SAVING HUGE COSTS?

[Note:  This posting is a continuation of a report on the development of a civics unit of study.  This unit is directing students to formulate informed positions on a governmental topic:  ground rules overseeing tort law.  It is being developed in real time.  Writer wants to identify his basic source of information, the Great Course’s course, Law School for Everyone.[1]]

In the last posting, this blog began reporting on its development of a unit of study in which a tension within tort law is highlighted; i.e., strict liability vs. negligence as a standard by which to assign liability in a tort case.  After establishing the fact that tort law development took a turn in mid-nineteenth-century courtrooms – from the strict liability standard to introducing negligence as a determinant factor, that posting addresses a reason for this shift:  industrialization.

          To further understand this shift, that posting describes how there seems to have been two basic explanations:  industrialization caused higher density of population – and more opportunities for joint accidents – and a strict liability regime was proving to be very expensive to business interests.  And one business it particularly was hurting was the railroads.

          Railroads, given the technology of that time, caused or provided many opportunities for harm to be inflicted.  Here is what Edward K. Cheng says of this “minefield:”

Incidents involving trains back in the nineteenth century were frighteningly common.  People and other vehicles were hit by trains at crossings.  Steam boilers exploded.  And sparks and cinders from coal-powered locomotives set fire to fields.  If you are a railroad company operating under a strict liability regime, you pay for all those harms.[2]

As was explained in the last posting, railroad companies, under a strict liability standard, were held liable for all those occurrences and, of course, that seriously hit their bottom lines.  So, if one looks at that history from an economic/political perspective, one is apt to believe profit-concerns caused courts to shift to a negligence standard.

          But before one casts strict liability to the dust bin of history, one can observe that it has made a limited, but important comeback.  Beginning with court decisions in California, dating to the 1960s, there is one area in which strict liability has become the standard again  and that is in product liability.

          One buys a consumer product – say an electronic appliance – and the thing is wired incorrectly.  At home, that person uses the product, causes a spark, hits an accelerant, and the house burns down.  Is there negligence?  Probably, but by whom?  Some worker on the assembly-line?  Again, probably, but which one?  And if the worker is identified, can he/she afford making the homeowner whole?  Probably not.  In those cases, the standard has again become strict liability and that liability falls on the business that produced the product.

          Yes, the company can question whether the product was used incorrectly and if so contributed to the fire.  It therefore can claim the company should not bear full liability or any liability – this will be further addressed in a subsequent posting.  But in the main, courts today utilize strict liability when it comes to assigning responsibility in tort claims against companies that produce and sell consumer or industrial products. 

And in passing, this evolving legal sentiment exemplifies how case law – common law – changes over time, albeit slowly.  And for those cases responsible for instituting change, they become famous cases within legal circles.  They are famous but considered weird – out of the usual.  Not only do these cases get a bit of notoriety, but so do the judges that issue the decisions in those cases; judges like Oliver Wendell Holmes and Benjamin N. Cardozo.

But despite this tantalizing aspect of common law – as opposed to civil law – one can ask:  is this the best way to go about handling torts?  Should the system shift totally away from common law and join many other nations by not relying on precedent, but on statutory law?  This account briefly mentions this at this point, because from here on, these postings will just accept a common law bias. 

In evaluating this nation’s adjudicating torts, citizens can and, perhaps, should question this basic alignment.  And, in turn, one should understand that to keep a common law system, as opposed to shifting over to civil law, is a political decision.  It should be mentioned, there have been efforts to rely more on civil law. 

But what are the concerns over common law?  Reformers cite several concerns;[3] many regarding the quality of juries.  Common law often leaves certain aspects of law or torts somewhat ambiguous.  And reformers argue that that leaves juries free to succumb to emotional appeals.  For example, often observers gauge juries as being too generous with defendants’ money in awarding damages. [4]   There have been legislatures that have enacted caps on such awards to reign in that generosity.

Reformers have also looked at the ease of filing class action lawsuits.  A class action lawsuit occurs when many plaintiffs join forces to make a claim in court for harm they all have allegedly suffered from the actions of a defendant.  Reformers have criticized this type of legal action and have called for tightening the rules allowing them.

Why?  Because associated with class action, there are two effects:  one, by joining forces, legal fees are minimized for individual plaintiffs making the tort action more efficient for them; and, two, since the cost is much less, the threshold for motivating potential plaintiffs to initiate a lawsuit is drastically increased and consequently leads to more legal actions.  If one is harmed to the tune of $100, he/she might not sue if he/she is acting alone, but if it’s a class action suit, the calculations are different.

Perhaps this issue should be introduced when any instruction begins talking about tort law and makes the distinction between common law and civil law.  As this blog has mentioned, this development is in real time and this issue came up at this point of that development.  Next posting will address one of those basic concepts associated with tort law:  duty.

---

[1] Edward K. Cheng, “Torts,” Law School for Everyone – a transcript book (Chantilly, VA:  The Teaching Company/The Great Courses, 2017), 230-445.

[2] Ibid., 246.

[3] There is an ample literature over the issue of whether America should be a common law nation or a civil law nation.  Different aspects of this question, in turn, have their own scholarly works.  For example, one article that argues for a “mix” system and is relatively easy to understand is offered by University of California professor, Stephen D. Sugarman.  See Stephen D. Sugarman, “A New Approach to Tort Doctrine:  Taking the Best from Civil Law and Common Law of Canada,” n. d., this is a document that downloads and is designated with the following:  [DOC].

[4] A dramatic rendition of this – much to the delight of audiences – is found in the feature film, The Verdict.  See Sidney Lumet (director), The Verdict, 20^th Century Fox, 1982.