Recognizing Torts and Decreasing Liability:
Business Law 531
Dr. Beverly Spencer
March 2, 2009
Recognizing Torts and Decreasing Exposure:
According to the business simulation, five years ago, the government cited Alumina for “failure to comply with environmental regulations” (University of Phoenix, 2009). Alumina failed to show it had “effective systems in place to deal with crisis. They showed little leadership and appeared indifferent to the environmental destruction” (University of Phoenix, 2009). The company received a large punitive fine for corporate irresponsibility. This paper’s focal point will be to identify the regulatory risks such as tort liability and to underscore how it can be managed through preventive, detective, and corrective measures. The mission behind this is to anticipate and prevent extensive losses environmental and commercial, maintain Alumina’s reputation, and to adhere to environmental norms.
According to Google (2009), the definition of regulatory risk is “the potential for loss due to changes in the regulatory environment.” Failure to abide by government regulations can expose companies to regulatory risks which can jeopardize their assets, profits and acceptability. Since many risks and regulations that can impact a business; it would be within a company’s best interest to designate resources to determine possible risks. Once these risks have been identified, a plan of action should be constructed and actualized. Having a proper plan in place and anticipating possible regulatory risks can prepare a business for changes therefore, allowing the business to adjust protocol accordingly to minimize exposure to tort liability.
Environmental Protection Agency (EPA) regulates and handles environmental concerns. According to U.S. Environmental Protection Agency (2009) “compliance with the nation's environmental laws is the goal, but...