The Domain of Torts

Abstract

This Article advances a novel positive theory of the law of torts that grows out of a careful reading of the caselaw. My core insight is that the benefit from the harm-causing activity determines the form and substance of tort liability. This finding is both surprising and innovative, since the operation of the doctrines that determine individuals’ liability for accidents — negligence, causation and damage — is universally believed to be driven by harms, not benefits. The key role of benefits in the operation of our tort system has eluded the searching eye of scholars, even though it is fully consistent with the caselaw, as I repeatedly demonstrate in the Article.

Specifically, I show that our tort system operates in two parallel modes — private and public — rather than just one, as conventional accounts erroneously suggest. Furthermore, the system’s mode of operation and the rules allocating liability for accidental harm are dictated by the type of the benefit sought by the alleged tortfeasor. If the benefit sought by the tortfeasor is purely private, she will be held liable for the harm resulting from her actions whenever she exposes her victim to a nonreciprocal risk. The tort system never allows actors to inflict harm on others when the benefit they seek to derive from their activity is purely private, no matter how significant that private benefit is relative to the victim’s harm. The system consequently does not hesitate to discourage the production of private benefits even when they are economically more valuable than the victim’s safety. That is, in cases of private benefit tort law excludes cost-benefit analysis in favor of the reciprocity and equality principles. When the benefit that accompanies the harm-causing activity is public, by contrast, tort law adopts a strictly utilitarian approach and focuses exclusively on minimizing the cost of accidents and the cost of avoiding accidents as a total sum. Liability in such cases is imposed based on the famous Learned Hand formula (and similar formulations). Accordingly, if the benefit from the harm-causing activity is greater than the expected harm and precautions are too costly, no liability will be imposed. The consequent reduction in the victim’s protection is counterweighted by society’s need not to chill the production of public benefits that the victim enjoys on equal terms with all other members of her community.

This insight has far-reaching implications for tort doctrine and theory. Contemporary scholarly debates about our tort system’s goals interpret the system as promoting fairness and corrective justice or, alternatively, economic efficiency. I demonstrate, however, that this dichotomous view is fundamentally mistaken. Careful analysis of the caselaw reveals that our tort system promotes fairness and corrective justice only when it operates in the private mode, and that when the system switches to the public mode it aims at achieving economic balance between victims’ safety and the production of public benefits. My analysis also demonstrates that tort doctrine is best understood as accident law because it focuses predominantly on individuals’ mutually unwanted interactions, identified as accidents, as opposed to mutually wanted and coercive interactions regulated, respectively, by contract law and criminal law. As I explain in this Article, switches between these regulatory regimes, and between torts and regulatory laws, only occur as a result of doctrinal migrations.

Keywords: Torts, Negligence, Strict Liability, Causation, Welfare, Corrective Justice, Reciprocity, Equality, Hand Formula, Regulation, Doctrinal Migrations, Public vs. Private

JEL Classification: K10, K13