When one of your employees makes a monumental screwup that could result in a big liability judgment, you do not, repeat, not, fire him. Ever.
When you do, you guarantee that the lawyers for the person you screwed will be contacting the employee immediately and enlisting him to get revenge on his former employer by giving them inside information and testifying on their behalf in their lawsuit.
You stand by your employee, reassure him, and get his sworn testimony as soon as you can.
It might have been a case where “everyone” was responsible-and therefore, no one was responsible.
Nonetheless, your legal point is well-taken. But it might be wise to put that individual on a really short leash until the incident/lawsuit danger blows over and you can dump him/her/them.