Liability: The Legal Revolution and Its Consequences

By Peter W. Huber | Go to book overview

amount of about $300 per birth, with an obstetrician in New York City paying $85,000 a year.

Because of the tax, you cannot use a sled in Denver city parks or a diving board in New York City schools. You cannot buy an American Motors "CJ" Jeep or a set of construction plans for novel airplanes from Burt Rutan, the pioneering designer of the Voyager. You can no longer buy many American-made brands of sporting goods, especially equipment for amateur contact sports such as hockey and lacrosse. For a while, you could not use public transportation in the city of St. Joseph, Missouri, nor could you go to jail in Lafayette County in the same state. Miami canceled plans for an experimental railbus because of the tax. The tax has curtailed Little League and fireworks displays, evening concerts, sailboard races, and the use of public beaches and ice-skating rinks. It temporarily shut down the famed Cyclone at the Astroland amusement park on Coney Island.

The tax directly costs American individuals, businesses, municipalities, and other government bodies at least $80 billion a year, a figure that equals the total profits of the country's top 200 corporations. But many of the tax's costs are indirect and unmeasurable, reflected only in the tremendous effort, inconvenience, and sacrifice Americans now go through to avoid its collection. The extent of these indirect costs can only be guessed at. One study concluded that doctors spend $3.50 in efforts to avoid additional charges for each $1 of direct tax they pay. If similar multipliers operate in other areas, the tax's hidden impact on the way we live and do business may amount to a $300 billion dollar annual levy on the American economy.

The tax goes by the name of tort liability. It is collected and disbursed through litigation. The courts alone decide just who will pay, how much, and on what timetable. Unlike better-known taxes, this one was never put to a legislature or a public referendum, debated at any length in the usual public arenas, or approved by the president or by any state governor. And although the tax ostensibly is collected for the public benefit, lawyers and other middlemen pocket more than half the take.

The tort tax is a recent invention. Tort law has existed here and abroad for centuries, of course. But until quite recently it was a backwater of the legal system, of little importance in the wider scheme of things. For all practical purposes, the omnipresent tort tax we pay today was conceived in the 1950s and set in place in the 1960s and 1970s by a new generation of lawyers and judges. In the space of twenty years they transformed the legal landscape, proclaiming sweeping new rights to sue. Some grew famous and more grew rich selling their services to enforce the rights that they themselves invented. But the revolution they made could never have

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Liability: The Legal Revolution and Its Consequences
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface ix
  • Acknowledgments x
  • 1 - Uncommon Law 3
  • 2 - The Death of Contract 19
  • 3 - Search for New Rules 33
  • 4 - Knowledge of the Law is No Excuse 45
  • 5 - The New Town Meeting 62
  • 6 - Resetting the Clock 84
  • 7 - Sentence Without Verdict 98
  • 8 - Pain and Punishment 115
  • 9 - Insurance in Retreat 133
  • 10 - What is Deterred? 153
  • 11 - Rights in Collision 172
  • 12 - Compassion by Consent 190
  • 13 - Choosing Safety 207
  • 14 - Consent and Coercion 220
  • Notes 233
  • Index 253
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