CETL Week 1 - 4 DAVID(74
QUESTIONS AND ANSWERS)
Why is tort law political?
- Tort law presupposes protected interests (e.g. property law) and is hence
political: it protects interests that are inherently political
Tort law v. criminal law
Same origins: an eye for an eye --> however in the curse of history tort law
and criminal law grew apart: now tort law deals with compensation, and
criminal law with punishment
Starting point of tort law
everyone bears their own losses à so if you lose something, it is first of
all your loss: then tort law provides opportunities to make it someone
else’s loss
Purposes of tort law:
Compensation of wrongs / risksCompensatory damages
Prevention / deterrenceInjunctionPunitive damages
Recognition of injury / wrong (has become increasingly more important:
ex: apology for historical laws, like slavery) Nominal damages
Changing policy (tort cases brought up to change policy: Urgenda case)
Weinrib (= a dude)
Weinrib (= a dude) (corrective justice): the link between compensation and
wrongdoing is essential
Compensation: insurance
Wrongdoing: criminal law
à you want to be paid by the person who injured you: sometimes the primary
purpose of compensation has been met (you get paid by his insurance), but
you feel like this person has thus not been punished because his insurance
just paid for it. However, this person is often not personally able to pay this
large amount of money.
,= Important from theoretical point of view: illustrates importance mix of the
insurance company/ government paying one part and the perpetrator
another part
US v. Carroll Towing Co. (1947)
The case concerned vessels that were not fastened to their moorings thus
causing damage.
à was it negligent of the owner of the boat not to have a watchman on the
boat?
Court answered with this formula:
B<p*L, then negligence
B = burden of prevention (amount)
p = chance loss occurs
L = Loss (amount)
So if it costs 100 euro to prevent a 10% chance of a loss of 500 euro (= 50
euro), no need to prevent the loss.
In risk liability, the risk bearer calculates internally.
(if there is risk liability, why invest in prevention because you have to pay
anyway)
à as long as it is cheaper to have a watchman there than the costs of a loss
would be (burden of prevention smaller than amount of loss if it happens),
then negligence if the watchman wasn't there.
à still there is something wrong with this formula: it looks at total costs, and
an economist would look at marginal costs: the real question should be if you
should invest an extra euro on prevention: will one additional euro on
prevention saves less than a euro of less, then you do not have to spent it
Problems with economic analysis Learned Hand
Some problems of economic analysis:
Goal: minimize overall costs of accidents
Risk liability: heavier burden on the actor (person who applies this formula is
the person who owns the boat)
Fault liability: heavier burden on the victims (person who applies this formula
is the judge) Risk liability influences activity level: harming people carefully
will lead to liabilityConsiderations of information
, · Most legal systems require a duty to someone
· Palsgraf v. Long Island Railroad Co. 248 N.Y. 339, 162 N.E. 99 (N.Y. 1928)
How to incorporate this into economic calculation?
Tort law and insurance:
Private and Social insurance à we accept rules of risk in tort law because
insurance exists: otherwise we would not accept these risks (like that when
you hit a child with your car you are liable even if it’s the child’s fault who
ran on the road)
First party: insurance of victim, e.g. (something happens to you, the
insurance company pays you)accident insurance / fire insurancemedical
insurance workers compensation insurance
Third party: insurance of person(s) liable (something happens to someone
else because of you, and the insurance company pays the injured person)
liability insurance (personal or professional)
Rights of recourse (insurance companies can claim money from the person
who causes the injury) Insurer against insurer
à important here: link between tort law and insurance
Building blocks of tort law I: (metaphor of Lego blocks that build tort law) =
the structure of every legal system we will study in this course
Damage (or threat of damage)of a kind (and related to a right) the law
recognizes
Causation
Liability generating fact Conduct in violation of norm (fault) intent and
omissions are special casesabsolute (abstract norm) or relative (duty to
someone)Manifestation of riskLiability for others for violation by other or risk
based (e.g. children)
· Defenses
o e.g. force majeure, act of third party, contributory negligence, assumption
of risk, consent et al.
o In cases of strict liability, the defenses determine the ‘strictness’
Important Issues (personal scope and burden of proof)
QUESTIONS AND ANSWERS)
Why is tort law political?
- Tort law presupposes protected interests (e.g. property law) and is hence
political: it protects interests that are inherently political
Tort law v. criminal law
Same origins: an eye for an eye --> however in the curse of history tort law
and criminal law grew apart: now tort law deals with compensation, and
criminal law with punishment
Starting point of tort law
everyone bears their own losses à so if you lose something, it is first of
all your loss: then tort law provides opportunities to make it someone
else’s loss
Purposes of tort law:
Compensation of wrongs / risksCompensatory damages
Prevention / deterrenceInjunctionPunitive damages
Recognition of injury / wrong (has become increasingly more important:
ex: apology for historical laws, like slavery) Nominal damages
Changing policy (tort cases brought up to change policy: Urgenda case)
Weinrib (= a dude)
Weinrib (= a dude) (corrective justice): the link between compensation and
wrongdoing is essential
Compensation: insurance
Wrongdoing: criminal law
à you want to be paid by the person who injured you: sometimes the primary
purpose of compensation has been met (you get paid by his insurance), but
you feel like this person has thus not been punished because his insurance
just paid for it. However, this person is often not personally able to pay this
large amount of money.
,= Important from theoretical point of view: illustrates importance mix of the
insurance company/ government paying one part and the perpetrator
another part
US v. Carroll Towing Co. (1947)
The case concerned vessels that were not fastened to their moorings thus
causing damage.
à was it negligent of the owner of the boat not to have a watchman on the
boat?
Court answered with this formula:
B<p*L, then negligence
B = burden of prevention (amount)
p = chance loss occurs
L = Loss (amount)
So if it costs 100 euro to prevent a 10% chance of a loss of 500 euro (= 50
euro), no need to prevent the loss.
In risk liability, the risk bearer calculates internally.
(if there is risk liability, why invest in prevention because you have to pay
anyway)
à as long as it is cheaper to have a watchman there than the costs of a loss
would be (burden of prevention smaller than amount of loss if it happens),
then negligence if the watchman wasn't there.
à still there is something wrong with this formula: it looks at total costs, and
an economist would look at marginal costs: the real question should be if you
should invest an extra euro on prevention: will one additional euro on
prevention saves less than a euro of less, then you do not have to spent it
Problems with economic analysis Learned Hand
Some problems of economic analysis:
Goal: minimize overall costs of accidents
Risk liability: heavier burden on the actor (person who applies this formula is
the person who owns the boat)
Fault liability: heavier burden on the victims (person who applies this formula
is the judge) Risk liability influences activity level: harming people carefully
will lead to liabilityConsiderations of information
, · Most legal systems require a duty to someone
· Palsgraf v. Long Island Railroad Co. 248 N.Y. 339, 162 N.E. 99 (N.Y. 1928)
How to incorporate this into economic calculation?
Tort law and insurance:
Private and Social insurance à we accept rules of risk in tort law because
insurance exists: otherwise we would not accept these risks (like that when
you hit a child with your car you are liable even if it’s the child’s fault who
ran on the road)
First party: insurance of victim, e.g. (something happens to you, the
insurance company pays you)accident insurance / fire insurancemedical
insurance workers compensation insurance
Third party: insurance of person(s) liable (something happens to someone
else because of you, and the insurance company pays the injured person)
liability insurance (personal or professional)
Rights of recourse (insurance companies can claim money from the person
who causes the injury) Insurer against insurer
à important here: link between tort law and insurance
Building blocks of tort law I: (metaphor of Lego blocks that build tort law) =
the structure of every legal system we will study in this course
Damage (or threat of damage)of a kind (and related to a right) the law
recognizes
Causation
Liability generating fact Conduct in violation of norm (fault) intent and
omissions are special casesabsolute (abstract norm) or relative (duty to
someone)Manifestation of riskLiability for others for violation by other or risk
based (e.g. children)
· Defenses
o e.g. force majeure, act of third party, contributory negligence, assumption
of risk, consent et al.
o In cases of strict liability, the defenses determine the ‘strictness’
Important Issues (personal scope and burden of proof)
