Thursday, January 06, 2005

Vicarious and Limited Liability

Said I was crazy, but the social ideas, willing to side or responsibility for the acts of another State, fascinated me. Of course, this is not only we are willing to do so, but trying to find out when we are willing to do so. Today, when my colleagues in a business organization in teaching, I discussed the recent New Jersey case, a "rogue" partner in law firm committed malpractice and stole client funds. In addition, this partner is lying for malpractice insurance, insurance providers are trying to abolish this policy. The case is complex, but boils down to whether the medical malpractice insurance providers should be bound to the hair based on the false rogue partner policy. On the one hand, this seems to be a simple question, law of agency. Each partner is a partnership between the agents, therefore, the agent behavior is partnership action, therefore, can not protect the policy of partnership, because it is based on available muddle through it.

However, in this case, the trial court has an interesting on this issue that we should not punish the policy of the abolition of all partners, only one of the partners lying. This line of reasoning will lead to insurance companies - rather than the law firm partnership - Indian partners, the burden of the wrongful act. That there are many possible responses. We can say that "innocent" partners should be more to choose their partners carefully. Or they do not really innocent, as they should be monitored more closely rogue partner. We can also argue that they had received the interest of agency relationship, and now they must bear the burden.

All of these are perfectly acceptable response, as well as the Court of Appeal seemed to accept this reasoning, ruled that the policy should be removed. But this fact: law firm partnership is a limited liability partnership. As the result of this decision, the insurance company is off the hook. The innocent partners exposed only to the extent of his money investment partnership. If the liabilities exceed its assets of partnership - this seems to be true in this case - the big losers will be the third party, who suffered a loss, but so far has not been fully compensate for the possibility.

All of this makes me want to know is vicarious liability and limited liability of the interaction of the. However, the burden of our current distribution make sense? Something tells me that if not, but I need to do more work on this before I can be sure.