Tort Law Flashcards
Tort
A wrongful act other than a breach of contract for which relief may be obtained in the form of damages or an injunction.
Plaintiff
The party bringing a lawsuit. (Also a victim)
Defendant
The party being sued in a lawsuit. (Also an injurer or tortfeasor)
Components of Tort Law: Harm
The victim must suffer some actual harm for tort law to apply. Mere exposure to risk is not sufficient grounds for a Tort Law claim.
Safety regulations are used by government agencies to deal with exposure to risk of low-probability harms
Perfect Compensation restores victims to the level of utility experienced before harm. Perfect compensation encourages efficient risktaking, but can also lead to unpredictability.
Harm can be tangible (damage to property) or intangible (emotional damages), although courts are often hesitant to award damages for intangible harms
Components of Tort Law: Causation
The defendant needs to have caused the harm to the plaintiff
Cause-in-Fact (or but-for Causality): “But for the defendant’s actions, would the harm have occurred?”
Proximate (or immediate) Cause: Actions by the defendant cannot be too in the past.
Components of Tort Law: Breach of Duty
It must be shown that the defendant breached a duty he owed to the defendant and that this breach led to the harm.
Requisite standards of care may be explicitly specified by the law, or they may be vague (e.g. reasonable care)
Note on Tort Law
Tort Law covers situations where transaction costs are too high to agree to anything in advance.
Various Liability Rules: No Liability
Neither the victim nor the injurer pays for an accident
Various Liability Rules: Strict Liability
The injurer pays damages for any accidents they cause
Various Liability Rules: Simple Negligence
Injurer is only liable if they breached the duty of due care.
Various Liability Rules: Negligence with a Defense of Contributory Negligence
Injurer owes nothing if the victim was also negligent.
Various Libaility Rules: Comparative Negligence
If both parties were negligent, the cost is shared between defendant and plaintiff
Various Liability Rules: Strict liability with defense of contributory negligence
The injurer is liable (even if they weren’t negligent), unless the vicitim was negligent.
Observations for Liability Rules
Under a strict liability rule, all that is necessary for liability is harm and causation
Negligence rules require all three elements: harm, causation, and fault.
Precaution: Anything either injurer or victim could do to reduce the liklihood of an accident (or damage done).
All liability rules create incentives for activity level as well as precaution. Activitiy levels are functionally just unobserved precaution, but its difficult to calculate optimal levels of activity, whereas optimal levels of observed precaution are easier to calculate.
Four General Principles of Liability Rules
(i) If you don’t bear any of the cost of accidents, you have no incentive to prevent them.
(ii) If you do bear the cost of accidents, you’ll do whatever you can to prevent them.
(iii) If you can avoid liability by exercising due care, you’ll do it, but then you won’t reduce activity.
(iv) If the other party can avoid liability through due care, you’re the residual risk bearer, and you therefore exerciseefficient precaution and engage in the efficient level of activity.
