Economic Considerations Should be the Basis of Tort Law - Essay Example

?Economic considerations, should be the basis of tort law. Tort law is the branch of law covering redressing of wrong done to a person by awarding them monetary as compensation of damages. Tort law covers most of civil lawsuits. The law is usually split into three basic categories. Negligent torts refer to harm and injury caused to people when the torfesor fails to exercise the level of care expected of them. Such negligent torts include accidents. Intentional torts on the other hand refer to harm or injury caused to a person or persons by the intentional misconduct of another or others. Theft, assault, arson and fraud are good examples of causes of intentional torts. Liability torts tend to focus on the damages resulting from a person's act rather than the intention. This means that if an action causes harm, the performer of the same is liable regardless of whether they exercised the expected degree of care or not or whether the action was maliciously done or was a result of an accident. 1 The economic framework states that each society has laws, institutions, policies which lead to inequitable distributions of economic resources and burdens among members of any given society. These economic frameworks because human political processes which eventually lead to change, both across and within societies with time. Structurally these frameworks are beneficial as the economic distributions arising from them usually affect human live. The tort law has over time evolved in many jurisdictions to consider the legal and economical implications since these are the two most important aspects of the tort laws. 1 Nicholas McBride and Roderick Bagshaw, Tort Law (Pearson Education 2008) One theory that has developed is the deterrence theory. This theory is most applicable in accident prevention. Essential the theory aims at reducing the occurrence of accidents by making those responsible for the accident bear heavy financial cost for their unsafe conduct. General and specific deterrence are handled quite differently in tort law. The tort law admonitory effect largely dictates on how specific deterrence goes. Insurance services, however, cushion the defendant from feeling the adverse effects of this approach to tort law. In traffic accidents for instance, the motorist who causes the accident hardly feels a pinch from the monetary damages they are required to pay as the same is catered for by insurance services. The deterrence is completely lost. Deterrence theory has been said to change the primary focus of the tort law. The crafter of the tort law intended to reduce injury through deterring behavior likely to cause harm. a careful and critical analysis of the tort law however proves that the approach of deterring through burdening those who cause harm financially may not have the desired effect due to several factors. The approach assumes that in the normal conditions, people tend hold maximization of wealth as their primary goal. This may not be strictly true in all societies. The theory further makes the assumption that there exists a large psychological relationship between safer conduct and tort law as people will tend to behave more safely to avoid being subjected to tort fines. This assumption tends to suggest that people behave rationally and are guided by projected consequences of their actions. This is not the case on the ground. Studies have shown that a driver is more likely to commit an accident if they have been fined for an earlier accident. Human nature has been described by many classical philosophers as being rebellious. Once a driver has caused an accident and has gotten away with just a fine, they do not improve their driving since their minds are unconsciously programmed that all they will have to do is to pay a fine if they cause an accident.2 The most fundamental question that ought to be asked when analyzing the deterrence theory is: Does tort law really deter? Economic analysis largely dominates legal discussion on tort law. This is in order because the economic aspect of the same cannot be underscored. Civil courts give vast consideration to the projected deterrence effect of the tort decisions they give.3 At the center of every economic model and consequent projection of the cost and benefit, there is the notion which though under tested, is considered true by many legal experts that liability of tort actually deters tortuous conduct. To test whether this is true, one needs to look at the individual and not the general take on the torts. A vast number approaches have been used to explain the rationale of tort laws and deterrence has no doubt taken the center stage of this. Though a lot of study and surveys have been conducted in the field of tort law, very few tests have been undertaken to prove the relationship between the imposing of tort liability and deterrence. The studies however have exhibit a different trend. 2David Howarth, `Textbook on Tort’ in Owen (ed.) Philosophical Foundations of Tort Law (1995). 3Richard Akers, Criminological theories. (Roxbury 2000) Law scholar Michael Smith’s survey in 2005 is one such study that cannot unfortunately be authoritatively taken to show whether imposing tort liability to a wrongdoer does or does not deter members of the general public or even the wrongdoer himself from doing the same. Smith used motor-vehicle and non-motor-vehicle fatality rates from the WHO mortality database for over 50 years from 113 countries and came up with established the following facts. Countries with legal systems based on English common law's fatality rates from motor vehicle accident have fallen below countries using the French civil code systems and those in the Eastern Bloc countries including former Soviet Union members and; earlier in the base period, they fell below countries in the German civil code. Fatality rates from motor vehicles in countries with legal systems based on the Scandinavian civil codes are akin to countries in common law. For fatality from accidents other than motor vehicle, common law countries have the lowest rates, followed by countries with the French, German, Scandinavian and Eastern Bloc legal systems consequently3. Smith’s study fails to consider many important variables including the difference in cultural norms, difference in types of cars, difference in population density and so forth. Smith however introduced a new idea in tort law study. By comparing different tort law systems, he essentially suggested that other avenues and approaches to tort law need to be taken into consideration. 3Richard Akers, Criminological theories. (Roxbury 2000) Various studies have been taken after the Smith study and have all brought different results due to the differences in demographics and legal systems. However, one thing has emerged clear. While threat of likely criminal sanctions were proven to have significant effect on willingness to engage in behaviour that would lead to the same, threat of likely tort liability failed to have the same effect.1 The findings of these studies demand a review of the tort theory. The failure of the courts in many judicial systems to consider the economic capability of the torfesor deals a great blow to the deterrence aspect of tort law a big blow. This is because when the torfesor is well to do, they fail to feel the effects of the tort decision hence are not deterred from committing the wrong once again. 4 While tort liability may be financially punitive, they rarely deter the general public from committing similar acts. It may therefore be prudent to revise the tort laws in respect to deterrence, to consider more than the financial aspect. Economic factors seem to have failed in their intended duty to coerce potential wrongdoers to desist from the same. Legal factors should be taken into account. 4Benjamin Zipursky and Steven Shavell, Economic Analysis of Accident Law (1987). Corrective justice theory is an influential non-economic approach to tort law. The theory regards tort law classically as first and second-order duties. First order is the obligations not to injure. These duties can alternatively be defined as the code of conduct. Second order duties are those of repairing harm resulting from wrongful deeds in the first order. Corrective justice in other words is based on the ideal that a wrong doer has the duty of amending the results of his wrongful deeds. These duties arise upon the breach of first-order duties. That second-order duties basically define the principle of corrective justice, which says that an individual has a duty to repair the wrongful losses that his conduct causes. The distinct features of corrective justice vis a vis Economic Analysis. When analyzed economically, all the legal liabilities are taken to be different costs as there are no normative differences arising from such things as tort liability, licensing fees, and taxes. On the contrary, corrective justice suggests that tort liability goes beyond shifting costs. Though a licensing fee, like a tax does impose a cost, it would be irrational to conclude that when we levy fees and/or taxes we hold people responsible. It is due to this therefore that corrective justice theory holds that differing legal liabilities cannot simply be taken to be implements of interchangeable cost-shifting in a reformer's tool box.5 Corrective justice is based from Aristotle's view of justice in his book Nichomachean ethics which present Corrective and Distributive justice as contrasting. 5 Joseph Carens, Equality, Moral Incentives and the Market (Chicago University Press 1981) As much as corrective justice is considered as being not economical it too takes an economical aspect when it attempts to equalize resources. Such balance is as economical as it is legal. Economics must be considered if the attempt to make the two parties have what is legally theirs, an equal attempt must be made to establish the worth of each party.5 It therefore follows that in the corrective aspect, the economic aspect is as important, in fact perhaps more important than the legal aspect. Distributive justice is another theory in tort laws that is also considered to be economical. The theory has been applied in many concepts in addition to tort law.­­ The theory is one of the central concepts in the Catholic Church traditions. It is closely linked to the ideals of the common good, human dignity, and human rights in the Church context. The theory is taken to be an ethical principle. The theory considers what society or any larger group owes individual members belonging to the group in relation to: a) the individual’s contribution to the common good, their needs, and their responsibilities in the group or society; 2) the resources that are available to the group or society. In this case, market and other financial considerations are made; and 3) the group or society’s role to the achievement of common good. If health care is taken as an index of distributive justice, it would follow that every member in the society receives equitable access to the same insofar as the basic human right to access health care is in existence. The distributive justice theory suggests that society does have a duty to each individual in the said society when in he or she is in serious need. Since the society is made up of its constituent members, the theory implies that all individuals in the society have duties to others who are in serious need. It also looks at the allocation of resources, and considers decisions involving issues such as rationing. In other words, allocation decisions should not be based upon judgments of the quality of persons. Essentially the theory suggests that all Benefits and burdens ought to be distributed in a fair and just manner.6 Approaches of distributive justice : Strict egalitarianism is among the simplest approaches to the theory. It demands radical equality. The principle demands that each member of a larger group is entitled to the same amount of material goods and services. It is based on the ideal that all human beings are equal. When the courts apply the principle, they must establish all that a group has and ensure that each member receives an equal share of the same.7 Even though the principle may seem extremely simple, complexities arise when implementing this. The two such main problems are the formulation of appropriate indices to measure the amount of resources also referred to as the index problem, and the specifying time frames. Due to the many solutions proposed to these problems scholar sometimes consider the principle primary group of many principles. The Difference Principle- The principle considers the fact that wealth of any economy is not fixed. More wealth may be created as has been the case in many industrialized nations in several past centuries. Economists are of the view that wealth is increased most readily in systems that give higher incomes to those who produce more. Proponents of this principle argue that while every person is equally entitled to equal basic rights and freedoms and political liberties, social and economic inequalities must satisfy two conditions for them to be acceptable: these are 6 Richard Lippke Torts, Corrective Justice, and Distributive Justice . (1999) 149-169 7Nielsen Kai, “Radical Egalitarian Justice: Justice as Equality,” Social Theory and Practice, (1979) 209–226. (1) They have to be attached to offices and offices open to all under the ideal equality of opportunity; and (2), they provide the greatest benefit to the least advantaged society members.8 Welfare-Based Principles This principle suggests that equality in distribution is only fair if it improves the welfare of the society.9 Desert-Based Principles These are principles of distribution that differ according to their identification of the basis for deserving. Aristotle proposed that moral character should be taken as the best desert-basis for economic distribution. Later theorists however argued that one’s toil and their industry and productivity, should be the basis for distribution of resources. Most contemporary theorists take three positions; 8Stephen Perry, ‘The Moral Foundations in Tort Law’ in George Fletcher (ed) Iowa Law Review (1992) 9John Rawls, A Theory of Justice, (Harvard University Press 1971) Contribution: People ought to be rewarded for work they do according to the value the work contributes to the social product. Effort: Some theorists argue that people ought to be rewarded in relation to the effort they expend when working. Compensation proponents of this argue that people ought to be rewarded in relation to the costs that they incur while working. 10 10Samuel Hershovitz ‘Two Models of Tort’, 92 Virginia Law Review (2006) 1147 Conclusion. When the tort laws are looked from these three primary theories, it is logical to conclude that the economic aspect takes the center stage in all. It is therefore imperative that a difference in the approach and consideration in tort laws. The legal aspect takes backs stage in the deterrence theory. In corrective justice, the legal and economical aspects show equal prominence while in the distributive theory; economical aspect beats the legal aspect once again. The suggestion that economic considerations should supersede justice as the basis of tort law therefore holds. Bibliography 1 Nicholas McBride and Roderick Bagshaw, Tort Law (Pearson Education 2008) 3Richard Akers, Criminological theories. (Roxbury 2000) 4Benjamin Zipursky and Steven Shavell, Economic Analysis of Accident Law (1987). 5 Joseph Carens, Equality, Moral Incentives and the Market (Chicago University Press 1981) 6 Richard Lippke Torts, Corrective Justice, and Distributive Justice . (1999) 149-169 10Samuel Hershovitz ‘Two Models of Tort’, 92 Virginia Law Review (2006) 1147 8Stephen Perry, ‘The Moral Foundations in Tort Law’ in George Fletcher (ed) Iowa Law Review (1992) 9John Rawls, A Theory of Justice, (Harvard University Press 1971) 7Nielsen Kai, “Radical Egalitarian Justice: Justice as Equality,” Social Theory and Practice, (1979) 209–226. Read More