Public Choice and Tort Reform

Abstract

This article examines tort law and the tort reform debate through the lens of public choice. The article uses the tools of public choice to explain the development of tort law over the past few decades and its evolution away from efficient rules. The article identifies a supply and demand dynamic for the evolution of expansive tort liability and damages and complex tort law doctrines. On the demand side, the evolution has been driven by the economic interests of plaintiffs' lawyers seeking to expand tort liability and damages. Defense lawyers share an economic interest in this development. Other interests, including insurers, manufacturers, and consumers, are shown to lack either the incentive to oppose these developments or are plagued by collective action problems from preventing them. On the supply side, the provision of expansive tort liability by judges is seen to be consistent with the self-interest of judges seeking power over society and status within the bar and academia. Finding the judicial process an unlikely avenue for tort reform, the article turns to the question of legislative tort reform. Although plagued by many of the same difficulties, legislative tort reform may hold out the possibility of greater consumer and manufacturer influence to counterbalance the interests of lawyers and judges. The article concludes with a model of how tort reform can succeed in the face of these obstacles. This model relies on the Peltzman-Becker model of regulation and points to Governor George W. Bush's success in enacting tort reform in Texas as consistent with the proffered model.