Public Tort Liability: An Alternative to Tort Liability and No-fault Compensation
| Author: |
Hassan El Menyawi LLB, BCL
Osgoode Hall Law School of York University
|
| Issue: |
Volume 9, Number 4 (December 2002)
|
Contents:
- After the events of September 11th, a decision was made by the Bush administration to allow the victims and victims' family members
to qualify for compensation. Many in America did not think it was unfair for victims to be given compensation to recuperate. In fact,
they believed that it would be unfair for a nation to turn a blind eye on the grievous suffering of its fellow citizens, particularly
in an event, which was not the result of choices made by the victims. For many Americans, asking them to sue Osama Bin Laden in a
tort case would not be viable.
- Clearly, this re-opens the question about whether tort liability is a viable option. But when one comes to think about this question
in greater depth, it seems clear that no-fault compensation also has its share of difficulties. For example, it may send a signal
to potential wrongdoers that committing a fault will likely go unpunished, thereby encouraging the commission of tort-based faults.
- In this article, we wish to revive the discussion about no-fault compensation and tort liability regimes, which was discussed often
in the academic literature of the 1970s when no-fault compensation schemes were being implemented in various nations (in different
degrees and extents). Today, early in a new century, we wish to reconsider these ideas, and in particular, the arguments for and
against both the tort liability regime and the no-fault compensation regime. Of course, in the past, the choice was often cast between
no-fault compensation and tort liability. We, on the other hand, would like to introduce a new supplementary section that would provide
a bit more than merely a description of both types of regimes, by describing a possible alternative to the two traditional regimes
as a third viable way. We hope by presenting a third way we will revive a new dialogue about this critical issue.
- We also hope to attract greater attention to this area of legal theory. In fact, the topic of this article falls under the rubric
of "philosophy of tort law". However, recently the major preoccupation of tort legal theory has been to describe a deontological
theory of tort liability: consider the recent work of Stephen Perry, Jules Coleman, Stone, and the like.[1]
We wish to re-introduce an area of "tort law theory" that has been largely ignored, but that is critical, both at the academic level,
and at the level of the public citizenry.
- This article attempts to articulate new reforms in tort law by recommending an alternative to tort liability and no-fault compensation
schemes, which we have coined as "public tort liability". In the literature up till this point, two major systems have been discussed
in scholarship, tort liability and no-fault compensation, and each of these systems contains distinct advantages and disadvantages.
In this article, we attempt to situate our recommendations in between tort liability and no-fault compensation schemes such that
we construct a system that incorporates the advantages of each of the systems without their disadvantages.
- In this article, we first discuss the definitions and differences between no-fault compensation and tort liability through the philosophical
notions of corrective justice and distributive justice. We then use this difference as a basis to discuss no-fault compensation,
which is justified primarily on the basis of a distributive justice justification and tort liability, which is justified primarily
on the basis of a corrective justice justification. Afterwards, we attempt to present the advantages and disadvantages of no-fault
compensation schemes and tort liability. Briefly, the fundamental advantage of no-fault compensation, which is not present in tort
liability, is that it compensates any victim who has suffered personal injury. The fundamental advantage of tort liability, which
is not present in a no-fault compensation scheme, is that it allows for deterrence and accountability.
- Overall, we attempt to demonstrate that no-fault compensation and tort liability each have advantages and disadvantages. By doing
this, it becomes clear that in order to persuasively reconcile the two schemes, it is essential that the reconciled scheme promote
the advantages of tort liability and no-fault compensation while minimizing its disadvantages. At the end of the article, in part
(ii), we attempt to determine whether it is possible to develop a scheme that accomplishes the task of reconciling tort liability
and no-fault compensation. Our conclusion is that it is possible to reconcile the two schemes by developing an alternative scheme
called "public tort liability". We explain what it is and how it might work if implemented.
- When discussing the advantages and disadvantages of no-fault compensation and tort liability, we do not attempt to get into much detail.
Our purpose is to highlight some of the important differences between the two approaches and outline their significant advantages.
Our overall purpose, after highlighting the advantages of each type of scheme, is to consider whether it is possible to reconcile
the two approaches. Again, in the last section, where we consider the viability of reconciling both schemes, we do not attempt to
provide detailed explanation of how the reconciled approach (public tort liability) would function. Rather our purpose is merely
to demonstrate that it can be reconciled, at least, for now, at a theoretical level. The detailed work with respect to how it would
be structured, what the procedure would be, how it would function when certain contingencies arise are not the subject of this article.
- We first explore the general differences between corrective justice and distributive justice. We then use this distinction to differentiate
no-fault compensation and tort liability. After explaining this, we describe the advantages and disadvantages of no-fault compensation
and tort liability. We do this in parts B and C.
- In this section, we describe the differences between corrective justice and distributive justice, since we use these concepts as part
of an overall background framework to describe the ideas of no-fault compensation and tort liability. Since we are using philosophical
concepts, such as distributive and corrective justice, this implies that our approach is formalist.[2]
- On a formalist account, a theory of justification stands for the idea that law is not merely a huge collection of separate and disparate
norms, but a cohesive social arrangement, which is describable in the form of one or several moral values. Formalism is the method
that attempts to deduce the implicit moral values that permeate a particular category of law, such as tort law. We adopt this methodology
and account for tort law by exploring a variety of distinct justifications. Each of these justifications, when articulated, accounts
for a separate tort regime or structure.
- Aristotle saw justice, unlike other virtues, as primarily social, rather than personal. Rather than focusing on the individual's inner
dispositions and character, justice concerned the relationships between individuals in society. Its domain was the person's external
acts and "holdings",[3]
such as money, honours, or security. Like other virtues, however, justice had a mean, or intermediate point between excess and deficiency.
This point is termed "equality" or "fairness".[4]
With respect to "holdings", the just mean is the mid-point between the two injustices, consisting respectively of having either too
much or too little in comparison to others.
- Aristotle believed that justice operated in two modes or forms, each of which corresponded to an operation. These two modes are termed
"corrective justice" and "distributive justice". Distributive justice involves a distribution, whereby a benefit or asset is divided
among the members of a group according to some criterion of comparative merit. The criterion is selected for a particular purpose
and is applied consistently to all members of the relevant group who qualified for participation in the group. The greater the party's
merit under the criterion of distribution, the greater his share of the benefit or assets would be. Distributive justice is just,
inasmuch as the ratios applied in the allocation are equal. Aristotle called this type of equality "geometrical".[5]
- Corrective justice, on the other hand, did not feature "distributions", but rather "transactions". Transactions are either voluntary,
being consensual transfers by a person of some or all of his holdings to another, or involuntary, resulting from one person depriving
another of some or all of his holdings without the latter's consent. Equality in corrective justice is not an equality of ratios,
but rather an equality of quantities. Aristotle refers to such equality as "arithmetic".[6]
The object of corrective justice is to restore to the party who had been wrongfully dispossessed of something rightfully belonging
to him, either the thing itself or its value. In other words, to give her back her "due". In that way, the mean (being the initial
holding at the start of the transaction) would be re-established,[7]
thus recreating a notional equality. The merit or worthiness of the parties is irrelevant to the idea of the Aristotelian view of
corrective justice.
- Implicit in the distributive justice is the notion of some form of social community (the members, which participate in the distribution)
and some criterion of distribution selected for a purpose. These elements are less significant for corrective justice, which relates
primarily to transactions between individuals as regards their respective holdings. The concept of one's due is purely private and
individual in corrective justice, and there is no duty to confer ownership on others, but only to refrain from depriving others of
what is their due.
- The difference between corrective justice and distributive justice, therefore, relates to the structure by which interactions are
ordered by the legal system. As Weinreb comments:[8]
To take a modern example, the legal regime of personal injuries can be organized either correctively or distributively. Correctively,
my striking you is a tort committed by me against you, and my payment to you of damages will restore the equality disturbed by my
wrong. Distributively, the same incident activates a compensation scheme that shifts resources among members of a pool of contributors
and recipients in accordance with a distributive criterion. From the standpoint of Aristotle's analysis, nothing about a personal
injury as such consigns it to the domain of a particular form of justice. The differentiation between the corrective and distributive
justice lies not in the different subject matters to which they apply, but in the differently structured operation that each performs
on a subject matter available to both.
- The structure of the American tort law system is eminently corrective, inasmuch as virtually all compensation (except work-related
injury) for loss or damage is sought through litigation by the injured party (or his private insurer) against the party alleged to
be legally responsible for the harm sustained by the plaintiff.[9]
- In most other industrialized countries, by comparison, compensation for a wide array of different losses and damages caused by wrongful
acts or omissions (e.g. automobile or industrial accidents or sickness/disability) are secured through public insurance schemes commonly
referred to as no-fault compensation schemes. Such programs bear the imprint of distributive justice, in the Aristotelian tradition,
because the benefits they provide are allocated out of a common fund (to which all citizens involved typically contribute) and the
quantum of benefits so distributed is determined by the application of defined criteria of entitlement, applied uniformly in accordance
with legislation governing the schemes concerned.
- Compensation plans are increasingly replacing tort liability as a more attractive device for accident compensation. It all started
with Bismark's first Workmen's Compensation Act in 1883 and has gathered pace with the growing quest for social security in the modern
welfare state.[10]
- Workmen's compensation, whether in its original structure or merged into a comprehensive social security system, provides preferential
benefits for job-related injuries. Specialized plans for particular type of accidents are proliferating in such areas as road traffic,
aircraft crashes, and victims of violent crimes, drug and vaccine, even sporting injuries. The ultimate objective of comprehensive
and exclusive no-fault accident compensation has been blossoming in New Zealand since 1974 and by a hair's breadth came close to
realization in Australia in 1975.[11]
Currently, in Australia and England, no-fault compensation schemes are set up for particular purposes.
- Proponents of no-fault compensation believe that the tort liability regime is inadequate as an accident compensation scheme for a
variety of reasons (that we explore when we consider the advantages of no-fault compensation and the disadvantages of tort liability
below). They believe that it is practical and more egalitarian. Typically, it is justified on the basis of justifications that can
be categorized as distributive justice justifications. For example, no citizen would claim that suing in negligence is a form of
accident insurance. This is evidenced by the fact that no person "rationally eschews accident insurance on the ground that she or
he already has sufficient protection through the tort system".[12]
- Ultimately, if compensation is the goal, the rational response is to obtain disability insurance regardless of whether the loss is
the result of fault or its lack. When compensation (as opposed to finding fault) becomes the central goal, we are, in effect, shifting
away from a fault based system that is based on individual responsibility towards a no-fault system based on collective support.
These alternative compensation schemes, (which can also be referred to as public or social insurance schemes), therefore, exist independently
from liability law.
- Almost all no-fault compensation schemes that have been set up worldwide have almost exclusively been for personal injury as opposed
to property damage. In many cases, governments (that have implemented no-fault compensation schemes) have financed these alternative
compensation schemes by restricting tort claims.[13]
However, there are many who argue for a total revamping of the tort system by completely moving from a tort liability system to a
compensation system. Others, which we are among, suggest a partial replacement of tort liability. For the purposes of this article,
we solely focus on the compensating victims for personal injury and not other types of injury or harm.
- Today, there are several nations that have adopted no-fault compensation schemes through legislation. Most legislation in this area
covers personal injury cases. Englard states that there are two reasons that explains this:[14]
First, personal injuries call for social solidarity. The physical impairment of the body is conceived to be
a matter of collective responsibility. Medical care, rehabilitation, and sustenance are social goals independently
of the cause[,] which necessitated them. Modern welfare society assumes, to various degrees, collective responsibility for
the misfortunes affecting a person's bodily integrity. In modern society, the individual
stricken by misfortune, as a result of accident, or otherwise, tends to consider himself deprived of a good
and, therefore, entitled to compensation, if necessary from the collective.
- The second reason is that personal injury has a special status. Englard argues that the "extent of the damage is easier to calculate...[and]
therefore, [would] be better handled by collective insurance".[15]
Englard continues:[16]
Past earnings are known; future earnings are statistically quantifiable according to professions and branches.
Moreover, the calculation of both pecuniary and non-pecuniary damages can be standardized on the basis of objective
criteria. If necessary, ceilings on the amount of compensation can be imposed in function of
certain reasonable averages.
- Englard compares bodily harm with financial harms. He explains that the economic value of the human body is limited, but consequential
financial harms are unlimited.[17]
Generally, it is for this reason that scholars argue that financial losses should not be included in a no-fault compensation scheme.[18]
- In this part of the article, we review the relevant arguments about the disadvantages of adopting a tort liability regime and the
advantages of adopting a no-fault compensation scheme. We discuss these two topics in the same section because it can be argued that
the disadvantages of the tort liability regime simultaneously represent the advantages of adopting a no-fault compensation scheme.
- Professor Weinreb believes tort law is based on Aristotle's notion of corrective justice. Tort law is based on the idea that wrongful
gains and wrongful losses are to be corrected in an "immediate personal interaction"[19]
between wrongdoer and victim. For Weinreb, corrective justice connects the entitlement of one party to the liability of another.
Corrective justice relates the parties directly through the harm that one of them inflicts on the other. Weinreb states that it "treats
the doer and the sufferer of the harm as the active and passive participants in a single relationship".[20]
Weinreb continues:[21]
Its unifying principle is the sheer correlativity of harm done and harm suffered. Neither the doing
nor the suffering counts independently of the other. The doing of harm is normatively significant only because of the
suffering that is correlative to it. For purposes of corrective justice, doing and suffering are not separate events
but the correlative aspects of a single event.
(i) Disadvantages of adopting a tort liability system
(a) Considering a momentary loss of attention
- There are, however, a number of difficulties with the tort liability regime. Feldthusen points out[22]
that the symmetry between loss and gain disappears when, as perhaps in a motoring accident, an instant's inattention makes a person
liable for millions of dollars. This, in his view, is contrary to the dictates of our moral intuitions. It is difficult for him to
seriously conceive of a moment of inattention as a wrongful gain.
- Feldthusen refers to this momentary loss of attention by an individual as inadvertent negligence. Examples include the assembler who
forgets to tighten a bolt or the child who fails to notice the child on the tracks. Imposing negligence liability does not have a
deterrent effect on these types of examples. Feldthusen is concerned that a momentary lapse of inattention can ensue in negligent
liability.[23]
This is due to the fact that people who act inadvertently are not acting in ways that presuppose the use of their conscious, rational
minds. If they were, they would probably consider several ways to avoid injuring someone.
- The fact that tort liability is blind to these distinctions makes tort liability a less advantageous regime. Felduthsen would probably
argue that no-fault compensation is an improvement over tort liability because it does not focus on fault, thereby excluding inadvertent
negligence of the defendant from the range of faults. Admittedly, however, a no-fault compensation scheme would not overlap exactly
with what Feldthusen would consider ideal, because he still wishes to hold those who commit advertent negligence accountable for
their wrongful actions.
(b) The increase in private insurance
- The second problem is the fact that corrective justice is no longer about correcting the wrongdoer's wrongful act, since many defendants
have private insurance. This violates corrective justice's requirement that there be an "immediate and personal interaction" (or
direct response of the wrongdoer to the victim), which is "the linchpin of Aristotle's and Weinreb's [idea of] corrective justice".[24]
Indeed, this violation of corrective justice, which is the basis of tort liability regimes, has been used as an argument to adopt
no-fault compensation: since the individual accountability of tort liability is, for the good part, removed, we should just adopt
a no-fault compensation scheme.
(c) Poor defendants in tort liability
- A third problem is that there are many persons who are poor who commit torts, but they are never actually sued because they are not
financially well off. Indeed, this creates two fundamental problems. First, it creates an inequality with respect to who can be sued,
which can be seen as being unfair.[25]
Second, it shows that punishing fault through compensation can be seen as a special regime for a particular class of society: usually
rich defendants. Johnson states:[26]
The impecunious defendant, guilty though he may be, may not be sued at all, if it is n[o]t worth anybody's time. The
middle class defendant may be charged (or settlement accepted) for the extent of his insurance, and the rich one
may be sued for millions, all for the same offense. This is...patently unfair.
- Of course, in a no-fault compensation scheme, the existence of harm, whether caused by a poor person or not, is sufficient reason
to compensate the victim. This clearly provides an advantage over the tort liability regime.
(d) The inequality between rich and poor defendants in tort liability
- Many scholars consider tort liability patently unfair because rich defendants pay while poor defendants do not, but also because
a plaintiff who is injured by a rich defendant has the opportunity to get compensated while a plaintiff who is injured by a poor
defendant does not have the same opportunity. These scholars end up questioning the appropriateness of justifying tort law on the
basis of corrective justice, and go so far as recommending a system justified on distributive justice, and in particular, public
insurance schemes, and more precisely, no-fault compensation schemes.
(e) No damages because there is no fault committed by the defendant
- Tort liability can be seen as disadvantageous because it compensates victims ONLY when the defendant has committed a fault. The result
is that many people cannot get compensated for damages. This violates the moral intuitions of many people, but others argue that
this is consistent with the idea of corrective justice, which is premised on the idea that fault is corrected through the compensation
of the victim. Of course, advocates of no-fault compensation argue that corrective justice does not represent the entire spectrum
of morality, and that a distributive justice justification is necessary to guarantee relief to persons who suffer personal injury,
whether or not it is caused by the fault of another human being.
(f) The Arbitrariness of tort liability
- Personal injury tort law too often compensates in an arbitrary, perhaps whimsical, way. People usually receive lump sums[27]
instead of periodic payments (as they need them).[28]
And, they often receive their money long after the accident.[29]
Moreover, lawyers' talents, plaintiffs' demeanor, defendants' grit, and the idiosyncrasies of jury composition combine to hand similar
victims altogether dissimilar results.[30]
- Geographical bias also pervades the system. In an empirical study of malpractice claims, Professor Danzon found that "urbanization
is the single most powerful predictor of both frequency and severity of claims, even after controlling for higher physician and lawyer
density in urban states".[31]
For some, this demonstrates that there is an arbitrariness in tort compensation.
- No-fault compensation, on the other hand, has the potential of providing a consistent amount of damages for similarly situated cases.
This is achievable (in no-fault compensation) because the state attempts to compensate any victim so long as they fulfill the eligibility
criteria. The eligibility criteria are the same for all victims regardless of their backgrounds. No-fault compensation advocates
argue that tort liability, on the other hand, is inconsistent since lawyers' talents, for example, can make a significant difference
in the amount of compensation a victim is given. No-fault compensation advocates therefore conclude that no-fault compensation is
a fairer and more egalitarian scheme for a society to adopt.
(g) The problem of tort liability's long waiting time for victims
- There is a problem with the length of time that victims must wait before a victim finally receives damages for the fault of a defendant.
This happens for two reasons. The first reason is that the victim feels uncertain about whether or not she can finally receive compensation
for her damages. The second reason is that victims often need immediate financial aid to recuperate. Both of these concerns are not
directly addressed by tort liability. Clearly, no-fault compensation has the advantage of providing immediate financial help, since
the state does not have to separately assess whether the defendant committed a fault. This constitutes a significant advantage over
the tort liability regime.
(ii) Advantages of a no-fault compensation scheme
(a) Not all damages can be compensated in tort liability
- Tort liability law cannot, however, provide compensation for all. Tort liability is by definition, a restrictive class, since it must
fulfill the criteria for tort liability; the defendant must commit a fault, the fault must be causally linked to the damages, and
there must be actual damages. Clearly, this excludes victims who suffered as a result of an act of God or by persons who did not
commit a fault.
(b) The problem of identifying a defendant
- No-fault compensation advocates argue that tort liability regimes are less advantageous (when compared to no-fault compensation schemes)
because of the difficulties of finding the necessary proof to hold a defendant accountable. Often, the problem is centered on determining
the true cause of the victims' damage(s). Consider cases where plaintiffs cannot identify which of several defendants caused the
damage in question. However, in no-fault compensation, there is no need to determine who exactly caused the fault that resulted in
the victims' damages.
(c) Friends and family members as defendants
- There are also many instances wherein the fault that caused damages was the result of a friend or family member. Such accidents typically
take place in familiar contexts, such as in one-car mishaps, in-home accidents, and recreational accidents.[32]
For example, most recreational accidents are between friends, colleagues, or family members.[33]
Most people, even if they are victims of negligence, do not legally pursue their friends, colleagues, and family members. This would
mean that most people who suffer damages in these contexts do not receive any compensation for their damages. Clearly, no-fault compensation
schemes remedy this problem, since plaintiffs can simply apply for compensation by showing damages.
(d) Not every victim obtains tort liability
- A British survey found that no more than 12 percent of all British accident victims obtain tort (liability) damages.[34]
In the medical context, Professor Patricia Danzon estimates that of those injured by medical malpractice only one in twenty-five,
at most, recovers through the tort system.[35]
(e) Moral rationale to compensate victims even though the defendant did not commit a fault
- Many no-fault compensation advocates make a moral argument that there is an intuitive reason to adopt a no-fault compensation scheme.[36]
The argument is that recovery for personal injury is crucial to the protection of individual bodily security. They argue that differentiating
victims of personal injury between those who are victims as a result of human-caused fault and those who are not is not consistent
with our moral intuitions. They believe that many victims who have suffered personal injury are deserving of the same amount of concern
and attention as victims who receive damages in the context of the tort liability regime. They argue that whether a person is a victim
of a defendant's fault or not, she still feels pain and suffering from the damage inflicted on her. That, they say, is morally sufficient
to compensate.
(f) Different reasons that result in the under-compensation of victims
- An important reason why it is relevant to have a no-fault compensation scheme is that many enterprises do not have liability insurance.
Also, plaintiffs settle cases for less than their full losses because of delay, lack of proof, urgent financial need, contributory
negligence, and limited defendant insurance. Even without these, we must consider the time and expenses it takes for a plaintiff
to take a defendant to court. Altogether, there is a substantial gap of uncompensated or under-compensated victims.
(g) Less Administration Costs
- The tort system is very expensive to operate in comparison to modern no-fault compensation systems.[37]
A shockingly small share of the money paid in for liability insurance ever finds its way back out and into the hands of victims.
The reasons stated by Sugarman are:[38]
First, there are large insurance commissions and other marketing costs that come with privately marketed, often individualized,
insurance policies. Next, highly
individualized and unpredictable tort law rules promote exorbitant claims
administration, including investigation costs and lawyer fees. Although precise estimates are difficult
to come by, it seems widely agreed that typically half or more of liability insurance premium payments are ground up in
transaction costs. When payments for losses already covered by collateral sources and for pain and suffering
are subtracted, one finds that only about 10-15 percent of costs of the tort system go to compensating victims for
out-of-pocket medical expenses, lost income, and the like.
- In addition to the above, Sugarman argues that plaintiffs and defendants both lose by incurring uninsured costs and time by going
through the tort process.[39]
There is also a great public expense to support the judicial system in the form of judges, juries, and administrative time. Compared
to health care, personal injury law is quite wasteful.[40]
The advantages in cost-savings are clear when we consider New Zealand whose accident compensation scheme allow 90% of expenditures
to be used on injured people; administrative and other transaction costs claim only 10% total.[41]
- James Kakilik and Nicolas Pace estimated the expenditure of tort litigation in 1985 to be around $29 to $36 billion dollars, but the
sum paid as compensation amounted to $14 and $16 billion, which is almost less than half.[42]
This includes the total costs of the tort system and the share going to the plaintiff as compensation after lawyer fees and other
associated judicial and extra-judicial costs.
- In this part, we first look at what is not included and then criticize the entire thing. And second, we look at some of the problems
associated with no-fault compensation schemes.
(1) Deterrence and Punishment: The non-inclusion of tort liability advantages in no-fault compensation schemes
- We classify the social goals of deterrence and punishment in the category of corrective justice. We do this because they are typically
justified on the basis of corrective justice. For example, people typically justify punishment as a mode of reparation for a wrongful
act. This is clearly corrective, because but for the existence of some wrongful behaviour, there would otherwise not be a basis to
punish. Also, in tort liability regimes, we can assume that deterrence is likewise related to corrective justice in the sense that
we punish wrongdoers to deter potential wrongdoers. Since we punish wrongdoers and not just any person in tort liability regimes,
deterrence can also be considered a species of corrective justice. Therefore, although punishment and deterrence are not entirely
justifiable on the basis of corrective justice, for the purposes of this article, we categorize them under the rubric of corrective
justice justifications for the reasons mentioned.[43]
(a) Deterrence
- Many adherents of tort and fault-based liability lament the undermining of the corrective justice principle and its replacement with
a no-fault compensation system premised on distributive justice because it depreciates the value of personal accountability.[44]
They argue that no-fault compensation schemes do not have the effect of deterring wrongdoers. In fact, they argue that no-fault compensation
schemes do not send a message 'not to act in harmful ways'. After the advent of no-fault compensation, tort liability supporters
often invoke deterrence to justify liability. The deterrence justification states that the "prospect of being held liable will deter
negligent conduct".[45]
- However, deterrence includes many different forms of conduct. Professor Feldthusen divides conduct into acts of individual inadvertent
carelessness and advertent negligence (and willful conduct).[46]
He believes that the deterrence implications differ for each type of negligence.
- Professor Feldthusen asks us to consider the pure negligence case of an isolated individual act of inadvertent carelessness. As examples,
consider the assembler who forgets to tighten a bold, or the physician who misdiagnoses the patient, or the engineer who fails to
notice the child on the tracks. Potential negligence liability has no direct impact on cases like this. According to Professor Feldthusen,
moments of inattention should not be considered as part of negligence. However, he also believes that negligence for advertent negligent
conduct should be legally enforceable.
- But there cannot be any deterrence even for advertent negligent conduct if there are no-fault compensation schemes. This does not
send the appropriate signals for persons not to act in wrongful ways. In fact, it may do the reverse and send signals that it is
fine to conduct oneself in negligent ways. This is a troubling possibility that ought to be considered when implementing a no-fault
compensation scheme.
- Statistical research carried out by famous law economist Micheal Trebilcock shows that implementing no-fault compensation schemes
correlates with an increase in physical injuries and fatalities. He examined data from fifteen American states that had adopted partial
no-fault schemes, and found that fatalities in each state had increased by between 376 and 1,009 a year.[47]
An examination of auto fatalities in New Zealand following the adoption of a universal accident compensation scheme in 1972, (which
effectively abolished all tort claims for personal injuries), found that road fatalities increased by 16 percent per capita.[48]
- Another study conducted in Québec[49]
before and after the adoption of a pure no-fault automobile insurance scheme in 1978 shows that bodily injury accidents increased
by 26.3 percent a year after the adoption of the scheme, and fatalities by 6.8 percent, which is equivalent to 100 additional deaths
a year.[50]
Overall, Michael Trebilcock argues that a no-fault scheme does not provide the necessary incentives to deter wrongful conduct. Related
to this, Trebilcock also concludes that a liability scheme is generally a more effective approach to deter wrongful conduct.[51]
(b) Punishment
- Another significant justification of tort liability is punishment. Professor Fleming explains that punishment is justified on a moral
basis. The justification of punishment rests primarily on the idea of retribution. The idea is that the wrongdoer is inflicted with
pain in retribution for the wrong done to the victim. And since it is the victim and not a third party, such as the state, that calls
for the punishment in tort liability cases, punishment and vengeance are closely related.
- The idea that vengeance is a justification of tort liability returns us to the original justification for the existence of tort law.
In medieval England, redress for injury appears to have served the function of ameliorating the desire for revenge.[52]
The kinsfolk of an injured person were "rewarded" for abstaining from clan warfare by receiving damages according to the station
of the victim.
- Overall, punishment and vengeance plays a role in justifying tort liability that is eliminated if we introduce a no-fault compensation
scheme. This is because no-fault compensation does not demand that the defendant pay for his wrongdoing. Simultaneously, if the plaintiff
receives compensation from the state knowing that her defendant has not paid for the harm caused to her, it would certainly not satisfy
her sense of vengeance.
(2) Problems with no-fault compensation schemes: the limitations of distributive justice justifications
- In this section, we discuss several points that are related to the adoption of a philosophy of distributive justice. The first point
is that no-fault compensation schemes tend to under-compensate victims of personal injury. And the second point is that rich plaintiffs
tend to be under-compensated. The third point is that no-fault compensation deprives plaintiffs from the moral satisfaction that
comes with the legal pursuit of a defendant.
(a) The under-compensation of victims
- The shift from liability to no-fault compensation results in a "limitation of compensation. Essentially, loss of income is subject
to a maximum amount or statutory ceiling".[53]
The calculation of other heads of damages is made often according to "standardized criteria",[54]
such as degree of hospitalization.[55]
Also, victims can only be compensated for personal injury, and not for mental distress.[56]
- According to Englard, these limitations are traced to the distributive justice justification that is inherent in social insurance.[57]
The limitations are the result of the fact that the state is only capable of compensating so much, since its financial capacity is
limited. In a private tort liability system, however, the plaintiff's claim can theoretically be as high as the defendant's net wealth.
(b) The under-compensation of rich plaintiffs
- Furthermore, many no-fault compensation programs have institutionalized favoured groups of accident victims, particularly victims
who are members of poorer socioeconomic groups. These schemes focus on the victim's economic situation prior to the accident.[58]
Englard states:[59]
A complete restoration of the affluent victim would constitute a violation of the principle of social
equality. On the other hand, the limited compensation of the wronged victim constitutes an infringement of
the corrective justice principle, postulating the full restoration of the pre-accident situation.
- But is it true that restoring the affluent victim constitutes a violation of social equality? If the concern here is to compensate
a person for the fault of another person, why ought she, even if she is rich, pay for the fault of her wrongdoer? This arguably creates
a social message that we are a two-classed society wherein we value the damages that are suffered by those who are less economically
well off over those who are rich.
- On the other hand, this system is premised on distributive justice. Society, therefore, can distribute to whosoever it pleases. Furthermore,
if the concern is social equality, it can be argued that the rich can already pay for their fault, and the poor cannot. To remedy
the problems of social equality, the state can only compensate the poor therefore.
- However, a rich person may not compare himself with a poor person, but with other rich persons, since this is his social reference
group. As a result of suffering harm at the hands of another person, he must attend to his wounds with his own finances, while another
rich person who is similarly situated can use her income without worrying about attending to any wounds. This demonstrates that the
equality between rich persons is breached. In other words, no-fault compensation schemes create new forms of inequalities that do
not exist in a tort liability system, (which is premised on corrective justice).
- Ultimately, the state does not have unlimited funds, and so, makes the rich responsible for the suffering inflicted upon them. Of
course, this ensures that, at least the poor, who tended to have been ignored in the tort liability regime, would be compensated.
This is a strong argument for the adoption of no-fault compensation scheme. However, this does not do away with the concerns about
rich plaintiffs.
(c) The need to create meaning through litigation
- Tort liability implies that the plaintiff must get her justice by suing the defendant. In particular cases, such as asbestos cases,
nuclear cases, deaths, reckless harm, etc., the plaintiff uses the litigation process as a means to heal herself. The litigation
process also provides the opportunity for plaintiffs to instill meaning and purpose in their lives. Indeed, these advantages are
lost in the context of no-fault compensation because the state simply grants compensation to the plaintiff. In fact, it can be argued
that no-fault compensation can potentially aggravate mental distress because it does not hold the defendant accountable, thereby
making the plaintiff feel that justice was not done. This can prove to be psychologically distressful to a plaintiff, even if she
is compensated for her personal injuries.
- The choice has often been characterized as between social insurance and tort liability. The framing of this choice has led to fundamental
clashes of political ideology, particulary between the individualist, liberal, free-market approach with the collectivist, egalitarian,
socialist approach.[60]
According to Englard, most of the public is placed somewhere in the middle, between the extremes.[61]
Of course, finding this middle ground becomes key to persuading different national communities to adopt a system of compensation.
- The debate, according to Englard, is framed such that "adherents of a tort theory...lament the resulting depreciation of the idea
of personal accountability and oppose the violation of a wrongfully injured person's right to full compensation".[62]
The supporters of a deterrence theory lament the supposedly "inevitable growth of [the] accident rate".[63]
There are also those who vociferously fight for no-fault compensation on moral grounds particularly to support and recover all or
most personal injury or disability claims since they are considered morally urgent. Their ideal is for financial support for all
injured, ill, and disabled people, "irrespective of the cause of their condition, but based on their relative need for support".[64]
- Clearly, the challenge in this area is to find some avenue that can reconcile no-fault compensation and tort liability. Indeed, such
reconciliation, if possible, should reflect the advantages of both no-fault compensation and tort liability, (or by that token, should
demonstrate that the disadvantages of both no-fault compensation and tort liability have been eliminated).
- To reconcile the justifications of distributive justice and corrective justice, we propose that the state create a compensation scheme
for victims. Such a compensation scheme would independently compensate victims who suffer personal injury regardless of the cause.
In other words, the state would compensate a victim of personal injury whether or not the injury is the result of an act of God,
the fault of a person, or caused by a person, but not as a result of a fault. This allows victims of personal injury to benefit from
the advantages of no-fault compensation, as discussed above.
- Of course, the above recommendation (if taken by itself) is not unique and does not reconcile the corrective justice justifications
of tort liability with the distributive justice justifications of no-fault compensation. The unique feature about our overall recommendation
is that, although the state compensates all victims who suffer personal injury, the state also pursues wrongdoers (or defendants)
who committed the faults that resulted in the suffering of victims. We recommend that the state demand, after having assessed whether
the wrongdoer did commit a fault and the extent of the damages, as well as financial ability of the defendant, to come up with a
figure that the defendant ought to pay to the state. This is analogical to criminal law where the state (instead of the victim) pursues
the criminal.
- In other words, this system is characterized by the disassociation of the defendant and the plaintiff. This disassociation is replaced
with the interposition of the state, which compensates the plaintiff and demands compensation from the defendant. The compensation
of an individual, unlike justifications of corrective justice (as presented by Weinreb or Englard for example), is not associated
with the fault of the defendant, yet the defendant must still take responsibility for her fault by paying the state the damages that
he caused, if any. This, therefore, preserves the idea of blame, accountability, and deterrence, while still compensating any victims
of personal injury. It also allows plaintiffs to receive immediate, (and if not, quick), recovery, while the state separately pursues
the defendant to pay damages; the state can take all the time it needs to determine whether the defendant committed a fault, and
if he did commit a fault, the extent of damages. This has significant advantages in terms of preserving due process, since due process
typically requires some time to elapse to consider and analyze the defendant's (and plaintiff's) behavior. We coin the term 'public
tort liability' to describe our recommended approach or regime.
- Clearly, our recommended approach requires an extensive procedure, and correspondingly, a well organized bureaucracy, to ensure that
it functions properly. However, we do not discuss or recommend types of procedure or how a bureaucracy ought to be structured for
the smooth functioning of our recommended system. This goes beyond the purview of our article.
- With public tort liability, the benefits of a no-fault compensation scheme and the benefits of tort liability can be combined. For
example, like the no-fault compensation, the public tort liability scheme would be less costly than a fully-fledged tort liability
system. Also, just because a plaintiff suffers as a result of a fault by an economically poor defendant, it does not mean that the
victim cannot receive compensation for her damages. Another benefit is that the state does not have to collect a great deal of taxes
to make a public tort liability scheme function, since the money it collects from defendants' fault(s) can be a vital source of funding
for compensating plaintiffs' damages. These are just a few examples of the benefits that accrue from our recommended scheme.
- Finally, public tort liability reconciles no-fault compensation and tort liability through the disassociation of plaintiff and defendant.
By disassociating the defendant from the plaintiff, public tort liability likewise disassociates distributive justice and corrective
justice, thereby making the pursuit of each possible. Therefore, public tort liability ensures that both corrective and distributive
justice justifications can be realized without compromising the other.
- Adopting a public tort liability scheme places the responsibility of personal injury in the hands of the state. This in turn creates
incentives for the state to reduce the overall expenditures that it spends in the domain of personal injury. In other words, it incentivizes
the state to lower costs and adopt systems and approaches that are efficient, thereby producing short and long-term economic benefits
for citizens. Also, the state can set socially beneficial goals that correct deficiencies that exist in tort liability and no-fault
compensation.
(a) Publicity campaigns
- For example, the state can save money by instituting awareness campaigns, educational programs, and publicity campaigns. For example,
Professor Fleming argues that publicity campaigns "ha[ve] repeatedly prove[n] [themselves] a potent sanction against defective products
or accident prone activities".[65]
Professor Fleming believes that "negligence law condemns people after it is too late",[66]
but publicity campaigns can prevent the occurrence of negligence.
(b) Inadvertent negligence
- The state can also make corrections to the traditional rules of tort liability law. If society does believe, as Feldthusen does, (as
explained above), that inadvertent negligence should not be subject to the penalty of paying damages, then the state can accordingly
draft regulations that restrict the traditional rules of tort liability.
(c) The possibility of compensating mental distress
- Considering the fact that the state now has a stream of funding from prior negligence cases in addition to the supplements that are
derived from taxation, there may be sufficient financial capacity on the part of the state to compensate victims for mental distress,
and particularly mental distress claims that are associated to physical injury. This would be advantageous, considering that mental
distress consists of suffering just as physical injury does.
(d) The equality between rich and poor plaintiffs
- Also, with a sufficient amount of financial capacity, the state can provide rich plaintiffs with at least the same amount of compensation
as poor plaintiffs. This allows the state to compensate victims on a more egalitarian basis. This can be considered a significant
improvement over the approach taken in no-fault compensation schemes, where rich plaintiffs receive less compensation than poor plaintiffs.
(e) Creating disincentives for the poor
- Although poor defendants would most likely not have to compensate their victims for the damages they caused them, the state can create
programs that disincentivize the poor from engaging in negligent conduct. In particular, the state can devise interesting new ways
for poor defendants who cause damages as a result of a fault to take responsibility. For example, the state can reduce their welfare
payments and/or obligate them to perform community service.
(f) Creating a system that allows victims an opportunity to heal and create personal meaning
- The state can also allow victims to participate and assist in the determination of fault, or at least, the determination of the extent
and type of damages of their wrongdoers. This would hopefully provide plaintiffs an opportunity to heal and create meaning (after
having become a victim). This would be an improvement over no-fault compensation schemes.
(g) Corporate liability and insurance
- Finally, there are many corporations that currently have insurance to cover negligence.[67]
In order to ensure that corporations still purchase insurance, (which reduces the financial load of the state), while still ensuring
that companies are sufficiently deterred from engaging in negligent conduct, the state can draft regulations that allows itself to
take a percentage of damages from the insurance of corporations, as well as a compulsory percentage from the corporation's overall
assets/income. This sends a message to corporations that having insurance does not exculpate their actions or mean that they can
act negligently.
- Our recommended approach has a significant problem that must be addressed. The fact that the state decides who commits a fault and
who deserves compensation can pose problems: defendants may disagree with the state's assessment of their fault and the extent of
the damages that it calculates. Also, plaintiffs may not be satisfied with the amount of damages given by the state. This creates
a need for judicial review of state actions and decisions. Ideally, there would be judicial review, such that courts would review
the state's assessment of a defendant's fault and the extent of the damages caused. If the plaintiff or defendant would elect to
have a judge evaluate the state's actions, they are permitted to go to trial. The judge would then evaluate whether or not there
is fault, cause, and the extent and types of damages. We speculate that judicial review would be no different from current cases
in tort liability law.
- We speculate that only some cases would go to the courts, but this would create an adequate body of case law that would in turn provide
sufficient supervision of the state's actions and decisions. This would hopefully limit any state excesses. Clearly, more research
has to be done on how and what type of judicial review is necessary by the courts in this matter. This, of course is a subject for
another article.
- In this article, we have sought to find a way to reconcile no-fault compensation and tort liability. To do this, we attempted to demonstrate
the differences between no-fault compensation scheme and tort liability, followed by a description of the advantages and disadvantages
of each in order to clearly enunciate the factors, which need to be reconciled when constructing a successful alternative model.
With these factors in mind, we recommended a new approach called public tort liability that we believe reconcile the advantages of
both no-fault compensation and tort liability.
- Even if there are still questions about the overall procedure such a system requires to function, the economics behind it, or even
the willingness of the state to trial a new scheme, it is important for academics and the public alike to recognize that alternative
models are possible and should be researched further by scholars in many disciplines.
[1]
See Postema, G., "Introduction", Philosophy of tort Law (Cambridge University Press, 2001) for a description of the major theories
that are currently being articulated in the area of tort law theory.
[2]
Weinreb, "Formalism, Morality, and Corrective Justice", in Ken Cooper-Stephenson, ed., Tort Theory, (North York, Ontario: Captus
University Publications, 1993), at 10.
[3]
Aristotle, Nicomachean Ethics V, trans. Terence Irwin, (Indianopolis, Indiana: Hacklett Publishing, 1985) at para 1130b2 [hereinafter
"Aristotle, Nicomachean Ethics"].
[4]
Ibid. The Greek term "to ison" can mean either equality or fairness. See Aristotle, Nicomachean Ethics, trans. Terence Irwin, at
124.
[5]
Ibid. at para. 1131a29-1131b12.
[6]
Ibid. at para. 1132b18-20.
[7]
Aristotle likened the role of the judge in corrective justice to a geometer who re-establishes the mid-point of a line that has
been split into two unequal segments, by attaching to the smaller segments the portion by which the larger segment exceeds the half.
See Aristotle, Nicomachean Ethics at para. 1132a21-32.
[8]
Ernest Weinreb, "Corrective Justice" (1992) 77 Iowa L. Rev. 403 at 415.
[9]
The corrective justice philosophy, as applied to tort law, still has strong supporters in the United States. See, for example, C.P.
Wells, "Tort law as Corrective Justice: A Pragmatic Justification for Jury Adjudication" (1980) 88 Mich. L. Rev. 2348.
[10]
Fleming, "Tort or Compensation", The Law of Torts, 2nd ed. (Oxford: Clarendon Press, 1985), at 172.
[11]
Ibid.
[12]
Feldthusen, "If this is Torts, Negligence Must be Dead", in Ken Cooper-Stephenson, ed., Tort Theory, (North York, Ontario: Captus
University Publications, 1993), at 407.
[13]
Ibid.
[14]
Englard, "Alternative Compensation Systems", The Philosophy of Tort Law, (Brookfield, Vermont: Darmouth Publishing Company, 1993),
at 110.
[15]
Ibid.
[16]
Ibid. at 111.
[17]
Ibid.
[18]
Ibid.
[19]
Weinreb, "The Insurance Justification and Private Law" (1985) 14 J. Leg. Stud. 681 at 683. See generally also, Weinreb, "The Special
Morality of Tort law" (1989) 34 McGill L.J. 403. The comments in this article do not take into account any changes in Weinreb's thinking.
[20]
Weinreb, supra, note 1 at 10.
[21]
Ibid.
[22]
Feldthusen, supra, note 11 at 413.
[23]
Ibid. at 409-10.
[24]
Ibid. at 413.
[25]
J.T.H. Johnson, "Punishment and Deterrence", Our Liability Predicament, (Lanham, Maryland: University Press of America, 1997), at
111.
[26]
Ibid.
[27]
Sugarman, "Doing Away with Personal Injury Law", in Robert Rabin, ed., Perspectives on Tort Law, (New York, New York: Little, Brown,
and Company Law Book Division, 1995), at 169.
[28]
There are instances where tort liability allows for periodic payments, however, we mention this generally and not as an absolute
statement. We will not explain the precise places where it is permissible because this is not the subject of the article.
[29]
Sugarman, supra, note 26 at 169.
[30]
Ibid.
[31]
Danzon, "The Frequency and Severity of Medical Malpractice Claims", (1984) 27 Journal of Law and Economics 115 at 143.
[32]
See Sugarman, supra, note 26 at 168-9, where he states: "Consumer Product Safety Commission studies show that the most frequent
injury-causing activities include (1) using stairs, (2) bicycling, (3) paying baseball, (4) playing basketball, (5) playing football,
(6) using cutlery, (7) using non-glass doors, (8) using chairs and sofas, (9) using tables, and (10) using nails. Although the list
includes some defective products and some instances of someone else's negligence, most of these injuries simply will not lead to
tort claims.
The Consumer Product Safety Commission reports that the products producing the most severe injuries include (1) cigarette
lighters, (2) gasoline, (3) batteries, (4) drain and oven cleaners, (5) heating equipment, (6) stoves and ovens, (7) swimming pools,
(8) power lawn equipment, (9) home chemicals, (10) money. Once again, however, injuries arising from these products are also dominated
by careless usage by victims rather than products defects. It is important to take account of the fact that cigarettes, alcohol,
automobiles, drugs, and firearms fall outside the Consumer Product Safety Commission's jurisdiction".
[33]
Sugarman, supra note 26, at 167-8.
[34]
See Sugarman, supra note 26, at 168. Less than one in three vehicle accident victims obtained damages, less than one in five work-related
accident victims obtained damages, and less than one in fifty victims of all other accident types obtained damages.
[35]
Danzon, supra, note 30. Also see "Medical Malpractice Liability", Liability: Perspectives and Policy, (R.Litan and C. Winston, eds.)
116 (1988). For a discussion of many reasons why tort victims fail to file claims and evidence of the class-related pattern of claims,
see Abel, "The Real Tort Crisis--Too Few Claims", (1987) 48 Ohio. L.J. 443.
[36]
Sugarman, "Personal Injury and Social Policy - Institutional and Ideological Alternatives", in Nicholas Mullany and Allen Linden,
ed., Torts Tomorrow, (Sydney, Australia: LBC Information Services, 1998), at 302.
[37]
Sugarman, supra, note 26 at 171.
[38]
Ibid. at 172.
[39]
Ibid. at 173.
[40]
Ibid.
[41]
Ibid.
[42]
Ibid. at 172.
[43]
For the purposes of this article, please assume that deterrence and punishment can be categorized under corrective justice.
[44]
Englard, supra, note 13 at 114.
[45]
Feldthusen, supra, note 11 at 409.
[46]
Ibid.
[47]
Trebilcock, "Incentive Issues in the Design of No Fault Compensation Systems", in Saul Levmore, ed., Foundations of Tort Law, (Oxford:
Oxford University Press, 1994), at 308.
[48]
Ibid. at 309.
[49]
Although Québec is a civil law jurisdiction, we comment on it as persuasive authority. Furthermore, no-fault compensation
is part of Québec's public law, and public law in Québec is common law.
[50]
Trebilcock, supra, note 46 at 310.
[51]
Ibid.
[52]
Rabin, "Historical Perspectives on Liability for Accidental Harm", Perspectives on Tort Law, (New York, New York: Little, Brown
and Company Law Book Division, 1995), at 34-5.
[53]
Englard, supra, note 13 at 113.
[54]
Ibid.
[55]
Ibid.
[56]
Ibid.
[57]
Ibid.
[58]
Ibid.
[59]
Ibid. at 114.
[60]
Ibid. at 114.
[61]
Ibid.
[62]
Ibid.
[63]
Ibid.
[64]
Ibid. at 114-5.
[65]
Fleming, supra, note 8 at 175.
[66]
Ibid.
[67]
George Priest, "The Current Insurance Crisis and Modern Tort Law", in Saul Levmore, ed., Foundations of Tort Law, (Oxford: Oxford
University Press, 1994), at 290-3.
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