States or a decision of United States

federal courts pursuant to the Constitution are governed by federal law.

The Supreme Court of the United States has the final authority to interpret the Constitution and makes finaldecisions regarding all federal laws. United States federal laws are in the United States Code. We shalldiscuss the issue of codification below, Deciding whether an issue involves state law, federal law or both isnot always easy because they often overlap. Taking the United States legal hierarchy as an example, theConstitution would form the top of the pyramid.

The constitution establishes the federal government with three distinct branches, exercising:

Legislative. Executive and.

Judicial powers.

Specific provisions for the separation of powers provide a balance between the branches, preventing anyone of them from becoming too powerful.


9/109



1.6 A Model of State v Federal Machinery - The United States of America.

Article Six of the Constitution states that the Constitution, federal laws and treaties are the "Supreme Lawof the Land." Thus, no state may pass laws or act in any way to contradict or interfere with their authority.

The United States Constitution limits the power of the federal government to specific areas, leaving most

lawmaking power to the states. Until relatively recently, federal law was limited to court interpretations ofthe U.S. Constitution, particularly the Bill of Rights, and to those areas of law that Congress was authorisedto address under the Constitution. However, Congress has determined that there is an overriding nationalconcern in such issues as social welfare, employment, health and safety, and the environment and so haspassed extensive legislation in these areas.

In the US, each of the fifty states has its own legal system, including a constitution that creates a distinctsystem of government reflecting the three-part division of powers of the federal government. Each statecreates its own body of statutes, regulations and court decisions. Everyday issues such as commercial,family and property matters are governed by state law.

Figure Above:map showing states of America.

However, many areas involve both state and federal law.

This includes health and safety.As a general principle, if federal funds are involved, some element of federal law will be involved.

The Constitution authorises Congress to spend money for general welfare, including health and safety. Todo so, Congress has, since the advent of the New Deal in the 1930s, typically created cost-sharingprogrammes in which federal funds are offered to state governments under certain conditions. Usually, thestate must match the funds in whole or in part and administer the programme in strict conformity with

Congressional requirements. While no state is required to participate in this type of programme, few statesrefuse. State governments are normally given some freedom in administering these programmes and sopass statutes and regulations to govern the state operation. A body of federal and state law is thus created.


10/109



1.7 Goal Setting v Prescriptive Legislation.

By the beginning of the 20thcentury, there was a mass of piecemeal legislation in place covering manytypes of workplaces and work activities globally. However, many activities were not covered.

This piecemeal legislation had several characteristics.

It was:

Specific, i.e. it related to particular classes of workplace or work activity. Reactive, i.e. it was enacted to deal with a particular problem e.g. 'dangerous machinery'. It only

acted after there had been an accident and did little or nothing to prevent accidents from occurring. Prescriptive, i.e. it said clearly what must be done or what must not be done in particular situations.

Following World War Two, the effects of the new social and technological environment were strongly felt inthe workplace. In turn, these affected health and safety.

For example:

The innovation and inventivenessdemanded by the war effort had radically changed the natureof industrial processes. For example, telecommunications; precision engineering; aviation and thejet engine; nuclear power; electronics and computing.

The rebuilding of industry and housingto meet the challenges of the post-war years and thedemands of the population brought a boom in construction and in the manufacture of consumergoods.

The role of women in the workforcehad changed. In wartime women had been essential to suchnormally unaccustomed jobs as munitions, factory work, agriculture and transport.

The expansion of the trade union movements, to which the war had put a temporary halt, revivedquestions about management by consent, consultation and negotiation.

The nationalisation of key industriesinto state ownership changed the nature of the

employer/employee relationship in them and created new expectations about the employers'responsibilities; and

Social attitudes after six years of war would no longer accept pre-war standards e.g. thedepression and unemployment of the inter-war years.

Goal (aim) setting legislation is concerned with the promotion of self-regulation. To this end, it is notprescriptive. It sets goals and requires employers and others to manage health and safety so that theyachieve them. It allows for flexibility in safety and those who are responsible are allowed to use theirknowledge of activities to design the best controls for hazards

In Europe, there has been a move away from prescriptive legislation to employer self-regulation via riskassessment. Other countries, such as Canada, Australia, New Zealand and Norway have developed similarself-regulation mechanisms.

In Finland, Japan, Sweden, Germany, Korea, China, Mexico, Costa Rica and Poland (to name but a few),the ILO-OSH 2001 system has been adopted. The International Labour Organisation (ILO) is a UnitedNations agency concerned with employment welfare. ILO-OSH 2001 offers a recommended occupationalhealth and safety management system. However, it is not intended to replace national laws, regulationsand accepted standards. The ILO recognises that a management system can only be successful whenoperated in conjunction with a national policy for health and safety.

1.8 Advantages of Goal-setting Legislation over Prescription.

These include:

There can be less legislation which is more generic and less detailed. It needs much less amendment and updating. It can be supplemented by Regulations which are quick and easy to make.


11/109



1.8 Advantages of Goal-setting Legislation over Prescription.

The necessary detailed guidance can be contained in Codes of Practice or Guidance Notes.

Limitations of goal-setting legislation against prescription. It does have some disadvantages.

There is a risk that employers will not realise what is expected of them.

Employers may feel that they can get away with the minimum compliance,since there are noprescriptive requirements.

1.9 The Effects of Government Policy.

Government policy influences health and safety in many ways.

Goal-setting and self-regulation will reflect a style of government. The reaction to major disasters, internationally, has shaped legislation and enforcement. Budgetary restrictions. Government interest in particular areas of workplace health and safety shapes policy and stimulates

focus on particular issues.

1.10 Schemes Designed to Improve Standards.

Breaches of Health and Safety can often result in mere fines.

Fines are a very limited and inadequate form of penalty for many reasons:

Often the level of fine is inadequate. Once paid, that is the end of the matter. Fines rarely affect the profitability of a company and the payment of dividends, so shareholders are

unlikely to be affected. Some companies, which make limited profit or are facing difficult financial circumstances may be

tempted to cut back on safety improvements in order to pay the fine, which is therefore counter-productive.

There is no evidence indicating that fines lead to improved safety.

One response is to assess fines according to some index of the financial resources of the multinationalenterprise. For instance, under the European Union antitrust laws, fines may run up to 10% of the offendingcompany's previous year's turnover. In the case of multinationals, the fine is based on the world turnover ofthe enterprise, not just the turnover generated within the EU by a local subsidiary.

However, this is a limited solution. Fines are ultimately enforceable only by seizing those assets of the

defendant that happen to be located within the boundaries of the country or jurisdiction bringing the case.Thus, a large fine based on the global turnover of a multinational is only partly enforceable when the localassets of the defendant are relatively small. Even where those assets are sufficient to cover the fine,enforcing payment may drive the local operation out of business, with disastrous effects on workers andtrade creditors. Further, fines do not focus on the defective organisational policies and procedures whichoften cause corporate offences.

More flexible and innovative penalties need to be considered if they are to be considered deterrents tobreaching health and safety legislation and allow for improvement in standards.

1.11 Schemes Designed to Improve Standards (cont'd).

Corporate probationis most likely form of sanction to achieve this objective.

Corporate Probation is a supervision Order imposed by a court on a company that has committed acriminal offence. It is impossible, of course, to send a company to prison. Therefore, a corporate probation


12/109




or remedial Order is the most effective means whereby a court can require a company and its officers anddirectors to alter their conduct in a particular way.

For example, in a case where a company has been found guilty of gross negligence and been convicted ofcorporate manslaughter, the court will want to impose penalties which penalise the company for the

offence, which will deter future offences and which will instigate a change in culture, procedure,organisation or activity so that such future deaths or injuries do not or are unlikely to occur.

If a company is fined, once the fine is paid that is the end of the matter. However under a corporateprobation or remedial Order, a company will be placed under supervision of the court. Half the fine could,for example, be suspended pending satisfactory completion of the probationary period. A court may need toappoint an expert or body to supervise the probation.

The terms of the probation Order might be that the company has to review its safety policy, its safetyprocedures, initiate a training programme for directors and senior management or others, require areduction in accidents etc. If after completion of the probationary period, the company has satisfied theterms of the Order then that is the end of the matter. If the company fails to co-operate or comply, thesuspended sentence could be invoked and further penalties could be imposed, including, if felt desirable,the disqualification of directors.

To carry out the Order, the court will probably (but not necessarily in all cases) appoint an expert or healthand safety organisation to supervise the company and report back to the court. The Order and otherpenalties would be in the public domain and therefore, by default, act as Adverse Publicity Orders.

The attraction of this type of Order is that it gives the court the power to set terms which will suit thecompany's own situation and achieve a positive change in the way in which the company operates. Itprovides a flexibility which other penalties do not and has as its objective achieving a positive and long termchange in company behaviour.

The United States of America and Canada are the main countries to introduce this option. In the USA,corporate probation can be imposed on corporations that commit criminal offences. The main objective inthe USA seems to be aimed at forcing companies to pay restitution, preventing them from hiding assets orsubverting payment of restitution but it is clear that the US Sentencing Council also envisaged other typesof corporate criminal offence by giving courts the power to introduce "any probationary conditions related tothe nature and circumstances of the entire case and the purposes of sentencing."

In Canada, the purpose of corporate probation Orders is aimed at improving occupational safety. Theintroduction of such Orders came about as a result of the 1992 Westray Mine Disaster in which 26 personslost their lives. Prosecution of the company failed because of the need to identify a controlling mind ordirecting mind, similar to problems faced in similar UK prosecutions before the introduction of the Corporate

Manslaughter Act of 2007.

However, in the lead up to the Canadian Bill, considerable thought was given to alternative sentencingoptions.

The new Canadian law created a criminal code duty on "every one who undertakes, or has the authority, todirect how another person does work or performs a task.to take reasonable steps to prevent bodily harm tothat person, or any other person, arising from that work or task". The Canadian law provides for probationOrders which could be useful in directly influencing the future conduct of organisations convicted ofoffences.


Among the optional probation conditions available are:

Making restitution.


13/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: 1*


Establishing policies, standards, and procedures to reduce the likelihood of subsequent offences(however, the court must first consider whether it would be more appropriate for another regulatorybody to supervise the development of implementation of such policies, standards and procedures).

Communicating those policies, standards, and procedures to its representatives. Reporting to the court on the implementation of those policies, standards and procedures.

Identifying the senior officer responsible for compliance with those policies, standards andprocedures. Providing, in the manner specified by the court, the following information to the public (i) the offence

of which the organisation was convicted, (ii) the sentence imposed, (iii) any measures taken by theorganisation to reduce the likelihood of its committing further offences and (iv) complying with anyother reasonable conditions considered desirable by the court in preventing subsequent offences bythe organisation or to remedy the harm caused by the offence.

Another severe limitation of fines is that they are targeted at the corporate entity and not at any personnelwho should be held accountable for the offence involved. This would be immaterial if personnel wereprosecuted successfully, but this rarely happens because enforcement resources are usually very limited.

Given the weaknesses of fines, non-monetary sanctions as outlined above could be more effective.Possibilities include incapacitating an offending corporation by dissolution, forfeiture, plant closure or denialof trading privileges.

Adverse publicity is a stronger weapon and one which has already been used against multinationals withconspicuous success. Given the importance large corporations attach to having a good public image, thereis a strong case for exploiting this sensitivity by making publicity available as a court-ordered sentence. Asentence of this nature would require a defendant to publicise details of its offences in specified media, anapproach adopted in a recent pollution case where a Los Angeles shipbuilding firm was ordered to exposeits wrongdoing in an advertisement in the Wall Street Journal.

Used skilfully, adverse publicity orders can hurdle jurisdictional barriers in sentencing. In cases such as thatof Browning Arms in Canada, for example, the practical upper limit of a fine is governed by the amount oflocally seizeable assets and the extent to which those assets can be seized without detriment to localworkers and trade creditors.

Adverse publicity is a potent sanction which can punish as well as spur internal compliance.

A sanction well-suited for this purpose would be the punitive injunction, a criminal variant of the civilinjunction. A punitive injunction could be used not only to require a corporate defendant to revamp itsinternal controls but also to do so in some punitively demanding way. Instead of requiring a defendantmerely to remedy the situation by introducing state of the art preventative equipment or procedures, itwould be possible to insist on the development of innovative techniques. The punitive injunction would thus

serve as both punishment and super-remedy.

One advantage of an interventionist sanction like the punitive injunction is that it can side-step the difficultyof trying to impose an effective fine on the local subsidiary of a multinational. The thrust of a punitiveinjunction is not exaction of money but improving internal compliance. Consequently, it becomes possibleto impose a stiff sentence on a local subsidiary without financially crippling it.

1.13 Loss and Compensation Schemes.

Most civil cases are settled out of court, often under a confidentiality agreement. This is usually the result ofnegotiation between insurers and lawyers. Often the settlement reflects both the need of the claimant to getsome recompense quickly and the defendant's realisation that costs as well as damages will be payable if

unsuccessful in defending an action.

Failure to protect individuals in health and safety aspects may result in personal injury. The Claimant in anaction to recover compensation may claim a "loss". There are different types of "loss" which result in


14/109



1.13 Loss and Compensation Schemes.

payment of compensation known as "damages".

Pecuniary loss compares a claimant's financial position before and after the tort or wrong occurred.

It consists of:

Pre-trial expenses i.e. all the expenses reasonably incurred as a result of the accident from the timeit occurred up to the time of the hearing, such as medical expenses.

Pre-trial loss of earnings. Future loss of earnings (which can be speculative).

Non-pecuniary loss looks at other losses less easy to quantify.

Awards for pain and suffering are based on the severity of the injury. There are generally adoptedsystems of tariffs. This head of damages can include mental suffering due to shortened lifeexpectation or inability to live life to the full.

Loss of amenity reflects the inability of the claimant to continue a previous standard of living. Forexample, impairment of the senses or abilities to pursue pastimes and hobbies.

In order to prove negligence, a claimant has to prove fault on the part of the defendant. This fault is thefailure to exercise the requisite standards as prescribed under national, international or case law.

Some countries, notably some states in the USA, Australia and New Zealand, have put in place systems of"no fault" liability backed by insurance.

1.14 Advantages of a System of No-Fault Liability.

There are several possible advantages.

A system of "no-fault" liability would be likely to offer:

More consistency in damages. More cost-efficient and quicker. More just outcomes; fault-based actions can fail simply because it is not possible to prove the fault

adequately. Less likelihood of out-of-court settlement, which favours large corporations and their insurers.

Disadvantages of "no-fault" liability.

Surprisingly enough, there are some disadvantages:

More cases going to court. At present, the difficulty in proving fault in some cases keeps them out ofcourt. No-fault liability could encourage litigation.

Less satisfying to the claimant. In many cases the claimant needs the satisfaction of having a courtdetermine fault on the defendant.

New Zealand abolished negligence in 1972 and set up a no-fault liability system. Claims for personalinjuries are made through a Compensation Commission financed through contributions from employers andthe self-employed, drivers, health care providers and taxpayers. Injured persons unable to work claim up to80% of pre-accident earnings. If they return to work at lower rates of pay than before, they can claim up to80% of the difference. The system is said to work well.

1.15 Punitive Damages.

Punitive damages are not intended to be compensatory. They are awarded in order to reform or deter


15/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: 1"

1.15 Punitive Damages.

pursuing a course of action such as a breach of health and safety procedure.

Punitive damages are often awarded where compensatory damages are deemed an inadequate remedy.

For their application in the UK (currently only in libel cases), it must be argued that:

There has been oppressive, arbitrary or unconstitutional actions by the servants of government. A defendant's conduct was 'calculated' to make a self-profit and. Where a statute expressly authorises the same.

It is noticeable that Australia and Canada, countries of the Commonwealth, are critical of these criteria andhave refused to follow them.

Elsewhere, Japanese courts do not award punitive damages as a matter of public policy and Japanese lawprohibits the enforcement of punitive damage awards obtained overseas.

In contrast, Punitive damages are a settled principle of common law in the United States. They are a matterof state law, and thus differ in application from state to state. In many states, including California andTexas, punitive damages are determined based on statute: elsewhere, they may be determined solelybased on case law. Many state statutes are the result of insurance industry lobbying to impose "caps" onpunitive damages; however, several state courts have struck down these statutory caps as unconstitutional.

In response to judges and juries which award high punitive damages verdicts, the United States SupremeCourt has made several decisions which limit awards of punitive damages through the due process of lawclauses of the Fifth and Fourteenth Amendments to the Constitution. In a number of cases, the Court hasindicated that a 4:1 ratio between punitive and compensatory damages is broad enough to lead to a findingof constitutional impropriety, and that any ratio of 10:1 or higher is almost certainly unconstitutional.

In BMW of North America, Inc. v. Gore (1996), the Court ruled that punitive damages must be reasonable,as determined based on the degree of reprehensibility of the conduct, the ratio of punitive damages tocompensatory damages, and any criminal or civil penalties applicable to the conduct.

Most recently, in Philip Morris USA v. Williams (2007), the Court ruled that punitive damage awards mustbe limited to the harm caused to the individual plaintiffs involved in the litigation at hand, although harm toothers may be a criterion in determining the reprehensibility of the defendants' conduct.

Question 1.

_____ clearly states what must be done or what must not be done in particular situations.

Question 2.

_____ compares a claimant

1.16 Mechanisms Used to Enforce Health & Safety Legislation.

Criminal action.

Non-compliance with the law of the state may result in prosecution in the criminal courts. Prosecution forbreaches of health and safety could include, fines, imprisonment or other sanctions such as being namedand shamed by the media. Those prosecuted could be individuals, employer or a corporate body.

The role and function of enforcement agencies and powers of enforcement.

ILO Occupational Health and Safety Convention C155 sets out broad requirements for member countries tofollow to ensure health and safety requirements are set into national laws and enforced.


16/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: 1!

1.16 Mechanisms Used to Enforce Health & Safety Legislation.

The convention requires member countries to:

Set up mechanisms to enforce the laws and establish penalties for non-compliance. Establish a system for inspection. expects employees to be provided with information and advice on compliance.

Article 9.

1. The enforcement of laws and regulations concerning occupational safety and health and theworking environment shall be secured by an adequate and appropriate system of inspection.

2. The enforcement system shall provide for adequate penalties for violations of the laws andregulations.

Article 10.Measures shall be taken to provide guidance to employers and workers so as to help them to comply withlegal obligations.

Different states take different approaches to the legislation, regulation and enforcement. In the UK the HSEand local authorities enforce health and safety legislation, under powers provided under the Health andSafety at Work etc. Act 1974.

Under Section 20 of the Act, inspectors can exercise the following powers in carrying out theirduties:

(a) Enter premises at any reasonable time. (b) To take a police constable or any other authorised person with him if there is likely to be

obstructions in the execution of his duties. (c) To make examinations and investigations.

(d) To direct that premises or part of premises remain undisturbed. (e) To take photographs and measurements. (f) To sample or retain unsafe articles and substances. (g) To dismantle or test any article or substance which is likely to cause a danger to health and

safety. (h) To detain articles or substances for examination, and for evidence. (i) To require answers to questions with a signed statement if necessary. (j) To inspect and copy statutory books and documents or any other relevant documents. (k) To require any person to afford him facilities and assistance to enable the inspector to exercise

his powers. (l) Any other power.

Under the Act, Inspectors may also serve:

Improvement notices (Section 21). Prohibition notices (Section 22).

1.17 Laws of Contract.

Definition of Contract.

The whole essence of business life is the making of contracts - contracts to perform work, contracts to buyand sell, contracts to make something, to employ someone, or to use something. We must therefore know

what a contract is, and when we have one. A contract is an agreement between two or more people. Everycontract is an agreement, but not every agreement is a contract. Say two people agree about something tobe done; they are called "the parties".


17/109



1.17 Laws of Contract.

Firstly, the subject of their agreement may be such that neither of them has the remotest intention that anylegal consequences should flow from it. For example, you invite someone to dinner and he says: "Yes, Iwould love to come". You have an agreement, but if he just does not turn up, neither of you would expect tohurry round to court and sue for the cost of the wasted food! So the first essential of a contract is that theparties should intend their agreement to have legal consequences.

Secondly, the agreement reached may have certain things about it which make it such that the law will notenforce it. In other words, although it is a contract, it is not a valid contract.

1.18 Essential Elements of a Valid Contract.

In order that an agreement can be a valid contract that the law recognises and will enforce, it mustcontain certain essential features.

Agreement- There must be agreement between the parties, or a meeting of minds. This is called"consensus ad idem".

Consideration- Usually there must be "consideration" present, i.e. something of value must begiven in exchange for a promise.

Legal Relations- There must be an intention to create legal relations. Legal Capacity- The parties must have legal capacity to contract, e.g. persons must be over 18

years of age. No Illegal Circumstances- There must be no circumstances surrounding the contract which make

it unenforceable, void (i.e. as if it had never existed) or illegal. Form of Contract- Most contracts are equally valid and effective whether they are oral or written.

The only difficulty with oral contracts is that the parties may not properly remember what theyactually agreed, and it is more difficult - should need arise - to prove the details of the agreement.

Simple Contracts- There are different types of contract which must be studied by the student ofcontract law. However, for our purposes, it is sufficient to know that the majority of contracts areclassified as simple contracts, whether in writing or parol (i.e. verbal). The limitation period for

simple contracts is six years.

1.19 Elements of the Contract -The details.

The Agreement.

As we have seen, in order to have a contract there must be an agreement, a "consensus ad idem" - theremust be an offer and an acceptance. However simple or however complicated the contract may be, thisrule is invariable. For example, at one end of the scale you may say: "I will sell you this book for 5". Theother person replies: "OK". Offer has been followed by acceptance, hence there is a contract.

At the other end of the scale, a civil engineering contractor may submit tender documents for theconstruction of a dam for 200 million. After months of negotiation, all the details will finally be accepted.Once again, an offer has been made and accepted. A contract exists, as you can imagine, a number ofrules have grown up to regulate and decide on whether a valid offer or acceptance has been made.

1.20 The Offer.

The Offer.

An offer is an expression by one person (the"offeror") that he (or she) is willing to contract with another (the"offeree") on specified terms. If it is to form the basis of a contract, the offeror must intend that legalconsequences shall result.

An offer can be made to one or more specified people, or it can be general, made to "the world atlarge", and can take a number of forms:

An offer made to one or more specified persons either verbally or in writing; this is straightforward.


18/109



1.20 The Offer.

An offer made to "the world at large"; this is where a person announces that he will do so and so, ifanyone who cares to accept will do what is required by the offer.

For example, a person puts an advertisement in the newspaper: "10 reward will be given to anyone whoreturns my lost dog, Fido".

That is a valid offer to anybody who finds Fido and duly returns him.

1.21 Invitation to Treat.

Invitation to Treat.An offer must be distinguished from both a request for information, and an invitation to make an offer,neither of these creates the basis of contractual relations.

There are many instances of "invitations to treat".

(a) A shopkeeper (or supermarket) which displays goods marked at a certain price is inviting the

public to make an offer. The price tag is merely an indication of the price he (or it) is likely to accept."He does not bind himself to sell at that price, or at all": what happens is that in a shop orsupermarket the act of taking goods off the shelf contractually means nothing. However, puttingthem down in front of the shopkeeper or cashier constitutes an offer to buy (at the named price,unless otherwise stated in the offer). Ringing the price up on the till constitutes acceptance.

(b) At an auction, the list of goods in the auction program is an invitation to treat. A bid constitutesan offer. As with other offers, this can be withdrawn at any time before the fall of the hammer, whichconstitutes acceptance.

1.22 Communication of Offer.

Communication of Offer.

In order to be effective, an offer must be communicated to the offeree, or at least he must know about it.This is not quite as obvious as it sounds, because if a person does something in ignorance of the offer, hecan neither reap the benefit nor be bound by any obligations.

To revert to our example concerning "offers to the world at large", if Fido had his owner's address on hiscollar, and the finder returned the dog without knowing about the offer of a reward, he would not be entitledto it.

1.23 Termination of Offer.

Termination of Offer.An offer, once made, does not remain open for acceptance indefinitely. It can terminate for a number of

reasons, and once terminated is no longer capable of being accepted.

An offer terminates in four ways:

1. Withdrawal.Unless an offer specifically states that it is irrevocable, or that it will remain open for a definite statedtime, then it can be withdrawn at any time before it has been accepted provided, that is, that therevocation has been communicated to the offeree.

2. Rejection.This is fairly obvious. A point to note is that the act of rejection destroys the offer, and the offereecannot change his mind and later accept. Rejection does not have to be expressed: it can beimplied; it is sufficient if the offeror can reasonably infer from the offeree's conduct that he does not

intend to accept.3. Lapse.

An offer will lapse and thereafter be incapable of acceptance in three events:o If the offer specifically stated that it would cease on, or had to be accepted by, a certain date.


19/109



1.23 Termination of Offer.

o If it stated that it was conditional upon some circumstances other than time.o If it is not accepted within a "reasonable" time.

It would plainly be quite wrong if every offer remained open for ever and a day unless the offeror

remembered to withdraw it. Hence this rule, but what constitutes a "reasonable" time depends on

the facts of the particular case. An offer to buy perishable fruit or vegetables will lapse after quite ashort period; one to sell a house or a motor car will remain open much longer.

4. Death of Either Party Before Acceptance.The death of the offeree always terminates an offer. His personal representative cannot accept onhis behalf. There is some doubt in the law as to whether an offer can be accepted if the offeree isnot aware of the death of the offeror. One view states that the death of the offeror automaticallyterminates the offer and knowledge of it is immaterial. The better view is probably that it isterminated only if the offeree is aware of the fact, unless the personality of the offeror is an essentialingredient of the matter.

1.24 Acceptance.

Acceptance.The acceptance of an offer must be absolute and unqualified. Offer and acceptance must correspond inevery particular. If a purported acceptance alters or qualifies the offer in any way, it constitutes a rejectionof the offer, followed by a counter-offer. The counter-offer is then open to acceptance or rejection in thesame way as the original offer.

It sometimes happens that the parties to a contract will agree in principle only, leaving many detailsunresolved, or they will agree only certain things, or omit other necessary matters. These are calledincomplete agreements. Quite often a contract is only incomplete in that, whilst the parties have agreedmost of the important aspects, they have left out something of minor importance, or they have merely notexplained exactly what they meant.

In such cases the courts may imply meaning into the terms expressed by the parties, where it is possible todo so. In such a case, where the courts can ascertain the true meaning of the parties, then the contract willnot be void for uncertainty. In other cases, where the parties have not expressed the full terms of theagreement, then statutes may imply terms, in particular the Sale of Goods Act 1979 in consumer sales.

1.25 Consideration.

Consideration.

"Consideration" is an essential element of a valid contract in English law. In certain other jurisdictions this

is not the case; however, historically, the common law of England has always viewed a contract as abargain; both sides must give something. In passing (and of no concern for your exam purposes) the onlyexception to this rule is in the case of contracts under seal - specialty contracts - which do not require to besupported by consideration.

A number of rules have grown up over the doctrine of consideration and, in practice in commercialcontracts consideration is invariably present. There are various types of consideration - "good", "valuable","nominal"and "bad". In order to be valid, consideration must be both "good" and "valuable". Valuableconsideration is where some benefit is given or some detriment suffered. It is only consideration which isvaluable in the eyes of the law which is sufficient to support a valid contract, although it must also be good,in the sense that it is not forbidden, or "bad"

Consideration has been defined as:

A valuable consideration, in the sense of the law, may consist either in some right, interest, profit or


20/109



1.25 Consideration.

benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given,suffered, or undertaken by the other.

A shorter and easier definition is:

The price for which the promise is bought.

So the essential feature is that there must be some benefit accruing to the promisor (i.e. the person whomakes a promise). Usually the benefit and the detriment are the same thing, looked at from the differentviewpoints of the parties. If I buy a book from you for 1, the 1 is a benefit to you and a detriment to me.On the other hand, the book is a detriment to you (because you no longer have it) and a benefit to me.

1.26 Intention to Create Legal Relations.

Intention to Create Legal Relations.

The requirement for the parties to a contract to intend that their agreement should have legal

consequences is an essential part of the contract. The principle is that even if consideration is present, anagreement is not a binding contract unless there is an intention that legal consequences shall flow from it.If, in their agreement, the parties expressly state that they do not intend that their agreement shall belegally binding, this is normally conclusive. These are so-called gentlemen's agreements or in honour onlyagreements. Where people are negotiating for a contract, or salespeople are attempting to sell theirproducts, statements are often made which induce a contract, or which may give the impression that acontract has been made. Difficulties can then arise as to whether the statement was a "mere puff" - notmeant to be taken seriously - or whether it was a representation intended to have contractual effect.

Rarely, if ever, do social or domestic agreements give rise to the implication that legal consequences wereintended.It has been held that the winner of a golf competition had no legal right to the prize, because no one

connected with the competition intended such results to flow from the entry of competitors.In the case of agreements between members of a family, some are, and others are not, intended to havelegal consequences. There is no reason why a husband cannot contract with his wife, or a father with hisson. But, on the other hand, such pacts are frequently not meant to have this effect.It is obviously much easier to imply contractual intent in an agreement between two commercialorganisations operating at "arm's length" than it is between immediate members of a family.

As always, if the situation is not expressly stated, the court has to construe the agreement and all thecircumstances surrounding it. A different situation may arise in the "pools syndicate" type of agreement. It isquite a widespread practice for members of a household, group of friends, or employees in a business toparticipate on a regular basis in a football-pools scheme or some other form of prize competition.

A leading case is Simpkins v Pays (1955). The defendant owned a house in which she lived with X, hergranddaughter, and the plaintiff, a paying boarder. The three took part together each week in a competitionorganised by a Sunday newspaper. The entries were made in the defendant's name but there was noregular rule as to the payment of postage and other expenses. One week the entry was successful and thedefendant obtained a prize of 750. The plaintiff claimed a third of this sum but the defendant refused topay, on the ground that there was no intention to create legal relations but only a friendly adventure.

Judgement was given to the plaintiff. The court held that there was an intention to create legal relations,and it was "a joint enterprise to which each contributed in the expectation of sharing any prize that waswon".

1.27 Classification of Statements and Terms.

Classification of Statements and Terms.


21/109



1.27 Classification of Statements and Terms.

All but the very simplest of contracts can be broken down into a number of constituent parts:

Promises to do something, or to abstain from doing something else. Statements of fact or of opinion. Assurances of quality, quantity or performance.

However, it is rare for all the terms of a contract to be actually written down or agreed between the parties.

Certain things are too obvious to need mentioning; some are simply forgotten, others are matters to whichthe parties never gave thought. Hence, terms are classified as express or implied.

1.28 Express Terms.

Express Terms.

These are the terms of the contract which have been specifically agreed between the parties, whether inwriting or verbally, i.e. they have been expressed.

Of these, some are plainly of greater importance than others:

(a) Fundamental terms are those on which the whole basis of the contracts rests, or the "core" ofthe agreement. What is, or is not, fundamental can be specifically agreed, but if it is not it is aquestion of fact for the court to determine.

(b) Collateral or ancillary terms are those which support the fundamental terms, or perhaps "addflesh to the bones". They are not in themselves vital to the validity of the contract.

1.29 Implied Terms.

Implied Terms.

Terms which, for one reason or another, have been omitted from the specific agreement often need to beput into the contract in order that it may make sense.

Courts have the power to interpret the agreement of the parties to represent what they (the courts) believethe parties would have agreed if they had put their minds to that particular problem when drawing up thecontract. This is the implication of terms by the courts at common law, either for business efficacy, ornecessity or to imply meanings into express terms where they will reflect the presumed intention of theparties.

The court's function is to interpret and apply the contract which the parties have made for themselves. If

express terms are perfectly clear and free from ambiguity there is no choice to be made between differentpossible meanings - the clear terms must be applied. An unexpressed term can be applied only if the courtfinds that the parties must have intended that term to form part of their contract. It must be a term that goeswithout saying - a term necessary to give business efficacy to the contract and which, although tacit,formed part of the contract which the parties had made for themselves.Thus in relation to terms, courts are restricted in the way in which they can imply meaning. They mayattempt to interpret an express clause which is in any way ambiguous to reflect the presumed intent of theparties, but they cannot change an express clause which is unambiguous.

This principle of finding the parties' true intent is well illustrated by the old case of The Moorcock (1889).There, a ship was moored alongside a wharf. There was sufficient water clearance for the laden ship at lowwater and it rested upon the river bed. There was a rocky shelf on the bed and this caused the ship to

break its back and sink. The court's view was that there could be a term implied that the wharf would be fitfor use by a ship of that size and draught. They stated that in doing so, they were not inserting anythingnew in the contract but merely reflecting what the parties had actually agreed, even though they had notspecifically written it in. The test in this case is known as the officious bystander and is stated by Lord


22/109



1.29 Implied Terms.

Justice Mackinnon to be as follows:"Prima facie that which in any contract is left to be implied and need not be expressed is something soobvious that it does without saying; so that, if while the parties were making their bargain an officiousbystander were to suggest some express provision for it in their agreement, they would testily suppress himwith a common 'Oh, of course'."

Terms may be implied:

By Custom.If a certain thing is customary in the particular trade, it will readily be implied into contracts in respectof that trade. The same applies if a thing is the custom in a particular district or place. In order to beimplied, the custom must be notorious, certain and reasonable and not offend against the intentionof any legislative enactment.

By Statute.Certain statutes provide that in the absence of specific agreement, terms will automatically be implied intocontracts dealing with the subject matter of the statute.

The principal UK ones are:

Sale of Goods Act 1979. Supply of Goods (Implied Terms) Act 1973. Supply of Goods and Services Act 1982. Sale and Supply of Goods Act 1994.

We shall now take a look at the Consumer Protection Act (CPA) 1987 which deals with vendor andconsumer relationships. It is worth noting that the principles established by the Act, may also apply in manycountries around the world.

1.30 Consumer Protection Act 1987.

Summary of the main features of the Consumer Protection Act.

The Consumer Protection Act is arranged in 5 parts and 5 schedules:

1. Part I Product Liability.2. Part II Consumer Safety.3. Part III Misleading Price Indications.4. Part IV Enforcement of Parts 2 and 3.5. Part V Miscellaneous and Supplemental.

SCHEDULES:

SCHEDULE 1 Limitations of Actions under Part 1. SCHEDULE 2 Prohibition Notices and Notices to Warn. SCHEDULE 3 Amendments of Part 1 of the Health and Safety at Work etc. Act 1974. SCHEDULE 4 Minor and Consequential Arrangements. SCHEDULE 5 Repeals.

Part I.Part I of the Act, which implements into UK law the provisions of the Product Liability Directive(85/374/EEC), came into force on 1 May 1988. The Consumer Protection Act 1987 removes the need to

prove negligence. A customer can already sue a supplier, without proof of negligence, under the sale ofgoods law. The Act provides the same rights to anyone injured by a defective product, whether or not theproduct was sold to them.


23/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: *


Who is liable? An injured person can take action against :

Producers - those who manufactured the product, mined the raw material and processors. Importers - in the European Community and not just the UK. Own-branders - suppliers who put their own name on the product to give the impression that they

are the producers.

What goods does it cover? Liability under this part of the Act applies to all consumer goods and goods usedat a place of work. From 4 December 2000 all food is covered.

Definition of defective product: 'one where the safety of the product is not such as persons generally areentitled to expect.' This provides an objective test of defectiveness.

When deciding whether a product is defective, a court will take into account all the relevantcircumstances including:

The manner in which a product is marketed. Any instructions or warnings that are given with it.

What might reasonably be expected to be done with it. Yhe time the producer supplied the product.

A person can sue under the Act for compensation for:

Death. Personal injury. Private property (provided the amount of loss or damage is 275 or more).

Defences.

A producer or importer can avoid liability if he can prove any of six defences:

1. He did not supply the product (e.g. it was stolen or is a counterfeit copy of his products).2. The state of scientific and technical knowledge at the time he supplied the product was not such

that a producer of products of the same description as the product in question might be expected tohave discovered the defect if it had existed in his products while they were under his control (the so-called "development risks defence").

3. The defect was caused by complying with the law. Compliance with a regulation will not necessarilydischarge a producer from liability; in order to claim the defence he would have to show that thedefect was the inevitable result of compliance.

4. The defect was not in the product at the time it was supplied (e.g. if a product becomes defectivebecause a retailer handles it carelessly).5. The product was not supplied in the course of a business, for example, the donation of homemade

toys for sale at the occasional church bazaar or sales by private individuals of second-hand goods.6. The producer of a component will not be liable if he is able to show that the defect was due either to

the design of the finished product, or to defective specifications given to the componentmanufacturer by the producer of the finished product.

Part II.Section 10 General Safety Requirement .The General Safety Requirement has been largely superseded by the General Product Safety Regulations1994 (the GPS Regulations), which came into force on 3 October 1994

Section 11 of the Act enables the Secretary of State to make emergency regulations, without consultation,when it is necessary on grounds of public protection. Such regulations, which can cover both new andsecond-hand goods, can set out in detail how specific products must be constructed, and what instructions


24/109




and warnings must be given. Failure to meet the requirements of safety regulations made under the Actcan result in a fine not exceeding Level 5 on the standard scale (currently 5000) or a prison term of up tosix months, or both.The Act also provides powers for the Secretary of State to make prohibition noticespreventing named suppliers from supplying particular unsafe products.

Enforcement.Enforcement of the safety provisions of the Act is primarily the responsibility of trading standards officers oflocal authorities. Enforcement officers have authority to make test purchases, seize, enter premises for thepurpose of ascertaining whether there has been a breach of safety provisions of the Act and bringprosecutions. They can also issue suspension notices prohibiting suppliers from selling goods which theybelieve contravene safety legislation.

There are three types of notices that can be served:

Prohibition notice -this notice can be served in respect of any unsafe goods prohibiting supply, offeror agreement to supply, or exposing or possessing for supply.

Notice to warn - this notice can be served and requires the publication of warnings about unsafegoods.

Suspension notice - this notice can be served and prohibits for a period not exceeding six months,supply, offer or agreement to supply, or exposing for supply, any goods in respect of which there isreasonable ground to suspect the contravention of any safety provison.

Part III.Part III of the Act is concerned with criminal liability relating to misleading price indications.

In order for organisations to ensure that they are meeting their obligations under the ConsumerProtection Act they should:

Review management procedures and stages of production to ensure that only safe products reachthe customer.

Check whether there are any mandatory requirements covered by specific regulations for theorganisation's products.

Introduce quality assurance at each stage of the production process. Review contractual arrangements with whom the business has relevant contracts. Ensure that records kept by the organisation are adequate.

Organisations which have adopted quality systems such as BS EN ISO 9000 family of standards mayalready have these preventative measures in place.

The Consumer Protection Act 1987 is available on the following link:http://www.legislation.gov.uk/ukpga/1987/43.

1.31 Summary.

A contract is an agreement between two or more people. A valid contract must contain certain essentialfeatures including agreement, consideration, legal relations, legal capacity and no illegal circumstances.

An agreement involves an offer and an acceptance. An offer can be made to one or more specifiedpersons, verbally or in writing; alternatively, it can be made to the world at large. An offer must becommunicated to the offeree, or at least he must know about it, and an offer can be terminated bywithdrawal, rejection, lapse or death of either party before acceptance.

Acceptance of an offer must be absolute and unqualified; if a purported acceptance alters or qualifies theoffer, it constitutes a rejection of the offer, followed by a counter-offer, which is then open to acceptance or


25/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: "

1.31 Summary.

rejection.

Consideration is "the price for which the promise is bought". Although consideration must be of somequantifiable value, it does not have to be adequate, but it must be real.

The parties to a contract must intend that their agreement should have legal consequences, and the partiesmust be legally capable of entering into a contract.

The terms of a contract are classified as express (specifically agreed between the parties) or implied(omitted from the specific agreement, but which need to be put into the contract in order that it makesense).

Contracts may be illegal by statute (the contract itself is illegal and incapable of creating any rights) or bycommon law (contrary to public policy).

With regard to performance of a contract, a person must perform exactly what he has promised to do, but

the law will not take note of trivial matters or differences2.0 The Role & Limitations of International Organisations in a Global Health & Safety Setting - The

United Nations.

Students are advised to spend some time reading through the notes below and gaining an insight into theUnited Nations, its background and its infrastructure.

Later, this information may help when considering the wider perspective of International law and itsinfluence locally.

2.1 The Foundation of the U.N.

The foundation of the U.N.

The United Nations (UN) is an international organisation whose stated aims are to facilitate co-operation ininternational law, international security, economic development, social progress and human rights issues. Itwas founded in 1945 at the signing of the United Nations Charter by 50 countries, replacing the League ofNations, founded in 1919.

The UN was founded after the end of World War II by the victorious Allied Powers in the hope that it wouldact to intervene in conflicts between nations and thereby avoid war. The organisation's structure still reflectsin some ways the circumstances of its founding.

The five permanent members of the UN Security Council, each of which has veto power on any UN

resolution, are the main victors of World War II or their successor states:

1. People's Republic of China (which replaced the Republic of China).2. The French Republic.3. The Russian Federation (which replaced the Union of Soviet Socialist Republics).4. The United Kingdom.5. The United States of America.

As of 2010, there are 192 United Nations member states, encompassing almost every recognisedindependent state. From its headquarters in New York City, the UN and its specialised agencies decide onsubstantive and administrative issues in regular meetings held throughout each year.

The organisation is divided into administrative bodies, including:

The General Assembly.


26/109


#E$%SH &nternational 'iloma 1.*a (0"08014) ,age: !


Security Council. Economic and Social Council. Secretariat. Trusteeship Council, and. The International Court of Justice (ICJ).

The Trusteeship Council suspended operations in 1994 after Palau, the last of the trust territories for whichit was responsible became a full member of the UN. It still exists but its status is uncertain.

Additional bodies deal with the governance of all other UN System agencies, such as the World HealthOrganisation (WHO) and United Nations Children's Fund (UNICEF). The UN's most visible public figure isthe Secretary-General. The current Secretary-General is Ban Ki-moon of South Korea, who assumed thepost on 1st January 2007.

The Founding Statement of the United Nations.

We, the peoples of the united nations determined:

To save succeeding generations from the scourge of war, which twice in our lifetime has broughtuntold sorrow to mankind, and.

To reaffirm faith in fundamental human rights, in the dignity and worth of the human person, in theequal rights of men and women and of nations large and small, and.

To establish conditions under which justice and respect for the obligations arising from treaties andother sources of international law can be maintained, and.

To promote social progress and better standards of life in larger freedom,

And for the ends:

To practice tolerance and live together in peace with one another as good neighbours, and. To unite our strength to maintain international peace and security, and. To ensure, by the acceptance of principles and the institution of methods, that armed force shall not

be used, save in the common interest, and. To employ international machinery for the promotion of the economic and social advancement of all

peoples,

Have resolved to combine our efforts to accomplish these aims.Accordingly, our respective Governments, through representatives assembled in the city of San Francisco,who have exhibited their full powers found to be in good and due form, have agreed to the present Charterof the United Nations and do hereby establish an international organisation to be known as the UnitedNations.


27/109




Harry Truman at the founding conference in San Francisco, 1945.

Wartime poster of the United Nations.

2.2 League of Nations and History of the United Nations.

The United Nations was founded as a successor to the League of Nations, which was widely considered tohave been ineffective in its role as an international governing body, in that it had been unable to preventWorld War II. Some argue that the UN's major advantage over the League of Nations is its ability tomaintain and deploy its member nations' armed forces as peace keepers. Others see such "peace keeping"as a euphemism for war and domination of weak and poor countries by the wealthy and powerful nations of

the world.

The term "United Nations" (which appears in stanza 35 of Canto III of Byron's Childe Harold's Pilgrimage)was decided by Franklin D. Roosevelt and Winston Churchill during World War II, to refer to the Allies. Itsfirst formal use was in the 1st January 1942 Declaration by the United Nations, which committed the Alliest

IDIP UnitA Element8

Documents

Transcript of IDIP UnitA Element8