Friday, June 29, 2007

Tort's Wrongs, Conclusion: A New Frontier

In the past posts I have given three examples of the tension in tort law between its compensatory role and its penal role. The latter is habitually denied by judges but is impossible to ignore without the appearance of great injustice, given that liability is generally attached according to some form of moral culpability.

The result is that Tort law as a whole survives without a clear rationale. If it were meant to compensate claimants, then why require strict standards of causation to link the loss to the action of another? Why grant damages based on what is lost regardless of money's ability to actually help? Why only penalise employers where a tort is in the course of employment and the tortfeasor is an employee rather than a contractor? On the other hand, if it were meant to penalise wrongdoing, then why only extract damages where actual harm has come about and a causal link established? Why determine damages according to loss rather than degree of fault? Why punish employers who could not have prevented employee torts?

Small changes could be made in the interests of more intuitive justice. In the causation area, so much progress could be made by looking at all damage in terms of chance of causation and discounting it appropriately, rather than the all or nothing approach at the moment. This would mean that if medical negligence is 30% likely to have been the cause of harm, the hospital should be liable for 30% of total damages. Equally among those responsible for asbestos or coal dust poisoning, where damages should be apportioned according to the contribution of each individual, and need not add up to 100% due to potential non-tortious factors. In the vicarious liability context, a rationale (and possibly a test) based on employer conduct in putting someone in the position to do wrong would be far preferable to the current mess.

However, such reforms cannot address the problem at the heart of the matter. As I hope to have demonstrated, the only way to rationalise the mess of tort law is to separate out the punitive and compensatory functions, and I propose to do this similarly to how Atiyah originally suggested (before he fell in love with private insurance). This would leave tort law as a purely punitive system alongside criminal law, with actions brought by the state. Its rationale would be to disincentivise wrongdoing, extracting money according to the degree of fault. Ideally, this would not rely on someone actually having been harmed - unjustifiably causing a risk of this would be enough - although this would usually be the best evidence that a tort had been committed. Meanwhile compensation would be dealt with through the same mechanism as compensation where one is hurt in a pure accident, because there appears to be no moral distinction explaining why the mechanisms should be different, once punishment is dealt with separately. Thus I say that social security payments should compensate all injuries, and the money available for this cause should be supplemented with all of that extracted from tortfeasors through the new system.

Once one realises that there is no real justification for the discrepancies between victims of tortfeasors who can affort to pay, victims of tortfeasors who cannot afford to pay (or who cannot themselves afford to go to court), and victims of non-tortious accidents, this appears to be only common sense. However, one big objection to it is that the social security system is generally inadequate for helping people who have received injuries. Therefore at least tort sometimes yields full compensation, and so should be maintained. The idea here is that even between state input and tort awards, there is not enough money for everyone.

The first response to this is to suggest that the state should be willing to put more money into social security to ensure adequate money is given to those in need. However, given the difficulties of this evidenced by systems across the world, more than this is necessary. The suggestion has been that it is better that some injuries are fully compensated and others barely, rather than all being somewhat compensated. There may be something to this. Clearly when we consider catastrophic injuries, only full compensation may help one to get their life back on track, so under-compensating absolutely everyone will give the worst of all worlds.

However, the current tort / social security distinction apportions funds to the injured based on what amount to random and irrelevant circumstances. We may as well pick from a hat those lucky few who are to be fully compensated. Instead, under my proposed system, the state should prioritise the catastrophically injured over those with minor injuries, making sure that the worst off get full compensation to ensure that overall, the minimum possible disruption to lives occurs through injuries.This may appear unfair to those with relatively minor injuries. But it should be kept in mind that our starting premise was that someone will have to lose out due to lack of funds. This prioritisation approach seems better than inadequately compensating absolutely everyone, and also better than randomly fully compensating some but not others.

What are the benefits of my proposed system (which is in truth, not my system at all, but is based on the system in places like New Zealand)? Firstly, it properly penalises wrongdoers according to their wrong and so accords with intuitive justice. Secondly, it avoids the incredible arbitrariness of the current system by which people receive money for injuries, replacing it with prioritisation for those most in need. It avoids the problems of a supposedly litigious culture and also the difficulties for ordinary people attempting to go to court (the financial risks, loss of time, and personal effort) by giving that responsibility to the state. Indeed, the financial point should be emphasised. Poor victims have much more trouble getting compensation than the rich because they often cannot afford the time, bare costs and decent lawyers to effectively go to court, creating a class divide in compensation. My system gives compensation according to need, not resources, while creating a responsible society through adequate punishment for wrongdoing.

Finally, I should point out some of the shortcomings of my system, purely in terms of its scope. The whole way through this I have dealt with personal injury, often considered the central case of tort (and Burrows argues that tort should be restricted to this). I do not see a problem with extension to damage to / loss of property, where priority compensation should go to those who lose more essential property like houses. There is more of a problem when it comes to defamation, but is still potentially possible where irreparable damage to reputation should be prioritised. The difficulties of adequately weighing these three areas together suggest to me that they should be compensated from separate pots, but that is subject to much further consideration. Finally, Burrows raises the spectre of nationalised damages for breach of contract. I see both sides of the argument here, as I see contracts as involving promises between parties creating a special relationship not present in the tort context, but I also know that the ability to recover damages depends on the party with which one has contracted staying solvent. Perhaps we can say that the act of contracting contains with in it assumption of the risk of the other's insolvency in a way which tort acts (in which the victim is usually involved involuntarily) do not. I am unsure on this point and would welcome comment. Nevertheless, these difficulties aside, I am quite convinced that it is quite time for tort law to undergo some major changes.