Liability for Risk: Citizens' Perspectives on Liability for Creation of Risk and Loss of Chance

Abstract

This paper reports on a series of studies we conducted concerning people's reactions to the imposition of liability for creating risk in others, absent actual injury. This problem is referred to as loss of chance in the tort literature, and as moral luck in the philosophical literature. When two actors perform similarly bad acts, but only one of them causes injury, the system often treats the lucky perpetrator far better than the one whose conduct resulted in actual harm.

These studies investigate how people react to such situations. Our core scenario involves a factory which, when not run properly, emits fumes that put people on certain medication at risk of stroke. We varied systematically the state of mind of the perpetrator, whether a stroke actually occurred, the amount of increase in risk, and, if no stroke occurred, whether the period of risk had ended, or whether the risk continued. We asked for a battery of judgments about compensatory and punitive damages, and about possible criminal sanctions.

Our findings generally showed that people care a great deal about the state of mind of the perpetrator in awarding damages or meting out sanctions, regardless of whether an actual injury has occurred; that there is a moral luck component to people's judgments (lesser penalties and lower damages when no injury occurs); and that people appear to distinguish, at least to some extent, the differing purposes of tort law (corrective justice) and criminal law (retributive justice).

Keywords: risk, moral luck, torts, punishment, damages, retribution, chance

JEL Classification: K13