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«COMPENSATION AS A TORT NORM Mark A. Geistfeld * The proposition that tort law implements a compensatory norm would seem to be clearly established by ...»

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COMPENSATION AS A TORT NORM

Mark A. Geistfeld *

The proposition that tort law implements a compensatory norm would

seem to be clearly established by history. According to the conventional

understanding, the emergence of legal rules requiring the payment of

“compositions” or compensatory monetary damages was pivotal in the early

development of law and the state. 1 As a substitute for revenge, the early state gave

individuals a legal right to receive monetary compensation from those who had injured them, regardless of guilt or fault. 2 The early common law continued to rely on compensation as a substitute for revenge. 3 Consistently with these historical developments, the first American treatise on tort law described the “nature” of tort liability in compensatory terms: “The liability to make reparation for an injury is said to rest upon an original moral duty, enjoined upon every person, so to conduct himself or exercise his own rights as not to injure another.” 4 On this view, one’s exercise of the right to liberty entails a duty of compensation, even if the behavior was reasonable or not otherwise blameworthy.

Despite this history, scholars have roundly rejected the proposition that tort law implements a compensatory norm, relying on a reason that would seem to foreclose further inquiry about the matter: “Measures of compensatory liability sometimes exceed, sometimes fall short of, and sometimes bear no relation to what is required to make the claimant whole.” 5 Tort law relies on a default rule of * Sheila Lubetsky Birnbaum Professor of Civil Litigation, New York University School of Law.

Copyright 2012 Mark A. Geistfeld. All rights reserved. I’m grateful to Ronald Dworkin for his helpful input on an earlier iteration of this project. Financial support was provided by the Filomen D’Agostino and Max E. Greenberg Research Fund of the New York University School of Law.

James Q. Whitman, At the Origins of Law and the State: Supervision of Violence, Mutilation of Bodies, or Setting of Prices?, 71 Chi. Kent L. Rev. 41, 42 (1995) (identifying four stages in the conventional historical depiction of how law and the state developed, with the final stage consisting of the early state’s institution of “a system of ‘compositions’, substituting money damages for talionic vengeance”).

Id. at 65.

David J. Seipp, The Distinction Between Crime and Tort in the Early Common Law, 76 B.U. L.

Rev. 59, 59–60 (1996) (“In most instances, the same wrong could be prosecuted either as a crime or as a tort…. According to the lawyers, victims who preferred vengeance over compensation prosecuted their wrongdoers for crime. Victims who preferred compensation over vengeance sued their wrongdoers for tort.”).

1 FRANCIS HILLIARD, THE LAW OF TORTS OR PRIVATE WRONGS 84 (Boston, Little, Brown & Co.

2d ed. 1861) (footnotes omitted).

Emily Sherwin, Compensation and Revenge, 40 San Diego L. Rev. 1387, 1388 (2003) (arguing that the poor fit between compensation and the damages remedy suggests that compensatory damages seek to counterbalance rather than repair a wrong, giving it a “close affinity to revenge”).

negligence liability that primarily values the duty to exercise reasonable care and accordingly limits the availability of compensatory damages, two fundamental attributes of tort law that appear to be wholly inconsistent with a compensatory norm.

Numerous scholars have also concluded that no-fault tort compensation is normatively indefensible. Such liability, on one view, is anachronistic, nothing more than “a survival from the early days when all acts were held to be done at the peril of the doer.” 6 Strict liability, as another put it, embodies “[t]he concept universal among all primitive men, that an injury should be paid for by him who causes it, irrespective of the moral or social quality of his conduct….” 7 A compensatory duty is “primitive” insofar as the payment of compensatory damages is merely an expedient means for buying off another’s demand for revenge and retaliation. Historical practices do not necessarily provide a persuasive rationale for no-fault injury compensation, although scholars have invoked other normative concerns to reject a duty of compensation, concluding that one cannot commit a “wrong” or violation of another’s tort right without being blameworthy or at fault. 8 The compensation afforded by a no-fault rule of strict liability, on this view, cannot be derived from a normatively defensible tort right.

In contrast to the prevailing skepticism about the matter, in my view tort law implements a norm of compensation. As I have argued at length elsewhere, a compensatory tort right that is justified by the value of individual autonomy or equal freedom can persuasively explain the important tort doctrines governing physical harm, including those that limit liability. 9 Having concluded that tort law can be plausibly described by a compensatory tort right and its correlative compensatory duty, I now address the separate question of whether compensation is a defensible norm of justice for answering “questions about who is to get how much of what and why (i.e., on what grounds).” 10 Part I below argues that a compensatory duty can be justified by the principle of liberal egalitarianism, supporting the claim with an analysis of how a compensatory tort obligation can be derived from the conception of equality articulated by Ronald Dworkin. Part II then specifies the substantive content of a compensatory tort right and explains why the correlative compensatory duty can be fully satisfied by the exercise of Jeremiah Smith, Tort and Absolute Liability, 30 Harv. L. Rev. 409, 413 (1917).





Francis H. Bohlen, Mixed Questions of Law and Fact, 72 U. Pa. L. Rev. 111, 118 (1924).

See John C.P. Goldberg & Benjamin Zipursky, Torts as Wrongs, 88 Tex. L. Rev. 917, 928-29, 951-52 (2010) (discussing the different scholars who have adopted a wrongs-based conception of tort liability and claiming that the conception excludes rules of strict liability).

See generally MARK A. GEISTFELD, TORT LAW: THE ESSENTIALS (2008) (hereinafter TORT LAW).

John C. Gardner, What Is Tort Law For? Part I. The Place of Corrective Justice, 30 Law & Phil. 1, 8 (2011) (defining norms of justice in these terms).

reasonable care. As this analysis shows, tort rules can distribute risk in a manner that satisfies the demands of a compensatory rightholder, even if those rules do not entitle the rightholder to compensatory damages in the event of injury. Part III completes the argument by showing how such a compensatory tort right implements the principle of corrective justice in a conceptually interesting manner that avoids the problem of vagueness that has otherwise plagued tort theories of corrective justice. This

Abstract

norm of compensation is both normatively defensible and adequately descriptive of tort doctrine, making it plausible to interpret tort law in compensatory terms.

I. Injury Compensation and Liberal Egalitarianism

Liberal egalitarianism justifies distributive schemes that strive to give everyone the same, just starting point so that each can pursue his or her own conception of the good life. Different pursuits typically generate different levels of individual wealth or welfare, and so only certain types of inequalities should be eliminated by redistribution. According to Thomas Nagel, “The essence of this moral conception is equality of treatment rather than impartial concern for wellbeing. It applies to inequalities generated by the social system, rather than to inequalities in general.” 11 To use Ronald Dworkin’s terminology, allowing for inequalities based on choice means that a distributive principle should be “endowment-insensitive” and “ambition-sensitive.” 12 One’s position in life should reflect ambitions and choices rather than the arbitrary circumstances of endowment beyond one’s control.

To identify the types of wealth redistributions that can be justified by liberal egalitarianism, Dworkin conceives of a hypothetical auction for determining the initial distribution of resources that would satisfy the principle of equality, an outcome he calls “equality of resources.” To conduct such an auction, the political system must have previously specified various legal entitlements, including those constitutive of tort law. These entitlements are grounded on the principle that individuals should incur the costs foreseeably caused by their autonomous choices, justifying a compensatory tort duty.

A. Equality of Resources

As Dworkin stipulates, equality of resources is a general theory of distributional equality that treats individuals “as equals when it distributes or transfers so that no further transfer would leave their shares of the total resources THOMAS NAGEL, EQUALITY AND PARTIALITY 106 (1991).

Ronald Dworkin, What is Equality? Part 2: Equality of Resources, 10 PHIL. & PUB. AFF. 283, 311 (1981).

more equal.” 13 So defined, the theory is “very abstract” because there are “different theories about what would count as equality of resources.” 14 Dworkin expends a considerable amount of his own resources to develop a “suitable conception,” but the basic idea is that once everyone has the same, just starting point, each can pursue his or her conception of the good life. 15 Wealth differences attributable to one’s ambition and autonomous choices are just, whereas differences stemming from one’s (unchosen) endowments, including disease and disability, are unjust. Consequently, “equality of resources requires that people pay the true cost of the lives they lead.” 16 To determine what counts as a “cost” for distributive purposes, Dworkin constructs a hypothetical auction in which participants have equal resources, defined as things external to the individual bidder. Like any other competitive auction, Dworkin’s hypothetical auction yields prices that reflect opportunity costs or “fix the value of any transferable resource one person has as the value others forego by his having it.” 17 The resulting distribution would satisfy an “envy test,” because each participant would prefer his or her own bundle over one purchased by anyone else (otherwise the individual would have purchased such an alternative bundle). The distribution is equal in this fundamental respect, making opportunity costs (the auction prices) the normatively appropriate measure for evaluating distributional equality.

The opportunity cost or price obtained from any auction depends on how the underlying entitlements for the resource have been specified. Dworkin’s hypothetical auction accordingly requires a “background or baseline liberty/constraint system” that defines the particular liberties or entitlements associated with the resources to be auctioned. 18 This baseline must be justified by the same principle that justifies equality of resources, namely, “in the more abstract egalitarian principle, which requires a community to treat each of its members with equal concern.” 19 The abstract egalitarian principle measures equal shares in terms of opportunity costs, and so the baseline itself must be constructed by reference to “what we might call the true opportunity costs of a set of resources.” 20 Dworkin then develops this concept by reference to a principle of abstraction: “This principle recognizes that the true opportunity cost of any transferable resource is the price others would pay for it in an auction whose RONALD DWORKIN, SOVEREIGN VIRTUE: THE THEORY AND PRACTICE OF EQUALITY 12 (2000).

Id.

Id. at 65-119.

Id. at 76.

Id. at 149.

Id. at 143.

Id. at 147.

Id. at 149.

resources were offered in as abstract a form as possible, that is, in the form that permits the greatest flexibility in fine-tuning bids to plans and preferences.” 21 When described at this level of generality, the scheme itself is highly abstract. Nevertheless, it has specific implications for the substantive content of tort law.

B. Opportunity Costs and Tort Compensation

According to Dworkin, the baseline of entitlements required by the

hypothetical auction includes those specified by the tort system:

[A]ny competent baseline liberty/constraint system would include a principle of security: this would mandate constraints on liberty necessary to provide people with enough physical security and enough control over their own property to allow them to make and carry out plans and projects. I assume, in short, that an adequate baseline system would have legal constraints forbidding physical assault, theft, deliberate damage to property, and trespass, of the sort that are common to the criminal and civil laws of all developed legal systems. 22 Dworkin expressly assumes the existence of laws that prohibit intentional wrongdoing, but a principle of security also addresses the more pervasive problem of accidental harms, making these rules part of the liberty/constraint baseline against which resources are equally distributed. Tort rules governing accidental harms, therefore, must be formulated by reference to the general consideration applicable to all aspects of the baseline—they must capture the “true opportunity costs of a set of resources.” 23 In Sovereign Virtue, Dworkin describes tort law as a system for constraining liberty that “would correct for externality.” 24 To ensure that individuals internalize the “true” opportunity costs of their risky behavior, tort law could adopt a rule of strict liability. One who engages in risky behavior would incur a compensatory duty to pay damages for the injuries of those who were foreseeably harmed by the conduct, thereby correcting for externality as required by Dworkin’s formulation of liberal egalitarianism.

This reasoning finds further expression in Dworkin’s earlier discussion of torts in Law’s Empire, in which the appeal of strict liability is made evident by his

conception of just distribution:

The theory of private responsibility we are testing explains why relative cost figures in these moral decisions. According to that theory we must act as if the concrete rights we cannot both exercise had not yet been distributed between us, and we must distribute these ourselves as best we can, in the way equality of Id. at 151.

Id. at 148-149.

Id. at 149.

Id. at 157.



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