Scienter

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Confidence tricks, such as those done by David Lamar, are a form of fraud. An element of fraud is scienter.

In law, Script error: No such module "Lang". (/saɪˈɛntər/,[1] Law Latin for "knowingly", Script error: No such module "IPA"., Script error: No such module "params".) is a legal term for intent or knowledge of wrongdoing, or reckless disregard for the truth.[2][3][4] An offending party then has knowledge of the "wrongness" of an act or event prior to committing it.[5]

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Scienter action in tort law

The scienter action is a category within tort law in some common law jurisdictions that deals with the damage done by an animal directly to a human. Tort law is designed to offer retribution for civil wrongs.[6] Scienter within tort law had a long history in English law until it was abolished by the Animals Act 1971.[7][8] An action in the common law jurisdictions in which it has not been extinguished by statute is in addition to the torts of negligence and nuisance or more bespoke torts like cattle trespass.[9] If an animal is known to behave in a certain way and is expressed on a person causing injury, an action can be taken in this tort, which also is not available in New South Wales, the Australian Capital Territory, South Australia, or New Zealand. In those jurisdictions, the actions involving animals need to be in nuisance or negligence.[10]

Cattle trespass has been a common tort that involves proving scienter.

To be successful, the plaintiff needs to take action against the person in control of the animal. The plaintiff can file a complaint to initiate a lawsuit to recover damages.[11] It is strict liability, requiring no more than proof of injury, the animal's having a problematic trait, and the knowledge of the person in control about the trait in the animal. Strict liability means that there is no need to argue fault in the form of wilful intent or negligence on the part of the animal or its controller. The only defence is if it can be proved the plaintiff voluntarily assumed the risk of injury by their actions, or if the plaintiff was the cause of the injury.[9][12]

It is common to distinguish between harmless animals and wild animals, as no scienter is needed for wild animals as long as they are native to their respective regions.[13] Animals are classed as wild or harmless on the basis of species or kind, not on the basis of being a tame individual.[14] An elephant is considered wild regardless of its use.[15] The scienter action is referred to in Rylands v. Fletcher in that one who keeps a wild thing "must keep it at his peril" to make reference to part of Justice Colin Blackburn's comment.[16][17]

General use

Scienter is generally used as a necessary condition of certain causes of civil action and as a standard for civil liability or criminal guilt.[2] For instance, Section 1960 of Title 18 of the United States Code provides a scienter condition, requiring that the accused "knowingly conducts, controls, manages, supervises, directs, or owns" a prohibited type of business.[18]

The concept of scienter is uniformly expressed in the text of the U.S. Code as the word know, appearing as "knowingly", "actual knowledge", "known", "knowledge fairly implied", etc.[19][20] The word scienter is not used in the text of the U.S. Code, although it appears once in a section title.[21] This use reflects the development of American law speaking plainly in its statutes.[22]

In contract law

Scienter is also an element of the contract law cause of action for breach of contract in which the aggrieved party alleges some destruction of the meeting of the minds, also known as mutual assent, because of fraud, misrepresentation, or duress per minas.[23] Distinguishing innocent misrepresentation and fraudulent misrepresentation involves determining if scienter exists. In contract fraud, scienter is defined as intent to deceive.[24][25]

Scienter can also be used as a defence to a breach of contract lawsuit.[26]

Element of claim of securities fraud

In the United States, to prevail in a securities fraud claim under Section 10(b) of the Securities Exchange Act of 1934, a plaintiff must allege and prove that the defendant acted with scienter.[27][28]

The Private Securities Litigation Reform Act of 1995 added the requirement that a plaintiff must plead facts giving rise to a "strong inference" of scienter.[29][30] The meaning of scienter under the 1995 law has been controversial since its enactment. The United States Supreme Court issued a decision that clarified what was to be understood as a "strong inference." In Tellabs, Inc. v. Makor Issues & Rights, Ltd., an 8–1 ruling of the Court defined the standard that the plaintiff had to meet to proceed with a securities fraud litigation. A complaint must show "cogent and compelling evidence" of scienter.[31][32][33]

See also

References

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  1. ^ Page Module:Citation/CS1/styles.css has no content."scienter, n. & adv. meanings, etymology and more". Oxford English Dictionary. Retrieved 9 May 2025.
  2. ^ a b Page Module:Citation/CS1/styles.css has no content.Bolger, Jeanne (1981). "Recklessness and the Rule 10b-5 Scienter Standard after Hochfelder". Fordham Law Review. 49 (5): 817–837.
  3. ^ Page Module:Citation/CS1/styles.css has no content.Wilkinson, Thomas (1980). "Securities Law — Rule 10b-5 - Recklessness Formulation of Scienter Requirement under Rule 10b-5". Villanova Law Review. 25 (6): 1082. ISSN 0042-6229 – via Villanova University Charles Widger School of Law Digital Repository.
  4. ^ Page Module:Citation/CS1/styles.css has no content."scienter". LII / Legal Information Institute. Retrieved 23 February 2025.
  5. ^ Page Module:Citation/CS1/styles.css has no content.Crumbley, D. Larry; Grossman, Amanda M.; Grossman, Steven D. (2024). "Improving the Efficacy of the Securities Fraud Lawsuit Against Catalent, Inc" (PDF). Journal of Forensic and Investigative Accounting. 16 (1): 87–95.
  6. ^ Page Module:Citation/CS1/styles.css has no content.Parker, Reginald (1951). "The General Tort Law of Personal Injuries". NACCA Law Journal. 8: 156–173 – via HeinOnline.
  7. ^ Page Module:Citation/CS1/styles.css has no content.Chevalier-Watts, Juliet (1 December 2007). "Civil liability for animals". Mountbatten Journal of Legal Studies. 11 (12): 56–101 – via Southampton Solent University.
  8. ^ Page Module:Citation/CS1/styles.css has no content.Barker, Francois (1993–1994). "The Animals Act 1971: A Dog's Breakfast". Holdsworth Law Review. 16 (2): 145–169 – via HeinOnline.
  9. ^ a b Page Module:Citation/CS1/styles.css has no content.Osborough, W. N. (1978). "Strict Liability for Animals". Irish Jurist (1966–). 13 (1): 182–185. ISSN 0021-1273. JSTOR 44027564.
  10. ^ Page Module:Citation/CS1/styles.css has no content."Civil Liability for Animals [1970] NSWLRC 8". New South Wales Law Reform Commission — Reports. Retrieved 21 February 2025.
  11. ^ Page Module:Citation/CS1/styles.css has no content."tort". LII / Legal Information Institute. Retrieved 17 March 2025.
  12. ^ Page Module:Citation/CS1/styles.css has no content.Karp, Adam P.; Fershtman, Julie I. (2009). "Recent Developments in Animal Tort and Insurance Law". Tort Trial & Insurance Practice Law Journal. 44 (2): 185–244. ISSN 1543-3234. JSTOR 25763916.
  13. ^ Page Module:Citation/CS1/styles.css has no content.Donaldson, James H. (April 1969). "Liability Arising from Owning or Harboring Animals". Insurance Counsel Journal. 36 (2): 268–278 – via HeinOnline.
  14. ^ Page Module:Citation/CS1/styles.css has no content.Cook, Peter (1993–1994). "Before the Animals Act: The Historical Fiction of a Base Property in Dogs and the Paradox of Scienter Liability". Holdsworth Law Review. 16: 119 – via HeinOnline.
  15. ^ Page Module:Citation/CS1/styles.css has no content.S., E. O. (1899). "Injuries by Domestic Animals". Journal of the Society of Comparative Legislation. 1 (1): 54–61. ISSN 1479-5973. JSTOR 751893.
  16. ^ Rylands v Fletcher, LR 3 HL 330 (House of Lords Script error: No such module "auto date formatter".).
  17. ^ Page Module:Citation/CS1/styles.css has no content.Fordham, Margaret (1995). "The Demise of the Rule in Rylands v Fletcher?". Singapore Journal of Legal Studies: 1–28. ISSN 0218-2173. JSTOR 24866734.
  18. ^ 18 U.S.C. § 1960
  19. ^ Rehaif v. United States, 558 U.S. 225 (Supreme Court of the United States Script error: No such module "auto date formatter".).
  20. ^ Page Module:Citation/CS1/styles.css has no content.Mens Rea: An Overview of State-of-Mind Requirements for Federal Criminal Offenses (Technical report). Congressional Research Service. 7 July 2021. Archived from the original on 20 March 2025.
  21. ^ 15 U.S.C. § 7706
  22. ^ Pub. L. 111–274: Plain Writing Act of 2010 (text) (PDF)
  23. ^ Page Module:Citation/CS1/styles.css has no content.Parchomovsky, Gideon; Stein, Alex (1 July 2017). "Empowering Individual Plaintiffs". Cornell Law Review. 102 (5): 1319–1366. ISSN 0010-8847 – via Cornell University Law Library.
  24. ^ Page Module:Citation/CS1/styles.css has no content.Hunter, Richard J.; Shannon, John H.; Amoroso, Henry J. (30 December 2023). "A Teaching Note on Contracts". Education Quarterly Reviews. 6 (4): 12–38. doi:10.31014/aior.1993.06.04.783.
  25. ^ Page Module:Citation/CS1/styles.css has no content.Powers, William; Niver, Margaret (1992). "Negligence, Breach of Contract, and the "Economic Loss" Rule". Texas Tech Law Review. 23: 477–523 – via Texas Tech University Libraries.
  26. ^ Page Module:Citation/CS1/styles.css has no content.Christian, George (5 May 2023). "SCOTX Maintains Common Law Scienter Requirement for Misrepresentations on Insurance Application". Texas Civil Justice League. Archived from the original on 15 May 2023. Retrieved 22 February 2025.
  27. ^ 15 U.S.C. § 78u-4
  28. ^ Aaron v. SEC, 446 U.S. 680 (Supreme Court of the United States Script error: No such module "auto date formatter".).
  29. ^ Page Module:Citation/CS1/styles.css has no content.Choi, Stephen J. (2007). "Do the Merits Matter Less after the Private Securities Litigation Reform Act?". Journal of Law, Economics, & Organization. 23 (3): 598–626. doi:10.1093/jleo/ewm014. ISSN 8756-6222. JSTOR 40058194.
  30. ^ Page Module:Citation/CS1/styles.css has no content.Klausner, Michael (October 2009). "Personal Liability of Officers in US Securities Class Actions". Journal of Corporate Law Studies. 9 (2): 349–366. doi:10.1080/14735970.2009.11421545. ISSN 1473-5970 – via Taylor & Francis Online.
  31. ^ Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308 (Supreme Court of the United States Script error: No such module "auto date formatter".).
  32. ^ Page Module:Citation/CS1/styles.css has no content.Ball, Ray (May 2009). "Market and Political/Regulatory Perspectives on the Recent Accounting Scandals". Journal of Accounting Research. 47 (2): 277–323. doi:10.1111/j.1475-679X.2009.00325.x. ISSN 0021-8456 – via Wiley Online Library.
  33. ^ Page Module:Citation/CS1/styles.css has no content.Labaton, Stephen (22 June 2007). "Investors' Suits Face Higher Bar, Justices Rule". The New York Times. ISSN 0362-4331. Archived from the original on 17 February 2023. Retrieved 23 February 2025.

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