FSU ECP 3451 - Economic Analysis of Tort Law

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November 26, 2012Tort“Tort” (French; derives from the Latin word “Torquere”) meaning a private wrong or injuryAlleged purpose of tort law, roughly speaking, is to protect the interests of people in their property or their person from damage by othersHistorical DevelopmentNot considered a discrete branch of law in US until mid-late 19th century1st American treatise on torts—18591st taught as a separate subject in schools—18701st torts casebook—1874Torts originally meant “wrong”: a synonym for trespass and part of property lawTortous wrongs are simply wrongs not arising out of contract that warranted liability for harmsTrespassers were always held liable for any harms arising from trespassTrespass liability applied for harms to property but also for harms to people (“trespass on his/her person”)CaseSome harms also arise indirectly without any trespassFirst referred to as “trespass in a similar case;” lawyers referred to such situations as caseTrespass meant that damages had to be paid (trespasser was always liable) but to recover in “case” the plaintiff had to demonstrate that there was some other illegal act or fault to establish liabilityUltimately this became what is now called negligence (carelessness)Can also have intentional tortNegligenceWhen first used by courts, negligence did not mean carelessnessMeant nonfeasance (failure to perform a prescribed duty)“Negligence” first used to refer to a public official failing to perform his assigned duties, resulting in someone being harmedIndividuals harmed had a “long established principle of common law” (both through precedent and statute) to sue the officialMost early cases involved actions against sheriffs (i.e. for allowing imprisoned debtors to escape)Prisons were first used to house those who had not paid their debts)18th century statues also made towns liable for harms arising from failure to repair roads and bridgesThe Fault Standard for TrespassDefendants for trespass began arguing that there was a double standard, as trespassers were strictly liable but in “case,” liability required evidence of faultBrown v. Kendall Mass. (1850) is generally cited as the first American tort case, as it employed a “fault” standard for liability in a trespass caseDefendant tried to separate dogs that were fighting by beating them with a stick; raised the stick and struck the plaintiff’s eyeRuling: when harm occurs as the consequence of an unintended contact, it is actionable only on the basis of negligenceImplication: trespass and do damage to property does not mean liability for damages if damages were accidental or unavoidableWeakens private property rightsMorton Horwitz: “The inquiry into causation shifted the attention of courts to questions of carelessness. And as liability for carelessness began to be understood as deriving from an independent social obligation imposed by the state, the search for a standard of care encouraged judges to regard themselves as social engineers and legislators whose decisions to impose liability were influenced by broader considerations of social policy. Yet it was some time after the advent of the negligence action that judges realized its potential for affecting the course of social change.”Start to change people’s incentives (social change via common law)Fault standard increasingly applied in trespass casesContributory Negligence in USFirst applied in MassachusettsStatute mandated that towns were liable for double damages for harms arising from neglect to repair roads and bridgesCourts regarded this statute as imposing a “crushing” burden on the towns, so allowed the defendant (town) to argue that they were not liable bc the plaintiff failed to use due care to guard against dangerous obstructions (contributory negligence)Transformation from trespass law into fault lawTort Transformed Property LawThe increasing importance of the negligence concept would ultimately lead to a general attack on common law protections of private property that had been erected over centuries“The rights of trespassers and licensees were filtered through a system of limitations on the use of land which were grounded in long established historical attitudes toward property ownership. Only slowly, over a period extending well beyond the supposed halcyon days of negligence, were these property-dominated principles subordinated to the tort system.” (Rabin, “The Historical Development of the Fault Principle: A Reinterpretation,” Georgia Law Review, Vol. 15, 1981, p. 946)Private property and contract law becoming dominated by tort lawElements of Fault-Based TortAs tort law developed three key elements became relevant for torts actions to succeed (all needed to be present); evidence of:1) A breach of duty owed to the plaintiff by the defendant (defendant did something wrong)2) Harm suffered by the plaintiffTort is all about compensation for harmsAt first, had to indicate measurable harms, not subjective harms (i.e. psychological distress)3) The breach of duty is the immediate or proximate cause of the harmLegal DutiesOwe legal duties to others (i.e. to be careful)When a breach of duty occurs, it is said that the defendant was “at fault” or “negligent”Breach of duty by the wrongdoer, or tortfeasor, can be an intentional harm to someone or the harm can arise from an accident caused by carelessness (majority)Duty of Reasonable CareA key question in tort law under the negligence standard is how are the duties determined?Potential tortfeasors have a duty of reasonable careCourt presumably compares the precautionary activity of a defendant with what a reasonable person would have done under the circumstances (subjective standard)HarmIf a breach of duty does not result in harm, there presumably is no grounds for a suit under tort lawMagnitude of harm presumably determines the monetary payment to be made in compensationLiable for the damages created through a neglect of duty presumably creates incentives to behave without reasonable care, but objective is compensation for harms, not punishment for carelessnessRequires that costs be determined, so historically focused on tangible or measurable costsThis has been changing: increasing tendencies to award payments for intangible harms and disciplinary damagesCausationUnder the Negligence Standard Breach of Duty must be the cause of the harmsHistorically limited to two types of cause1) Cause-in-fact (more

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FSU ECP 3451 - Economic Analysis of Tort Law

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