The question posed for this panel reads as follows: Should tort law be a form of public regulatory law? My answer is no. What I mean by that will become clearer in a moment, but let me offer an immediate set of qualifications. I do not mean to dispute that there are certain respects in which tort law is public. For one thing it is law, provided by government--no service, no sheriff, no tort law. For another, its operation can have widespread effects--a tort suit can change how cars are designed and how health care is delivered, for example. Finally, through its day-to-day operation, tort law undoubtedly promotes public objectives including deterrence of risky or otherwise undesirable conduct, maintenance of social cohesion, vindication of individual rights, affirmation of the equality of persons under law, and reinforcement of the ideal of limited government. (1)
But now consider the following question: What, in the first instance, does tort law promise to do that warrants retaining it as a distinctive facet of our law? (Or: What is it about tort law that renders it capable of delivering goods such as the ones just catalogued?) Because of tort law's unique features--plaintiff-initiated complaints, the right to a jury trial, litigation and adjudication turning on rules and concepts designed to help determine whether a person can be held responsible for having injured another, etc.--its best justification is that, unlike all the other political and legal institutions we have for dealing with antisocial conduct and injuries (administrative regulation, criminal law, public welfare law, private insurance, bankruptcy, contract, etc.), it provides a means by which those who have been wronged can seek redress against those who have wronged them. By contrast, the tort system is not well designed to function as a form of disaster relief for injury victims because of its high transaction costs and its tendency to produce feast-or-famine compensation. It is also not well equipped to provide public safety regulation because of, among other things, judges' and jurors' lack of agenda control, their limited access to information, and their relative lack of expertise and accountability. In this sense, I maintain, tort law is not defensible as public regulatory law.
In providing a negative answer to the panel question, I have already declared myself to be outside the mainstream among torts professors. Indeed, most would profess puzzlement at its having been asked in the first place. To inquire whether tort law "should be" public regulatory law supposes that it could be something else--"should" implies "can." And very few scholars believe that it can. Instead, they would say that the real issue is whether, given that tort law is of course regulatory law, it should be celebrated or condemned. I will argue that tort law is poorly served--and poorly serves us--when academics attempt to describe and defend it as public regulatory law.
Let me illustrate my point by discussing a famous tort suit that raised issues ultimately decided by the U.S. Supreme Court in 2003: State Farm Mutual Automobile Insurance Co. v. Campbell. (2) State Farm issued auto insurance to the Campbells. After Mr. Campbell's careless driving caused a car accident, he was sued for negligence by the person he injured. State Farm took over the defense of the suit and willfully mishandled it. In particular, it declined an offer to settle the case at the rather modest limits of the Campbells' policy. State Farm's "bad faith" breach of the duty to defend resulted in a judgment against the Campbells that exceeded their coverage by more than $135,000 and put them in danger of losing their home. (3)
A Utah jury hearing the Campbells' claim against State Farm awarded them $2.5 million in compensatory damages (mostly for emotional distress). In addition, based on evidence of sharp practices employed by State Farm in handling other claims by other insureds, the jury awarded $145 million in punitive damages. …