Management and Organizational Studies 2275A/B Lecture Notes - Lecture 1: Class Action, Magners, North American Free Trade Agreement
25 Oct 2016
School
Department
Professor
Tuesday, September 22, 2015
Legal Systems
Business Law
-Vokswagen: US environmental protection agency claims VW altered emissions
numbers. They rigged the software on the vehicles so that they showed a favourable
reading when hooked up to an emissions machine, but were emitting crazy amounts of
harmful gases in reality.
•It’s not a safety issue (unlike Toyota and GM ignition/airbag/brake issue)
-These recalls amounted to oversight and policies that weren't strict enough or not
revealing the extent of the defects.
•More insidious, a deliberate attempt to deceive. 7 years of car sales and presenting the
wrong information to the public and the government. 11 million cars to recall.
-Only allegations right now, but CEO has more or less apologized (did not deny).
-They marketed these vehicles as cleaner (environmentally responsible).
-VW lost 20% of its share value ($15 billion). Class action law suit.
-They are liable for $18billion in fines in USA alone. Could be a $50 billion hit.
-Damage to the brand is extensive (could be permanent).
-In Canada, they temporarily halted sales of diesel vehicles.
-Legal Risk Management Strategies
•Risk avoidance: don't take the risk!
•Risk reduction: take steps to minimize potential harm.
•Risk shifting: buy insurance!
•Risk acceptance: take the risk.
-Law: a set of rules established by the government and enforced by the government.
•Machiavelli: legal positive. If it’s enforced, its a law.
•Natural lawyers: human made law is just an approximation of natural law. Like the law
of gravity. Natural lawyers look at law that governs human behaviour
•Utilitarians: laws should provide social utility. It’s a law if it maximizes happiness
(utility).
•Legal realists: the law is random and arbitrary. It’s the whim of humans.
-Abortion: Dr. Morgan Teller was tried for performing abortions. The evidence was
substantial, but the trial verdict was not guilty. The prosecutors went to the court of
!1
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Tuesday, September 22, 2015
appeals. That reversed the trial verdict to guilty. The doctor went to the Supreme Court
of Canada, appealed that decision and said that a jury of his peers found him not guilty. So
they took it to the crown again and again a jury of his peers acquitted him.
•It’s very difficult to define what the law is. It’s not legal or illegal, its a discussion.
-Paul Magner operated a fur store in Toronto. At the time, Sunday shopping was
illegal in Ontario (the Lord’s Day Act). The government changed the law to promote
tourism (to fuel the economy). They designated some areas in Toronto and Niagara Falls
as Designated Tourism Areas. Paul Magner’s store had to remain closed, but his
competitors were in China Town and were allowed to open in Sundays. So he opened on
Sundays. They fined him and gave him penalties. Went all the way to the Supreme Court
of Canada. They hammered him with the fines, the penalties and legal costs of both sides.
He went bankrupt.
•Civil disobedience has its costs.
•They both ended up being right, their issue was timing. A big part of what the law is is
timing. The law changes, develops, ebbs and flows. You have to understand where the
law comes from in order to make educated decisions about what it will become.
-Civil Law vs Common Law
•Civil Law is based on a comprehensive code.
-Each case is treated differently and follows a legal code. (Quebec, parts of Europe,
Louisiana)
-Also used to refer to all law that isn't criminal law.
•Common law is based on previously decided cases. (Canada, US, UK, Australia)
-Based on previously decided cases.
-Sources of Law:
•Constitution (Canada is a constitutional democracy)
-Every other law yields to the constitution. The constitution prevails.
-The Canadian government must obey the law. In other countries, governments are
not subject to the law.
•Statutes or Legislation
•Common Law/ Case Law
-Constitutional Law
•s. 91 - Federal Jurisdiction (what the federal gov’t can pass laws on)
-Banking
-Criminal Law
!2
find more resources at oneclass.com
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Document Summary
Vokswagen: us environmental protection agency claims vw altered emissions numbers. These recalls amounted to oversight and policies that weren"t strict enough or not revealing the extent of the defects: more insidious, a deliberate attempt to deceive. 7 years of car sales and presenting the wrong information to the public and the government. Only allegations right now, but ceo has more or less apologized (did not deny). They marketed these vehicles as cleaner (environmentally responsible). Vw lost 20% of its share value ( billion). They are liable for billion in nes in usa alone. Damage to the brand is extensive (could be permanent). In canada, they temporarily halted sales of diesel vehicles. Legal risk management strategies: risk avoidance: don"t take the risk, risk reduction: take steps to minimize potential harm, risk shifting: buy insurance, risk acceptance: take the risk. Law: a set of rules established by the government and enforced by the government: machiavelli: legal positive.
