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The Expansion of Tort Liability in the United States
U.S. tort law is based primarily on common law--in which
judicial rules are developed on a case-by-case basis by
trial judges--rather than on legislation. Tort liability
is assigned using two basic standards: strict liability
and negligence. Under strict liability, injurers are held
fully liable for their victims' losses without regard for
whether they were actually negligent or intended to harm
anyone.(1) Under a negligence standard, by contrast, injurers
are held liable only if they failed to meet a certain standard
of care. According to legal scholars, a number of important
developments have increased the scope of liability for torts
in the United States.
Early English tort law, the antecedent of U.S. tort law,
was chiefly concerned with making injurers pay for the losses
of their victims, with little emphasis on fault or negligence.(2)
That standard was used in the United States until the 19th
century, when U.S. common law established negligence as
the basis for tort liability. However, strict liability
continued to apply in certain cases, such as injuries caused
by wild animals kept as pets or damage to crops caused by
trespass of domestic animals.(3) Some scholars argue that
the requirement for plaintiffs to show that defendants had
been negligent effectively limited the scope of the U.S.
tort system.(4)
The turn of the 20th century saw public policy increasingly
emphasize victim compensation and accident reduction. The
enactment of workers' compensation laws--which established
a public insurance system aimed at lowering employers' payments
while making workers' recovery of damages automatic--played
an important role in the evolution of tort law and policy.(5)
Before workers' compensation programs, the only remedy that
injured workers had was to prove their employers negligent
through the tort system. Workers favored legislation instead
because they often had been unable to recover damages or
had experienced delays or high costs when they had been
successful. For their part, employers favored legislation
because it limited their liability and made payments predictable.(6)
That shift away from tort law to a public compensation system
led to more thought about how tort liability could be improved
or better applied in other types of cases.
By the 1940s, legal scholars had begun to think about two
ways in which the tort system could serve the wider goal
of enhancing social welfare. First, they saw the economic
concept of "cost internalization" as a tool for
reducing accident rates: if potential injurers know they
will be held liable for accidents, they will take appropriate
action to avoid liability. In that view, by awarding damages
to compensate victims, tort law would serve as a mechanism
to ensure that potential injurers faced the appropriate
future costs of their actions.(7) Second, some scholars
argued that the tort system could provide a kind of accident
insurance for victims. They did not focus on the possibility
that an expanded liability system could increase carelessness
on the part of potential victims, nor did they adopt any
of the methods that traditional insurance policies use to
deal with that problem.(8) Rather, they focused exclusively
on the distributional goal of relieving victims of the burden
of accident losses and spreading that burden across a broader
population.
One area in which those concepts proved appealing in practice
was product liability.(9) Historically, product liability
was dealt with either as a breach of warranty under contract
law or as a tort subject to the negligence standard. Under
contract law, recovery in such cases was limited to repair
and replacement of the product; under tort law, recovery
was limited by the difficulty of proving negligence. In
the 1960s, the courts moved rapidly toward a standard of
strict liability for defective products; in 1964, that standard
was accepted and recommended by the American Law Institute
in its second Restatement of the Law volume on torts. By
the mid-1970s, most states had adopted provisions that were
either identical or similar to those in the Restatement.(10)
In addition, the concept of negligence has undergone significant
reinterpretation over time, according to legal scholars.
The law now takes into account the fact that manufacturers
often have more ability than consumers to avoid accidents;
thus, it is more likely to view failure to take inexpensive
action as negligence or to attach liability to indirect
or partial contribution to an injury.
Characteristics of the Tort System Today
Getting a complete picture of the state of the U.S. tort
system is difficult because no data are available that cover
all of the tort cases brought in the various jurisdictions
across the country. However, the National Center for State
Courts (NCSC) provides some data on trends in civil filings
in general-jurisdiction courts in several states.(11) It
also conducts periodic surveys of civil trials in the nation's
75 largest counties for the Bureau of Justice Statistics
(BJS). In addition, data about cases disposed of in federal
court are available from the Administrative Office of the
U.S. Courts.
In 16 states consistently tracked by the NCSC, tort filings
in general-jurisdiction courts grew from 189,520 in 1975
to 260,745 in 2000, which appears to support the common
view that the number of tort cases is rising. But controlling
for population growth in those states indicates that tort
filings relative to population declined by 8 percent over
that period--from 230 per 100,000 residents in 1975 to 212
in 2000.(12) Additionally, total tort filings in those 16
states were relatively constant from 1986 to 1996 and have
shown a downward trend since then, falling from 320,976
filings in 1996 to 260,745 in 2000.
In drawing inferences about the tort system as a whole,
however, it is important to note several limitations of
the available information.
Data do not exist for those tort disputes that do not go
to trial, because the details of settlements are usually
private.(13)
Collecting consistent data between the various jurisdictions
is difficult. The overwhelming majority of tort filings
occur at the state level, and the structure of state courts
and the laws under which they operate differ from state
to state. Moreover, those courts have not tended to view
keeping records on the details of case outcomes as being
central to their mission.
Both anecdotal and statistical evidence about damage awards
can be misleading because the amount of damages actually
paid can be reduced after a trial.(14)
Overall trends can be misleading because various categories
of torts have different economic impacts, and the timing
and disposition of mass torts (cases involving large numbers
of people) can significantly skew the numbers.
Settlement Versus Trial
The majority of tort disputes never reach a trial verdict.
For example, of the 41,696 tort cases that were terminated
in U.S. district courts in fiscal year 2000, only 3 percent
were decided in trials.(15) The NCSC similarly reports that
"[t]he vast majority of all [state] tort cases are
disposed through some form of settlement, with only 3 percent
of all tort matters resulting in a jury trial."(16)
Litigants have mutual incentives to save on litigation costs
by settling out of court. They avoid uncertain trial outcomes
and delays and can agree to keep settlements confidential.(17)
In some cases, settlements may be reached through alternative
methods of dispute resolution, such as voluntary arbitration
or mediation.
Generally, details of civil disputes settled before a trial
are not reported to the courts and hence are not included
in publicly available data. Those data therefore show only
part of the picture--there may be important differences
between cases that go to trial and cases that settle out
of court.(18) For example, cases that go to trial probably
involve larger dollar amounts, on average. Nevertheless,
trial verdicts set precedents for all cases and thus affect
the incentive to settle by signaling the value and probability
of success to future litigants.(19)
Where Are Tort Cases Heard?
The vast majority of tort filings occur in state courts.
In 2000, more than 700,000 torts were filed in state general-jurisdiction
courts, compared with only about 37,000 in federal courts,
the Congressional Budget Office (CBO) estimates.(20) Liability
standards are not uniform among the various jurisdictions.
For example, the extent to which damages may be reduced
if the injured party contributed to the accident differs
among states. In addition, a small number of local courts
have been described as "class-action magnet courts"
and criticized for being biased toward plaintiffs.(21)
U.S. district courts have jurisdiction in civil cases when
a case deals with a federal question, the federal government
is either a defendant or plaintiff, or the case involves
"diversity of citizenship."(22) Of the tort cases
that were terminated by trial in federal courts in fiscal
year 2000, 72 percent involved diversity of citizenship,
18 percent involved a federal question, and 11 percent involved
the U.S. government as a defendant or plaintiff. Many of
those tort cases did not originate in federal courts: 28
percent were removed from state courts.(23)
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