Are Risks Wrong?

Feb 27, 2013 Anthony Sebok1 comment

Anthony Sebok

In The Moral Significance of Risking, John Oberdiek offers a theory of why risk imposition is prima facie wrong.  Oberdiek admits that his argument will only be persuasive if he applies it to risk imposition in its purest form (what he calls “risking”).  Risking’s moral significance – if it has any – must be based on the imposition of the risk of harm, and not the harm itself. In other words, if risking is wrong, it shouldn’t matter in our evaluation of it that the risk of injury never ripened into an injury. Thus, second-order effects of risking on the victim, such as emotional distress, cannot justify the conclusion that risk-imposition is wrong. Similarly (although Oberdiek does not discuss this) instrumentalist accounts for imposing liability on the basis of risk obviously cannot explain why risking is wrong, given that risking is significant to an instrumentalist only to the extent that deterring it would result in the optimal level of harm.

Although Oberdiek claims that his article is about risk imposition from the perspective of moral philosophy, he is quite conscious of the fact that his argument, if accepted, would reshape debates in law, especially tort law. Further, he recognizes that establishing the fact that risking is wrong does not answer the question whether any particular act of risking should be condemned or should be the basis of a liability judgment.  His only point in this article is to say that risking is a prima facie wrong, and it may be the case that it is justified in many situations in the balance of reasons, or excused, or, in the case of private law, left unrecognized like other moral wrongs that do not generate liability.

Oberdiek observes that there is a tension in everyday moral discourse when it comes to risking. On the one hand, many (not just utilitarians) feel that moral judgments about risk are in the end proxies for moral judgments about harmful acts (however broadly defined), and thus Oberdiek’s search is pointless.  On the other hand, he asserts, with some justification, that it makes sense to say of a drunk driver who drives home safely that she did something wrong.  “Wrong” not just from a criminal law perspective, but from a second-person perspective as well. Oberdiek thinks that a person who was almost hit by the drunk driver would be saying something true if she were to say to the driver, “even though I suffered no physical injury or emotional distress, your act wronged me.”

Oberdiek’s solution is to create what he calls a “détente” between the two prongs of this tension. He notes that the person who is almost struck by a drunk driver has suffered an injury to her “wider conception of life” – wider than her physical body, property, and mental tranquility. (P. 350.) Borrowing from Joseph Raz, Oberdiek argues that the by redefining autonomy as an interest, we can understand how risking can cause “a setback to a nonmaterial autonomy interest of a certain kind” (p. 342) without causing harm (or at least harm conventionally cognizable in law).  But that is only half of Oberdiek’s burden.  He has to further explain how risking actually reduces autonomy, and this is where I find his argumentwanting.

Assuming for a moment that a person’s autonomy is a primary good, Oberdiek’s characterization of how risking reduces autonomy seems inadequate for his task. He argues that riskings that do not ripen into harm – and of which the victim is unaware – may not affect the victim’s “experiential or biological life” but may affect her “normative life.” (P. 351.) The victim has fewer options in life, and just as one can limit autonomy by laying traps where someone might walk, imposing risk limits autonomy.

But saying that risk “limits” options is to speak metaphorically twice over.  First, in some pure risk cases, the wrongdoer does not reduce the number of choices available to the victim – the wrongdoer may simply make an unwanted result more likely (or reduce the chances of a wanted result). Second, even if we reinterpret Oberdiek to mean that risk limits autonomy by increasing the likelihood that a person’s plans will fail, there is still the question whether it makes sense to say that the victim’s autonomy is affected if, after the risk has passed, her plans were in fact not thwarted.  If I point a revolver with one bullet in six chambers at you while you sit at your dinner table without knowledge of me, and I pull the trigger and no bullet is fired, it may be true that I imposed a risk on you and that when I did so I increased the chances that your plans would be thwarted (eating dinner, living, etc.), but after the risk passed, in what sense was your autonomy altered?  Your options return to where they were, and unless you suffered some other harm – e.g. emotional distress at learning of my act – it is difficult to see how the risking reduced autonomy.

It is possible that Oberdiek’s forthcoming book, Imposing Risk, answers the questions above.  In any event, I think that Oberdiek’s instincts are correct and his project quite worthwhile.  The slow but steady increase in jurisdictions adopting some form of “loss of a chance” in medical malpractice suggests that the intuition Oberdiek is trying to explain has deep roots.  Other practices, such as the award of extra-compensatory damages in cases where only nominal damages are found also needs justification.  While such practices can be explained from an instrumentalist perspective, for those of us uncomfortable with such explanations, Oberdiek poses a question for which there is, as yet, no easy or complete answer.

Against the Law?

Jan 18, 2013 John C.P. Goldberg

John C.P. Goldberg

Why have tort law? After all, other laws and institutions cover a lot of the same ground. If we want to punish bad actors, there is criminal law. If we want to ensure safety, there is regulatory law. If we want to aid injury victims, there is public and private insurance. What’s left for tort?

A standard answer is that tort, with its threat of liability, deters people from engaging in conduct that unduly risks harm. Tort law is needed for this purpose, the answer continues, because a good deal of risky conduct falls outside the ambit of criminal and regulatory law. For example, injuring someone by careless driving usually isn’t a crime, so the threat of negligence liability fills the void.  Of course this answer assumes that the prospect of liability will actually induce people to act more carefully.  Does Tort Law Deter?, by Professors Cardi, Penfield, and Yoon, is an innovative attempt to harness social science methods to investigate that assumption.

The authors anonymously surveyed 700 first-year students at multiple law schools. (Most respondents completed the survey before or during their first Torts class.) Each was invited to state the likelihood that s/he would undertake certain specified activities that carry risks of injury to others.  For example, each was asked to rate the likelihood that s/he would make a watercraft available to house guests without providing them with life jackets. At the same time, participants were randomly assigned a description of one of four legal regimes governing the activities: (1) no liability (i.e., no legal consequences for engaging in the activities); (2) a nonquantified possibility of a significant criminal fine, but no tort liability; (3) an absence of “laws or rules against” the activities, but a nonquantified possibility that the subject “might be sued and might have to pay for any injury caused by [the activities]”; or (4) no description of the legal regime.  The main goal was to determine whether regime (3) – which features tort but not criminal liability – reduced participants’ stated inclination to undertake any of the activities as compared to regime (1)’s no liability scheme.

The results suggest that the prospect of tort liability had little or no deterrent effect: participants reported being just as likely to undertake the risky activities in regimes (1) and (3).  By contrast, participants reported that they would be less likely to undertake the activities in regime (2).  If valid, these findings support the notion that the threat of tort liability has no significant deterrent effect, at least with respect to the kinds of activities mentioned in the survey. However, the authors are for appropriately cautious about reading too much into their study, acknowledging both limitations of survey-based research and their own particular survey.

This is an imaginative and provocative paper, well worth a read. The authors deserve praise for use of a novel research design to try to make headway in assessing tort law’s effects.  Still, I have concerns about the design, particularly the description of the tort liability regime that is built into the survey.

Recall that the survey asked participants to gauge their willingness to participate in a set of risky activities under different legal regimes. The tort liability regime – regime (3) – was defined as one in which “[t]here are no laws or rules against” the risky activities, and instead only a risk of liability. I gather the authors meant by this language to convey to participants that, in this regime, risky activities generated possible tort liability, but no risk of criminal punishment.

My worry is that this language could just as easily be interpreted to specify a regime in which liability is completely divorced from wrongdoing. And if respondents understood regime (3) in this way, then it is perhaps not surprising that the threat of liability had no deterrent effect.  Imagine a legal system in which the courts make clear that it is perfectly acceptable, as far as the law is concerned, to engage in certain risky activities, so long as one is prepared to pay for any resulting harm.  By deeming such activities acceptable, the law might not only fail to deter them, it might actually encourage them, in part by undermining social norms against them. Perhaps, then, the survey (inadvertently) assessed the deterrent effect of a liability regime that, instead of enjoining certain risky activities, condoned them (or deemed them permissible). If so, it probably won’t tell us much about the deterrent effect of the tort law we actually have.

Indeed, the study’s findings instead may help to explain why tort law overwhelming ‘speaks’ in a different voice from the one ascribed to it in the survey. Tort is a law of wrongs, not a law of permissions and fees. When liability attaches to risky conduct that causes injury, it attaches precisely because there are “laws and rules against” such conduct. Even when not a crime, careless driving that injures another is against the legal rules – the rules of tort law.  Specifically, the tort of negligence contains within it a rule that imposes on each of us a legal obligation to refrain from driving carelessly.

One might defend the survey’s framing of tort liability as disconnected from a notion of rule-breaking or law-breaking on the ground that legal economists – among the leading proponents of deterrence theory – tend to adopt the view that tort liabilities are mere fees. But then the question posed by the study is not whether tort law deters; it is whether tort law understood on a liability-rule model deters. That is a different question.

A Preference for Strict Liability?

Dec 3, 2012 Sheila Scheuerman

Sheila Scheuerman

A long-enduring question in tort scholarship concerns the purpose of tort law.  One camp, anchored by the powerful scholarship of John Goldberg and Ben Zipursky, argues that tort is a law of fault and wrongs, and strict liability is sort of that weird cousin no one likes to talk about much.¹

In a compelling new sociological study, however, Joseph Sanders tests the idea of tort as wrongs (and only wrongs), and adds to the scholarly debate about tort’s rationales.  Sanders persuasively argues that—far from being “at the margin of tort law”² —from the public’s perspective, strict liability reigns supreme.  In four discrete studies, Sanders assessed whether the public believes fault or wrongdoing is a requirement for tort liability.  His thoughtful article presents some surprising findings that should have those of us in the academy taking another look at the purpose of tort law.

In Sander’s first study, he presented participants with a factual scenario involving a glue-making factory that emitted a toxic chemical.  Two factors varied: the location of the factory and the owner’s state of mind.  Consistent with the factors for strict liability in the Restatement (Second) of Torts, participants assigned less liability when the factory was located in an industrial area.  A majority of participants, however, believed that the factory owner should be responsible for damages even when he was not negligent and even when the factory was located in an appropriate area.  Still, Sanders attributed this result to a potential problem in the vignette and concluded that participants might have read a negligent state of mind into the fact pattern.

Sanders corrected the state of mind factor in the second study.  In the second scenario, the driver of a pickup truck injured a bicyclist.  The state of mind of the truck driver varied from a careless driver to an attentive driver who hit an unseen spike in the road.  The scenario also varied the manner of injury.  In one, the driver hit the bicyclist directly.  In the other, the driver’s cargo spilled a toxic chemical onto the bicyclist.  The results of this study were interesting in two respects.  First, participants responded to the mere presence of a chemical in the vignette as a ground for liability.  Second, two-thirds of the participants assigned liability in a mundane truck accident where the driver took every reasonable precaution.

In the third study, Sanders sought to eliminate any potential that the participant’s liability findings in the first two studies were improperly influenced by the involvement of a corporate actor.  The third scenario presented two variations:  a bicyclist struck another bicyclist, or a truck driver struck a bicyclist.  The study found that participants viewed both scenarios – truck and bike – as free from negligence or fault.  Nevertheless, the participants imposed significant liability in all variations.  In the bike-on-bike accident with no corporate actor, nearly forty percent of participants assigned some liability.

Of course, a bike accident with another bike clearly does not involve an abnormally dangerous activity, and would not justify strict liability under current precedent.  In this study, participants further were asked to justify their liability decisions.  Here, the findings were shocking—nearly three-fourths of those who assigned liability believed that the injurer should compensate the victim simply because he caused the injury, even though he was not at fault.  In other words, as Sanders summarizes, “mere causation created liability.”  (P. 22.)

In the final study, Sanders tested whether jury instructions affect a layperson’s response to imposing liability.  The fourth study assigned half of the participants the role of a juror and instructed them to apply a negligence standard to a scenario resembling the Indiana Harbor Belt Railroad case.  Forty-six percent of participants in the control group assigned liability to the railroad.  But in the juror group, no one assigned full liability and only seven percent assigned partial responsibility.  In short, assuming the role of the juror and being instructed on the law of negligence eliminated the strict liability responses of the participants.

So what does all of this mean?  Sanders is careful not to draw any unwarranted conclusions and does not speculate on why participants assign liability in non-negligent situations.  He simply observes that fault is not required “within the realm of everyday moral intuitions.”  (P. 34.)  Is this relevant to us as torts professors?  I think it is for two reasons.  First, social norms impact tort law.  Tort law continues to evolve; new legal wrongs are created by judges and by legislatures.  Accordingly, understanding lay opinions of strict liability can help us see where social norms place responsibility, and thus, where tort law may evolve.  Second, our students come to us as ordinary lay people.  It is only after we have “taught them to think like a lawyer” that their ordinary moral intuitions take a back seat.  This article reacquaints us with a perspective of tort law likely shared by many of our students, and opens our minds to non-conventional thinking about strict liability.

1. Goldberg and Zipursky’s body of work on civil recourse theory is voluminous.  See Civil Recourse Revisited, 39 Fla. St. U. L. Rev. 341 (2011); Torts as Wrongs, 88 Tex. L. Rev. 917 (2010); and Unrealized Torts, 88 Va. L. Rev. 1625 (2002).
2. See Torts as Wrongs, supra note 1, at 952.

The (Mis)alignment Debate

Nov 5, 2012 Gregory Keating

Gregory Keating

In Mistakes, Misunderstandings and Misalignments, Jules Coleman joins the debate precipitated by Ariel Porat’s Misalignments in Tort Law and carried on by Mark Geistfeld in The Principle of Misalignment: Duty, Damages and the Nature of Tort Liability, and by Israel Gilead and Michael D. Green in Maligned Misalignments. Coleman’s contribution to the debate is important both in its own right and because the larger debate in which it figures represents the state of play with respect to important issues in tort theory. That debate throws into relief the issues that now divide wrongs-oriented and efficiency-oriented theories of tort. The debate also flushes out the lurking significance of “harm” as perhaps the most understudied concept in tort law.

Professor Porat’s originating contribution identifies five misalignments in negligence law—circumstances where the risks accounted for in setting the standard of care differ from the risks for which liability is imposed and damages are awarded at the conclusion of a successful negligence suit. Alignment requires that the same risks be taken into account and the same valuations used by courts in setting the standard of care and in imposing liability and damages. Misalignments are a sign that the law may be structured in a way which leads potential injurers to make inappropriate investments in accident prevention. Professor Porat’s fine paper prompted three diverse rejoinders. Professors Gilead and Green rejoined that the misalignments may be ways in which the law of torts takes approximate account of negative externalities.

Professor Geistfeld rejoined that misalignment is a necessary and proper feature of negligence law because the duty of care is properly predicated on a valuation of prospective harm which will often exceed the proper measure of damages. This occurs because negligence law frequently involves “irreparable injuries,” that is, injuries for which money damages are an inadequate remedy. Ex post compensation cannot restore victims to the conditions they were in before they were harmed. Death is the paradigmatic case. When negligence law confronts harms that cannot be repaired it increases the stringency of the obligation to avoid harm in the first instance.

Professor Coleman has now responded that Porat’s account of misalignment is unpersuasive because negligence law is not misaligned. It is aligned but in terms of its own intrinsic logic not in terms of efficiency. The sequence of elements in a negligence claim determines whether a putative wrongdoer in fact conducted themselves with sufficient regard for the interests of the party claiming wrongful harm at their hands. The elements are coherent on their own terms and that is all the coherence they need.

This is a rich, sophisticated debate which will repay close study by anyone interested in the nature of tort liability and the future of tort theory. Let me highlight two themes:

Instrumentalism and anti-instrumentalism. This debate is often understood as a contest between moral theories—consequentialist and non-consequentialist. The debate between Porat and Coleman shows another, perhaps more important dimension. Porat’s view is instrumental in the following way: he takes the Hand Formula to be the master formulation of the idea of negligence; takes the formula’s content to be economic (CBA); and evaluates other negligence doctrines by investigating how effectively they realize the end of efficiency. For Porat doctrines appear to be rules of thumb which serve as proxies for achieving the independently valuable objective of efficiency. Tort doctrines have no independent normative authority. Coleman’s anti-instrumental rejoinder is not that Porat’s economic theory is wrong and that the correct theory is deontological but that Porat’s conception of negligence is wrong. In saying this Coleman is rejecting the view of legal doctrine and concepts as rule of thumb proxies for independently valuable objectives. He is claiming, instead, that negligence is an institution constituted by a set of related rules and concepts—by the elements of a negligence claim (duty, breach, harm and causation) and by overarching concepts such as “harm,” “wrong” and “relationality.” Those concepts are necessary to understanding the institution on its own terms.

This disagreement is important, all too often overlooked, and of special importance to legal scholars as opposed to economists and philosophers. The special expertise of lawyers is law and the special expertise of legal academics is the legal subjects that they teach and about which they write. Lately, economically inclined property scholars (Merrill and Smith) have begun to insist on the institutional character of property, that is, on the way that its norms and concepts cohere to constitute an institution. One consequence of this for their work has been to alter the explanatory and justificatory role of instrumental (economic) precepts and concepts. Merrill and Smith are indirect instrumentalists. In their work property doctrines and concepts have independent significance and their application governs cases; the goal of efficiency figures in as an explanation and justification of the institution. For example, systemic informational efficiencies may justify and explain the simplicity and apparently inefficient inexactness of basic property norms. If the parallel claims that Coleman and other contemporary justice theorists of tort law are making are correct instrumental theories of tort may also need to be reformulated as indirect accounts. This question, in any case, deserves to be at the forefront of the instrumental/anti-instrumental debate.

Harm. Coleman argues that “harm” is a fundamental “concept” in tort whereas “cost” is not. Geistfeld’s concept of “irreparable injury” hints at a similar idea. Lurking here is the least examined issue in contemporary tort theory. From the First Restatement to the Third actions which place plaintiffs in “impaired conditions” have been necessary predicates of most tort claims. Just what counts as an “impaired condition” and why impaired conditions have such normative significance is a matter about which much more needs to be said.

Insurance as Safety Regulator

Oct 9, 2012 Catherine Sharkey

Catherine Sharkey

In Outsourcing Regulation: How Insurance Reduces Moral Hazard, Omri Ben-Shahar and Kyle Logue make a pitch for the underappreciated role of insurance as manager and minimizer of safety risks.

The study of tort law in the modern administrative state increasingly entails a comparative institutional account of private common law versus public agency control in terms of satisfying the goals of compensation and regulation of safety risks.  I would go so far as to say that the future of tort law and scholarship belongs to those who tackle complex health and safety issues by integrating concepts and doctrines drawn from public administrative law and private tort law.  Ben-Shahar and Logue make a major contribution by adding the third dimension of insurance: “Choosing the ideal regulatory role of these two institutions—agencies versus courts—depends on how well insurance arrangements support the regulatory function of tort and agency law.” (P.20)

In the contest between institutions, Ben-Shahar and Logue boldly pronounce insurance the winner: “[I]n a variety of areas private insurance companies can, and already do, replace or augment the standard-setting and safety-monitoring currently performed by government, and they do so in ways that increase overall social welfare.” (P.1)  As their title suggests, they are ready to “outsource” to the private insurance market regulatory functions now performed by the government.

Why?  According to Ben-Shahar and Logue, private insurance companies enjoy two main comparative advantages: superior information and competition.  In terms of informational advantages, insurance companies have “expertise in acquiring and sorting sophisticated information.”  (P.12)  Central to their business is the assembly of large actuarial databases used to classify and price risks in the underwriting process.  Moreover, unlike government regulators, insurance companies are subject to competition, which is key to their motivation to reduce risks.

Ben-Shahar and Logue want to upend conventional thinking about insurance as merely providing indemnity for losses.  They stand on the shoulders of several insurance law scholars (notably Ken Abraham, Ronen Avraham, Tom Baker, and Steven Shavell) to present an overarching view of insurance as a pervasive form of regulation in the modern economy.  They present a detailed, clear picture of insurers engaging in various forms of ex ante and ex post regulation.  Unlike most government regulators, insurers present actors with a menu of safety options, not simply an either-or choice.  Insurers tailor and adjust insurance premiums according to policyholders’ risk characteristics and loss experiences over time, setting prices for actors’ choices or levels of care much like government-set Pigouvian taxes.  Employing a centralized network of agents who administer claims, insurance transforms vague safety standards into bright-line rules.  And finally, insurers monitor the conduct of their policyholders on an ongoing basis.  Ben-Shahar and Logue give myriad examples of how insurance supplies “both the incentive and the know-how that actors often lack, to administer a more efficient level of accidents” (p. 2), moving seamlessly from the world of “what is”—with examples of risk management in the homeowners, auto, and products liability insurance contexts—to the world of “what could be”—imagining insurance as a substitute for government regulation in consumer protection, food and import safety, and financial markets.

Ben-Shahar and Logue’s article bursts with fresh insights.  One of their most fascinating ideas is a kind of “law of conservation of regulation.”  Namely, if tort-based liability is eliminated in a certain area and the government has yet to step in, then private insurance markets will spring up.  For example, they predict: “It is possible . . . that the trend in American law, of businesses immunizing against court-imposed liability for breach of consumer product contracts, through their use of mandatory arbitration clauses, may dramatically increase the demand for first-party insurance coverage as a substitute for legal control of consumer product quality.” (P.48)  Another provocative idea is that subrogation claims brought by first-party insurers can substitute for class-action lawsuits as a means of regulating bad behavior where individualized lawsuits are not cost effective. (P.46)

In a recent article, Ken Abraham divided the field of insurance law into “Four Conceptions of Insurance,” each of which “paints a different view of the cathedral.” (P.56)  Ben-Shahar and Logue’s work falls squarely within the “governance” conception, which Abraham describes with the catchphrase “insurance as ‘surrogate’ for government.” (P.5)  (The competing conceptions are insurance as contract, public utility, or product.)  Reading Ben-Shahar and Logue’s article against the backdrop of Abraham’s typology, the reader may wonder, “Where are we most likely to see insurance wear its risk manager hat?”  “Where not?”  The risk management role played by insurance is likely to vary significantly by insurance line and by market conditions.  Ben-Shahar and Logue offer a formidable start down this path. To their credit, the authors make bold predictions and do not shy away from claims that still await empirical testing.  But, for the time being, if their conceptual claims hold sway, then we might welcome, rather than fear, insurers’ larger role in the health and safety contexts of the modern administrative state.

Meet the Editors

Oct 9, 2012 Michael Froomkin

Torts Section Editors

The Section Editors choose the Contributing Editors and exercise editorial control over their section. In addition, each Section Editor will write at least one contribution (“jot”) per year. Questions about contributing to a section ought usually to be addressed to the section editors.

Professor Gregory Keating
William T. Dalessi Professor of Law and Philosophy
USC Gould School of Law

Professor Catherine Sharkey
Crystal Eastman Professor of Law
New York University School of Law

Contributing Editors

Contributing Editors agree to write at least one jot for Jotwell each year.

Professor Ellen Bublick
Dan B. Dobbs Professor of Law
University of Arizona, James E. Rogers College of Law

Professor Martha Chamallas
Robert J. Lynn Chair in Law
The Ohio State University, Moritz College of Law

Professor Nora Engstrom
Stanford Law School

Professor Mark Geistfeld
Sheila Lubetsky Birnbaum Professor of Civil Litigation
New York University School of Law

Professor John Goldberg
Eli Goldston Professor of Law
Harvard Law School

Professor Scott Hershovitz
University of Michigan Law School

Professor Keith Hylton
Honorable Paul J. Liacos Professor of Law
Boston University School of Law

Professor Sheila Scheuerman
Director of Faculty Development & Scholarship
Charleston School of Law

Professor Anthony Sebok
Benjamin Cardozo School of Law

Professor Benjamin C. Zipursky
Associate Dean for Research
James H. Quinn Professor
Fordham University School of Law

Call For Papers

Oct 9, 2012 Michael Froomkin

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Jotwell Mission Statement

Oct 9, 2012 Michael Froomkin

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