Tort Law & Objectivism

Here are some very basic tenets of tort law for Objectivists to chew on and critique through an Objectivist lens.

Let's start the Objectivist way and first differentiate tort law from other areas of law. It's not contract law: Tort law doesn't much care about fixing broken promises. It's not property law: Tort law does not much care about the disposition of land and material goods. And it's not criminal law: The defendant who loses a tort suit is not going to jail or the gallows. The People aren't coming after him; some private entity is.

So why do we need tort law? To address certain problems that can't be remedied through property law or contract law. And what problems are these? Well, there are several kinds of problems construed as torts, but let's just concentrate on the big one: negligence. To be tortiously negligent under the law, a plaintiff must show that the defendant (1) owed the plaintiff a duty (2) that the defendant breached, (3) which actually and proximity caused (4) actual damages to the plaintiff. Those 4 elements, together, comprise tortious negligence.

If you want to think about this in terms of legal rights, then popular legal theory says that every legal right corresponds with a legal duty. In this case, the plaintiff has a legal right to be free from the wrongful harm caused by the defendant, and the defendant a corresponding legal duty to take care to avoid causing such harm to the plaintiff.

People disagree on what the underlying goals of tort law are or should be. Some emphasize its use as a vehicle to restore wrongfully injured parties to the position they would've been in had their injuries not occurred. That's the compensation theory and can be viewed as "victim-oriented." The flipside emphasizes tort law's use as a vehicle to deter and correct risky behavior. That's the corrective theory and can be viewed as "injurer-oriented." A third view says tort law serves to internalize costs of harm that can occur from failing to take care, and it internalized such costs by making the injurer compensate the victim. Put another way, tort law uses liability to internalize externalities created by high transaction (i.e., bargaining) costs. That's the economic theory, and it can be viewed as an attempt to strike an "efficient" balance between rights and duties.

There is oh so much more, but that ought to be enough to chew on and critique for now. Ask questions if you like.

Jordan

Post 1

Wednesday, February 18, 2009 - 6:07pm

Thanks, Jordan. Lots of stuff to chew on.

Just off the top of my head I see torts as filling two general purposes - both of which relate to an injury being remedied:

The need for contract-like arrangements where the specifics of an injury arise more out of negligence relative to cultural standards rather than a specific contract. Like suing a doctor for failing to meet the standard of care in a case where a patient is harmed. Alleging a failure to meet fiduciary duty would be another example. Morally this would be treated like a contract - what you expect out of parties to a commercial relationship - the duties that are required. But the law has developed in a way where a contract is more tightly drawn.
Where rights are violated that don't rise to criminal levels, or where the focus of the action is to address the harm more than punishment of the wrongdoer - like a factory that pollutes the air - and decreases the quality of life for people downwind. Here there is injury but no contractual relationship between the parties.

Post 2

Wednesday, February 18, 2009 - 6:15pm

Breach of contract? Fraud?

Post 3

Wednesday, February 18, 2009 - 6:44pm

Dean, breach of contract wouldn't necessarily be a tort and fraud could be both a crime and a tort. The criminal court seeking punishment and protection of the public, and the civil court seeking to remedy the harm done to the victim.

Torts would cover things like an automobile accident, or an incompetent doctor doing some damage, or a banker making a really bad decision with funds held in trust for a customer.

Post 4

Wednesday, February 18, 2009 - 7:22pm

So could a tort be considered a breach of an implied contract?

Steve, after re-reading your post 1, I see that's just what you're saying. Never mind. Sorry. Carry on.
(Edited by Randy Mahoney on 2/18, 7:27pm)

Post 5

Wednesday, February 18, 2009 - 7:38pm

Dean,

I don't understand, but maybe Steve cleared it up.

Steve,

I wonder if you'll rustle some feathers here with reference to "cultural standards." I'd say you're right that tort law heavily appeals to cultural standards, as it so often asks what a "reasonable person" would do in this or that situation. The trouble is that the "reasonable person" standard can vary per region, education, pay, race, age, religion, ethnicity, you name it! The law asks about the "reasonable person" in an effort to get jurors to evaluate a situation objectively. It seems fairer to call this method pluralistic, rather than objective, because it attempts to reconcile up to twelve jurors' *personal takes* on what a "reasonable person" is.

Jordan

Post 6

Wednesday, February 18, 2009 - 7:53pm

Randy,

Just to be sure, the law currently does not view torts as breaches of implied contracts. Implied contracts are considered "quasi-contracts." They arise when facts and circumstances *suggest* an agreement but where no formal agreement has been made.

The typical scenario is that a plaintiff provided the defendant some goods or services; the defendant knew he was getting the goods or services and had time to reject them but did not; and if the defendant were not to compensate the plaintiff, then the defendant would be "unfairly" or "unjustly" enriched.

I'm not saying tort law *shouldn't* be reconstructed as a sort of contract law; I'm just saying it currently is not.

(Edited by Jordan on 2/18, 8:39pm)

Post 7

Wednesday, February 18, 2009 - 8:02pm

Jordan, in your second paragraph in post 6, did you mean to say that the defendant would be unfairly or unjustly enriched?

Anyway, it seems that the "compensation theory" might lend itself better to an objective analysis. Compensating the victim has a moral clarity that, for example, economic efficiency might not have. I don't know how extensive and detailed tort law is, but I can see that it could easily grow to the extent that legislators respond to real or perceived "bad decisions" made by judges and juries. The area of awards for "pain and anguish" might be a particularly thorny issue for an objectivist. How do you objectively value subjective suffering? If a surgeon botches an operation and permanently disables a patient, the defendant might be responsible for the plaintiff's loss of income and continuing medical treatment. But what about the aforementioned pain / suffering? And is the surgeon's medical license at risk in a tort judgment or is that reserved for criminal law?
I'm ignorant about the details, but it seems to me that the current cultural climate favors what I think is called the "statute law" approach where every "new" situation calls for yet another round of new law, simultaneously justifying the legislators' existence, relieving judges of responsibility and providing secure employment for the next generation of lawyers.
(Edited by Randy Mahoney on 2/18, 8:04pm)

(Edited by Randy Mahoney on 2/18, 9:39pm)

Post 8

Wednesday, February 18, 2009 - 8:39pm

Hi Randy,

That was an unfortunate typo. I went ahead and fixed it.

Thanks,
Jordan

Post 9

Wednesday, February 18, 2009 - 10:37pm

Jordan,

The reference to "cultural standards" is a possible pivot point for lots of tom-foolery. But it is also needed to attempt to make a rational fact finding. For example, if a doctor treating a patient results in the patient suffering, then the fact finders have to determine what a reasonable standard of care would be (for that technological period and the circumstances of the service) to determine if negligence was present.

Reasonable person standard is a tough one (region, education, pay, etc.) but it is the variations that are needed to determine where the standard of care should be set for a specific case.

These cultural aspects and the fuzziness of reasonableness is a problem, but I'm not able to think of another way to approach the needed determination. The heart of the problem isn't always in the law, but in the products of our poor educational system, and ways the law is gamed (like tort lawyers using pseudoscience and gullible jurors to get irrational decisions).

Randy, I think that "pain and suffering" are real and objective (they exist, despite the problems with measuring) and the problem isn't that they are awarded, but that other factors result some defendents winning when they shouldn't, and some of the awards being irrational in size. (Educational system, procedural rules, tort lawyers gaming the system, irresponsible jurors voting with emotions instead of reason, etc.)

No amount of perfection in the law will provide a utopia when we have people that are so far from perfect in their education, beliefs, character, and psychology.

Post 10

Thursday, February 19, 2009 - 3:20pm

Steve,

I think the economic theory crowd offer a more objective alternative to the reasonable person standard. They base their view largely on the brilliant formula developed by Judge Learned Hand in United States v. Carroll Towing Co. (1947). The formula is often presented as a way for jurors to think about the reasonable person, but it's seldom followed correctly.

Here's the formula: B < PL = injurer is negligent.

B = defendant's cost burden for taking precautions
P = probability that injury will occur
L = the cost of the loss.

Take a generic product liability case for example. (B) Say it costs* Honda $50 to add a seatbelt (let's just say) to each car. (P) The probability of a fatal Honda accident that a seatbelt would have prevented is 1/10,000. (L) The cost of the fatality is $1,000,000 (I'm just keeping it simple!). So $1,000,000 > 50/.0001, and Honda is liable (or is considered "unreasonable").

It's an impressive formula because it tells us not just whether the defendant is liability but how much he should spend in the future to avoid being liable (i.e., to be considered "reasonable"). In this case, if the other figures hold, Honda would have to spend just under $100 per seatbelt to avoid being liable. Once the price of the seatbelt goes past $100, Honda should not be liable for not adding it. Adding that seatbelt would be excessively cautious or "inefficient," as economists like to say; it would effectively injur the injurer. (*we're really talking about marginal costs, not total costs here, but I don't feel like writing that out.)

Two caveats: First, we have actuarials to help us figure out these costs, some of them pretty exact, others rather flexible, which is where we would still probably need to call on a jury for help, even though their grasp of statistics and actuarial tables probably sucks to high heaven. Second, above is the simplest version of the Hand formula. I've seen way more complex variations.

Jordan

Post 11

Thursday, February 19, 2009 - 4:10pm

Jordan, you used 'objective' with the little 'o' as a way of describing a standard to apply that will yield results not subject to emotion, results that will be the same each time rather than random, and results that seem to arise logically out of the amounts specific to the case.

But what I don't see is an Objectivist's reason to support that approach (not in that application anyway). The reasonable man standard that I think of is where one asks, "Would a reasonable man think that it is negligent to sell a car without seatbelts?" The Objectivist would answer no. Primarily because they are in the open and their absence is visible to a buyer, and it is common knowledge that using seatbelts is a prudent safety measure. This is very different from a doctor who operated on a patient and was very sloppy and left a couple of sponges in the patient. In that case, testimony might elicit facts that the surgeon told the nurse to quit trying to figure out why the sponge count was off - it had been a long day and everything is okay. It is reasonable to count on a higher standard of care and it was not possible for the patient to discern that lack ahead of time.

I don't see any logic that ties moral culpability to cost of seatbelts vs. the cost of the injury. To me, moral culpability is measured more by the degree to which a standard of excellence is failed (say a car company used an inferior metal surrounding the rotating parts of the transmission and they could explode and cause leg injury of front seat passengers), and the degree to which that failure is not visible (say the public doesn't knows this and certainly couldn't discover it with normal examination before buying), and if the customer's not discovering that failure is to some degree on purpose (they buried a test that showed defects), or at least known or should be known by the defendant (engineers should have know the risks).

The amount of the award should be what is the best estimate of the cost of making the plaintiff whole - restoring them to where they were before - a measure of the harm done. And it is reasonable to adjust it down if the plaintiff shares in the negligence, or to adjust it up if the defendant was purposeful in hiding information about the dangers.

Post 12

Thursday, February 19, 2009 - 4:53pm

Hi Steve,

The Hand Formula is often viewed as synonymous with the "reasonable person" standard. For instance some jury instructions might define a reasonable person as someone who takes more care when compared to the combination of an injury's likelihood and extent. I see that you disagree with the alleged synonymy, and with good reason. I'm sure some of the more complicated variations on the Hand Formula take into account whether the victim could reasonable detect the risk beforehand. Usually, however, "assumption of risk" informs the calculation of damages (how much the defendant owes), not liability (whether the defendant is legally responsible), which is exactly what you articulated in your last paragraph.

I can see why Objectivism would reject the Hand Formula as it applies to the product liability case. Parties to that case usually have the ability to contract, and I believe Objectivism is open to allowing Honda to contract away its duty of care to the car buyer who would knowingly assume the risk of no seat belts. (I suppose, also, we could impute an implied contract as between the car buyer and the passengers of her car, such that the passengers knowingly assume the risk of riding in a car without seatbelts.) To that end, I'd suggest that Objectivism would also reject the "reasonable person" standard. That standard needn't arise. Instead, the rules of contract law would apply, where we just ask (a) was there a contract, (b) what are the terms, and (c) was there a breach?

But I think Objectivism would accept the Hand Formula where it would unreasonable to contract before an injury.

Jordan

Post 13

Thursday, February 19, 2009 - 8:09pm

Jordan,

You said, "I can see why Objectivism would reject the Hand Formula as it applies to the product liability case. Parties to that case usually have the ability to contract, and I believe Objectivism is open to allowing Honda to contract away its duty of care to the car buyer who would knowingly assume the risk of no seat belts."

Objectivism doesn't see any "duty to care" that isn't part of 'contract.' For example, someone makes a contract with a doctor for some elective surgery. That 'contract' has some explicit parts (the procedure the doctor will perform and the amount the patient will pay and when it will occur), and some implicit parts. The parts that are implicit have to do with the expectation of at least a normal level of care and expertise. The doctor doesn't have any "duty to care" that doesn't arise out of either an explicit or implicit contract. Ethics can look at the large picture, all one contract. But the law must distinguish between the actual contract and the tort separately.

Even though I see the 'contract' ethical framework as the Objectivist view of some torts, I don't think contract law could replace tort law. For example, my example of a car whose transmission can explode. Nothing in a contract we would imagine between car dealer and buyer is likely to protect against the negligence in that example (even if the dealer had installed the transmission rather than the manufacturer). This is where I start calling it an implied contract (an ethical contract, not a legal contract), and where the law starts talking about "duty of care."

Post 14

Friday, February 20, 2009 - 3:41pm

Hi Steve,

Objectivism doesn't see any "duty to care" that isn't part of 'contract.'

Hmm...I'd suggest that Objectivism acknowledges a non-contractual legal duty of care, that being the care not to violate others' rights (via initiations of force) when there's no contract. Of course, Objectivism could adopt a Lockean or Rousseau-esque "social contract" theory such that all rights violations are contractual rights violations of sorts.

Nothing in a contract we would imagine between car dealer and buyer is likely to protect against the negligence in that example . . .

Wouldn't a warranty or disclaimer cover it?

Jordan

Post 15

Friday, February 20, 2009 - 11:14pm

Jordan,

You are right that there is a 'duty' to not violate another's right. But those aren't the terms that would usually be used. A duty is usually a positive act that is required, which would be a different thing. And since that 'duty' is universal and omnipresent it isn't in the same category as, say a doctor's duty to care which extends to a patient, or an automotive manufacturer to someone who uses one of there cars.

As to the warranty or disclaimer covering an exploding transmission where we have an allegation of negligence and a presumption of harm - no, I don't think so. Would a warranty provide a new foot, cover medical bills, etc.?

Post 16

Saturday, February 21, 2009 - 10:14am