New Directions in Liability Law

By Walter Olson | Go to book overview

Neo-No-Fault: A Fair-Exchange
Proposal for Tort Reform

JEFFREY O'CONNELL

The current tort-liability system in the United States cries out for reform. Its laborious and uncertain workings inflict a great deal of personal trauma on both injured parties and defendants. Its excessive legal costs and undue delays are largely responsible for the skyrocketing of liability-insurance rates. It is increasingly viewed by the very people whose behavior it is supposed to regulate as a game of chance in which factors other than the law and the evidence influence the outcome of cases, a perception that compromises the integrity of the system's role in punishing fault and deterring unreasonably hazardous behavior.

More important, the system's haphazard manner of making decisions has undercut its ability to provide fair compensation to the injured. Some victims recover far more than their economic losses, while others who are similarly injured recover nothing at all. This problem is intensified by the awarding of "noneconomic" damages for pain and suffering or grief. The irrationality of fixing a monetary value for nonmonetary losses encourages claimants to play on juries' sympathies, thus further removing the controversy from the issues of fault and accurate compensation.

That only a small fraction of claims actually go to trial in no way lessens the severity of these problems. Both claimants and defendants assess settlement prospects in light of the likely outcome of litigation. As a result, both sides incur the same types of costs and delays in evaluating claims whether or not the claims ever reach court. While a model system of insurance would provide for settlement of typical claims by prompt, periodic payment of actual economic losses, the unpredictable and intensely adversarial nature of tort-liability suits makes such settlements the exception rather than the rule.

____________________
The author is grateful for the expert research assistance of Edmund D. Graft, University of Virginia Law School, class of 1989.

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