From Fault-Based to Strict Liability: A Case Study of an Overpraised Reform

Abstract

On September 25, 1976, the Israeli Road Accident Victims’ Compensation Act came into force. Prior to its enactment, road accident injuries were subject to the common law of torts, as codified in the Civil Wrongs Ordinance. The statutory reform was intended to achieve a social goal, namely securing prompt and satisfactory compensation to all road accident victims, including many who would not have been entitled to compensation otherwise. To this end, the legislature abolished fault, both as a basis for and as a defense against liability, expanded mandatory insurance, and established the Road Accident Victims’ Compensation Fund as a residual compensation mechanism. Two secondary goals of this socially motivated reform were extensive loss-spreading and reduction in court congestion and administrative costs. The article provides a critical evaluation of the common perception of this legislation. It challenges the Act’s claims to fame, demonstrating that the changes it was intended to bring about did not occur, occurred to a much lesser extent than commonly believed, or could have occurred anyway. This casts doubts about the validity of the rhetoric surrounding the legislative project, and provides valuable lessons for other jurisdictions considering similar reforms.

Keywords: tort law, road accidents, traffic accidents, social insurance, fault-based liability, strict liability, litigation, damages, interim payments, loss spreading

JEL Classification: K00, K13, K41