Minimizing Tort

Minimizing Tort and Regulatory Risk Plan

Alumina, Inc is in the business of automotive parts, alumina refining and smelting. Alumina has to take into consideration compliance with Environmental Protection Agency Regulations. Five years ago, Alumina was found to be in violation of environmental discharge. The PAH concentration was above the allowed limit and EPA ordered Alumina to perform a clean up which Alumina complied with and corrected.

After this incident, Alumina did not put in place a well defined plan to identify measure and manage torts and regulatory risks. This lead to a tort liability when Kelly Bates claimed that Alumina is contaminating water and her daughter has developed leukemia (University of Phoenix, 2008, Week Two Material).

Identifying Torts and Regulatory Risks

The first step is to identify the torts and regulatory risks to be able to measure and mange them. Alumina was violating the water clean act when EPA reported discovery of environmental discharge by Alumina.

Clean Water Act

Alumina was forced to comply with EPA regulations and do a mandatory clean up. It is major set back when a company is reported as violating regulations. This will increase auditing and reduce the confidence of the company. Alumina should identify the environmental discharge as a regulatory risk that could also lead to a future tort liability. Kelly Bates is using this incident as a base for claim that Alumina is continually contaminating water.

Defamation

Defamation is the publication of untrue and damaging statements about a company. (Jennings, 2006)

After being in violation for contaminating water, it is a risk that public media and communities can use that incident to spread rumors and untruthful information about Alumina. This can be harmful to Alumina reputation and cause for community dissatisfaction that could lead to more accusations and law suits in the future. It is costly to go after newspapers and hence it is better to prevent it....