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Private lawsuits and systematic externalities

Elizabeth Anderson, writing at Left2Right (scroll to heading # 2):

The libertarian Richard Epstein, following through on individualist intuitions about justice, has argued in favor of replacing our negligence system of torts with a system of strict liability ("A Theory of Strict Liability," 2 Journal of Legal Studies 151 (1973)). Such a system would ensure that whenever one person caused damage to another, they'd have to compensate them for it. Long before we reached this point, I'd be joining the critics of the tort system in crying "crisis!" The problem wouldn't be frivolous lawsuits. It's that when negative externalities are systematic, it's grossly inefficient to deal with them on a case-by-case basis, as the tort system does. The costs of litigation are too high, not in the amounts of judgments, but in lost production opportunities, as the valuable time of defendants and plaintiffs gets sopped up in lawsuits. That's why I prefer alternatives to litigation, such as regulations for worker safety and pollution, workers' compensation, and no-fault auto insurance, to cover systematic costs imposed on people by our advanced capitalist system of production. Excessive reliance on Individualized solutions puts too much sand in the gears of capitalist production.

Reader comments mostly deal with other aspects of Anderson's post, but commenter D.A. Ridgely responds in part as follows:

Strict liability makes some sense as private law when it comes to inherently dangerous activities. As public law it becomes the bludgeon of the nanny state. ... If it is true that litigation is too expensive (and I think it is), the solution is to find less expensive methods of litigation, not to turn private law into public law. In any case, litigation should be at least somewhat expensive because it should be the resolution method of last resort.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


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The Manhattan Insitute's Center for Legal Policy.