In Reconceptualising Strict Liability for the Tort of Another Christine Beuermann—a Lecturer in Law at the University of Newcastle—shines new light on strict liability for the wrongdoing of others. In the United States, we generally classify these as vicarious liabilities and non-delegable duties, and we usually conceptualize them in terms of the liability of principals for the acts of their agents. Perhaps surprisingly, these liabilities are at once ancient, very active at present, and poorly understood. Professor Beuermann’s book supplies a badly needed, original, and illuminating framework for thinking about these forms of liability. The book both offers an answer to longstanding theoretical puzzles, and guidance in deciding cases that presently vex the courts. It repays a reader’s careful study by reorienting the reader’s thinking.
Vicarious liability may well be the oldest form of tort liability extant in contemporary tort law. Legal historians often trace it back to Roman law, which held masters liable for the legal wrongs of their slaves, husbands liable for the wrongs of their wives, and fathers liable for the wrongs of their children. Blackstone distanced himself from Roman law’s instantiations, but he saw in them the roots of a more modern and general liability of masters for the torts of their servants. Over time, that liability transformed into the liability of employers for the torts of their employees committed within the scope of their employment. If the broad outlines of the history are clear, both the doctrine and the justification are not. Oliver Wendell Holmes thought that vicarious liability was wrong in principle, if too entrenched to uproot. Modern corrective justice theorists also tend to see the doctrine as anomalous because it is not fault-based. Other contemporary scholars have been more receptive to justifying the doctrine by reference to policies of accident prevention and loss-spreading, or by reference to “a deeply rooted sentiment that a business enterprise cannot justly disclaim responsibility for accidents which may fairly be said to be characteristic of its activities.” Whatever their virtues, these justifications have not been particularly helpful to courts struggling to decide the wave of sexual assault cases that have recently arisen. Why, exactly, is sexual assault a characteristic risk, say, of being a teacher but not of being a school janitor?
For its part, legal doctrine in this domain is an untidy morass of highly specific rules. The Restatement (Second) of Agency, for instance, once summarized the liability of “masters” (or principals) for the torts of the independent contractors that they employ by stating a general rule of non-liability and followed up that general rule with a list of specific exceptions. The Restatement (Second) of Torts accepted the same general rule and followed its statement with twenty exceptions. The sheer number of exceptions suggests a domain where the doctrine lacks overarching logical unity. Consequently, when new problems arise, it’s hard for everyone—lawyers, scholars, and judges—to know how to reason even analogically from the preexisting materials of the law. And pressing problems do arise. On both sides of the Atlantic, we have just muddled our way through extremely disturbing scandals involving the sexual abuse of minors. Just how to conceptualize the problem of institutional liability for the wrongful acts of individual actors exploiting their positions as priests—or pastors, or teachers, or coaches, or school janitors—to commit such abuse has proven very difficult. The problems do not get any easier when the parties involved are adults, and the questions have to do with sexual batteries and sexual harassment.
Professor Beuermann’s account speaks to both to Holmes’s objection and to the difficulties that courts confront. Her framework puts relations among persons at its center and makes authority the master key to liability. The basic thesis that Professor Beuermann develops is simple: authority relations are the key to understanding strict liability for the wrongdoing of another. In the vicarious liability context, the relevant authority is the authority of the principal over the agent. In the non-delegable duty context, the authority is the authority of that the principal has conferred on the agent over a third party. In the first circumstance, the relation between the principal and the agent is the critical relationship: the agent is under the thumb of the principal. In the second, the relation between the principal and the third party is critical: the principal puts the third party under the thumb of the agent. In both cases, strict liability is a check on the abuse of authority.
In the vicarious liability context, the authority of an employer over an employee may lead an employee to pay insufficient regard to their obligations not to wrong third persons in diverse ways. For example, a pizza company’s authority over the drivers who deliver its pizzas puts the drivers in a position where they have reason to assign less weight than they should to their obligations to others, and more weight to delivering pizzas promptly. It is this standing possibility that justifies strict liability. In the non-delegable duty context, the authority that a principal confers on an agent over a third party may be used to wrong the third party. Authority over someone can enable wrongs that the wrongdoer might otherwise lack the means to commit. When this framework is brought to bear on sexual assaults in school setting, it is illuminating in two ways. First, it shows that non-delegable duty is the right doctrine, not vicarious liability. That is, the connection between the institution and the wrong is the authority that the institution confers on the teacher over pupils, not the school’s authority over the teacher. The school’s authority over the teacher might tempt the teacher to disregard obligations to third persons in favor of pursuing the institutions’ interests. Abusing students, though, isn’t an institutional interest in the way that, say, delivering pizzas to customers within thirty minutes of the customer placing of the order is. The authority that teachers have over students creates special powers which might be used for sexual abuse. Second, it shows why we might sensibly distinguish between teachers and janitors. Teachers have an authority over students which they may deploy to sexually assault a student. A teacher may usher a student into an empty classroom, or isolate a student in their office under pretext of educational purpose, and do so in order to commit an assault. Janitors do not have similar authority. The authority they have to clean the premises does not confer authority to direct the conduct of students in comparably extensive ways. The framework pours content into the concept of “characteristic risk”.
The framework that Beuermann’s book develops responds to Holmes’ objection. The principles of responsibility that govern wrongs committed by others differ from the principles that govern wrongs that people commit personally, because liability for the wrongdoing of others responds to a phenomenon—namely, authority over either the wrongdoer or the victim—that is simply absent when personal wrongs are at issue. Moreover, because this account is relational, it does not suffer from the defect that afflicts policies of loss-spreading and accident-prevention. Those policies identify states of the world in which a desirable end is realized; it remains unclear exactly why a particular person or institution can be singled out by the law of torts to promote that desirable end. Beuermann puts her finger on grounds of responsibility which arise from forms of authority that some people either assume over others, or confer on others. Beuermann’s framework holds people responsible for what they have done—for authority relations they have created.
To be sure, there are questions. For one thing, Beuermann’s book addresses the law in Commonwealth countries. American law appears to be somewhat different. In the United States, it is common to call the inherent, peculiar, and abnormally dangerous risk exceptions to the non-liability of principals for the torts of independent contractors “non-delegable duties”. For another, the features of relations between employers, employees, other kinds of agents, and victims of tortious wrongs that attract forms of responsibility for the wrongs of others may go beyond “authority” as Beuermann conceives it. Sometimes, as in the Bushey case, the justification for liability appears to be the fact that the institution at issue (i.e., the Coast Guard) imposes on people a distinctive kind of risk for which the institution is more responsible than the individual wrongdoer. American courts appear to care more about whether the risk is created by the institution than Commonwealth courts do. The may be doing something different, and for good reason. For another, one might think that there are forms of vulnerability to institutional power and position which should be checked by strict liability even if the relations are not relations of authority. Ultrasound technicians may not have authority that enables them to commit sexual batteries on patients, but their institutional role may put them in a position where victims have little power to protect themselves against such assaults. Yet, even if this book is does not really address American incarnations of the doctrines it discusses, that silence is a limit not a fault. The book’s chief and considerable virtue remains intact: its account does more to illuminate non-delegable duty than any other account that I have read. It finds unity of principle where the weight of American authority has seen only ad hoc judgment or a delicate balance of competing considerations of “policy”. Better yet, Strict Liability for the Tort of Another teases that unity out of the cases. These are impressive achievements.
Kenneth S. Abraham & G. Edward White, Conceptualizing Tort Law: The Continuous (and Continuing) Struggle
__ Maryland L. Rev.
__ (forthcoming 2020), available at SSRN
Like Gaul, tort law is divided into three parts: torts of intent, negligence, and strict liability. At least, that is what most torts professors teach and what many scholars, judges and practitioners suppose.
In an engaging, lively, and perceptive article, Professors Abraham and White remind us that this tripartite division is descriptively inadequate for characterizing the variety of individual torts recognized today. They further claim that this plethora of distinct torts is a disorganized, fragmented mess. They then surprise the reader with a provocative conclusion: tort law is incapable of principled organization. The authors provide solid evidence of their descriptive thesis. Their critiques of the inevitability of this unprincipled disorganization are more controversial, for reasons that I will later suggest.
The authors uncover a “lost history” that largely supports their descriptive argument. They point out that treatise and casebook writers in the 19th and early 20th centuries tried without much success to create a more straightforward organization of tort law after the abolition of the old procedure-based forms of action. In their view, a classification according to the underlying rights that were violated was circular; a classification according to standards of conduct was more promising but still problematic insofar as different scholars had quite different conceptions of the relevant standards. For example, some but not all commentators recognized a category of “willful or wanton” harm; and some but not all restricted “intent” to “malice” or “animus.”
The authors then turn to the efforts of Francis Bohlen in the first Restatement of Torts in the 1920s to develop a more coherent organization of tort law. Bohlen’s earliest drafts displayed a new vision of how to organize tort law—namely, according to the right infringed and then, according to the standard of conduct (intent, negligence, or strict liability). Thus, Bohlen originally suggested that the right to personality includes a right to freedom from bodily harm that should be protected from intentional, negligent, or, in a few cases, faultless invasions, a suggestion that could have been the basis of a rational organization of all torts. But, the authors point out, in the end Bohlen did not realize this vision. Instead, although he organized some of the first Restatement according to intent, negligence, and strict liability, large portions ignore that structure. The authors speculate that Bohlen might have given up on his original, more ambitious classification plan after he drafted the materials on negligence and other specific torts, perhaps because Bohlen concluded that the task was not feasible. And, according to the authors, the Second and Third Restatement of Torts have largely followed the first Restatement in rejecting any rational organizing principles, leaving judges, academics, and practitioners with a fragmented, unprincipled concatenation of miscellaneous individual torts.
The analysis offered by the authors of early tort scholars’ classification schemes and of successive drafts of the first Restatement of Torts is an illuminating exploration of the early history of American tort law—and also quite detailed. Not all readers will relish bushwhacking through these weeds. But many will savor the adventure. The authors are also correct that the Restatement, Second and Restatement, Third of Torts largely carry forward the classification system of the first Restatement. The Third Restatement, they say, “is effectively a collection of independent modules” (P. 53).
The authors conclude that three main reasons explain the fragmented state of contemporary tort law. First, no comprehensive substantive theory explains why some harmful activities are actionable and others are not. Economic efficiency, corrective justice, and civil recourse theories are too abstract to give particularized guidance, they plausibly claim.
Second, a more coherent organization has only limited usefulness to the practicing bar, which is perfectly content with atomistic listing of numerous distinct torts. This argument has force but seems overstated. For example, a new classification scheme that categorized all emotional harm torts together might spur the development of more consistent legal rules for negligent infliction of emotional distress and intentional infliction of severe emotional distress.
Third, the authors assert that the actual nature of tort law is inevitably fragmented, because of the consensus “that some kinds of harms should be actionable and that some should not be, and that the degree of blame attributable to the party causing the harm may be relevant, but that this relevance may vary, depending on the kind of harm or other circumstances in question. As long as these things are true, then something like the forms of action—separate causes of action with distinctive, mandatory elements—is inevitable” (P. 58).
The authors’ skepticism about the promise of principle is understandable. History indeed plays a significant role in explaining otherwise arbitrary and archaic distinctions between torts (as well as distinctions between different property rights and other legal rights and duties). Why, for example, do courts not require contemporaneous awareness of an offensive contact for offensive battery liability, yet require contemporaneous awareness of a confinement for false imprisonment, and require awareness of an anticipated touching for assault? At the same time, the article does not mention, and we should not forget, some of the remarkable and principle-based changes that occurred in tort doctrine in the 20th century—expanding negligence doctrines; recognizing new torts of privacy and of intentional infliction of emotional distress; and developing elaborate, and sometimes strict, rules to govern product liability for defective products.
As an academic who has considered these issues in some prior work I agree with the authors to a point. The tripartite division of all torts into intentional torts, negligence, and strict liability torts is indeed a gross oversimplification. As chief Reporter for the Restatement of Torts, Third: Intentional Torts to Persons, I confess that I have participated in some of the developments that the authors decry. (Why are battery, assault, and false imprisonment singled out for a distinct project, and not combined with privacy and defamation, for example?) Perhaps I am a guilty accomplice. But before the authors pass their final sentence upon me and (more importantly) on the American Law Institute and on other tort scholars, let me raise some questions about their analysis.
First, although the authors are correct in noting the piecemeal way that the Restatement, Third of Torts has been developed over many years, the full story of its evolution is more complex. The original plan of the American Law Institute was to restate only certain portions of the Restatement Second of Torts in the Restatement Third—those that were in special need of updating, such as products liability (in 1992) and apportionment (in 2000). Over time, however, the Institute determined that this partial approach was inadequate and that a comprehensive Restatement was necessary. This was a wise judgment. As evidence, consider the Third Restatement’s evolving treatment of the traditional intentional torts—battery, assault, and false imprisonment. The Restatement Third, Torts: Liability for Physical and Emotional Harm (completed in 2012) asserted a broad criterion of intentional tort liability in § 5: “An actor who intentionally causes physical harm is subject to liability for that harm.” Unfortunately, this umbrella provision is an awkward fit with the traditional intentional torts. Battery, for example, requires an intent to contact but (in most states) does not require an intent to cause physical harm or offense. The ongoing Restatement Third of Intentional Torts is much more careful in identifying the specific intent requirements and other elements of harmful battery, offensive battery, assault and false imprisonment. Although it is true that the many projects that comprise the Third Restatement of Torts are overlapping and, on first appearance, haphazard, the best explanation is a change in direction, not a commitment to fragmentation.
Second, when an actor causes bodily harm to another, the tripartite division does have some descriptive power—and more than the authors concede. Ceteris paribus, intentionally causing such a harm is a more serious wrong than negligently causing it; and liability is least justifiable when the harm is caused faultlessly. These differences matter: they affect the availability of punitive damages, the relevance of plaintiff’s fault, the causal scope of liability, and whether another will be vicariously liable, as well as collateral legal rules such as insurance and worker’s compensation coverage.
For evidence that the tripartite classification remains vital, consider a recently adopted provision in the Intentional Torts Restatement, imposing liability for the purposeful infliction of bodily harm. This provision effectively expands the ancient tort of battery and recognizes that an actor’s purposeful causation of bodily harm is a proper basis of liability, even if the actor does not physically contact the plaintiff. (Suppose a prison guard turns off the heat to an inmate’s cell in order to make the inmate sick.) Strikingly, Bohlen’s first Restatement of Torts also adopts this expansionist approach in a little-noticed provision, recognizing “an actor’s liability for the intentional infliction of bodily harm by means other than bodily contact”—precisely the position recently adopted in the Intentional Torts Restatement. Thus, Bohlen executed his vision of a comprehensive tripartite approach to the right to freedom from bodily harm to a greater extent than the article acknowledges.
Third, the article’s account of the tripartite approach is somewhat oversimplified. Most torts do not merely identify a relevant harm and then simply require that the actor have intentionally, negligently, or faultlessly caused that harm. Rather, torts typically contain several elements, and often the fault required for one element differs from that required for another. For example, trespass to land requires an intent to enter but does not require the actor to know that the parcel that she intentionally entered is the property of another. Battery requires an intent to contact, and in some states an additional intent to harm or offend, but it does not require that the actor intend or know that the plaintiff does not consent to the contact.
Fourth and relatedly, the authors seem to assume that a principled account of tort law would entail either the tripartite division or some other relatively simple classification system. Others have also endorsed a much greater degree of simplification of tort law. But this assumption can be, and has been, questioned. Pluralism, in both law and morality, can be principled. On this view, the wrongs addressed by tort law are multifarious because the rights underlying them, their potential fault requirements, and their other relevant characteristics are multiple. Yet these characteristics can be combined in a principled way.
Notwithstanding these questions, Abraham and White have written an enlightening historical and critical analysis, nicely framing an important challenge to tort scholars, the challenge of developing a principled and useful classification of the wide range of tort doctrines.
Cite as: Kenneth W. Simons, Is Tort Law Hopelessly Fragmented?
(July 27, 2020) (reviewing Kenneth S. Abraham & G. Edward White, Conceptualizing Tort Law: The Continuous (and Continuing) Struggle
__ Maryland L. Rev.
__ (forthcoming 2020), available at SSRN), https://torts.jotwell.com/is-tort-law-hopelessly-fragmented/
Aaron D. Twerski, An Essay on the Quieting of Products Liability Law, 105 Cornell L. Rev. 101 (forthcoming, 2020), available at SSRN.
Over and over, legal scholars have revealed situations in which different legal rules do not produce the different legal outcomes they portend. When states limit juries’ power to award punitive damages, juries instead award increased damages under a compensatory damage head. Catherine M. Sharkey, Crossing the Punitive-Compensatory Divide, in Civil Juries and Civil Justice 79, (Bornstein, Wiener, Schopp & Willborn eds. 2008). When states require juries to apportion responsibility between intentional and negligent tortfeasors, jurors may preserve negligence liability by apportioning more civil responsibility to a negligent party than an intentional one. Ellen M. Bublick, Upside Down – Terrorist, Proprietors, and Civil Responsibility for Crime Prevention in the Post – 9/11 Tort-Reform World, 41 Loy. L.A. L. Rev. 1483 (2008). Legal rules matter, but not as much as we may think. Other normative values intercede.
In An Essay on the Quieting of Product Liability Law, Restatement (Third) of Torts: Products Liability Reporter Aaron Twerski examines one of the most fevered controversies of recent products liability law— “whether liability for defective product design should be covered by risk-utility balancing or the consumer expectation test.” (P. 102.) Twenty years after the debate, Professor Twerski examines the difference between the risk-utility test applied in most states and the consumer expectations test followed in 17 jurisdictions. After much case analysis, Twerski concludes that the answer to the difference question in the two sets of jurisdictions is: not much. In 15 of the 17 jurisdictions that retain a consumer expectations test, Twerski could not find a single case in which the plaintiff did not introduce evidence of a reasonable alternative design. (P. 101, Pp. 111-120.) California and Florida are the outliers. (P. 120.) In California, reasonable alternative design (RAD) evidence is barred completely. (P. 121.)
What happened to the foretold split in practice? Twerski theorizes that “four significant reasons support the ubiquitous presence of a RAD in design litigation.” (P. 108.) The four reasons are that the RAD test: 1) tells “a far more compelling story” than consumer expectations; 2) relates to fault which, in turn, augers higher damage awards; 3) may be needed as a substitute if a judge denies a “consumer expectations” instruction, and 4) supports the claim that a product disappoints consumer expectations. (Pp. 109-110.) Thus, the choice of “reasonable alternative design” or “consumer expectation” standard, which seems important at first blush, turns out to be a non-starter in the realm of practice, in which RAD is ubiquitous.
The strength of the article is Twerski’s willingness to travel deep into the caselaw, and to mark the trails he takes. Twerski makes the time to really look at what courts are doing—state by state—despite the slow and laborious nature of the work. Because he does, and footnotes his findings extensively, readers understand that they can trust the guide. Moreover, Twerski lets readers know where he has searched and where he has not, as well as the limitations of his choices. (P. 107.)
Through this transparency, a reader can decide if additional journeys are necessary. For example, the focus of this piece is on the 17 minority consumer-expectation jurisdictions. It would be nice to see a review of the majority jurisdictions as well. Could it also be that consumer-expectations language pervades reasonable-alternative-design jurisdictions? If the reasonable-alternative-design test speaks to consumer expectations, could we just as easily make consumer expectations rather than risk-utility the reigning test and still employ RAD? Perhaps most importantly, even if evidence of the RAD test is used in both risk-utility and consumer-expectations jurisdictions, could the manner of use, or nature of outcomes in the two sets of jurisdictions differ?
Specifically, evidence of other designs and products under RAD might perform different roles in the jurisdictions. In risk-utility jurisdictions the RAD test focuses on product engineering from the perspective of someone putting the product on the market. In consumer-expectation jurisdictions, the RAD test may speak to product performance from the perspective of a user or consumer. Even when using evidence of reasonable alternative designs, the questions asked, and outcomes reached may not be the same.
Still, Twerski’s article and its conclusion should be the focal point of any future analysis. Twerski claims: “[W]hether courts demand a RAD or not is of minor importance, for whatever theory a court adopts, the case will be decided on whether there was a reasonable alternative design available.” (P. 124.) The care Twerski takes to sift through the many state cases reveals again why there are few voices as powerful on the subject of products liability as Professor Twerski’s. As Twerski documents in his article, in recent years there have been fewer voices on the subject of products liability at all. (P. 102 n.7.) Perhaps as cases accumulate under the recent standards, some newer voices will join the search—whether to expand on Professor Twerski’s findings, or to debate them.
In The Curious Incident of the Falling Win Rate, Alexandra Lahav and Peter Siegelman highlight a remarkable—but heretofore overlooked—fact: Between 1985 and 1995, the plaintiff win rate in adjudicated civil cases in federal courts fell precipitously, from 70 percent to 30 percent. In subsequent decades, although the plaintiff win rate has fluctuated, it has generally hovered at or below 40 percent, significantly off its 1985 peak. (P. 1371.) From there, Lahav and Siegelman put their discovery in context and explore potential explanations for the observed trend. In this Jot, I’ll endeavor to explain why their Essay—on the face of it, not about the tort system—in fact, supplies an important piece of the tort-decline puzzle. Then, I’ll offer a fuller account of the Essay itself. Finally, I’ll share a few questions the paper stimulates.
First, how is this Essay about the civil justice system in general—and the federal civil justice system, no less—a tort law piece? It’s a fair question since only around 2 percent of tort claims are litigated in federal court. But, the tort system has long been the most controversial corner of the civil justice system, and it’s still one where myths and misinformation abound.
Americans continue to believe that the system is “choked” with tort claims and that there’s a pot of gold waiting, even for undeserving plaintiffs. Yet, over the past two decades, the evidence has accumulated to paint a very different portrait. We know that tort filings are way down. According to the Wall Street Journal, in fact, we know that, in the state system, there is a “nationwide ebb in lawsuits.” Whereas, in 1993, about ten in 1,000 Americans filed tort lawsuits annually, as of 2015, that number was fewer than two in 1,000. “Tort cases declined from 16% of civil filings in state courts in 1993 to about 4% in 2015, a difference of more than 1.7 million cases nationwide.” Supplying information from the federal system, here, Lahav and Siegelman add to our understanding. Comparing federal tort suits initiated in 1985 and 2016, their data reveal a stunning drop: There were 29,655 such cases filed in 1985 but only 12,114 such cases filed in 2016, a decline of 69 percent.
There’s some evidence (at least within the state system), that, when plaintiffs recover, their recoveries are lower than in prior years. According to a Bureau of Justice Statistics study, the median jury award in state court tort cases was $33,000 in 2005, whereas the median jury award in tort cases was $71,000 in 1992, in inflation-adjusted dollars—a drop of 53.5 percent.
And, there is no question: Trials are also down sharply. The federal civil trial rate is 0.7 percent. One way to look at that: Federal courts conducted half as many civil trials in 2019 as they did in 1962, even as they disposed of over five times as many civil cases. A similar trend is apparent in the states. According to data maintained by the National Center for State Courts, in 2015, the percentage of civil cases resolved by jury trial ranged from .05 percent to .5 percent in the twenty-one jurisdictions studied.
The final piece of the puzzle, of course, is plaintiff win rates. While limited to the federal system, Lahav and Siegelman help to bridge that gap by showing that, just as filings are down, damages are down, and trials are down, plaintiff win rates are dropping, too. As noted above, they show that, generally, plaintiff win rates in civil cases plummeted starting in 1985. And, zeroing in on tort cases in particular, their data reveal a sharp fall in plaintiff win rates from 1985 through 2016. Of the federal tort lawsuits initiated in 1985, the plaintiff win rate was 38.1 percent. Of those initiated in 2016, the rate was 11.9 percent. Even though fewer lawsuits were initiated over that three-decade period (suggesting, possibly, that lawyers had become more selective in their filings), the tort-specific federal court plaintiff win rate was slashed more than in half.
Even if the piece did nothing more than highlight those core findings, it would make a very large contribution, to tort scholars and beyond. Yet, the authors do more than merely surface this surprising trend. They also seek to explain it. Seeking to address why the general plaintiff win rate has dropped so sharply, they suggest that most of the observed decline (perhaps 60 percent) is attributable to shifting inputs, to “changes in the makeup of the federal caseload” during the period. (P. 1374.) Over time, they find, cases in subject-matter areas where plaintiffs tend to fare poorly (e.g., prisoner-rights litigation) became more prevalent, even while categories of suits in which plaintiffs tend to fare well (e.g., suits to enforce student loan obligations) became less prevalent or were eliminated altogether. But, even if that’s right, as Lahav and Siegelman note, that still leaves the remaining 40 percent of the drop unexplained.
This 40 percent may be attributable to any number of factors, which the authors proceed to explore, and for the most part reject, as either belied by the available data or inconsistent with rational litigant behavior. For example, one might hypothesize that a chunk of the reduction is attributable to selection effects, including plaintiffs filing a higher proportion of junk cases, plaintiffs litigating (rather than settling) a higher proportion of junk cases, and/or “selective settlement of winning cases that would previously have been litigated.” (P. 1387.) But, as Lahav and Siegelman observe, none of these hypotheses are clearly supported by available evidence.
So, too, it could be that the composition of plaintiffs, themselves, or defendants, themselves, has changed—which the authors can’t entirely rule out—but which, again, is hardly self-evident. Finally, drawing on the work of Steve Burbank, Sean Farhang, and others, the authors consider—but once again, mostly scrap—the possibility that “judicial attitudes towards plaintiffs” may have changed during the period, “making judges more skeptical of plaintiffs’ claims.” (P. 1408.)
From there, Lahav and Siegelman set forth the data that would be needed in order to better unravel the mystery. They survey the relevant theoretical and empirical literature (with particular attention to the classic work by George Priest and Benjamin Klein). And, in the paper’s final part, they draw out a normative claim: “[T]he justice system,” they assert “is obligated to explain suspicious developments in the administration of justice at the systemic level.” (P. 1375.)
I find Lahav and Siegelman’s discussion learned, persuasive, and extraordinarily thought-provoking. In terms of thoughts that spring to my mind, for starters (though, probably unrealistically), I find myself hungry for more data, and, in particular, data stretching back further, so we can identify trends prior to 1985. (Could it be that the early 1980s were themselves anomalous and what we see is merely a reversion to the mean?)
Further, when it comes to probing potential hypotheses, I can think of a few more possibilities that might be addressed and, if possible, tested. Regarding inputs, for example, when the authors discuss the possibility that some of the observed reduction might be explained by plaintiffs opting to file lower-quality cases, it would have been helpful to draw out the fact that the boundary between federal and state litigation is porous. Could it be that, in the mid-1980s, federal courts started to get a bad rap, so plaintiffs started to filter—to file more viable cases in state court, leaving longer shots for the federal system?
So, too, while the authors draw on Burbank’s and Farhang’s important work to discuss the political leanings of trial court judges, we might also interrogate the law handed down from on-high. We know that, during this period, Congress enacted numerous statutes that made life harder for plaintiffs. (The Private Securities Litigation Reform Act and the Prison Litigation Reform Act come to mind.) We know SCOTUS handed down a raft of defendant-friendly decisions—doing everything from tightening standing requirements, to limiting expert testimony, to eliminating aider and abettor liability, to expanding the preemptive effect of certain regulatory activity, to liberalizing Rule 56.
And, last but not least, we know that significant tort reform measures—including noneconomic damage caps, contingency fee restrictions, alterations to the collateral source rule, and extensions of statutes of repose—were enacted in many states. Might these myriad changes explain some of the observed trends?
Finally, while I am fully persuaded by the authors’ plea for more and better data, I’m not wholly convinced of the authors’ more insistent claim that, whenever “system-level consequences . . . are inconsistent with the understandings of how the civil justice system should work,” (P. 1430) “the system” must offer a “justification that is consistent with rule of law values.” (P. 1370.) The justice system, of course, is a “they” not an “it,” and it’s not clear to me who, within the messy and fragmented system, should bear such responsibility. Furthermore, when judging whether outputs are inconsistent with observers’ “understandings,” it’s not clear to me whose understandings should prevail.
Quibbling aside, the fact remains: Lahav and Siegelman document and highlight a phenomenon that had been hiding in plain sight. And they do so in a paper that is nuanced, technically sophisticated, and richly generative. Scholars—from tort and beyond—will be drawing on Lahav and Siegelman’s “curious” and critically important discovery for years to come.
Cite as: Nora Freeman Engstrom, Supplying a Key Piece of the Tort-Decline Puzzle
(March 30, 2020) (reviewing Alexandra D. Lahav & Peter Siegelman, The Curious Incident of the Falling Win Rate: Individual vs System-Level Justification and the Rule of Law
, 52 U.C. Davis L. Rev.
1371 (2019)), https://torts.jotwell.com/supplying-a-key-piece-of-the-tort-decline-puzzle/
Richard H. Fallon, Jr.’s Bidding Farewell to Constitutional Torts is an important article at many levels. The provision by a leading constitutional scholar of a thoughtful and rigorous overview of the field, recent Supreme Court decisions within it, and new trains of scholarship criticizing those decisions is itself of great value. But there is much more here, and some of it is surprising. One might have expected a robust defender of the rule of law such as Fallon to excoriate the Supreme Court’s repeated expressions of skepticism about the principle that “where there’s a right, there is a remedy.” Instead, Fallon shares much of the Court’s skepticism and, in principle, shares its view that, in a range of scenarios, it is sensible to permit anticipated social costs to defeat the ability of victims of constitutional rights violations to hold those who have victimized them accountable. While the article ultimately defends the landmark Bivens decision itself, and a certain notion of state accountability to victims before courts of law, this too is something of a surprise in a piece purporting to “bid farewell” to the entire field.
In a manner consistent with his sensitivity to a range of constraints on legal interpretation, Fallon subdivides his article into three parts: (1) a doctrinal descriptive section; (2) the articulation of normative considerations relevant to the establishment of an attractive framework of liability rules for government actors and a proposal for such a framework; and (3) an analysis of which institutions are well-suited to adopt and implement that framework. Each of these inquiries is thoughtful, defensible, and important.
On the doctrinal descriptive section, Fallon makes several points. First, he emphasizes the Court’s increasingly adamant yet not quite complete rejection of the possibility of new Bivens claims in Ziglar v. Abbasi (following on the heels of Ashcroft v. Iqbal). Second, he describes the remarkable breadth of qualified immunity under Harlow v. Fitzgerald and its progeny, and the still-greater breadth of official immunity for judicial and legislative acts. Third, he recognizes the Court’s efforts to restrict plaintiffs’ remedies further by procedural requirements such as those laid down in Iqbal. Similarly, he notes the weakening of Ex Parte Young and rights to injunctive relief as laid out in Armstrong v. Exceptional Child Care Center.
While the descriptive section of the article ends by condemning the Rehnquist and Roberts Courts for its “methodologically untethered activism in service of the apparent cause of limiting suits to enforce the Constitution,” Fallon is also highly critical of recent scholars advocating a reinvigoration of constitutional torts by a common law tort mindset. Instead, he puts forth a framework that treats individual rights as interests and candidly recognizes both the value of private rights of action to vindicate rights and the value of pragmatic judicial crafting that balances those interests against the needs of the state, the costs of liability, and the practicalities of litigation. Bivens and 1983 doctrine, he argues, should be adjusted in light of all of these considerations. Neither qualified immunity nor absolute immunity should be regarded as “regrettable” necessities but as “valuable, adaptive device[s] for achieving the best overall regime of substantive rights, rights to sue for tort remedies, and immunity defenses.” Recognizing the incompatibility of his view with the common-law mindset advocated by other scholars, he writes:
However serviceable a tort-law-based mode of controlling official misconduct may have been in the Founding era, a framework built on common law concepts and categories is outdated, misleading, and potentially dangerous as a guide to thinking about constitutional and rule-of-law issues in the current day. Since the collapse of the Lochner era, it has been widely recognized that modern legislatures should have broad authority to displace common law assignments of private rights and duties. And just as the common law fails to provide a reliable baseline for identifying constitutionally protected rights, a tort-law-based conceptual scheme fails to mark the categories of legal norms that most urgently require judicial enforcement against public officials for the rule of law to thrive in the modern era.
When we view rights and remedies as part of a package, moreover, it may sometimes be better to have more broadly defined rights with a set of partially incomplete remedies than to have individually effective remedies for every constitutional violation. To give a pair of concrete examples, if the costs of the Supreme Court rulings in cases such as Brown v. Board of Education and Miranda v. Arizona had included damages remedies against school officials who had maintained racially segregated classrooms or against judges who had allowed the admission of confessions obtained without Miranda warnings, the Court might have felt unable to decide Brown and Miranda as it did.
Once engaged in crafting a theoretical framework from an instrumentalist point of view, Fallon identifies three important functions of constitutional remedies: compensation to the victims of official misconduct, empowerment of victims to hold accountable those who have injured them, and deterrence (and enforcement of the law as against the government itself) in recognition of the importance of rule-of-law values. A crucial point of the article is that the existence of rights of action for injunctions or damages – which would putatively (and sometimes, actually) help to achieve the aforementioned goals – must be weighed against the offsetting social costs not only to the state, but also to the individuals whose substantive rights might not be recognized by courts were their recognition necessarily connected to an expansion of liability.
The last part of Fallon’s article offers reasons for thinking that a place remains for judicially created remedies for official wrongdoing, and that the Supreme Court’s restriction of Bivens is unjustifiable not only from an instrumentalist point of view, but from the point of view of constitutional theory and in light of the institutional competence concerns that have been offered in defense of the Court’s current position. When he finally does weigh in on various substantive issues in this field, he argues (among other things) that: (a) the FTCA and the Westfall Act actually provide reasons for the Court to be more open to Bivens claims than it has been, not less open; (b) some forms of official immunity and qualified immunity are indeed justifiable, but the sharply pro-defendant form that has developed since Harlow v. Fitzgerald is unjustifiably restrictive; (c) the conception of municipal liability in Monell v. Department of Social Services is too narrow; there should be substantial constitutional tort liability for state and municipal entities.
There are at least three paradoxical features of Fallon’s article. The first is at one level semantic, but at another substantive. The article is titled “Bidding Farewell to Constitutional Torts,” but it is in fact a reacquaintance with the field and an argument for a more robust return (hence, the title of this jot). A second is that what Fallon recommends as a replacement for a common law tort approach to official liability is in fact what the Supreme Court and a range of legal scholars have long regarded as the very core of common law tort thinking, namely, an approach that favors crafting liability rules based on a pluralistic instrumentalism that calls for the weighing of various social consequences that seem likely to follow from the presence of more or less liability. Third, it is a central tenet of rule-of-law scholars like Fallon that no one is above the law and that government actors must know that they will be held accountable for their misuses of office, yet Fallon seems to be advocating for free-form judicial policymaking as to when there is and when there is not accountability for the government’s infringement of individual rights.
I will take these points in order. Fallon must mean by “constitutional torts” a particular conceptualization of Bivens and 1983 actions that has attracted significant scholarly attention in recent years – roughly speaking, an overlap of the views defended by James Pfander and William Baude (respectively) in recent articles. Pfander points to a broad period in American legal history when it was widely understood that government actors are straightforwardly liable in their individual capacity for torts they commit against private citizens, unless what they did was in fact proper under the Constitution. On this view, constitutional torts are just common law torts (like trespass or battery or negligence), committed by governmental actors. Pfander and others have sharply criticized the Supreme Court of the past quarter century not only for eviscerating liability in Bivens and 1983 more generally, but also for undercutting this common law conception of what a constitutional tort claim really is. Fallon is with them on the first point, but not on the second. He thinks the Court is closer to having the right conception of constitutional torts than Pfander or others. For any number of reasons he elaborates in the paper, he believes that the common law conception cannot really work. That is why he wants to bid it farewell. It would have been less catchy but more perspicuous if he had named the article “Bidding Farewell to the common law conception of constitutional torts,” or, more precisely, “Bidding Farewell to the Nineteenth Century common law conception of constitutional torts.”
For scholars like myself and my collaborator John Goldberg (Fallon’s colleague), it is ironic that Fallon contrasts common law tort thinking with pluralistic and instrumentalist reasoning that takes seriously compensation, deterrence, and social costs. That is what a great deal of common law thinking has been since roughly 1960s when William Prosser was the country’s preeminent tort scholar and the California Supreme Court became the nation’s leading expositor of tort law. Fallon seems to be under the impression – perhaps from recent constitutional tort commentators like Pfander, Baude, and Wells – that common law torts is widely understood as a rights-based, non-instrumentalist domain of legal reasoning. For better or worse, neither courts nor the majority of law professors look at common law torts this way today. Indeed, the pragmatic instrumentalist mindset Fallon ultimately prescribes to courts for thinking about Bivens and 1983 is quite close to the way most law professors think about common law torts today.
The most striking feature of Fallon’s article is his willingness to say that the social costs of providing redress to individuals whose constitutional rights were violated will sometimes count as a decisive reason to decline to hold those state actors accountable. This is one of the reasons he believes official immunity of various forms must be maintained. And it is the principal reason he rejects the outright attack on the results reached by the Roberts’ Court in constitutional tort cases. On the face of it, this recognition of costs defeating rights – put forward not simply as a law professor telling a hard truth but as an approval of judicial cautiousness in recognizing rights of action – is at odds with a strong commitment to the rule of law in its classic, Diceyan form, and, relatedly, to a Dworkinian conception of rights as trumps.
Ironies have two sides, of course, and my own principal takeaway is that Fallon, in the end, is a great advocate for further elaboration of constitutional rights and rights of action. Indeed, I commend this article because, in its deliberately down-to-earth quality, it both educates torts professors as to where we are in this complex field and indicates the availability of many middle paths in these times of extremism. Coming from a leading figure in constitutional law and theory, this is a lot to ask for, and we get it.
My problem, of course is more in marketing than in substance. Why did Fallon have to pitch the discussion as a critique of rights, when he is indeed a rights-based thinker? It appears to me that Fallon has fallen into the trap that also caught Prosser and mid-Twentieth Century common law scholars. They believed there were two choices in the judicial crafting of doctrine – ‘traditional’ common law, which (in their minds) carried with it an inherent bent toward laissez faire, or a flexible form of instrumentalism that would allow for progressive law reform. In response to the worry that, even today, contemporary advocates of a common-law approach are intentionally or unintentionally arguing for the restoration of a narrow, classical liberal conception of government, Fallon advocates for instrumentalism. As John Goldberg and I have argued, however, it is fallacious to align common law with laissez-faire and instrumentalism with progressivism – these were merely contingent associations characteristic of a certain phase of our history. Fallon is on solid ground when he rejects rights-based formalism for constitutional torts, but a rights-sensitive form of pragmatism will be needed if we are serious about preserving government accountability and the rule of law.
Ori J. Herstein, Nobody’s Perfect: Moral Responsibility in Negligence, Canadian Journal of Law & Jurisprudence, Vol. XXXII, No.1 (Feb. 2019), Pp. 109-125.
The sad story of Menlove, the defendant in the English case Vaughn v. Menlove is well known to all first-year torts students. Menlove was born, according to his lawyer, with the “misfortune of not possessing the highest order of intelligence,” and, as a result did something quite imprudent with flammable material that no person of average or typical intelligence (or judgment) would have done, resulting in a fire that damaged the plaintiff, his neighbor.
Menlove’s defense on appeal was that he had acted “to the best of his judgment,” and it was unfair to call him a wrongdoer, given that he had acted prudently, given the cognitive and behavioral handicaps under which he operated. Of course, his defense was rejected and, as Holmes said memorably in The Common Law, while “the courts of Heaven” might forgive Menlove, the common law courts would not, since “his neighbors . . . require him . . . to come up to their standard,” not his. This is what is now known as the reasonable person standard, which holds that negligence in the law is measured against an objective standard of care under the relevant circumstances.
Ori Herstein offers a nuanced defense for why the court of Heaven would be right to hold Menlove harmless. Herstein’s argument is worth the attention of torts scholars because it indirectly strengthens the objective standard and Holmes’ approach, although it also makes more complicated the Restatement Third’s further embrace of the idea that “if an actor has skills or knowledge that exceed those possessed by most others, these skills or knowledge are circumstances to be taken into account in determining whether the actor has behaved as a reasonably careful person.”
Herstein begins with the classic question of why the pejorative “fault” is even attributed to unintentional injurious conduct. For intentional conduct, the action fulfills the actor’s subjective purpose, and hence is easily attributable to the will of the “witting actor”. But “all negligence is unwitting” since it produces a result at variance with the actor’s purpose. More specifically, it is not so much that the result is at variance with one’s purpose, since that can be true of intentional acts that go awry. Negligence occurs when one’s conduct is at variance with one’s purpose, and one’s purpose was to perform the act in a conformity with a standard of care drawn either from an external source or from one’s picture of what conduct is desirable. (Pp. 4 – 6.)
Herstein argues that the commonsense argument that fault is attributable whenever an actor had the capacity to cause her conduct to meet the purpose she desired is too harsh, and fails because is unfair to fault someone for failing to succeed at something where success depended on factors outside their agency. Herstein notes that it obviously would be unjust to find fault with an actor whose purpose – to act in a way that everyone agrees is careful – was thwarted by external conditions that the actor could not know about. (P. 7.) For the same reason, argues Herstein, it would be unfair to find fault with an actor whose purpose – to act in a way that everyone agrees is careful – was thwarted by internal conditions “regarding the actor herself,” as in Menlove. (P. 7.) Herstein offer the following illustration of an internal condition which is not attributable to the actor – a doctor, never trained in a certain type of diagnosis, is no more responsible for missing a disease than a doctor trained in the right kind of diagnosis treating a patient whose symptoms have not yet presented. (P. 7). Where an actor’s purpose is frustrated by external and internal conditions, her agency is frustrated and she cannot be held blameworthy or morally responsible.
Herstein’s argument for the blamelessness of the internally frustrated but diligent actor is crucial to his argument. He makes the following point. In an activity that is hard to do, we evaluate an actor’s performance of the activity based on a baseline of competency. (P. 9.) His example is playing basketball. For someone who is competent at basketball, certain actions are part of the basic repertoire of actions that anyone who plays basketball knows how to do. For example, the “lay-up” is a basic shot that every competent basketball player knows how to do. It can be done competently or incompetently, and given the vagaries of external conditions, not every layup attempt will be successful, even if competently done. But, when a competent basketball player fails at a layup, it makes sense to find fault with the player’s actions, even if she intended to make a competent layup, if, in retrospect the layup she executed failed to meet the minimum standard of conduct that constitutes competent play. (P. 9)
One the other hand, were I to attempt a layup, I would almost certainly fail, in terms of success (the ball would not go in the hoop) and action (my execution would fail to meet the minimum standard of conduct that constitutes competent play). That is because I played basketball a few times in my childhood and not once since then. Herstein would say that it would not be accurate to say that my layup is “faulty.” The fault label would be inapt because my failure to perform a competent layup was not a reflection of my agency but of my lack of competency. (P. 10.) My lack of prior training in basketball means that I cannot be evaluated as someone for whom the practice of “playing basketball” is “reliably, regularly, readily, and relatively easily, and confidently available to” me. I am capable of playing basketball as well as a competent basketball player, but my failure to perform a lay-up is not something for which I should be held responsible, because I am not competent at basketball. For Herstein, my failure to make a lay-up in an empty court under ideal conditions is no more my responsibility than were I blocked by a falling piece of the roof as I attempted the shot. Not so for a competent player – her failure to achieve something she is capable of doing is excused only if her shot was blocked by an external event – something like the falling piece of roof.
An important consequence of Herstein’s argument is that negligence is a result of two variables: competency and agency. Herstein offers the following observation. Two surgeons, Ed and Ned, may be equally competent – equally dexterous and equally trained with equal grades and board scores and equal years on practice – but instantiate different degrees of “quality of agency” in surgery. “Quality of agency” means “how good [Ed and Ned] are at meeting their individual competency of doctoring.” (P. 12.) In the hypothetical Herstein offers, Ed and Ned’s competency is ex hypothesi the same (let’s stipulate that is 1.0) but Ed is “better” at applying his 1.0 unit of competency every time he cuts into a patient – he’s not perfect, but he is close, so let’s stipulate that he performs the act competently 999 times out of 1000. Ned applies his 1.0 unit of competency less well, so let’s stipulate that he performs the act competently 980 times out of 1000. Despite being equally competent, Ed is an excellent surgeon – 1/10 of 1% error rate – while Ned is merely an average surgeon, with a 2% failure rate. (Pp. 11 – 12.)
According to Herstein, if on the same day, in neighboring operating rooms, Ed and Ned fail the same way, we would react differently to the news that they had failed. In Ned’s case, per standard medical malpractice doctrine, we would say that his failure was blameworthy. It is no defense to say that Ned tried his best, or that there is no such thing as perfect surgery. As Mark Grady observed, “when a surgeon forgets to count the sponges before she sews up a patient, she may not present a claim of innocent mistake to the jury” even if she can show that she took every precaution and had a good history of care. A deviation from the standard of care is attributed to Ned’s agency, and we fault him. But, curiously, according to Herstein, we should not fault Ed. Even if Ed is held legally liable (for the reasons Grady noted), we should not say that he is at fault. (“Ed is not responsible for his malpractice or, at least . . . he is far less responsible than Ned.”) (P. 14.) Why?
Herstein’s argues that the error – which is one in a thousand that will occur in Ed’s life – is not the result of his agency, but the result of his humanity. (P. 13.) To err is human, and so some errors must be a result of our humanity, not a part of our personality. Herstein puts it this way: “[I]n the case of negligence, responsibility grows the more the failure of one’s agency is due to shortcomings in one’s facility – as an individual agent – to live up to one’s competency.” This produces a series of curious results. For example, according to Herstein’s logic, although at least one of Ned’s patients will be harmed by an error for which he is not at fault (the same must be true of Ned as Ed – his humanity causes one error), we will blame him for that error too, since we have no way of distinguishing between the one error cause of Ned’s humanity and the none caused by his agency. That doesn’t seem fair.
Also, as Herstein observes, if we can distinguish between degrees of competency, then it may be the case that certain less-competent surgeons, even when they are as diligent as Ed, will be held blameless for all erroneous surgeries, despite Ned being blamed for all of his. Imagine Meg, whose competency is 10% less than Ed and Ned’s (perhaps she comes from a less – advantaged medical community, or is just a little more “hasty and awkward”, etc.) – but she compensates for this by being as diligent as Ed. So, she comes to each surgery with less competency than Ed and Ned and, because of her Ed-like ability to make the most of her reduced competency, she performs the surgical act competently 980 times out of 1000. According to Herstein, it makes sense to blame Meg for zero errors, even though we would blame Ed for twenty. (P. 22.)
Tort theorists should pay attention to Herstein’s argument for two reasons. First, regardless of whether it is ultimately persuasive, it illustrates the wisdom of the reasonable person test and the rejection of Menlove’s defense. Herstein concedes in a footnote that “legal negligence is not conditioned on competency,” (P. 7, n. 9.) but I think he understates the degree to which the objective standard endorsed by Holmes rejects not only competency but what Herstein calls agency. Both, after all, are variables that must be weighed in the moral judgment of negligence. Chief Judge Tindal, who ruled against Menlove, anticipated the practical difficulty of processing a defense based on these two variables. He noted that it would be impossible for a jury to make a judgment about fault if the question was whether “the Defendant had acted honestly and bona fide to the best of his own judgment”. The reference to “honest and bona fide” action recalls Herstein’s concept of agency and the reference to “the best of his own judgment” recalls Herstein’s concept of competency.
Second, as my observations about Ned’s situation relative to Ed and Meg illustrate, the argument for the objective standard is not just practical (although that may be sufficient). While Herstein concedes that conventional tort law would hold Ed, Ned, and Meg liable for each of their medical misadventures, the logic of his argument entails that if the legal system could ascertain, from a “God’s Eye” vantage point, the facts as Herstein asserted them in his hypotheticals, the rationale for holding Ed and Meg liable sound in strict liability, but in negligence for Ned (in 19 out of 20 of his misadventures). Herstein’s logic entails that holding Ed and Meg responsible for their misadventures is like blaming a competent basketball player for failing to complete a lay-up because a piece of the roof fell onto the ball in flight. A troubling by-product of Herstein’s theory is that it forces tort law to embrace a theory of liability in cases like Ed and Meg’s that, both rhetorically and normatively, goes further than necessary.
It is not clear why Ned is more blameworthy than either Ed or Meg. The implication is that Ned’s conduct instantiates a normatively significant fact that grounds personal responsibility (as opposed to Ed and Meg, whose failures merely implicates their “humanity”). But it is quite mysterious (a) what mental states correspond to the “quality of agency” to which Herstein refers and (b) why agency is normatively significant in a way that competency is not.
Herstein is emphatic that the “quality of agency” is not a subjective state in relation to the purpose of the actor – that is clear from the description, consistent throughout the article, of negligence as unwitting agency. (P. 16.) But the “quality” of agency also presents in differing degrees in different unwitting actors (Ed and Meg have more of it than Ned). The problem is not with Herstein’s claim that different actors produce similar outcomes for different reasons (although, as noted above, it may be very hard to discern the underlying cause of an identical error), the problem is that there seems to be little argument offered by Herstein as to why the different etiology of an error should matter. His one effort to explain why lower “quality of agency” is a ground for attributing fault is where he considers the objection that person’s “quality of agency” may be immutable, like their competency. His response:
Moreover, even if to an extent our capability to meet our competency is set at birth . . . ascribing responsibility to an individual person based on her agency’s innate shortcomings may still in some sense involve personal responsibility. Because responsibility here is attributed based on features that make one the individual person one is, rather than merely a member of a species. (P. 18.)
It is not clear in what way this is a justification. The argument could run in reverse – for the same reason that Herstein doesn’t think that attributing responsibility to Ed based just on his humanity is fair, neither should responsibility be attributed to Ned based on his innate “Ned-ness”.
Herstein’s analysis sheds light on a confusion suffered by Section 12 of Restatement (Third). Under the Restatement, Menloves are not treated more generously but the extra-competent are treated more harshly than the merely competent actor. Comment A of Section 12 says, “[O]n balance it is best to take persons’ actual knowledge and skills into account when the level of their knowledge or skills exceeds the average.” Under Herstein’s logic, the Restatement would be right to treat Ed more harshly than Ned were he fail to “meet” his above-average competency and produce (for the sake of argument) 10 misadventures out of 1000. Despite doing better than both Ned and Meg, Ed js, according to Herstein, either equally or more blameworthy then they. For the same reason I cannot accept Herstein’s differential treatment of Ed and Ned based on his agency analysis, I cannot accept Section 12’s reverse analysis—that we should depart from the objective standard adopted by negligence law after Menlove in order to impose more liability on the actor with greater competency because their agency was somehow lacking. Perhaps the inadvertent lesson from Herstein’s effort is that the objective standard should be preserved across the spectrum of competency in tort law—not more and not less.
Herstein’s article is not about tort law, but it is instructive for tort lawyers because it illustrates how not to justify why we impose liability on the Menloves of the world. Barring a declaration that all tort law is either intentional torts or strict liability, the answer to Menlove, or Ed, Ned, or Meg, of why they are deemed faulty has to do with their what is reasonable for others to endure. Herstein’s analysis shows why it is a fool’s errand to try and ground judgments about personal fault on counterfactual outcomes that rooted in a fixed aspect of the character of the defendant that went ‘awry’. The putative distinction Herstein draws between competency and agency is not only spurious, it is normatively banal, since, as Herstein is the first to admit, neither are sensitive to the conscious choices of the actor. To paraphrase Shakespeare, Herstein’s mistake is to think that when it comes to negligence, fault must lay either in “our stars” or in “ourselves” – but that false dichotomy leads to confusion, not understanding.
Eric Descheemaeker, Rationalising Recovery for Emotional Harm in Tort Law, 134 L.Q. Rev. 602 (2018).
Tort compensation is often said to be governed by the make-whole principle – damages should compensate the successful plaintiff for all the losses she suffered as a result of the tort. Even if there is such a principle, it seems to have exceptions. In Rationalising Recovery for Emotional Harm in Tort Law, Eric Descheemaeker focuses on an apparent exception that applies to suits for interferences with possessory rights. For example, in standard cases of conversion, the plaintiff is not entitled to recover compensation for emotional distress caused by the wrongful interference with her property rights. Examining English authorities, Descheemaeker offers a surprising result. Although courts purport to disallow distress damages in these cases, they actually do allow them. English tort law is more principled in hewing to the make-whole ideal than it appears to be.
Rationalising Recovery is not in the first instance concerned with the question of when emotional distress serves as a “predicate injury” – i.e., the injury that the defendant was duty-bound to avoid causing. Nor is it concerned with cases in which the plaintiff sues for having been made to suffer the sort of psychiatric injury that, under English law, is treated as a personal injury on par with a broken leg. Rather, it focuses on the availability of “parasitic” emotional distress damages – compensation for fear, horror, grief, anger, frustration, worry, or other negative emotions arising out of a distinct injury that grounds the victim’s tort claim.
No one disputes that such damages are sometimes available. A plaintiff who suffers bodily harm in a car accident proximately caused by the defendant’s negligence is entitled to recover compensation for anxiety or misery over her injury. So too are successful battery and libel claimants. However, many courts and commentators deny that emotional distress damages are always available to tort victims.
For example, courts in the U.S. maintain that, absent special circumstances, victims of conversion are not entitled to recover emotional distress damages. Imagine that Jasper returns home to discover that the young dogwood tree in his front yard has vanished. He investigates and determines that it was uprooted by the landscaping company that he had hired to maintain his yard – a company employee somehow misunderstood Jasper’s instruction to prune a different tree as an instruction to remove the dogwood. For the landscaper’s mistaken but intentional taking of his property, Jasper stands to prevail on a conversion claim. However, Jasper is not entitled to compensation for his distress over the loss of the tree.
Descheemaeker’s thesis is that, even though English jurists, like their American counterparts, tend to insist that property torts such as these don’t give rise to claims for emotional distress damages, such damages are recoverable under other guises. Thus, courts sometimes permit “aggravated damages” for conduct that is not merely tortious but insulting, humiliating, or malicious. Aggravated damages, Descheemaeker claims, compensate for the psychic wounds generated by particularly nasty torts. Courts also award compensation for certain abstractly defined losses, including the “loss of use” of a damaged item of personal property, even if the plaintiff had not previously used the item to earn revenue. Here, he says, compensation is actually being paid for the annoyance that comes with not having access to one’s stuff. Finally, judges sometimes permit claimants to recover more than would be awarded under a diminution-in-value measure. Suppose some trees in Jennifer’s backyard are trampled by her neighbor’s trespassing cattle. Even if their destruction barely affects the value of her land, if the evidence shows that she took great pleasure in viewing the trees from her living room, a judge might order the defendant to pay higher, replacement-value damages. By these subterfuges, Descheemaeker argues, English judges have helped see to it that the make-whole measure is realized even in areas of tort law supposedly not faithful to it.
Others better qualified than I can speak to Descheemaeker’s reading of the relevant English decisions. I will instead approach his very interesting article from a more theoretical perspective. There is real ingenuity to his analysis. My question is whether and why such ingenuity is required. The reasoning of the courts in the relevant cases does not cry out for second-guessing – while hardly unassailable, these decisions are by no means exemplars of “transcendental nonsense.” Moreover, they seem to reach perfectly palatable results. Rulings that provides the Jennifers of the world with a bit more compensation strike me as unlikely to generate outcry from the bar or the public. Why, then, should we suppose, with Descheemaeker, that there is a hidden logic to these cases? Why not just take them at face value?
Descheemaeker has an explanation of sorts. English judges, he claims, have long been discomfited by the thought of treating emotional distress as a compensable setback. Stiff upper lip and all that. Thus, when we see property tort cases in which English courts award damages under headings such as aggravated damages, we can surmise that they are surreptitiously compensating emotional distress.
This explanation strikes me as wanting. The article acknowledges all the different torts for which English courts have long allowed parasitic distress damages – everything from negligence to false imprisonment to defamation. Where’s the discomfiture? Even Victorian-era jurists (Pollock, CB, we’re looking at you) deemed the award of distress damages appropriate in physical injury cases. Given that these jurists also tended to embrace robust notions of property rights, why would they have felt sheepish about compensating owners for miseries associated with dispossession? It is one thing to argue – as, famously, has Martha Chamallas – that common law judges’ sexism led them to reject claims for ‘pure’ emotional distress that struck them as unmanly. It is quite another to suggest that the Pollocks of the world would be put out by a rule that provides compensation for the anguish of men deprived of their land or things. (Note that, on this side of the Atlantic, even the Anglophilic and hard-headed Holmes paused his cynical musings in The Path of the Law to wax poetic about how a long-held possession “takes root in your being, and cannot be torn away without your resenting the act . . . .”)
I am led to wonder if Descheemaeker’s analysis ultimately belies an implicit acceptance of a brand of empiricism that arbitrarily limits the class of compensable setbacks to those with a physical and hence potentially observable dimension. Some such thinking seems to fuel his otherwise under-motivated effort to recast aggravated damages as emotional distress damages. My casebook co-author Anthony Sebok expertly exposed the fallacy underlying a comparable effort by the U.S. Supreme Court to treat punitive damages as “compensatory” of distress over having been treated in a high-handed manner. In fact, there seems little reason not to take aggravated damages at face value. They are redress for having been insulted, humiliated, or otherwise trashed, independent of one’s emotional reaction to the trashing, just as damages for loss of reputation or privacy compensate in the first instance for being held in lower esteem by others or because others know things about one’s private life they shouldn’t know, not for one’s anxiety or fear over such things. If one supposes – as one should – that there is nothing philosophically problematic about the idea of a wrongdoer compensating a victim for the very fact of having subjected her to gross maltreatment, there is no pressure to recast aggravated damages for malicious property torts as a sneaky way of compensating a ‘real’ setback such as distress.
Finally, to return to where I started, it is worth highlighting the teleological (Whiggish?) flavor of Descheemaeker’s doctrinal exposition. He seems to assert that “make whole” – by virtue of being a basic principle of tort justice – exercises a gravitational force that has been pulling courts unwillingly and perhaps unwittingly toward its full realization in case law. One might question whether “make whole” really is a principle of this sort. I have argued that it is instead a default rule for tort cases fashioned by modern judges in an effort to render more predictable the application of a deeper but also more indeterminate principle of “fair compensation.” On this view, a practice of denying parasitic emotional distress damages in plain-vanilla conversion cases need not constitute a departure from principle. It could be instead that courts have simply decided, quite reasonably, that compensation for the value of the damaged or destroyed property just is fair compensation in cases of this sort.
Assuming, however, make-whole is the core principle of tort damages, one wants to hear more about how it influences judicial decisionmaking. When, in property tort cases, courts have awarded aggravated damages, or use- or replacement-value damages, have they done so out of a sense that it would be unjust to deprive the plaintiff of full compensation for his losses? How would we know that this particular sentiment is driving their decisions?
Jotwell Torts contributor Sandy Steel previously published a Jot reviewing Professor Descheemaeker’s article. I hope it will prove interesting for Jotwell readers to see a second take on the same piece.
Gregory C. Keating, Is Tort Law “Private”?
, in Civil Wrongs and Justice in Private Law
(Paul B. Miller & John Oberdiek, eds.) (forthcoming Oxford University Press), available at SSRN
Tort law is no stranger to controversy. What duty does an employer owe to children sickened by workplace carcinogens brought home on parents’ clothing? What damages appropriately punish actors for willful and malicious conduct, or for non-economic harm? How far should liability extend when actors make dangerous products available to others who, in turn, choose to use or abuse them? But all of these freighted disputes pale in comparison to the larger question—what is tort law, or perhaps, what is tort law for? Although the questions seem intractable, Greg Keating’s recent article, Is Tort Law “Private”?, methodically guides readers through the theoretical claims.
The dividing lines have been staked out for some time. The instrumentalist camp sees tort law as one of many means for achieving optimal deterrence. Meanwhile a “contemporary revival” of traditional views sees tort as private law. Professor Keating wastes no time dismantling both assessments. Private law theorists miss the extent to which “modern tort law emerged as a response to the law having accidental injury thrust upon it as a pressing problem.” (P. 2.) Moreover, tort law’s “core domain is not optional,” but instead “protects persons against various forms of impairment and interference by others as they go about their lives as members of civil society.” (Id.)
According to Keating’s criticism of the private law camp, tort law is neither voluntary, nor wrongful, in any robust sense. Legal fault for tortious wrongs bears only slight relation to moral fault. Negligence liability is conduct that fails to meet an objective standard of care with respect to risks of harm to others, even when the conduct is not blameworthy. Moreover, tort law imposes liability not based on wrongful conduct alone, but only when fate has coupled that wrongful conduct with harm. (P. 3, n. 7) (invoking a thoughtful example of Jeremy Waldron’s regarding two identical wrongful acts, only one of which produced harm). In Keating’s view, accidental harms “command the attention of the legal system . . . not because they are characteristically very wrongful but because they are characteristically seriously harmful,” causing injury and death. (Id.)
But Keating’s private law critique does not lead to his full-scale endorsement of an instrumentalist program. The economic account of tort liability proposes that “the role of tort adjudication is to deter the squandering of social resources going forward.” (P. 5.) However, “[l]ooking backwards is instrumentally irrational” as a method of future risk-reduction. (Id.) In addition, the parties are not merely “vessels through which the socially desirable end of wealth-maximization is served.” (Id.) Instead, “harm’s distinctive moral significance can be grasped only within a deontological framework that takes persons and their lives as fundamental objects of concern, and the relations among persons as the fundamental subject of morality.” (P. 6.)
Despite this dual critique, the majority of Keating’s criticism is aimed at the failings of private law theory. Keating writes that a taxonomy that differentiates private law and public law misses the constant historical dialectic between the two. In tort law, private actions have often been considered alongside administrative alternatives—workers compensation and vaccine injury funds for example. They have also been compared to direct regulation of risk, as through environmental law. (P. 12.) Neither can tort law disentangle the interests of the parties to a suit from larger questions of social justice altogether. (P. 11.)
Amidst the criticism, a reader senses the mixed theory that animates Professor Keating’s own views. “The law of torts protects persons against various forms of impairment and interference by others as they go about their lives as members of civil society. The obligations that it imposes and the rights that it recognizes, play central roles in establishing people’s freedom to realize diverse conceptions of the good and lead independent and equal lives.” (P. 16.) This view treats the parties to the action as important objects of concern and yet simultaneously invokes questions of social justice—for example, what interests of the parties ought to be protected against interference by others? It also views tort law as an important player on the team, but not without possible stand-ins.
If I have a quarrel with Professor Keating’s work, it is not so much dispute as request. The appeal is to show the way in which Keating’s own mixed theory of tort law drives, and should drive, outcomes in particular cases and doctrines. In other words, If tort law is social and instrumental but simultaneously concerned with interests of the parties, how does that view shape what tort law does and should do? Professor Keating’s lucid criticism makes me look forward to his own endeavor to build and explain a guiding principle for the field.
Editor’s note: Gregory Keating had no role in selecting this article to be reviewed.
Cite as: Ellen Bublick, What Tort Law Is
(October 15, 2019) (reviewing Gregory C. Keating, Is Tort Law “Private”?
, in Civil Wrongs and Justice in Private Law
(Paul B. Miller & John Oberdiek, eds.) (forthcoming Oxford University Press), available at SSRN), https://torts.jotwell.com/what-tort-law-is/
Sandy Steel, Compensation and Continuity
, Oxford Legal Studies Research Paper
(July 20, 2019), available at SSRN
“Wrongdoers may incur duties to compensate the victims of their wrongs.” This, the opening sentence of Sandy Steel’s Compensation and Continuity, sounds like a truism. Who would deny it? It’s hard to imagine the defendant in a normal tort lawsuit conceding liability but insisting that her concession in no way implied responsibility for repairing that wrongfully inflicted harm. In tort law, the obligation to repair harm tortiously inflicted seems to tumble out of the breach of the primary duty to avoid tortiously wronging someone. Moreover, the continuity here seems both reasonable and rooted in basic morality.
Suppose I am cycling past a grove of peach trees. I stop, sample a peach, and decide to fill my pockets and bag with as many peaches as I can. I take them home and make peach pies out of them. Unsurprisingly, it turns out that the peaches weren’t just there for the taking. They were the property of a farmer who was growing them for sale. After reviewing her security tapes and deploying face recognition technology, the farmer shows up at my door demanding compensation. Surely, her demand is justified. I was wrong to have taken the peaches. I committed the tort of conversion, even if my assumption that the peaches were just there for the taking was an innocent mistake. Having baked the peaches into pies I am now unable to return them. So I must compensate the farmer for the peaches. This is what Aristotle called corrective justice and what John Locke called the obligation of reparation. The obligation of reparation seems to be a basic principle of morality, picked up in the law of torts.
Professor Steele’s paper investigates whether the fundamental logic of reparation is persuasively explained by what the late John Gardner called the “continuity thesis”. That thesis explains remedial responsibility to repair in the following way. Failure to perform a primary obligation—to, say, exercise reasonable care to protect the plaintiff from avoidable harm—leaves that primary obligation undischarged. Yet, when that failure leads to avoidable, negligent harm, it also prevents “first-best” conformity with that obligation. It is no longer possible to exercise reasonable care and avoid harming the plaintiff. That impossibility does not, however, extinguish the defendant’s obligation to the plaintiff tout court. Instead, it requires the defendant to do the “next-best” thing and repair the harm that it should have avoided in the first place. That remedial obligation is the rational residue of the undischarged primary obligation. Factually, matters have changed. It is no longer possible to exercise reasonable care and avoid harming the plaintiff. This factual impossibility is not the end of the normative obligation, however. The defendant’s breach of her primary obligation does not discharge that obligation. On the contrary, the failure to perform the obligation leaves it unsatisfied. Indeed, a special responsibility tumbles out of that breach. The defendant’s failure to perform her obligation makes her uniquely responsible for repair the harm that she has wrongly done.The fact that the obligation has been breached is the reason why the defendant must now do what she can to repair the harm that she has wrongly inflicted. As Steele puts it, “[i]f an agent fails to conform to a reason, and that reason persists, the person has a reason to come as close to conformity to the reason as possible.” (P. 4.)
The thought that the normative continuity coupled with factual impossibility explains and justifies reparation in tort (and elsewhere) is intuitively attractive but it presents its own puzzles. For one thing, although it is true that breaching an obligation is not a way of discharging that obligation it does not follow that an undischarged obligation must continue to constrain the person who breached it in some legally enforceable way, as scholars like Arthur Ripstein are plausibly read to assert. Breach of an obligation might extinguish that obligation without discharging it; breach might simply make it impossible to perform the obligation. In fact, we know that some primary obligations in tort do not survive their breach. In the nineteenth century, tort law did not recognize any recovery for wrongful death. Even now, the vast majority of jurisdictions do not attempt to award damages for the value to the victim of the life the victim has lost. In the circumstance where the primary obligation to exercise reasonable care to avoid inflicting harm on the plaintiff is breached and the ensuing harm is death, the law of torts effectively concludes that the failure to discharge a primary obligation brings that obligation to an end. Why should we think that other cases are different? Why should we think that the primary obligation persists when an arm, or a leg, or a table, or a chair is destroyed? As Steele says, “there is no duty not to kill the killed, to keep in confidence information that is no longer confidential, [and] there is no duty not to damage an irreparably damaged arm (in the precise respect in which it was irreparably damaged).” (P. 4.)
For another, upon reflection, there are salient respects in which the obligation of reparation in tort seems to rest on reasons that arise from the failure to comply with the primary obligation. These reasons do not exist prior to the breach of the primary obligation and are not continuous with the reasons which justify the primary obligation in any obvious way. For example, it seems that obligations of reparation grounded on breach of primary obligations to, say, exercise reasonable care are grounded in new reasons created by the breach. It is the defendant’s failure to discharge the primary duty of care which, along with various facts such as causation of harm to the plaintiff, subjects the defendant to an obligation of reparation. Breach of the duty makes the defendant responsible for the plaintiff’s harm and it is that responsibility which explains and justifies the defendant’s obligation of reparation. The tortious wrongdoer singles herself out as uniquely responsible for repairing the harm to the victim because she is uniquely responsible for wrongly inflicting that harm. The wrong, not the original duty, is the ground of responsibility. When, for example, I appropriate the farmer’s peaches without her permission, through that wrongdoing I bring unique responsibilities upon myself. Everyone in the world was under an obligation not to take the peaches, but only I breached that obligation. By doing so, I subjected myself to a special obligation of reparation owed specifically to the farmer.
Third, it is unclear how to characterize the normativity that “continues”. The existence of multiple “continuity theses” evidences the problem. Some scholars assert that continuity of reasons is the key (e.g., John Gardner); other scholars insist that continuity of duty is (e.g., Ernest Weinrib); and still others cast their lot with continuity of right (e.g., Arthur Ripstein). To an outsider, all of this can look like the proliferation of distinctions without differences or, worse, a circumstance where we don’t even know what would make one of these competing versions of the continuity thesis more illuminating than the others, much less which formulation of the thesis is better. Is it, for example, an objection to “duty continuity” that the specific duty not to carelessly break someone’s arm cannot be conformed to once the arm has been carelessly broken? Or does that just show that we must conceive of the relevant continuing duty more abstractly? Perhaps the relevant duty is not a duty to avoid breaking the victim’s arm carelessly but “a ‘duty to respect the victim’s right to the physical integrity of their person.’” When we move to a higher level of abstraction it is unclear why that highly abstract duty calls for the particular action of reparation by the defendant. In some contexts, respecting a person’s right to their body may require recognizing their right to have an abortion. Why does it now call for compensation?
Compensation and Continuity wrestles with these and other questions with subtlety, precision, and insight. It’s a rich and clear paper which advances our understanding it at least three important ways. First, the paper clarifies respects in which claims of reasons continuity, rights continuity, and duty continuity are saying the same thing and respects in which they are disagreeing. Second, the paper argues persuasively that continuity explains some things about reparation but not everything. Breach of a primary obligation, and the responsibility that it brings upon the breaching party, plays a role in justifying many instances of reparation in tort. Other kinds of reasons may also be relevant. In a case like Vincent v. Lake Erie, for instance, reasons relating to the fair allocation or distribution of harm may play a role in explaining the obligation of reparation. Reasons of fair allocation are different from reasons rooted in the commission of a wrong and they may come to bear only after the fact—only when the squall has passed and the loss has landed on the plaintiff. These reasons may interact with reasons rooted in the plaintiff’s pre-existing property rights and the continuing respect those rights demand.
Third, and most originally, in an all too modest way, Compensation and Continuity advances the hypothesis that the normative notion at the bottom of the “continuity thesis” may be value, not reason, duty or right. (Pp. 4, 9, 19-20.) The same value(s) may ground both a duty of non-interference and a duty of compensation. Steele’s arguments here are, in some respects, quite technical. They turn on how we should understand the relations among values, reasons, rights, and duties. But they are also intuitively attractive and restore direction to a debate which was in danger of becoming aimless. For example: the value of individual autonomy might ground the right not to be battered (and the correlative duty not to batter) and also the duty of reparation that a batterer has. Unrepaired physical harm impairs autonomy. Its repair is necessary to restore autonomy. The right not to be battered differs from the right to reparation; they impose different constraints. But the same value underpins them.
Among other things, this line of argument provides a satisfying explanation of why it is that the breach of a primary obligation sometimes ends all relevant obligation and why it sometimes does not. In some cases—when the plaintiff is killed, for instance—there may no way of continuing to serve the value that justified the prohibition on her killing. In other cases—when a table is totally demolished, say—it may still be possible to serve the relevant values by making compensation to the owner of the table sufficient to replace the value destroyed.
There is a still more general lesson, too. Primary and secondary obligations in tort (and elsewhere) form a unity and it pays to put that unity front and center in our thinking about the subject. There are much worse questions to ask than “what value is the law of torts serving here?” Indeed, few, if any, questions are better.
Cite as: Gregory Keating, Why Reparation?
(September 5, 2019) (reviewing Sandy Steel, Compensation and Continuity
, Oxford Legal Studies Research Paper
(July 20, 2019), available at SSRN), https://torts.jotwell.com/why-reparation/
As distributed ledger or “blockchain” technology continues to offer decentralised and distributed decision-making, Yeung considers the way in which those automated processes (code as law) are likely to interact with conventional means of governance (code of law). This technology is based on peer-to-peer verification of transactions: it takes various forms, but the common theme is that the record of transactions is shared with all users of a given system, and transactions only make it on to that record after a fierce process of mathematical ratification. As a result, the intermediaries on which transactions have for so long depended, such as banks, clearing houses and property registries, are no longer required. Altruism and self-interest are aligned because all users have a vested interest in the continued integrity and success of the closed system, and third party intervention is neither required nor (for many users, at least in principle), desired.
Distribution and decentralisation are the crucial components of distributed ledger technology, and are the principle features which distinguish them from those forms of electronic payments which use intermediaries and electronic bank money, such as Paypal, WorldPay and BACS, for example. These characteristics also explain why cybercurrencies are often described as “trustless”, meaning that transacting parties need not have any trust for one another in the real world, so long as they trust the payment protocol (which, for reasons which will soon become apparent, they probably should). Decentralisation in this context simply means that everyone who might want to use the currency, and so has a copy of the relevant software, also has a copy of the ledger. The ledger is a record of every transaction made using that currency, and each computer operating the software (known as a node) has a copy of the entire thing: from the beginning (the “Genesis Block”) to today’s latest block. This is where the term Distributed Ledger Technology (DLT) comes from: Blockchain, which was created to underpin Bitcoin, was the first distributed ledger, but there are now distributed ledgers of several different forms. Common to every one, however, is the idea that all participants have access to the full history of transactions made using that protocol. This is a novel way of dealing with the ages-old double spend problem. Historically, the challenge of how to prevent double spending has been met in two ways: the first is by using physical tokens, whose corporeal form physically prevents their being spent more than once, and the second is by employing an independent third party, such as a bank, to keep a record of transactions and their effects on the subsequent spending power of the parties involved. Cybercurrencies achieve the same thing by sharing information with every user and by ensuring that the information so shared is perfectly synchronised. This way, “coins” cannot be spent twice because everyone would know that this is what was being attempted, and the consensus necessary for validation and recording would not be reached. Security is thus achieved through complete transparency, and distributed ledgers have no need for any centralised record-keeping, nor for any third party intermediary to verify the integrity of transactions.
Such transparency is achieved through what is known as distributed consensus protocol, and this is characterised by two features:
- All computers on the network (referred to as nodes) must agree on which transaction data is ultimately recorded on the ledger
- The transaction data must have been generated by an honest node
The question remains how any of this can be achieved. One method, used by Bitcoin, is known as proof-of-work, and this allows nodes to reach a consensus on which transactions to record and in which order to do so. (The order is of course all-important, as it is with any spending pattern, since what you have already spent determines how much you can spend in the future.) Proof-of-work is the means by which nodes persuade other nodes that the block of transactions that they wish to add to the chain is legitimate and should be trusted. The work involved here is the cryptography: the solving of a mathematical puzzle, and this puzzle is of a very specific type: the optimum way of solving it is simply to work through very large numbers of trial and error iterations. In other words, lawyers might say that it is a difficult case, but not a hard one. It is clear what needs to be done, but doing it takes an immense amount of computational power simply to work through the many repetitions of the same calculation, each time trying a different input. Once this happens, the proposed block gets added to the chain and the transactions in it get confirmed. This, however, is not the only thing which happens when the block gets verified. Another of Bitcoin’s revolutionary qualities is its alignment of self-interest with altruism. Verifying blocks is hard grind and very expensive in computational terms, and yet it is essential to the continuation and security of the system. So, when a node successfully adds a block to the chain, it gets rewarded with bitcoin. In the Bitcoin protocol, the verification process is known as mining, and is simultaneously the means by which new coin is minted. This is a system, therefore, in which self-interest works in favour of the collective interest, and the two are mutually reinforcing.
The ethos underlying these technological developments (particularly that of Bitcoin) is that peer-to-peer transactions should be able to avoid the intervention of intermediaries or external regulators. In Yeung’s view, the belief that blockchain systems are capable of operating outside of conventional law rests on two assumptions: first, that conventional state legal systems are rendered redundant by the alternative governance frameworks offered by distributed ledger technology and, second, that the state will not intervene in these alternative modes of governance because it has no interest in doing so. Yeung makes it clear from the outset that the notion of a self-contained cybertopia in which national laws hold no sway is not likely to be realised: whilst the genius of blockchain technology allows for exceptionally high transactional security, it can do nothing to guarantee the wraparound rights that conventional law protects and upholds, such as security of personal integrity, property and dignity.
Yeung sets out three models of potential interaction between conventional law and blockchain systems, which she labels “cat and mouse”, “the joys of marriage” and “uneasy coexistence and mutual suspicion”. The first of these arises in a context in which blockchain systems are used deliberately to try and evade the reach of conventional law; a form of cyber-anarchy which provokes the state into asserting its sovereignty in some substantive way. Yeung’s prediction is that this will not take the form of wide-ranging, high-level regulation, but will instead occur on a more localised, ad hoc basis as individual “mice” are identified and reined in. So, for instance, a state is unlikely to allow the formation and enforcement of private contracts which exploit inequalities of bargaining power between commercial entities and consumers. Once attention is brought to any such arrangements, national law is very likely to step in and subject such transactions to some form of regulation, as it commonly does with conventional contracts.
The “joys of (patriarchal) marriage” model describes a situation in which the supremacy of conventional law is ultimately recognised, and in which there is a mutual commitment to co-operation between the two available modes of governance and decision-making. This refers to a situation in which parties transacting by means of distributed ledger technology do so in order to take advantage of the efficiencies of that medium, rather than with any desire to evade regulation and accountability. In such circumstances, their agreements will recognise and accommodate the restrictions imposed by national laws. For example, parties making a contract on a blockchain platform for software development services might code into their agreement a means of granting one party a compensatory amount of cryptocurrency in the event of a breach by the other party. This recognises the authority of national law, but does not require the intervention of a judge or court.
Finally, Yeung’s “uneasy coexistence” refers to a situation in which there is mutual suspicion from both sides, but in which intervention from national law enforcement will only occur where there is a threatened or perceived harm to third parties. This account reads like something of a hybrid of the previous two models: there is no express avoidance of national law by contracting parties, but neither is there an open or willing accommodation of its authority. Instead, both parties and national authorities warily keep tabs on each other, interacting only when is necessary for the prevention of unacceptable risk or loss.
Underlying the uncertainty of regulation and dispute resolution in this context is the constantly-evolving technological foundation on which it all sits, and the challenges this presents to established “bright line” boundaries between the private and public legal spheres. Should blockchains be regulated? Or should individual private disputes be resolved on an ad hoc basis? Yeung predicts that, ultimately, both code of law and code as law will have to provide some form of combined solution by finding an equilibrium which, like any other legal construct, balances the creation of value with the prevention of harm. Brave new technology invites brave new ideas.
There is a certain inevitability in this combined outcome: the impetus behind the development of autonomous code was the desire to achieve pure peer-to-peer interaction, but it is naïve to think that anyone, however technologically literate, can unilaterally contract out of states’ legal jurisdiction. The ability of parties to design their own dispute resolution processes could be a very welcome means of reducing transaction costs, judicial time and what can sometimes be a long wait for an appropriate remedy. It must, however, be a process within a process; reflecting the objectives, constraints and policies of the wider legal landscape of which it forms part. The efficiencies and advantages of coded agreements should, in other words, enhance individuals’ rights but not to bypass them.