Business Law (part 2)

Introduction to Law (part B)

 by

 Charles Lamson

Civil Versus Criminal Law

 Law may be classified as either civil or criminal. A person may file a lawsuit in order to enforce or protect a private right by requesting compensation for damage suffered or other action for restoration of his or her property. This action in civil law is concerned with private or purely personal rights.

Criminal law is that branch of the law dealing with crimes and the punishment of wrongdoers. A crime is an offense that tends to injure society as a whole. A criminal action differs from a civil action in that an employee of the government---usually called the prosecutor or district attorney brings a criminal action. The standard of proof required is greater than in a civil case. A person can be convicted of a crime only if proven guilty "beyond a reasonable doubt." If a person accused of a crime is subject to the penalty of imprisonment, the accused has a right to an attorney even if he or she cannot pay for one. In addition, the constitutional prohibition against double jeopardy means that a person can only be tried for a crime once. This protection is not absolute since it allows for retrial, for example, if a conviction is overturned or if there is no decision in a first trial. 

Historically, crimes are usually classified, according to the nature of the punishment provided, as felonies or misdemeanors. Generally speaking, felonies are the more serious crimes and are usually punishable by death or by imprisonment in a penitentiary or state prison for more than one year. Misdemeanors are offenses of a less serious character and are punishable by a fine or imprisonment  in a county or local jail. Forgery is a felony, but disorderly conduct and unauthorized entry of a dwelling are misdemeanors. 

Some offences carry penalties that can be either misdemeanor penalties or felony penalties. These offences are called wobblers. In the case of wobblers, if the punishment imposed is more than a year of imprisonment the offense is a felony. If the punishment is less than a year of imprisonment the offense is a misdemeanor.

Because there are some offenses punished by government that are not considered serious offences and therefore do not carry severe penalties, a number of states have established a third level of offense. These offences are at a level below that of misdemeanors and might be called violations or infractions. An infraction could be making an illegal U-turn while driving or speeding. In some states, violations or infractions might not even be considered criminal offenses. They would carry penalties of a fine or imprisonment, but only in a local jail for a few days. Obviously, criminal statutes vary somewhat from state to state. 

Tort Law

A tort is a private or civil wrong or injury for which there may be an action for damages. A tort may be intentional or it may be caused by negligence. Negligence is the failure to exercise reasonable care towards someone. It is tort law that allows an innocent motorist who is the victim of a careless or negligent driver to sue the negligent driver for damages. Other torts include fraud, trespass, assault, slander, and interference with contract. A tort action must be brought by the injured person against the personal alleged to be negligent.

Ethics

These last couple posts discussed the basis for laws. One of the most important ideas mentioned is that "laws are the result of societies changing concept of what is right and what is wrong." That means laws are based on our judgment regarding what human conduct is right, and therefore should be encouraged, and what kind of conduct is wrong, and therefore should be discouraged. We thus base our laws on our morals. These principles that help a person determine the morality of conduct, its motives, and its duties are called our ethics.

Bases for Ethical Judgement

Everyone has opinions on what behavior and thinking is right and what is wrong, basing these ethical judgments on personal values. We develop our values from our religious beliefs, our experience, our cultural background, and our scientific knowledge. Since people have differing backgrounds, our judgments as to what is right and wrong vary somewhat.

Ethical Principles

And considering how ethics relates to the law, several principles regarding the application of ethics emerge. These principles include:

1. Seriousness of the consequences
2.  Consensus of the majority
3.  Change in ethical standards

Seriousness of consequences. Although law is based on what we believe is right and wrong, our laws do not reflect everything we believe is right or wrong. When unethical behavior can harm others---when the matter is of serious consequence to people---laws are usually enacted to regulate that behavior. Less serious matters can be considered wrong, but laws do not address them. For example, rules of etiquette frequently reflect our ethical judgments about behavior, but they do not have serious enough consequences that we passed laws to enforce them.

Consensus of the majority. Our laws cannot express every individual's ethical principles since everyone does not agree on what is moral. There may be no law or reflecting of judgment on a particular matter, or the laws might reflect the judgment of some. For example, vegetarians and non-drinkers may not believe laws permitting the eating of meat or the consumption of alcoholic beverages are ethical. Their morality may not be reflected in law. In a democratic society such as ours, the laws are designed to reflect the ethical view of the majority.

Change In ethical standards. Ethical standards change over time. Behavior believed ethical in the past becomes unethical, and behavior previously viewed as immoral becomes acceptable. Consider the matter of cigarette smoking on airplanes. Many years ago airline passengers could smoke no matter where they were seated. Then the law mandated smoking and non-smoking sections on planes. Now all commercial airlines in the United States prohibit smoking in all sections and the federal government uses the force of law to enforce this rule. This change in government rules reflects the change in the view of most people about the harmful effects of cigarette smoking. Our ethical standards have changed and this is reflected in the law. 

Business Ethics

Our ethical standards apply to every to every aspect of life. For businesspeople, this means that ethical standards help determine their business practices. In our competitive economic system, the standard people in business have been expected to follow in determining behavior is "the bottom line." Is the behavior something that will help the business financially? When studying ethics as applied to business, we ask, does a business have obligations other than simply to make a profit or maximize the bottom line?

Many types of businesses or professional organizations have adopted codes of ethics to guide the behavior of their members. Variety occurs not only in the types of business that have adopted such codes, but also in the impact of the codes on business. Some codes are legally enforceable, technically making them laws, not ethical rules. Other codes are strictly voluntary and are thus truly rules of ethics.

Legally enforceable. A number of professions that have codes of ethics, usually called codes of professional responsibility, which when violated provide the basis for penalties against members of the profession. For example, the American Bar Association has produced a model code and model rules for ethical Behavior by lawyers. Although these particular models have not been adopted by every state, each state has adopted an ethical code for lawyers. A violation of legal ethics subject a lawyer to discipline, including suspension from practicing law or even disbarment.

Voluntary. Some businesses have adopted codes of ethics for themselves as guides for individuals employed in these businesses. Since government has not imposed the codes, they do not carry legal penalties for violation. However employees who violate ethical codes subject themselves to discipline by their employers. The codes recognize that ethical business conduct is a higher standard than that required by law and encourage behavior that is fair, honest, and, if disclosed, not embarrassing to the individual or the business.

The need for ethical practices, particularly in business is greater than ever. The demand for such ethical behavior is so great that we often see it reflected in new legislation. If the public is not confident that businesses will comply with their ethical responsibilities, we will undoubtedly see more and more legislation asking business to rise to ethical rather than just the previously legal standards.

*SOURCE: LAW FOR BUSINESS, 15TH ED., 2005, JANET E. ASHCROFT, PGS. 6-9* 

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