Policy

Question 1

Goal of Tort Law

Answer 1

The goal of Tort law is not necessarily to compensate an individual plaintiff but to provide a system of rules that, overall, contribute to the good of society
- If a law over floods the courts, it is inefficient for society!

Question 2

General Policy Questions to ask on the test

Answer 2

Is the rule going to contribute to deterrence [over/under]?

Is the rule going to contribute to corrective justice?

Is the rule holding the less cost avoider liable?

Is the rule negatively affecting more risk averse parties?

Question 3

Deterrence

Answer 3

Want to deter wrongful action, but there needs to be a congruence between the risk that the defendant is running and the harm that they cause
- over deterrence
- under deterrence

Question 4

Fairness

Answer 4

Liability should be proportionate to the defendant’s wrongful act
- Miss O’Leary

Question 5

Most Culpable Actor

Answer 5

Liability should fall on the most culpable actor because of fairness and deterrence

Question 6

Least Cost Avoider

Answer 6

Who was in the best position to avoid the accident?

Question 7

Appropriate Insurance

Answer 7

Want people to insure appropriately for the predictable risks they run, so defendants should only be liable for relatively predictable harms

Question 8

Appropriate Risk Avoidance

Answer 8

Want people to adopt appropriate risk avoidance measures

Question 9

Coase Theorem

Answer 9

When transaction costs are low, parties will contract/negotiate around the law
- contracting around may be better than a new tort rule
- want to deter negative externalities but keep positive ones

Question 10

Pareto Efficient

Answer 10

No party experiences negatives - everyone is satisfied
- making changes would cause harm
- if it is Pareto Efficient it is also Kaldor-Hicks Efficient

Question 11

Kaldor-Hicks Efficient

Answer 11

Party who benefited from the change could provide compensation and still be better off
- the benefits outweigh the negatives
- repeat change has the potential to become Pareto Efficient

Question 12

Policy Reason for Pure Emotional Distress

Answer 12

Deterrence Theory: for
- behavior causing emotional distress should be deterred

Insurance Theory: against
- money would not help so buying insurance is not necessary

Question 13

§402A

Answer 13

Want to protect consumers and make sure companies are extra careful about the products they put into the world

Question 14

Policy Arguments For Negligence [efficient investments in safety]

Answer 14

Goal is to ensure parties take safety precautions when the cost of precaution is less than the benefit of preventing harm - B vs. PL
- incentives defendants to invest in safety measures but avoids penalizing them for failing to take inefficient precautions&raquo_space; REFER to arguments against strict liability

Question 15

Policy Arguments For Strict Liability [efficient allocation of risk]

Answer 15

1. want to change activity levels
   Posner: strict liability encourages safer activities
   * e.g., limit the amount of pet tigers
2. risk averse plaintiff, risk neutral defendant
   - shifts the burden away from a risk averse individual to someone who is risk neutral and more capable of bearing the loss
   * plaintiff buys insurance, so the insurance company can absorb any potential harm
   – Subrogation: insurers can then recover their payouts from the tortfeasor
   * like in negligence insurance is not really helpful in cases of emotional distress
3. safety precautions known to the defendants but unknown to the courts
   - defendants should take precautions they know about
4. encourage defendant to do research and discover safety technologies ^^
   - incentives people to be more cautious

Question 16

Policy Arguments Against Strict Liability

Answer 16

Any situation where the plaintiff is the cheapest cost avoider and is in the best position to avoid the accident (FOSTER again) . . .
1. want to change activity levels
- stops the defendant from doing the activity entirely when the goal may be to reduce the risk
– changing care levels through negligence may be more applicable

2. risk averse defendant, risk neutral plaintiff
   - makes the defendant EXTRA cautious which both adds cost and deters innocent behavior
   – negligence may be more applicable because it allows the defendant to weigh the cost of their actions in deciding what safety measures are reasonable
3. safety precautions
   - defendant has no incentive to improve safety if they are held liable regardless
   – negligence may be more applicable because it also encourages the plaintiff to think about their own safety
4. encourage research and discovery of safety technologies ^^
   - negligence would incentive both the plaintiff and defendant to do R & D

Question 17

Corrective Justice Argument

Answer 17

Focuses on fairness between the parties and rectifying a wrong [minimizing societal costs and incentivizing safety]

Negligence: a defendant who breaches a duty of care and causes harm MUST compensate the plaintiff to correct the imbalance

Strict Liability: even without fault, strict liability can align with corrective justice if the harm is linked directly to the defendant’s actions/product

Question 18

Statute of Limitations/Statute of Repose

Answer 18

• evidence is better if the case is brought sooner
• at some point we have to get on with life

Question 19

Vicarious Liability

Answer 19

Employees may be insolvent, so the employer is liable to ensure deterrence through consequences and proper training

Question 20

How does the Coast Theorem apply to nuisance disputes?

Answer 20

In ideal negotiations (knowledgeable parties, no transaction costs), the party who values land use more will prevail and compensate the other for the loss

Question 21

What is the role of the “damage rule” in nuisance cases?

Answer 21

The damage rule prices the defendant’s activity, incentivizing them to avoid the nuisance if the cost of prevention is less than the liability (B < PL)

Question 22

What incentive do parties have in resolving nuisance issues under the Coase Theorem?

Answer 22

Parties are incentivized to bargain out the inefficiencies, including overdetterence and underdetternece, if transactions costs are low enough

Question 23

How does the reciprocal nature of externalities relate to nuisance law?

Answer 23

Externalities are reciprocal, meaning there is no clear “wrongdoer”
* e.g., Does a feedlot impose an externality on homes, or do homes impose an externality on the feedlot if it is shut down?

Question 24

Zoos

Answer 24

There is not strict liability for wild animals in zoos because for public policy reasons (e.g., economic benefit) we want to keep zoos in business