The Inevitability of Aggregate Settlement: An Institutional Account of American Tort Law

Abstract:     
In the courts and in the academy, the ostensible commitment of American tort law to individualized justice has experienced a sustained revival in recent years. Neither the modern mass tort case-law nor the scholarly literature, however, has adequately grappled with long-standing practices of de facto aggregation that have sprung up in the shadow of American tort law since the very beginnings of tort as a field. Reviewing more than a century of private aggregation from employers' liability to automobile accident litigation to the modern asbestos cases, this article contends that American tort practice has been characterized almost from the start by decentralized and private institutions for the aggregate resolution of what may be described as "mature torts": personal injury cases that resolve themselves into regular and reiterated fact patterns. Private settlement institutions constitute a powerful counter-tradition to much better-known traditions of individualized justice in American tort law.

The article begins with a historic account of the role of claims agents, sometimes lawyers but sometimes not, in providing claimants' side aggregation to offset the economies of scale and information that the coordinated defenders of local manufacturers or public transport companies held. The article then traces the same pattern of routinization and efficient claims settlement from the industrial setting to seemingly idiosyncratic, one-time events such as auto accidents. By focusing on the institutional actors who administratively expedite settlement of similar claims, the article adds a missing ingredient to the theoretical literature on settlement. It is not only shared assessments of the legal authorities governing claims that inform settlement, but the actual experience of repeat-play legal representatives in resolving factually similar cases in the past.

The article concludes with an examination of the mass asbestos settlements rejected by the Supreme Court in Amchem and Ortiz. In contrast to the Court's characterization on these mass settlement cases as departures from a "day in court ideal," the article argues that the persistent aggregation of mature tort claims in private settlement markets situates the mass tort class action on a continuum of aggregating practices in American tort law. Moreover, the long-standing existence of private markets in aggregated settlement indicates that the truly distinctive challenges raised by class actions arise out of the monopolistic representation awarded to class counsel and the difficult agency relations that may ensue, not out of the mere fact of aggregation.

Keywords: Torts, Class Actions, Lawyers, Automobile Accidents, Employers' Liability, Asbestos

JEL Classifications: C78, D73, J28, K13, K32, K41

Accepted Paper Series