Dimensions: 6'' x 9'' 120 pages AEI Press  (Washington) Publication Date: March 2003 Paperback ISBN: 0-8447-4178-7 Price: $ 20.00 Add to Cart   Examination Copies

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March 2003
Making Tort Law: What Should Be Done and Who Should Do It
By Charles Fried and David Rosenberg

The system of tort liability in the United States seeks to compensate injured individuals, create incentives for large entities to avoid dangers, and empower individuals to make their grievances felt against large organizations. The authors contend, however, that the current tort system is almost certainly not the best possible way to achieve those goals. At best, they claim, tort compensation represents an uncertain, delayed, and expensive form of insurance. In addition, its disciplining effect on business is haphazard.

Charles Fried, Beneficial Professor of Law at Harvard Law School, is also author of Contract as Promise: A Theory of Contractual Obligation (1981) and Medical Experimentation: Personal Integrity and Social Policy (1974, 1987). He is a former solicitor general of the United States and associate justice of the Supreme Judicial Court of Massachusetts. David Rosenberg, professor of law at Harvard Law School, has written The Hidden Holmes: His Theory of Torts History (1995).

A press release about the book, as well as information about a related book forum, are available. The following is a summary of Making Tort Law.

The social costs of tort litigation are estimated to range into the hundreds of billions of dollars per year. Less than 40 percent of this expenditure reaches injured plaintiffs, while the rest mainly goes to the lawyers on both sides. This deadweight transaction cost exerts a drag on the economy far beyond the expenditure in absolute terms; the burden also includes all of the consequences for individual welfare when businesses pass through their litigation costs in lower employment and wages, and higher-priced and fewer products and services. Naturally, the question arises: What does society get in return? This book identifies the functions that tort law can and cannot serve--essentially, the social "goods" that the system can effectively deliver.

The authors focus on the application of tort law, judicially imposed civil liability (typically for money damages), and accidents resulting from the systematic risks of business enterprise. This legal regime essentially governs the safety and supply of virtually all mass-produced goods and services--including prescription drugs, medical care, and other vital products. It is said to accomplish several primary objectives: prevent socially inappropriate risk-taking; provide those at risk with accident insurance; redistribute wealth from well-heeled businesses to less well-off accident victims, and vindicate individual rights of plaintiffs to a "day in court" and "corrective justice."

Tort law supplements administrative regulation, reputational and bargaining effects in the marketplace, and other social forces that prevent business from taking unreasonable risks. In short, tort law may smoke out and sanction abuses and inefficiencies in the mass production and distribution of products and services and thereby aid in deterring them. But the other proffered functions should be emphatically ruled out. Tort law is patently wasteful and ineffective, as well as generally unnecessary to secure accident insurance or redistribute wealth progressively. The justification for tort liability as a means of vindicating individual rights is a sentimental and distracting myth.

This book offers a comprehensive theoretical and practical perspective for assessing the social worth of the functions of tort law. Based on analysis that sorts worthwhile from worthless objectives, the authors suggest a realistic program for both systemwide and specific reforms. They provide guidelines for determining whether a legislature or court is the institution best suited to take the lawmaking initiative.

The Plan of the Book

The book lays out this argument in four chapters. It begins with an introduction that outlines the social and legal context and overviews the authors' thesis, argument, and findings.

The second chapter develops and applies the normative theoretical measure for judging the social value of tort law: its contribution to enhancing well-being as judged by individuals seeking to promote their own welfare before they know whether they are victims or beneficiaries of the processes of production and the legal system. The central conclusion is that if given the opportunity, an individual would choose a legal system that reduced total accident costs to a minimum. The chapter specifies and critically appraises the several principal means by which a legal regime could secure this result: creating incentives for businesses to take optimal precautions against accidents, supplying optimal accident insurance, and redistributing wealth progressively to fund the undertakings to regulate and insure accident risk. It dismisses deontological assertions of individual process rights--precisely because they command the allocation of scarce legal and other social resources regardless of the adverse effects on individual well-being.

Chapter three analyzes the basic legal institutions and tools that society has for pursuing these particular regulatory, insurance, and redistributive goals and the combined end of minimizing the sum of accident costs. It delineates the structural and operational requirements and constraints of the various options and evaluates their respective benefits and shortcomings in achieving the social objectives.

The fourth chapter considers the comparative advantage of using tort liability to further the regulatory, insurance, and redistributive goals. After demonstrating the superiority of legislatures in providing social insurance and redistributing wealth progressively, the focus turns to tort liability as a means of deterring unreasonable risk. The book then elaborates the role of tort liability as a complement to other law enforcement, market, and social modes of regulating accident risk. The authors propose realistic and achievable reforms of the tort system to facilitate its deterrence function, conduct an information-cost analysis, and derive a "default" rule to allocate the tasks of devising and implementing reforms to the legislature or judiciary, according to the institution best suited to accomplish them.

Appended to each chapter is a detailed bibliographic note describing the relevant leading studies.

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