Week 4 - Legal Rights of Stakeholders in Decision-making

Question 1

Role of legal system:

Answer 1

The law sets out the norms (standard of conduct) of society.
- Law also forces an equal ‘playing field’, making business with normative decisions still competitive in the market.

Australia offer investors: a strong legal framework; continuous economic growth; high quality assets; availability of skilled labour; and proximity to Asia and relevant export and import markets

NOTE: It the government job to foster an environment for business to succeed

Question 2

Developing laws: Commonwealth laws

Answer 2

• Bill presented & discussed 3 times each in lower (House of Representatives) and upper (the senate) houses. (They are called READINGS).
• If approved, signed by the Governor-General (Royal assent from Crown).
• Published in Commonwealth Government Gazette

Question 3

Developing laws: State laws

Answer 3

Same process as Commonwealth but approved and signed by the Governor.

Question 4

Developing laws: Courts

Answer 4

Judges make decisions following legal rule of doctrine of precedence

NOTE: Previous decisions from higher authorities i.e high court should be followed when faced with similar facts

Question 5

Developing laws: Tribunals

Answer 5

Make decisions about the merit of administrative decisions

Question 6

Concept of control:

Answer 6

The law controls business decision making and operate to manage the parameters of firms:
- The Modern Slavery Act of 2018 requires that bussiness over $100m in revnue must submit an annual modern slavery statement about slavery in their supply chain.

Law can limit what items a manager can sell:
Either products are illegal or additional requirments make the product not profitable.
- EXAMPLE: Mining companies by law must replant and recreate the environment they destroyed

Question 7

Concept of Liability:

Answer 7

Law makes firms or individuals accountable for malpractice i.e a feature of tort law is that the business (or a person) at fault should bear the consequence of their actions.

The elements of the tort of negligence are: duty of care, breach of that duty, causation and remoteness of damage.

Under the Corporations Act (2001) corporations make an artificial person (alberit), this reduces the shareholder liability however if it is deemed that they engaged in risk activities they still may be liable.
- If the corporation becomes insolvent (more liabilities than assets) then creditors may not be paid - i.e reduces risk/liability for shareholders

Regulators:
ACL or Australia Consumer Law is a national law which makes corporations liable for faulty products or misleading advertisements:
- The Australian Competition and Consumer Commission (ACCC) is the regulatory authority for competition law and consumer law.
- The Australian Securities and Investments Commission (ASIC) is the regulator for consumer protection in relation to financial matters.

NOTE:
Can’t be charged if the accident was not foreseeable but situations that give rise to a business owing a duty of care include product liability, defective structures and employer liability.

Question 8

Concept of ownership:

Answer 8

Law of property protects physical land, vehicles (personal property), intellectual property and shares in a corporation:
* Trade marks are government issued to protect logos
* Designs (protection of visual look of the product)
* Patents protect inventions i.e the invention of electric cars.
* Copyright doesn’t require a formal application

An example is Deckers Outdoor Corporation (a US-based publicly listed company successfully trademarked ‘UGG’ in more than 130 countries, meaning Australians are largely prevented from selling their boots internationally.

Question 9

6 core Competition law prohibitions:

Answer 9

Consumer Act 2010: contains laws against certain anti-competitive conduct between competitors, suppliers and customers.

1. Anti competitive dealings, contracts, arrangements and understandings:
   - Actions that have the purpose, effect or likely effect to substantially lessen competition in a market
2. Misuse of market power:
   - Using position within the market to mitigate/impact upon competition
3. Cartel Conduct:
   - Anti competitive agreements between competitors (opec)
   - Collusion
4. Exclusive dealing:
   - Attaching anti-competitive terms or conditions to the supply or acquisition of goods or services. Exclusive dealing is against the law only when it substantially lessens competition
5. Resale Price Maintenance:
   - Requiring customers to pay a price at or above a specified minimum price
   - Prevents competition and raises prices for consumers.
6. Anti-competitive mergers:

7.Reduces competition in the market that the company operates in: