A Legal Ramification in the general sense of the word is pretty easy to understand. It simply refers to the law related consequences of an action. For instance, when a person shoplifts, the legal ramification could be that he/she is charged with theft. In the United States, once the act that brings these ramifications along with it is committed in multiple states, it becomes a federal offence and is dealt with as the same.
In proper business terms, Legal Ramifications refers to the consequences through the course of law that await a fraud act or anything that is defined by law as being a monetary crime.
For instance, Volkswagen’s dieselgate scandal where they tricked the environmental tests on their diesel vehicles brought them several lawsuits. These lawsuits all resulted in monetary fines and sanctions. In South Korea, the sales of about 80 Volkswagen models has been prohibited by law. All of these can be considered an example of Legal Ramifications for the trickery that ensued at the German behemoth.
Where can Legal Ramifications be expected
For businesses and corporates, Legal Ramifications can be expected for acts they do voluntarily or involuntarily. The above example of dieselgate was an example of the former. There are, however, instances of companies being sued where they were not expecting it when committing the act that led to those legal consequences.
However, there have been instances where the lawsuit has been termed as frivolous due the nature of the same. In the Aitken vs. NBC (A broadcaster) case where Aitken claimed that watching Fear Factor caused him to vomit and run into a wall. He demanded $2.5 million in damages and said that he wanted to show a message to the broadcasters that they need to be a bit more conservative with Graphic content.
However, the judge showed him the doors by saying that if something disturbs you, all you need to do is change the channel.
Common grounds for legal ramifications
- Patents are one of the most active reasons for legal ramifications. When innovation from an entity are copied without permission by another, they are entitled to reimbursements, monetary and otherwise. Samsung Apple is a very prominent example from recent memory.
- Divorce: You would assume that ending a marriage in mutual consent would be an easy thing. However, it has legal ramifications as well. Alimony is a nightmare for any person and so is the custody of children for both of the parents involved.
- Antitrust: In an ideal economy, the market should be a fair play game with everyone on a level playing field. However, more often than not companies with big cash reserves and influences use their stature to belittle and damage their competition. AMD and Intel were involved in such a case, and the legal ramification for Intel was that they had to pay billions of dollars as a legal ramification for their malpractices in keeping AMD out of the products of OEMs.
Some high profile examples of Legal Ramifications
- The Enron Saga is probably one of the most prominent class-action lawsuits in history. The company had to pay north of $7 billion dollars to former shareholders. Some of the executives from the company were awarded prison sentences. Talk about huge legal ramifications and you can never leave Enron out of it.
- J. Reynolds vs. Cynthia Robinson: The tobacco companies in the previous century deceived their customers by not informing them of the addictive and carcinogenic properties of Smoking. As a result, a huge number of people died young of Lung Cancer. As a result, the court ordered for damages to be paid to the tune of $23.5 billion which was later reduced to $16 billion on appeal. This legal ramification came out because of negligence for the lives of millions of smokers.
- Bernie Madoff who has now got a movie made on his achievements that resulted in severe legal ramifications. He organized and oversaw the execution of a Ponzi scheme, defrauding the public of $20 billion. He was sentenced to 150 years in prison for his fraud and even lost his son due to the same.