Unit 8

The Nature and Aims of Tort Law

What is a Tort?

To commit a tort is, like crime, to violate a legal standard, but the authorized response to a tort typically is the payment of damages.

Economic Account

Accidents causing harm set back the common good. The economic account reasons that by internalizing the costs of accidents to those who cause them, parties will be motivated to prevent accidents that set back the common good. This is similar to the idea of deterrence in criminal law.

Coase

Ronald Coase, however, argues that, under ideal conditions, in many cases there is no loss of economic efficiency (measured purely in terms of dollars) involved in choosing the agent who caused the accident rather than the victim to be liable for damage.

Coase

In either case, each will act in his or her economic interest, so - regardless of who is made to shoulder the loss – if the loss is economically worth preventing, it will be prevented. Thus, in an ideal world, says Coase, if the common good is defined in terms of economic efficiency it will be achieved regardless of who shoulders the burden of liability.

Coase

There are transaction costs in implementing any economic transaction. Coase observes that differences in each party’s transaction costs can affect efficiency. For example, information (or the lack thereof), the cost of bargaining, and the cost of enforcement will not be the same for both parties.

What happens if A and B owns farms along a stream. A is upstream and B is downstream. A’s use of his land triggers floods on B land. A can prevent the flooding of B’s land by installing special run off devices. B can deal with the large amounts of water by installing special draining devices.

Who shoulders the costs?

Coase

The forward-looking view suggests that tort liability be imposed in a way that enables the most efficient accident prevention – that imposes liability for the cost of accidents such that those in a better position to prevent the accidents efficiently have an incentive to do so.

Coase

The Justice Account

The justice account holds that the point of tort law is to rectify an injustice that exists because of a party’s tortuous act. Instead of looking at tort from overall societal good (measured in wealth), the justice account focuses on the nature of the interaction between the tortfeasor and the victim.

The Justice Account

Everyone has a moral right not to have his or her interests set back through the carelessness of others, and there is a corresponding duty of others not to set back one’s interest through their carelessness.

Stephen Perry says that this moral right and duty are two aspects of the same idea.

The Justice Account

The reason not to injure is forward looking, and the duty to compensate, backward-looking, is an attempt to undo the injury, to make it so that the victim is not worse off through being injured. This undoing of injury is the ideal aim of compensation in tort actions.

Duty

Legal duty is one imposed by law and is not necessarily the same as moral duty, which could be much broader.

Duty

One only owes a negative duty of care, that is, to not to commit misfeasance that harms others, and owes no affirmative duty

Duty

Why does tort avoid imposing affirmative duties, even where a small sacrifice could provide a large gain to society? One reason given is that once law begins imposing affirmative duties, such duties would multiply and have no clear logical ending.

Duty

Affirmative duties can arise through certain special relationships, such as engaging in a joint dangerous venture, innkeeper-guest, or property owner-invitee.

These special relationships can be defined with reference to social roles, social expectations, individual expectations, or political or moral arguments.

Breach

Duty is a question of law decided by judges. Breach is a question of fact decided by juries.

An objective “reasonable person” standard is used.

Breach

Oliver Wendell Holmes supposed that it is for the general welfare that an objective standard is used.

Arthur Ripstein argues that an objective standard is justified because corrective justice requires that folks be held to an equal and impartial norm.

Judge Hand

Judge Learned Hand expressed in a formula the breach of duty. The Learned Hand formula is an algebraic formula (B = PL)

The most common economic definition of negligence can be seen in operation in Judge Learned Hand's famous opinion, U.S. v. Carroll Towing Co., 159 F.2d 169, 174 (2nd Circuit 1947).[3] The event that gave rise to the case were as follows: Several barges owned by the Connors Marine Co. were tied together off a busy Manhattan Pier. The defendant's tug boat, "Carroll," removed one of the lines connecting the barges to the pier. When the remaining lines broke, the barges were washed down-river and sank. No one was aboard the barges when they broke away, and the evidence indicated that had Connors' barge operator (the "bargee") been on board, the barges could have been saved. The question for the Court was whether Connors was liable for failing to have its "bargee" remain aboard. Judge Learned Hand wrote that Connor's liability for the lost barge depended on: 

http://cyber.law.harvard.edu/bridge/LawEconomics/neg-liab.htm

Judge Hand

1) The probability that she will break away; (2) the gravity of the resulting injury, if she does; (3) the burden of adequate precautions. Possibly it serves to bring this notion into relief to state it in algebraic terms: if the probability be called P; the injury, L; and the burden, B; liability depends upon whether B is less than L multiplied by P: i.e., whether B less than PL.

http://cyber.law.harvard.edu/bridge/LawEconomics/neg-liab.htm

Judge Hand

A defendant is negligent if and only if B < PL. This formulation of the negligence rule has come to be known as the Hand Formula. Judge Learned Hand went on to conclude that, taking into account the surrounding circumstances (there were strong winds, the harbor was busy, and the ship's cargo valuable), the risk (PL) outweighed the burden of prevention (B). Consequently, he held Connors liable

http://cyber.law.harvard.edu/bridge/LawEconomics/neg-liab.htm

Judge Hand

Cause

“But for” or “cause in fact” test for causation states that but for the breach of duty the accident would not have happened.

Cause

This type of causation could extend out indefinitely, so an additional test is required – that the breach be the “proximate cause.”

Proximate cause exists if the results of one’s actions were foreseeable.

It is not undisputed that injury to one’s body or property is loss. More controversial are damages for pain and suffering, emotional harm, or loss of consortium.

One concern is proof. However, as tort law has evolved damages of this type have, within limits, been recognized as the bases for tort claims.

Loss and Damages

“Make the victim whole” is the general principle by which tort law has measured damages. A difficulty arises when applying this to losses not easily translated into economic terms, such as loss of life or bodily integrity, emotional distress, pain and suffering, loss of consortium, and the like. These damages are not commensurable with money but can be among the most important losses caused by the tort.

Loss and Damages

Loss and Damages

An “indifference measure” holds that one can measure such damages by estimating what one would accept in money to be indifferent between his condition before and after the accident.

Strict Liability

Strict liability can be compared to assumption of risk in that by choosing to engage in the activity that is subject to strict liability you assume the risk of liability for harms resulting from that activity.