Faces of the Tort Pyramid: Compensation, Regulation, and the Profession

Abstract:     
One can visualize the tort system as a pyramid of possible claims, the base consisting of all plausible claims, the middle consisting of a series of filters that significantly reduce the number of claims that are litigated, and the pinnacle representing the claimants that ultimately receive compensation. This essay considers three faces of the tort pyramid by examining the intersecting functions of compensation and regulation, then shows how pragmatic case selection screens employed by the plaintiffs’ tort bar affects how well these twin functions are served.

The essay primarily addresses individual claimants seeking damages for injury, typically from institutional entities. An individual’s effort to obtain compensation is ordinarily thought to be barred by the hurdle of establishing fault; but research shows that many victims with plausible claims don’t sue, either because they don’t recognize they have a claim, don’t want to deal with lawyers or courts, or cannot find lawyers because their claims are too small. In turn, the regulatory role of tort is limited by several of the same hurdles: the tort system doesn’t regulate safety in the absence of litigation. But, channeling safety regulation through a litigation system requires an individual claimant with a plausible claim willing to pursue a suit, plus a lawyer willing to accept the case and to press forward.

This third face of the pyramid, the plaintiffs’ tort bar, screens cases to filter implausible claims, but the screens also filter meritorious claims that are either too expensive to litigate or where the contingency fee doesn’t provide adequate compensation to the lawyer even if successful. These value screens are particularly high - e.g., $500,000 in medical malpractice cases - when the upfront costs of litigation are significant.

Thus, the capacity of the tort system to function either as a system of compensation for individual claimants or a system of safety regulation is skewed by multiple pragmatic considerations affecting the willingness and capacities of individuals to sue. In addition, attorneys’ case selection screens that focus on the expense of litigation and the prospect of adequate fees skew the tort system toward high value claims, further limiting the tort system’s effectiveness in redressing substantial numbers of meritorious claims. Improving the overall efficacy of the tort system requires much more attention to these pragmatic limits.

Number of Pages in PDF File: 25

Accepted Paper Series