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Partlett, David --- "Of Law Reform Lions and the Limits of Tort Reform" [2005] SydLawRw 21; (2005) 27(3) Sydney Law Review 417

Of Law Reform Lions and the Limits of Tort Reform


1. Introduction

This essay tracks a tort law under siege for half a century. The challenge to tort has been provided by the likes of Harold Luntz in Australia, Steven Sugarman in the United States, Geoffrey Palmer and Justice Owen Woodhouse in New Zealand, and Patrick Atiyah in England. John Fleming bridges both Australia and the United States with his effective critical scholarship. All pointed to torts’ absurdities, and all argued that replacement by a state-run universal compensation system was logical and necessary. For all of the intellectual firepower of these giants, the gnarly body of tort law has survived. I want to take readers back to the 1970s when Luntz’s vision was close to reality.[1] I will discuss the intersection between reform and politics and the strengths of tort law that have kept it alive against criticism. As I say at the end of the essay, citing the 9/11 compensation experience, compensation schemes are likely to be ad hoc in the future, tracing the elements of tort law compensation. The likelihood of the adoption of a universal compensation system is extremely low, although faith in tort law and its processes is failing. Like Luntz, I bemoan the present slew of tort reform in Australia and the United States, as thinly veneered wealth transfers from accident victims to industry and other potential tortfeasors and their insurers. Empirical evidence is sorely wanting in supporting these reforms. My suggestions for legal improvement are incremental. They are to do what we can in mature accident areas to compensate victims more effectively while maintaining the other desiderata of tort law. Tort law, as part of the civil justice system, ought to be maintained as a critical plank in an individual’s right in democratic governance. The attack on tort law has weakened faith in its integrity, but ironically a feeble tort law has not encouraged the reforms Luntz would press. The political economy of the times is alien to universal compensation schemes.

A. Harold Luntz and the Major Figures

Luntz speaks, in his sparkling paper, of the personalities in the law who influenced him in his distinguished career. He cites the likes of Fleming, Atiyah, and Tony Honoré. He mentions younger scholars like Jane Stapleton, who carried through on the pathfinding work that he had done. He was, he says, heavily influenced by Justice Woodhouse (in this essay, I will refer to the Universal Compensation Scheme favored by Luntz and Woodhouse as the ‘Woodhouse-Luntz Scheme’). He registers his dismay with theoretical developments in law and economics[2] and with corrective justice.[3]

Many of the scholars first mentioned formed the ideas that I absorbed as a young torts professor. Luntz’s ideas and commitment to the law were, for me, deeply influential. His scholarship has always been passionate; one could not mistake his stance. At the same time, he is the most exacting of legal expositors. Read his now iconic book on damages and you will see a mastery of doctrine and a clear enunciation of legal pre-suppositions; you have in your hands a tool that is essential for courts and practitioners in Australia.[4] Luntz, like Achilles, masters that which he, in the end, despises. Luntz has enlightened us about the substance of tort law, as Achilles won the bloody victories of war.[5] The gods gave both talents that had them marvellously succeed in fields of human activity the results of which were deeply distasteful.[6]

Luntz’s work in compensation for personal injuries ranks with that of Atiyah.[7] Both were social rationalists who saw that tort law and negligence, in particular, was a woefully poor mechanism to deliver compensation to the victims of accidents. Indeed, the transaction costs of tort law were so high that if one could take those dollars and put them into a governmental no-fault scheme, one could begin to cover illness in addition to injury. If the victim’s need was the central rationale, no principled distinction could be drawn between injury and illness. Fleming had espoused the same philosophy but did not go as far as Luntz in crafting replacement schemes.[8]

B. Disappointed Expectations

There were days in the 1970s when the National Compensation Scheme was an achievable goal. The Whitlam Labor Government was in power, whose platform called for a national compensation scheme. Justice Woodhouse had earlier propelled New Zealand, in a remarkable way, to a national compensation system. From an inquiry on workers’ compensation, he had successfully argued that the entire tort system ought to be abolished and replaced by a system of no-fault compensation.[9] In replacement of tort law, a state-run compensation system could cover, on the aforesaid no-fault basis, some of the injury costs incident to accidents. Those injured slipping and falling in a bath tub were, under the scheme, compensated on the same basis as those injured in motor vehicle or industrial accidents. Social welfare was at the base of the scheme and the aim was to maximise that social welfare by government action. The bases of the scheme that Justice Woodhouse brought to Australian shores were community responsibility, comprehensive entitlement, complete rehabilitation, real compensation and administrative efficiency.[10]

Following the election of the Whitlam Government in 1972, Justice Woodhouse led a commission to organise and propose a similar scheme for Australia.[11] The initial version ambitiously planned to cover rehabilitation costs and provide compensation for losses arising from injury, sickness and congenital defects. Justice Woodhouse and his Committee completed their inquiry in June, 1974, however the Whitlam Government subsequently faced widespread opposition to their proposals. Government employees who already enjoyed compensation schemes offering more generous benefits than the proposed scheme rallied against it, as did the insurance industry, as well as organisations representing lawyers and doctors. Finally, resistance to the abolition of all common law rights manifested itself in the Senate of the Commonwealth and the legislation was shunted to the committee. This resulted in a recommendation that the proposed bill be redrafted. A less ambitious version of the original Woodhouse Report was formulated. However, the dismissal of the Whitlam Government, and the subsequent victory of the Liberal Coalition Party in 1975, eliminated any real hope of enacting a national compensation scheme similar to that in New Zealand.

I can vouch for those high expectations that Australia would adopt the Woodhouse Scheme. I joined the Australian Attorney–General’s Department in 1974. I was keen to engage in the work in bringing to Parliament the Racial Discrimination Act 1975 (Cth) and other human rights legislation at that time. Leslie Zines and David Hambly asked me to teach torts on an ‘adjunct’ basis at the Australian National University (ANU). To prepare classes on tort law was seen as rather a dead end – a fatuous exercise. Tort law was drawing its last breath in Australia, for soon liability for personal injuries would go the way of the Dodo.[12] Who better to teach the course than an adjunct faculty member, reserving the energies of full-time faculty members for more vital areas – administrative, constitutional, criminal and contract law to name a few? My students were subjected to a class that, in the last term, mainly covered the compensation matters in the Woodhouse Report. Throughout the year I recall invoking Luntz, Atiyah and others in their critique of negligence.[13]

However, as in the case of Mark Twain, the report of death was premature. Tort law still lives thirty years after and I have taught this area of law in both Australia and the United States. For about a decade, I taught largely from Luntz’s and Hambly’s torts casebook[14] at the Australian National University. I have continued to teach that law in the United States for the last twenty years, often referring my students and readers of the Prosser casebook, of which I am a co-author, to the vibrant tort law in Australia.[15] I consider that American tort law should be better informed about tort developments in its related common law systems. It is encouraging that Stapleton has taken a leading part in the articulation of tort law in the Third Restatement of Torts now being debated before the American Law Institute.[16] Stapleton is the first non-American scholar to be elected to the American Law Institute Council.[17] Again, it is an irony that one of our most celebrated scholars internationally should be working in the area of torts once thought of as dead.

Two intriguing questions may be asked. One, what if Australia had adopted the Woodhouse-Luntz Scheme? What would the nature of our tort and related law have turned out to be? How would the Woodhouse-Luntz Scheme have fared? Two, should Australia now adopt the scheme? What salience does tort law have in a world of physical injuries as it has developed in the last thirty years? Do these insights about the role and function of tort law bear upon the appropriateness of a Woodhouse-Luntz Scheme in Australia or the United States? The remainder of this essay is divided between the two questions.

2. The Road Not Taken

If Australia had accepted the reforms for accidents causing physical injuries, one result would have been that the expository work of Luntz, Fleming, and, later, Stapleton, would have never surfaced, except in niche tort areas. Their energies would have gone elsewhere, perhaps in explicating administrative law and regulation as it would have developed. The welfare paradigm of government — community responsibility — would have been much advanced by powerful commentators. However, this would have taken place against a background where the role of government in the Western world had been increasingly viewed with suspicion. The Second World War had brought governmental coordination to the centre of the economy. The post-Second World War Welfare State was a product of the war mood that resided considerable faith in the redistributive function of government. The United Kingdom is the major exemplar of the Welfare State and it was the Beveridge Report on Social Insurance and Allied Services that infused the post-war period and inspired proposals for broad state-run compensation schemes. They were part and parcel of the Welfare State. It is not surprising that tort reform efforts – scholarship and governmental reforms – sprung up at that time, both in the United States and in the British Commonwealth. Throughout the 1960s, the ameliorative role of government was relatively unquestioned.[18] Since the 1970s, however, the free market and ideas of individual liberty have dominated

discourse in political economy. The power of those ideas paralleled the decline in the reality of the socialist ideal.[19]

In the immediate post-Second World War period in the United States, legal scholars like James regarded traditional tort law as being in need of radical surgery.[20] The dominance of legal realism encouraged a view of the law as a system of social engineering. In the realm of tort, the rules were increasingly viewed against a measure of loss distribution and enterprise liability. The public policy end of the law was to compensate the victims of accidents. Its substance ought to be consciously bent by courts to that end.[21] American reformers had to deal with a tradition of feckless state legislatures uninterested in changing the law to effect compensation. The best that could be done was for the courts to try to change, by the introduction of doctrines that widened liability. The most marked success was the introduction of strict liability for defective products.[22] Later, courts in large mass torts claims were innovative in devising what were, in effect, administrative compensation systems.[23]

If Australia had adopted a national compensation scheme in the 1970s, it would have seemed like an appropriate next step, just as workers compensation schemes followed throughout the industrialised world after Bismark’s reforms in the late 19th century. In the common law world, more note would have been taken of Australia’s steps than New Zealand’s plunge into reform. Moreover, the South Seas would have been viewed – as they were in the 19th century – as a laboratory for reform that would have had more salience in the larger economies of the United Kingdom, Canada, and the United States.[24] The New Zealand experiment for American reformers was difficult to translate to the enormous and diverse American economic and political system. New Zealand was, in size and complexity, like a medium sized city.[25] Australia, a small economy, was, nevertheless, a more relevant model with its greater complexity, its federal structure, and its larger judicial and academic sector.

Liability for pure economic loss may have gained more judicial attention, while the economic torts may have been exploited and, therefore, become more developed and defined.[26] Additionally, other dignitary interests, like privacy, may have received earlier attention. Certainly, administrative law fueled by compensation claims and regulatory enforcement would have consumed a greater proportion of the law reports.

The significant challenge would have been to adhere to the tenets of the Woodhouse-Luntz Scheme without succumbing to the shifts in the political climate and the consequent imperatives of reducing governmental spending throughout the remainder of the 20th Century. With faith flagging that government was either an efficient or desirable agent for protection of the citizen, how far would investments have been made in safety and general deterrence?[27] The record in New Zealand is not encouraging.[28] In addition, how far would real levels of compensation have been maintained? In a world of public choice,[29] the pressures to reduce real compensation would have been significant. Compulsory third party or liability insurance for motor vehicle accidents, where insurance rates are tied to the registration of motor vehicles, provides one example. These costs have been the perennial target of politics in Australia, where they have been regarded as a tax impost. Responding to the cries of motorists, the government has entered the insurance markets. Little opposition is voiced since the injured continue to be a weak, diffuse political voice. Although all potential victims should, in a world of no information barriers, rationally factor in the costs of accidents, it is notorious that the risk of injury is grossly misjudged by individuals.[30]

Not foreseeable in the early to mid–1970s was the explosion in health care costs that would occur over the remainder of the 20th century and continue apace in the 21st century.[31] Recall that the original Woodhouse-Luntz Scheme called for coverage of illness in addition to accidental injuries.[32] Illness was to be excised from coverage in the final versions of the Australian legislative proposals. Even if the limited coverage of accidental injuries had been adhered to, much of the burgeoning law of torts and its costs since the 1970s have related to diseases caused by toxic substances.[33] The costs of a compensation scheme giving generous health care coverage would, by the same token, have risen steeply, putting financial pressure on the scheme.[34] Two results are predictable. First, the medical coverage may have been truncated. Second, resources that should have been allocated to other ends of the scheme, accident prevention and rehabilitation,[35] would likely have been curtailed.[36] Certainly with escalating health care costs, any shift to include illness within the coverage of the Australian scheme, subsequent to its adoption, would have been resisted and the logical incoherence that Luntz and others have pointed to would have persisted. Take the first response of truncating health care coverage. The provision of medical services would be restricted either by utilisation review, by adding co-payments to be borne by claimants, or by forcing claimants to queue for medical services. If Australia had adopted a public national health system, the apparent cost of health care to the compensation system would have been restrained as the national health system could have absorbed the costs of the Woodhouse-Luntz Scheme. Although costs would have grown, they could have been hidden, as rationing would have taken place. This false refuge, however, would not have been available since the conservative governments had no sympathy for national health. Thus, with health care costs rising, action would have been taken to reduce actual benefits.

Although incentives for safety and investigation of the aetiology of disease would have been blunted under a Woodhouse-Luntz Scheme,[37] some rescue lines would have been thrown by an unlikely hero. The strong remedial American torts system has produced considerable information about injuries and illnesses caused by toxic substances and defective products.[38] Australians, the victims of these exposures, would have recovered under the scheme for such exposures. No doubt information also would have been brought to the commission administering the scheme, although the use to which the information would have been put would again have been limited by the availability of resources and other bureaucratic roadblocks.

Administrative bodies sometimes fail in properly pursuing their statutory mandates. They are subject to both administrative and judicial review in an attempt to force administrative action to conform with statutory mandates. The review, however, is frequently circumscribed. Much recent scholarship has elucidated this institutional failure and suggested means of reducing its incidence.[39] This scholarship is directed to how the public ends of the agency can be best achieved in light of the failures of command and control of regulation. John Braithwaite, of the ANU has been deeply influential in analysing how regulations can be effective.[40] Such has been the despondency with regulation throughout the Western world, that privatisation has been adopted as a way of overcoming the frustrations and costs of regulation.[41] It is conceivable that under the compensation scheme, as it marched through the remaining decades of the century, private actors would have been substituted for public to make the regulation more responsive and the services to the public more effective. For example, private insurance companies may have bid to cover compensation costs and health care companies the coverage of rehabilitation.[42]

Private law mechanisms could have also been utilised where it was observed that certain wrongdoers were, through their wrongdoing, placing undue burden on the public fisc. The Woodhouse-Luntz Scheme called for specific deterrence of harm-producing activity through regulatory enforcement.[43] If such enforcement were to fall short, private incentives to enforce breaches would have possibly found favour. In the United States, the antitrust laws are enforced both publicly and privately. Incentives are given to “private attorneys–general” to detect breaches and bring actions for treble damages.[44] The same mechanism is used to attack criminal racketeering activities.[45] In the absence of enabling legislation, the availability of exemplary and punitive damages serves similar purposes of overcoming pusillanimous public enforcement.[46] Supercompensatory damages encourage attorneys, as bounty hunters, to root out harm-producing behavior, bringing malefactors to book.[47]

Each of the institutional and legal changes would have detracted from the original conception of public responsibility through public governmental agency, each would have encouraged responsive regulation.[48] It is noteworthy that Luntz has taken more seriously the role of punitive damages. As non-compensatory, these damages were found permissible within narrow confines in New Zealand outside the scope of the compensation scheme.[49] The principle at play is that for deterrence or retributive reasons, the courts ought to be able to exact damages that go beyond a compensatory function. The formulation of the rule in all Commonwealth jurisdictions is remarkably similar: punitive damages may be awarded for conduct that demonstrates an arrogant disregard for the plaintiff’s rights. The American courts and policy-makers have recently been concerned about the excessiveness of punitive damages, and the Supreme Court has attempted to apply brakes by way of relevant factors pursuant to the 14th Amendment due process clause.[50] The Australian courts, absent the jury in most cases, have not been beset by a similar problem of excessive damages.[51]

A real question would have arisen if the scheme were in place. Given that exemplary damages would have continued to be available, it is reasonable to assume that courts may have extended the criteria of their award if the real levels of compensation under the scheme had become inadequate. Pressure would then have mounted for legislative reform to cut back on the courts’ ‘erosion of’ the tenets of the scheme. One could have imagined the argument that the scheme, by a side wind of punitive damages, should not be undermined. The ideas of deterrence and retribution that are at the heart of punitive damages sit uncomfortably with community responsibility.

The Woodhouse Commission assumed that the level and nature of injuries would remain static. We are aware of, and see as inevitable, a level of injury in the workplace, on the road, and in the use of products. These, however, do not represent the entire set of injuries. For as society changes, as scientific knowledge is expanded, and as demands for protection are heightened, the field of injuries demanding compensation and optimal deterrence expands. Emotional distress has increasingly become an accepted type of damage supporting an independent cause of action.[52] Informed consent in medical malpractice has pushed categories of harm thought worthy of compensation.[53]The meaning of injury has altered, as we look at expectations in birth and conception.[54] In a world where central policing authority cannot, and should not, be empowered to protect all citizens, certain limited duties imposed on individuals may be more effective in protecting public safety.[55]

The real politik would have been a toleration of reducing levels of compensation, and restriction to health care and rehabilitation services. The accident victims would have been, as they are now, weak voices in the political process.[56] A scheme that in its inception contained generous benefits and robust enforcement would, over decades of political choices, have become a pale shadow of its first conception.

Even more radically, the scheme may have been fully repudiated by governments not subscribing to its social welfare roots. The rhetoric of community responsibility appears antique in an era where individual responsibility has taken the central intellectual ground.[57] Conservative American commentators have complained about the cost of widening tort liability in America. They see it as an off-budget impost on the economy created by judicial fiat.[58] In a political mood of privatization and the shedding of government responsibilities, it is predictable that to shift costs away from budget imposts, back to a weakened tort law, would have been attractive. The political advantage in repealing the scheme would have been considerable. Niggardly compensation and access to the courts, pressed by tort reform, would replace on budget compensation payments.[59] Government could avoid responsibility by permitting the private tort system to pick up the major role. No doubt established no-fault schemes, such as workers’ compensation and motor vehicle accident compensation, could still have been covered, although the levels of compensation would, again pressed by budgetary concerns, have been modest.

Thus, pressures would have been great to resile from Harold Luntz’s vision in the world as it emerged over the last thirty years. However, to be pessimistic on this front does not answer the question whether the time is ripe for a comprehensive compensation scheme to replace a tort law that is assailed on all fronts. The political forces that would have weakened a Woodhouse-Luntz Scheme may be on the wane. To be sure there is no dearth of creative suggestions for reform that would transform discrete branches of tort law.

3. Should the Woodhouse-Luntz Scheme be Adopted?

Debate on this matter has been marred by a “nirvana” fallacy. Often, the cumbersome tort system has been compared to the idealised compensation scheme. Contrariwise the compensation system is caricatured and compared with a tort system stripped of its vices. Both systems are human institutions and are subject to institutional failures. The extremely difficult job for commentators is to assess the likelihood of failure for both systems.

One must first expose the purpose of the tort and compensation scheme. The roots of the scheme focus on compensation. Although it is likely that the Woodhouse-Luntz Scheme would erode compensation over time, it has distinct advantages over tort. The transaction costs of the private law tort system have been shown in numerous studies to be onerous.[60] Schemes delivering compensation on a no-fault basis do so comparatively more efficiently than the tort system.[61] If the scheme is universal, as in the Woodhouse-Luntz model, the advantages are even greater as the issue of whether the cause of the injury falls within the definition of a compensable event is otiose. All incapacities stemming from accidents will be compensable. For limited no-fault schemes, such as workers compensation and motor traffic accidents, the oft-litigated issue is whether the injury fell within the terms of the scheme, that is, was it in the course of employment or a traffic accident?[62]

Let us concede the point in terms of compensation. Take, however, a clear objective of the torts system and that of any accident scheme – deterrence. Deterrence is socially important. We would want to devise ways of inculcating incentives upon actors to take care to avoid harm-producing activity. We would want the rules of the society designed in a way to produce optimally safe products and encourage persons to take optimal care to avoid harming others in their activities.[63] The deterrence may be specific, as in the criminal law, or it may be general, where harm-producing activities are priced in such a way as to disincline persons from engaging in the activity in a careless way or by reducing the extent of harm-producing activities.[64] It is general deterrence that Richard Posner first took up in his seminal article over thirty years ago.[65] Liability rules in negligence, he proposed, work an efficient allocation of resources under which negligent behavior is optimally deterred.

Luntz and others have criticised the notion of tort providing optimal deterrence. No doubt they are correct that, in the real world, the signals are dulled to such an extent that optimal deterrence is illusory.[66] The deterrence perspective, however, places a burden on the proponents of compensation schemes to show how deterrence can be effected within those schemes. Those proponents usually prefer criminal or regulatory sanctions. The real question is whether, on the deterrence vector, regulation is superior to tort law. The answer must be, ‘it depends’. Regulation may be prone to failure in some instances but in others, be advantageous.[67] I am a sceptic on whether proponents on either side make out their cases convincingly.[68]

A. Non-Economic Rationales

Both compensationists and deterrence theorists take a consequentialist view of tort law and thus view its substance as furthering the particular ends, either of compensation of persons or of deterring tortuous conduct. Other theorists view tort law as a system of rules that instantiates corrective justice. To view tort as servicing external ends is, in this view, mistaken.[69] These theorists disagree with both the compensationists and the deterrence theorists, who hold that the validity of tort is judged externally by its instrumental efficacy in either its furthering of compensation or of optimal deterrence.[70] For these latter theorists, ends may be externally imposed through legitimate public action, but those ends are not part of the structure of private law. Thus, Ernest Weinrib, the champion of corrective justice, is quite content to see torts replaced with a compensation scheme.[71] If the political choice is that welfare is increased in this way, corrective justice, a private law notion, has nothing to say.

It follows that corrective justice theorists are not enemies of the Woodhouse-Luntz Scheme. All they would say is that one cannot draw on tort as a failed system upon which to build the palace of a compensation system.[72]

Reformers favoring compensation schemes have focused on the economic shortfalls of the tort system.[73] The virtues of tort law as a means of empowering citizens through vindication of private rights are often ignored or dismissed. Torts’ moral dimensions are cast aside.[74] Instead, the adversarial system that encourages an assertion of rights is seen as wasteful and to be avoided if possible. I have argued elsewhere that punitive or exemplary damages are justifiable as a reflection of republican government.[75] Tort law empowers citizens to share responsibility in governing: a private suit accompanied by responsive sanctions allows citizens to assert rights against powerful corporations and government and to bring them to book by dint of financial sanctions (damages) and publicity impacting upon their reputation. Some writers refer to this as ‘tort law as ombudsman’.[76] In the American context with the jury it is more effective, in that citizens may rely on the jury as a mediating institution that ameliorates the power of government and the corporations.[77]

Tort law also has process benefits that are not easily balanced in an economic calculus. The Woodhouse-Luntz model bows to interests of speedy resolution and rehabilitation, but more in terms of arguing that the common law is woefully inadequate in these respects. This cannot be gainsaid. Victims of accidents demand, however, more than compensation from any system. Processes that provide a sense of vindication and an ability to probe for explanations for accidents are vital. Some years ago, co-researchers and I examined medical malpractice claims in Florida that stemmed from permanent injury or death suffered during birth or treatment at hospital emergency rooms.[78] Florida law requires that information on all closed medical malpractice claims be reported to the State Department of Insurance and our research covered adults aged 25-54. In total, 187 interviews were completed, with 127 households experiencing a birth-related injury, and 60 households experiencing an injury in a hospital emergency room.[79] Our research polled claimants to ascertain their satisfaction with the tort system. We found that the ability to bring even an unsuccessful claim generated claim satisfaction: to have a sense of accountability and vindication and an opportunity to discover information about the cause of the accident was of vital importance to these claimants.[80] These are desiderata discarded under compensation schemes because they introduce elements of procedure, claims resolution, and fact-finding that are expensive. They tend to be seen as vestiges of the tort system that should be traded off of wider and bureaucratic claims determinations.

In the common law, moreover, tort law is the repository for vindication of changing interests in a changing society.[81] The trespassory torts of battery, assault, conversion and false imprisonment were early and powerful expressions of the role of the courts in recognising and enforcing citizens’ rights.[82] A changing society is constantly creating new interests that traditionally have been nested in tort law for the coordination of social interactions.[83] As mentioned above, this dynamic may continue despite a Woodhouse-Luntz Scheme, but with violence to its economic efficiency. Recall that in the most seminal of cases, Donoghue v Stevenson,[84] the dicta, later to become the mantra, was that the categories of negligence are never closed.[85] If this were not the case, a vitally creative stream of the common law would have been dammed. The political process is a poor mechanism to promote new interests of this kind; interests that are often sectional and individual, and would not attract majoritarian support through legislation.[86] The common law process, with its decentralised law creation, has an inherent advantage of tracking social norms and, through a testing process, deciding if they should enter the legal canon.[87] The very best legislative reforms permit the courts to test limits against the law’s traditions to develop mature legal norms.[88]

It is an Herculean feat to codify areas of the law where the past is fully captured for the regulation of relationships in the future, but it is much more difficult to create a system from whole cloth.[89] The frustration that Luntz has voiced about tort as a starting point is understandable because of his wider agenda that the very basis of the compensation scheme should be social welfare. Luntz recognised, as others did not, that one may criticise tort law but one should not take it as a failed compensation system to build a replica in the form of a government scheme. Community responsibility – social welfare – is a new foundation that is justified by its own lights. The relevance of tort law for personal injury is not its compensatory framework, or its claims for justice, but that with its demise social savings can be made.[90] It is like scrap metal from which a new fleet of ships can be built. Without a tort anchor, however, the writ for government intrusion lacks a standard drawn from tradition.[91] In an era disfavouring social engineering, it is a quixotic quest.

B. Reform As We Have It

Luntz may count me as a nay-saying conservative content with the status quo that is far from satisfactory. But, Luntz, let me counter: there is no denying the unsatisfactory state of the law. I certainly agree that it is the duty of the commentators and the courts to move the law to a more satisfactory level. Conservative forces have restrained effective regulation for safety where called for. Reforms of compensation schemes have been held captive to industry interests.[92] Asbestos, a success of the tort system, where long-held secrets were uncovered by the probings of plaintiffs’ lawyers, has become a blight creating inequities and enriching plaintiffs’ lawyers to no social advantage.[93]

Reform of the tort system in the United States has become a theatre of the absurd.[94] What passes for reform is often a dressed-up version of industry subsidisation. For example, caps on damages are a brutal way to lessen the incidence of liability subsidising the production of dangerous products or of substandard medical care.[95] Generally speaking, it is the most catastrophically injured victims who will suffer when they are the ones likely to have been undercompensated in a world of uncapped damages.[96] Many of the reforms are based upon unsubstantiated claims about the dire impact of damage awards on doctors’ practice of medicine, of investment in products, of citizens’ willingness to engage in ordinary social activities, and other elements of a parade of horribles.[97] In the United States, it is a testament to the power of the sound bite and to interest group politics that reform proposals are supported and pressed despite contradictory empirical evidence.[98] I do not want to enter into the lists of the recent Australian reforms, but I do note that the Ipp reforms in New South Wales are marked by a remarkable rush from idea to legislation.[99] The reforms seem to respond to perceived abuses and liability burdens, however I do not see that careful empirical work that has laid a proper foundation for the changing of important legal rights. In this way, I am in accord with Luntz that modern tort reform lacks the coherence of his scheme. Luntz wanted, as did Justice Woodhouse, to promote social welfare. State and new federal reforms in the United States are motivated by the most base majoritarian interests to the detriment of the weakest members of our society, victims of accidents. It is noteworthy that not only tort law is under pressure. Workers compensation benefits have increased and thus steps are being taken to reduce payouts.[100] For example, in 1993, California enacted legislation providing that no compensation shall be paid ‘for psychiatric injury if the injury was substantially caused by lawful, non-discriminatory, good faith personnel action’. Employees, in contrast, have complained about inadequacy of coverage limits on claims and the eroding of benefits as levels of compensation are not adjusted for cost of living increases.[101]

It is necessary to be careful in translating American assumptions about power in the political process to Australia. The differences abound, particularly as political parties are a strong mediating force in the Australian context tending to mitigate the influence peddling common in the United States. However, the United States does have a more robust social research apparatus that, along with an influential legal academy and a vigorous press, forces a debate. The fact that, to date, a tort law has been quintessentially state law has helped reduce the incidence of special interest legislation in the United States.[102] The problems of coordination of reform efforts and the vigorous debate has seemed absent in the rush to reform in Australia.

C. The Australian Perspective — The Role of Government

The barriers to reform through compensation schemes are less prominent in Australia than in the United States with its suspicion of government. The Australian political economy is much more under the sway of Benthamite notions than the United States with its republic political economy catalysed by the ideas of the American revolution.[103] This can be salutary in harnessing tort law to effect social ends. Let me take two examples. In compensation for agent orange injuries in Vietnam, the American federal courts compensated the victims of agent orange by using a tort base and, in a procrustean way, cobbled together a compensation scheme.[104] The lack of executive and legislative responsiveness dictated that the rights of the victims had to be vindicated by an inventive judicial compensation scheme.[105] There followed later Congressional action.[106] Australian victims had direct recourse to government that determined compensation through the executive. Both processes determined issues of causation. Arguably, the Australian process with a more responsive legislature was superior in drawing on wider resources outside the confines of judicial proceedings. If compensation was to be awarded, it did not entirely depend upon tort norms of causation, but could transparently be given on compassionate or general social policy or welfare grounds.

Other litigation, such as the Dalkon Shield claim, has forced the courts to create compensation structures and schemes to bring a measure of equal and fair compensation to victims.[107] With the appointment of Special Masters to handle the claims, the courts have become managers of claims and strayed far beyond the adjudicative tribunals of classic private law.[108] The fecklessness of the executive and legislative arms of government have arguably forced this role upon the American courts. The question must be whether the powerful remedial engine in the United States, despite its cumbersome process, has advantages in empowering the citizen.[109]

D. The Persistence of Compensation

Since the 1970s government compensation schemes have lost their lustre.[110] In the midst of the recurring medical malpractice crises, the cry for a compensation scheme can be heard but no heed has been taken. The terrorist attack of September 11, 2001, was epoch-making in many ways. A side effect was to put the topic of compensation schemes on the plate of social policy again. The legislation was enacted in haste within 11 days of the attack.[111] Its goals were to provide compensation to families of those killed in the attacks and those who suffered physical injuries, as well as provide an alternative to civil litigation with the goal of avoiding lawsuits. Congress did not contemplate that tort law could play a constructive part. Its inefficient and costly ways were accepted. A compensation scheme was funded that would allow claims by victims (poorly defined) of the attack for the benefit of the victims and of the airline industry and all potential dependents.[112] As under court-inspired compensation schemes, Congress opted to appoint a Special Master to handle the claims and award compensation.

The levels of compensation traced those that could be expected in tort litigation. Compensation was designed to put victims back in the position they enjoyed prior to the injury or death of the relative. Collateral benefits were deducted from awards in a way less generous than the common law. The Special Master, Special Master Feinburg, has declared the compensation a great success. Most victims and their relatives seem to be satisfied.

However, it is clear that equality of treatment was sacrificed by Congress. One disaster was selected and victims and families were compensated while others, also the victims of terrorist attacks, were left in the cold. For example, the victims and families of the Oklahoma City bombing and those of other terrorist attacks, for example the USS Cole, received stingy compensation in comparison.

The inequality of treatment is explained by the 9/11 attack as an exceptional occurrence requiring, for political and practical reasons, an exceptionally generous response.[113] Government had set no precedent while signalling compassion to an exercised populace. The claims of other victims had no particular political valiance in this context.[114]

Special Master Feinburg’s claim of success is mainly based on the level of compensation he was able to accord to victims. Recognizing the importance of non-economic aspects of the tort system the Special Master invested heavily in time and effort to listen to the stories of claimants under the scheme. Victims and families were encouraged to tell of their loss and the personal tragedies that accompanied the loss of loved ones. This was partly dictated by a compensation scheme that demanded compensation according to lost earning capacity, but more it was a lending of an ear that seemed essential to a quietening and resolution of the agony of the deaths of so many. Not all agreed that a highly remunerated stockbroker should receive more than a fireman who acted heroically in the disaster, but the process of hearing the claim, Special Master Feinburg asserts, helped the claimants in coming to terms with their tragedies. He has also stated that the generous quantum of the compensation aided reconciliation.

Gillian Hadfield in a recent paper has questioned whether the hearings apprehended the common law desiderata in demanding open court explanations and answers from those who may have contributed to the deaths of the family members, and in drawing upon the subpoena power of the state to produce information about why people died and what steps were taken or not taken to help prevent those deaths.[115] Hadfield strongly argues that the rule of law turns on our access to courts. She adds that psychological satisfaction is contingent on an explanation of the events through court process.[116] She staunchly defends the democratic role of the courts, seeing this enfeeblement as a reason for erosion of civil liberties since 9/11. The fund was part of the belief that the civil liability system was inimical to the interest of the citizen, when it is quite the opposite. She states that any substitutes for ‘civil actions’ not only must give a reasonable substitution in money, but also the opportunity civil litigation gives ordinary citizens to participate in the institutions that give meaning to the rule of law.[117]

An interesting question may be asked. Would Australia have given extraordinary compensation? Would that compensation have been given on the basis of putative tort recoveries, or if the Woodhouse-Luntz Scheme had been operative, would compensational levels thereunder have been sufficient? Would the processes under which compensation were viewed have obliged equal treatment to others? In a government structure more accommodating to public solutions, the response could have been more equal and less generous on a per victim basis. Would the claims process have been individualised to give explanations and to allow stories to be told? The reviviscence of torts concepts of compensation is remarkable and predictably would hold against claims of inequality.

4. The Future

It will be plain that, in contrast to many of my colleagues writing on this issue, I have more faith in the common law of tort. I see it as a dynamic set of rules that reflects society’s evolving norms. It is highly imperfect and our societies should, for reasons of utility and compassion, create compensation schemes in certain contexts, particularly where claims are mature and liability is well-rehearsed.[118] Those schemes should deliver not only fair compensation but attend to noneconomic imperatives of giving victims hearings and an opportunity for explanations.

Luntz will continue for a long time to cast a gimlet eye on present tort reform and will, at the same time, contribute to tort law, making it more responsive to the ends of justice. No one has fought the battle better than Luntz, but no one has been more critical of the war in which he has been engaged. In the end, the world in this century is as flawed as that in Homer’s classical vision. Achilles is lauded for a fight in which he surpasses all others, and yet, his ambition for peace is beyond him because the gods do not make the world that way. The gods have not made the world in this part of the 21st century the way that would encourage a Woodhouse-Luntz Scheme. Gnarly tort law will continue to exist, not because it delivers compensation efficiently and not because it optimally deters, but because it is a system outside government bureaucracy that affords individuals an ability to bring claims that may demand an individual accountability and may produce information about the random occurrences in our society capable of devastating and dislocating harm. The best that we can hope for, in my view, is an engagement between those inspired by social welfare and those sceptical who would depend upon a decentralised system of claims adjudication. There is little to encourage supporters of the Woodhouse-Luntz Scheme, yet a dim light shines and hope springs in the destruction of the common law by the present spate of tort reform found in the United States and perhaps in Australia. Government action blindly and ill-advisedly taken may yet usher in, after public disillusionment, the good angels of a Woodhouse-Luntz Scheme.

[*] Dean and Professor of Law, Washington & Lee University School of Law. I thank Greg Durkin, Class of 2007, for research assistance. The Francis Lewis Law Center provided financial support.

[1] Harold Luntz in a retrospective sees that even then, the chances were slim. See Harold Luntz, ‘Looking Back at Accident Compensation: An Australian Perspective’ (2003) 34 VUWLR 279.

[2] Richard Posner, Economic Analysis of Law (6th ed, 2003).

[3] Ernest Weinrib, The Idea of Private Law (1995).

[4] See Harold Luntz, Assessment of Damages for Personal Injury and Death (4th ed, 2002).

[5] The Illiad of Homer, vol I (1900) (translation by Alexander Pope) at book X.

[6] An American torts scholar of great fame, Fleming James, also falls into the Achilles model. James wrote influential doctrinal scholarship, culminating in his multi-volume treatise, Harper & James, The Law of Torts (1956); the successor is Harper, James & Gray, The Law of Torts (1986). From his deep knowledge and experience, James’s reaction was to call for radical reform via compensation schemes. See George Priest, ‘The Invention of Enterprise Liability: A Critical History of the Intellectual Foundations of Modern Tort Law’ (1985) 14 J of Leg Studies 461 at 470–473 for reference to James’s scholarship in this vein.

[7] Peter Cane has, in the last three editions, added his intellectual power to the Atiyah core. See Peter Cane, Atiyah’s Accidents, Compensation and the Law (6th ed, 1999).

[8] Fleming, also an Achilles character with his withering critique of the law, set aside a superb legal exposition of the field of tort law. He was appointed to the Canberra University College (which amalgamated with the Australian National University of 1960) in 1949, as the first fulltime faculty member. In 1955 he was appointed the first Robert Garran Chair of Law at Canberra University College and he published The Law of Torts in 1957. The story is told that Fleming wrote the book while at the Australian National University. After his notes had perished in a fire, rather than rewrite lecture notes, he simply wrote the book, now in its tenth edition (Carolyn Sappideen has taken over as the author of the last two editions): Carolyn Sappideen, Fleming: The Law of Torts (10th ed, 2002). See Peter Cane & Jane Stapleton (eds), The Law of Obligations: Essays in Celebration of John Fleming (1998). Fleming’s condemnation of tort law’s role in personal injury is summed up in his following words: ‘The overall accident compensation landscape in America is therefore highly fragmented and lacking any systematic plan. The benefits of tort liability are not husbanded for those who are un- or under-compensated from other sources but are distributed randomly without regard to the needs or deserts of victims. Its grossly inflated transaction costs add to the remarkable inefficiency of the tort system. Only the affluence of American society has deflected serious misgivings about this wasteful arrangement and about the need to develop a more purposeful compensation policy such as that which other countries, with more limited resources, have been driven to pursue.’ John Fleming, The American Tort Process (1998) at 30–31.

[9] Peter McKenzie, ‘The Compensation Scheme No One Asked For: The Origins of ACC in New Zealand’ (2003) 34 VUWLR 193. Terence Ison stated: ‘Exactly why New Zealand was the first country to adopt a reform of this type is less clear. An imaginative attempt to find an explanation in the values implicit in New Zealand culture did not produce any easy or definite answers. It is clear, however, that New Zealand has a tradition of communal as well as individual responsibility in a systematic way. In particular, the country already had an organised system of public medical care. Thus, the Woodhouse Report was not embracing any alien view when it began its statement of objectives with a principle of community responsibility.’ Terence Ison, Accident Compensation: A Commentary on the New Zealand Scheme (1980) at 17.

[10] See New Zealand Royal Commission to Inquire into and Report upon Workers’ Compensation, Compensation For Personal Injury in New Zealand: Report of the Royal Commission of Inquiry (1967) (hereafter Woodhouse Report).

[11] See Luntz, above n1, providing an excellent discussion of the origins and fate of no-fault compensation in Australia.

[12] See ibid, arguing that the adoption of the reform was not so proximate.

[13] I was to focus some of my earlier scholarship on economic loss recovery, an area in which the New Zealand courts, free of the personal injuries docket, had been pathfinding. Patrick Atiyah had held a chair at the ANU before returning to England, eventually to take up a chair at Oxford.

[14] Harold Luntz & David Kembly, Torts: Cases and Commentary (5th ed, 2002).

[15] Victor Schwartz, Kathryn Kelly, & David Partlett, Prosser, Wade and Schwartz’s Torts: Cases and Materials (11th ed, 2005).

[16] American Law Institute, Restatement of the Law Third, Torts: Liability for Physical Harm: Proposed Final Draft (2005).

[17] ‘Jane Stapleton is First Foreign National Elected to Council’ Winter 2005 < ali/5–2702_Stapleton.htm> (10 June 2005).

[18] It is noteworthy, although often forgotten, that the United States Congress came close to enacting the ‘National No-Fault Motor Vehicle Insurance Act’ in 1974. It passed the Senate in May, 1974. It did not pass the House of Representatives. President Nixon may well have signed the legislation. As a student at Duke University Law School, he had authored a piece analysing the no-fault auto legislation: Richard M Nixon, ‘Changing Rules of Liability in Automobile Accident Litigation’ (1936) Law & Contemp Probs 476. Other matters were occupying the President and the Congress at the time. For a description and exposition on the issue of federal legislation, see William Powers, Jr, ‘Some Pitfalls of Federal Tort Reform Legislation’ (1996) 38 Ariz L Rev 909, 958–959. The book that had a marked impact on the American public policy debate was Robert E Keeton & Jeffrey O’Connell, Basic Protection for the Traffic Victim: A Blueprint for reforming automobile insurance (1965).

[19] The foremost critic of dirigiste policies was FA Hayek. See FA Hayek, The Road to Serfdom (1944); FA Hayek, Law, Legislation and Liberty (1976).

[20] James’s influence is discussed by Priest, above n6 at 470–472.

[21] Leon Green, The Litigation Process in Tort Law: No Place to Stop in the Development of Tort Law (2nd ed, 1977). See Priest, above n6. The modern scope of tort law has inspired contemporary commentators to take a public approach to the function of tort law. David Rosenberg, ‘The Causal Connection in Mass Exposure Cases: A ‘Public Law’ Vision of the Tort System’ (1984) 97 Harv L Rev 851. The mood of the decades from the 1950s to the early 1970s was summed up as follows, by Eugene Kamenka & Alice Erh–Soon Tay in ‘Social Traditions, Legal Traditions’ in Eugene Kamenka and Alice Erh-Soon Tay (eds), Ideas and Ideologies, Law and Social Control (1980) 3 at 5: ‘The distinction between the private and the public is indeed breaking down as the central, organizing principle of legal and political theory, which rested so strongly on the paradigm of property as the expression of private power and private will, of an area of independence and inviolibility. Contracts dictated from above, loss distribution and social insurance, ever-increasing state regulation and inhibition of unequal bargaining, the felt need for frank judicial policy to meet new circumstances and take account of new dangers – all are combining to undermine the traditional liberal conception of private law and its credibility in the legal system and centrality tradition.’ While true of the environment that spawned the Woodhouse-Luntz Scheme, the remainder of the century was to witness a revitalisation of the private sphere and the law that nurtured it. The division between public and private spheres has emerged most strongly in the late 20th century, but is still being articulated. See Martin Loughlin, The Idea of Public Law (2003), criticised by NW Barber, ‘Professor Loughlin’s Idea of Public Law’ (2005) 25 Oxford Journal of Legal Studies 157 at 166.

[22] American Law Institute, Restatement of the Law Second, Torts (1965) § 402(A), comment b. The foundational case is Greenman v Yuba Power Products, Inc 59 Cal 2d 57, 377 P 2d 897 (1963), 27 Cal Rptr 697 § 402(A) swept the nation. In 1993, the American Law Institute began work on a new Restatement of Torts with specific focus on products liability. See James A Henderson Jr & Aaron Twerski, ‘A Proposed Reform of Section 402A of the Restatement (Second) of Torts’ (1992) 77 Cornell L Rev 1512. The process of the adoption of the Third Restatement is described by Victor Schwartz, ‘The Restatement (Third) of Torts: Products Liability: The American Law Institute’s Process of Democracy and Deliberation’ (1998) 26 Hofstra L Rev 743. For a comprehensive examination of the law see David Owen, Products Liability Law (2005).

[23] John Goldberg, ‘Misconduct, Misfortune, and Just Compensation: Weinstein on Torts’ (1997) 97 Columbia L Rev 2034; Peter Schuck, Agent Orange on Trial: Mass Toxic Disasters in the Courts (1986).

[24] See Jürgen Tampke, ‘Bismark’s Social Legislation: A Genuine Breakthrough?’ in Wolfgang Mommsen (ed), The Emergence of the Welfare State in Britain and Germany 1850–1950 (1981) at 71, 81–82. Australia and New Zealand had adopted Workers Compensation early. Following Germany and Britain, Australia and New Zealand were among the first countries to adopt workers’ compensation plans. New Zealand adopted its first plan in 1900 and Australia followed with its first plan in 1902 in Western Australia. In 1910, New York was the first state in the U.S. to adopt workers’ compensation legislation.

[25] For an analysis of difference and commonalities, see Jeffrey O’Connell & David Partlett, ‘An America’s Cup for Tort Reform? Australia and American Compared’ (1988) 21 U Michigan J L Reform 443 at 454–455. For commentary see International Workshop, ‘Beyond Compensation: Dealing with Accidents in the 21st Century’ (1993) 15 U Hawaii L Rev 524. See Paul Weiler, ‘The Case For No-Fault Medical Liability’ (1993) 52 Maryland L Rev 908; Paul Weiler, Medical Malpractice on Trial (1991).

[26] Hazel Carty, An Analysis of the Economic Torts (2001). It is noteworthy that the New Zealand courts took a lead in this very area, see Scott Group Ltd v McFarlane [1977] NZCA 8; [1975] 1 NZLR 582; [1978] 1 NZLR 553. The New Zealand courts have made a major contribution to that central concept of tort law, the duty of care. See Christian Witting, Liability for Negligent Misstatements (2004) at 22–24; Steven Todd (ed), The Law of Torts in New Zealand (2d ed 1997) 157–158.

[27] Geoffrey Palmer an architect and active promoter of the Luntz-Woodhouse scheme gives short shrift to deterrence: ‘I have ended up as a skeptic as to whether any scheme capable of implementation will achieve much by the way of economic deterrence, at least so long as it is attached to a compensation scheme.’ Geoffrey Palmer, Compensation for Incapacity: A Study of Law and Social Change in New Zealand and Australia (1979) at 380. The absence of deterrence in most no-fault schemes partly explains their ‘low overhead costs’, when compared with tort law. Patricia Danzon, ‘The Swedish Patient Compensation System: Myths and Realities’ (1994) 14 Int Rev of Law & Econ 453 at 463.

[28] For general criticism of the New Zealand scheme, see James Henderson, book review, ‘The New Zealand Accident Compensation Reform’ (1981) 48 U Chicago L Rev 781; International Workshop, above n25. For a critique of the scheme as it operates, see Alan Clayton, ‘Some Reflections on the Woodhouse and ACC Legacy’ (2003) 34 VUWLR 449 at 459.

[29] The concept of public choice derives significantly from the work of Tullock & Buchanan, see Geoffrey Brennan & James M Buchanan, The Reason of Rules: Constitutional Political Economy (1985) at 19–31. The theory depends upon human actors behaving in such a way as to maximize individual utility. Edward Rubin, ‘Rational States?’ (1997) 83 Virginia L Rev 1433. For a broad discussion of a broader conception of utility taking account of others’ utility and wider mortality, see Steven A Hetcher, Norms in a Wired World (2004) (discussing at 149–226 ‘negligence norms’).

[30] See Kenneth Abraham, Distributing Risk: Insurance, Legal Theory, and Public Policy (1986) at

[22] . See generally Jenny Steele, Risks and Legal Theory (2004). The assumption is often made that individuals are risk averse, thus justifying an insurance function in economic efficiency of tort law. Social psychology literature shows, however, that individuals often overlook the prevalence of risk of harm. Thus, individuals behave according to certain heuristics that do not weigh risk on a purely rational basis. Daniel Kahneman et al (eds), Judgment Under Uncertainty: Heuristics and Biases (1982) and Cass Sunstein, ‘Introduction’ in Cass Sunstein (ed), Behavioral Law and Economics (2000). This is possibly a human adaption dictated by the evolution of humans. Jerome Barkow, Leda Cosmides & John Tooby (eds), The Adapted Mind: Evolutionary Psychology on a Generation of Culture (1992).

[31] Timothy Jost, Disentitlement?: The Threats Facing Our Public Health-Care Programs and a Rights-Based Response (2003); Timothy Jost, ‘Our Broken Health Care System and How to Fix It: An Essay on Health Care Law and Policy’ (2005) Wake Forest L Rev (forthcoming).

[32] Reformers had argued the need for bringing illness under the umbrella of compensation. Donald Harris, et al, Compensation and Support For Illness and Injury (1984); Jane Stapleton, Disease and the Compensation Debate (1986). Terence Ison stated: ‘It is difficult to see why, in the allocation of resources to compensation for human disablement, the victims of disease should be assigned a lower priority than the victims of injury. The needs of the disabled reflect the consequences of disablement, which depend on the nature, the extent, the duration, and the social and environmental significance of the disability. The needs of the disabled do not vary according to the cause of the disablement.’ Terence Ison, above n9 at 21.

[33] For example, the accelerating costs of liability in the United States are attributable to a relatively small number of high-impact liability areas like asbestos, tobacco, medical devices, and motor vehicle design. Between 1974 and 1986, the estimated number of asbestos filings increased from 7 to 5632. See Terence Dungworth, Product Liability and the Business Sector: Litigation Trends in Federal Courts (1988) at 36. Also see Peter Schuck, The Limits of Law: Essays on Democratic Governance (2000) at 345-373 (pointing to the strains in the law as claims burgeoned).

[34] In the United States, the cost of provision of medical services has precipitated a spate of regulatory, and market mechanisms designed to contain costs while maintaining a sufficient quality of service. The system still evolves. See Mark Hall, ‘The Death of Managed Care: A Regulatory Autopsy’ (2005) 30 J of Health Politics, Policy and Law 427.

[35] See Woodhouse Report; Geoffrey Palmer, above n28 at 394–399 (describing the confusion and government in-fighting on rehabilitation services at the beginning.)

[36] This was always viewed as a weakness in the tort law where victims were discouraged from rehabilitation prior to the determination of liability and/or compensation. Compare Ison, above n10 at 137–158 (pointing to weaknesses in the scheme but saying it is an improvement over the common law situation).

[37] Geoffrey Palmer concedes that knowledge about accident prevention is at a ‘primitive state’, but implies that a remedy is outside the bailiwick of a compensation scheme. Palmer, above n28 at 380.

[38] Paul Brodeur, Outrageous Misconduct: The Asbestos Industry on Trial (1985).

[39] The Food and Drug Administration in the United States has received attention. See Catherine Struve, ‘The FDA and the Tort System: Postmarketing Surveillance, Compensation, and the Role of Litigation’, (2005) Yale Journal of Health Policy, Law and Ethics forthcoming (arguing that private suits may bolster enforcement).

[40] Ian Ayres & John Braithwaite, Responsive Regulation: Transcending the Deregulation Debate (1992); Eugene Bardach & Robert Kagan, Going By the Book: The Problem of Regulatory Unreasonableness (1982); John Braithwaite, ‘Enforced Self-Regulation: A New Strategy for Corporate Crime Control’ (1982) 80 Mich L Rev 1466; John Braithwaite, To Punish or Persuade: Enforcement of Coal Mine Safety (1985); Michael Dorf, ‘Legal Indeterminacy and Institutional Design’ (2003) 78 New York Univ L Rev 875; Jody Freeman, ‘Collaborative Governance in the Administrative State’ (1997) 45 UCLA L Rev 1; Susan Sturm, ‘Second Generation Employment Discrimination: A Structural Approach’ (2001) 101 Columbia L Rev

[458] .

[41] See David Pozen, ‘Managing a Correctional Marketplace: Prison Privatization in the United States and the United Kingdom’ (2003) 19 J of Law and Politics 253; Ralph Kramer, Hakon Lorentzen, Willem Melief, Sergio Pasquinelli, Privatization in Four European Countries: Comparative Studies in Government-Third Sector Relationships (1993); Dennis Gayle and Bruce Seaton, ‘New Zealand: A Welfare State Through Corporatization?’ in Dennis Gayle and Jonathan Goodrich (eds) Privatization and Deregulation in Global Perspective (1990) at 329–346.

[42] In the compensation arena, a champion of such schemes, Jeffrey O’Connell, has shifted focus to private contracting as a substitute to state/government schemes. See Jeffrey O’Connell, ‘Elective No-Fault Liability by Contract—With or Without an Enabling Statute’ (1975) 1975 U Illinois L Forum 59.

[43] See Ison, above n10 at 159–162.

[44] The Sherman Act, 15 USCA § 1 prohibits ‘every contract combination … or conspiracy in restraint of trade,’ and s2 prohibits ‘monopolization, attempted monopolization, and conspiracies to monopolize.’ The Clayton Act prohibits mergers and acquisitions where the effect may be ‘substantially to lessen competition’ as ‘to tend to create monopoly’, 15 USCA § 18 (1994). The provisions may be enforced by individual aggrieved persons who may seek treble damages.

[45] 18 USC §1962(c) of the Racketeer Influence and Corrupt Organizations Act. See Sedima v Imrex Co [1985] USSC 197; 473 US 479 (1985).

[46] David Partlett, ‘Punitive Damages: Legal Hot Zones’ (1996) 56 La L Rev 781 at 798.

[47] This supposes an identity of interest between attorney and client not always present. See Ellen Wright Clayton & David F. Partlett, ‘Lawyer-Client Relationships’ in Frank A Sloan et al, Suing For Medical Malpractice 72 at 77–78 (1993).

[48] The courts have generally deferred to agency action respecting its capacity to assess risks more generally: Ramirez v. Plough, Inc. (1993) 6 Cal. 4th 539, 863 P.2d 167.

[49] See Taylor v Beere [1982] NZCA 15; [1982] 1 NZLR 81; Donselaar v Donselaar [1982] NZCA 13; [1982] 1 NZLR 97; Green v Matheson [1989] NZCA 195; [1989] 3 NZLR 564; McLaren Transport Ltd v Sommerville [1996] 3 NZLR 424. See John Gotanda, ‘Punitive Damages: A comparative Analysis’ (2004) 42 Colum J Transnat’l L 391 at 415–420 (describing the wide availability of punitive damages in New Zealand but their modest quantum). For evaluations, see David Partlett, ‘The Republican Model and Punitive Damages’ (2004) 41 San Diego L Rev 1409; For comparative law discussion of punitive damage jurisprudence, see Russell L Weaver, ‘Remedies Discussion Forum’ (2004) 41 San Diego L Rev 1407. Laura Hines, ‘Due Process Limitations on Punitive Damages: Why State Farm Won’t Be the Last Word’ (2004) 37 Akron L Rev 779; Steve Chanenson and John Gotanda, ‘The Foggy Road for Evaluating Punitive Damages: Lifting the Haze From the BMW/State Farm Guideposts’ (2004) U Mich J L Reform 441.

[50] State Farm Mutual Automobile Ins Co v Campbell, [2003] USSC 2746; 538 US 408 (2003).

[51] Although it may be observed that the English courts were concerned about excessive damages in defamation cases in John v MGN Ltd [1997] QB 586 (Eng CA 1995), NSW law prohibits punitive damages in defamation cases. Defamation Act 1974 (NSW) s546(3)(a). See Gotanda, above n43 for comparative law and damages awards. In the Dow breast implant litigation, where an issue was the comparative quanta of damage awards in the jurisdictions of claimants, Luntz was an expert witness for the defendants, while I was an expert for the Australian claimants. Luntz’s evidence, among other relevant evidence, convinced the Bankruptcy Court that Australia experienced a lower level of claim frequency and severity, thus justifying the Australians as a class to receive less compensation. In re Dow Corning Corp 244 BR 634 (Bkrtcy ED Mich, 1999). We exchanged good natured letters after the event, Luntz having won the ‘battle of the experts’.

[52] Nicholas Mullany & Peter Handford, Tort Liability for Psychiatric Damage (1993). See also David Partlett, ‘Tort Liability as the American Way: Reflections on Liability for Emotional Distress’ (1997) 45 American Journal of Comparative Law 171; Tame v Morgan; Annetts v Australian Stations Pty Ltd (2002) 211 CLR 317; [2002] HCA 35; Nancy Levit, ‘Ethereal Torts’ (1992) 61 Geo Wash L Rev 136.

[53] Scott v Bradford, 606 P 2d 554 (OK 1979); Canterbury v Spence, 464 F 2d 772 (DC Cir 1972); Moore v The Regents of the University of California, 51 Cal 3d 120, 793 P 2d 479 (1990); Hart v Chappel (1998) 195 CLR 232.

[54] See Todd’s article in this collection. In Australia the High Court addressed the issue in Cattanach v Melchior [2003] HCA 38; (2003) 215 CLR 1 (holding that where a plaintiff couple become parents of an unintended child due to the defendant’s negligence, they would recover the cost of raising and maintaining the child). The decision has been widely criticised and subjected to legislative overrule in Queensland, South Australia, and New South Wales. For a collection of the American law, see Schwartz, Kelly, & Partlett, above n16 at 476-479.

[55] Although tort law has been reluctant to impose duties on citizens to rescue others, the courts have been willing to do so when those others are particularly vulnerable and the rescue may be exerted without endangerment or great expense. Jane Stapleton, ‘The Golden Thread at the Heart of Tort Law: Protection of the Vulnerable’ (2003) 24 Australian Bar Review 41 (reprinted in Peter Cane (ed) Centenary Essays for the High Court of Australia, (2004) at 242-255); Jane Stapleton, ‘Duty of Care Factors: A Selection from the Judicial Menus’ in Peter Cane and Jane Stapleton (eds), The Law of Obligations: Essays in Celebration of John Fleming (1998) at 5995; Liam Murphy, Beneficence, Law, and Liberty: The Case of Required Rescue (2001) 89 Geo LJ 605. These cases are often at the boundaries of liability as, for example, the liability of servers of alcohol to those imbibing or to third parties: See the debate before the High Court in Cole v South Tweed Heads Rugby League Football Club Limited [2004] HCA 29; (2004) 78 ALJR 933. The leading American case is Kelly v Gwinnell 96 NJ 538, 476 A2d 1219 (1984); the liability of those who know that a child is being sexually molested: JS & MS v RTH (1998), 155 NJ 330, 714 A2d 924; the liability of psychotherapists for the violent injuries caused by patients to third parties: Tarasoff v Regents of University of California, (1976) 17 CAL3d 425, 551 P.2d 334. American Law Institute, Restatement of the Law Third, Torts: Liability for Physical Harm: Proposed Final Draft (2005) §§ 37–44 (setting forth circumstances in which a duty of care can be imposed to act to protect others).

[56] Mancur Olson, The Logic of Collective Action: Public gGods and Theory of Groups (1965) (the classic statement of the dilemma of collective action).

[57] At the same moment that the Beveridge Report set a course for the Welfare State, the tradition of individual rights under the US Constitution was revivified in Brown v Board of Education [1955] USSC 59; 349 US 294 (1955). The court, citing support of social data, decided that segregated education was inherently unequal and therefore violative of the 14th Amendment. This strong stance set a mood of judicial activism as the courts in many contexts found that the courts should provide remedies for constitutional wrongs, thus finding that a citizen could bring a cause of action for denial of constitutional rights by federal officials. Bivens v Six Unknown Named Agents of Federal Bureau of Narcotics [1971] USSC 133; (1971) 403 US 388. It is clear that this stream of constitutional tradition is counter-majoritorious and difficult to reconcile with Dicey’s views of sovereignty of Parliament. For a discussion in the American context, see Barry Friedman, ‘The History of the Countermajoritarian Difficulty, Part One: The Road to Judicial Supremacy’ (1998) 73 New York L Rev 333, at 334. Australian courts, in contrast, had no such remedial revolution to draw on. The idea of human rights that may be judicially enforceable came late and by way of Parliamentary action, eg, The Racial Discrimination Act 1974 (Cth). See David Partlett, ‘The Racial Discrimination Act 1975 and the Anti-Discrimination Act 1977: Aspects and Proposals For Change’ [1977] UNSWLawJl 7; (1977) 2 UNSW L J 152. Individuals and groups have, under emerging principles of administrative law, gained entitlements to health and welfare services, Ellie Palmer, Judicial Review, Socio-Economic Rights and the Human Rights Act (2005).

[58] Note the governmental interest would be to put back in place a tame tort system with restrictive damages. Michael Horowitz, former General Counsel of the Office of Management and Budget, has said: ‘The crisis in tort liability is really the third wave of the politics of redistribution. In the 1960s, the political system reallocated resources through vast on-budget transfer payment programmes such as Medicaid, disability and food stamps. In the 1970s, the focus shifted to the regulatory agencies … which had the discretionary power to impose massive effective taxes on regulated parties, and regularly did so. In the Reagan era, however, those avenues have become political dead ends. Tort law, previously a backwater area of private law, has now become the principal means for reallocating resources away from active economic produces to passive — often culpable — ‘victims’ of the economic system.’ Manhattan Institute, Manhattan Report, cited in ‘Notable & Quotable’, Wall Street Journal (17 September 1986).

[59] The consistent attempts at law reform reducing claim frequency and claim severity testify to that governmental interest. For an analysis in the medical malpractice context, see Patricia Danzon, Medical Malpractice: Theory, Evidence, and Public Policy (1985). It is not plain that the courts would have accepted tort reform that derogated from certain ‘structural due process rights’ that have become imbedded in the law and in the United States have attained constitutional status. See John Goldberg’s article ‘The Constitutional Status of Tort Law: Due Process and the Right to a Law for the Redress of Wrongs’ (2005) 115 Yale Law Journal forthcoming.

[60] James Kakalik & Nicholas Pace, Costs and Compensation Paid in Tort Litigation (1986).

[61] Stephen Carroll, James Kakalik, Nicholas Pace, & John Adams, No-Fault Approaches to Compensating People Injured in Automobile Accidents (1991). See Gary T. Schwartz, ‘Auto No-Fault and First-Party Insurance: Advantages and Problems’ (2000) 73 S Calif L Rev 611.

[62] Steven Smith, ‘Mental Health Malpractice in the 1990s’ (1991) 28 Houston L Rev 209 at 274, mentioning the difficulty and costs associated with issues of causation and identifying compensable events in the context of mental health care.

[63] Ronald Coase, The Problem of Social Cost, (1960) 3 J L Econ. Fully expanded upon in Posner, The Economic Analysis of Law (1972).

[64] Guido Calabresi, The Costs of Accidents: A Legal and Economic Analysis (1970); Harold Luntz, ‘A Personal Journey Through the Law of Torts’ (2005) in this issue (citing the influence of Calebresi’s work); Steven Shavell, Economic Analysis of Accident Law (1987); Stephen Sugarman, ‘Doing Away With Tort Law’ (1985) 73 Calif L Rev 555, at 558, 560 (stating the general tort deterrence argument).

[65] See Posner, A Theory of Negligence, (1972) 1 J of Leg Stud 29.

[66] David Partlett, Book Review of, ‘Richard Posner: Economic Analysis of Law (2nd ed, 1977)’ (1980) 11 Fed L Rev 239.

[67] See Kip Viscusi, ‘Toward a Diminished Role of Tort Liability: Social Insurance, Government Regulation, and Contemporary Risks to Health and Safety’ (1989) 6 Yale Journal on Regulation 65.

[68] Danzon, above n60 (recognising the costs of liability but finding that on balance the cost may be worth it by inculcation of safety.)

[69] Weinrib, above n4; Jules Coleman, ‘The Mixed Conception of Corrective Justice’ (1992) 77 Iowa L Rev 427; Peter Cane, Responsibility in Law and Morality (2002) at 244-245.

[70] The debate on law and economics is sometimes seen as whether the end is descriptive or normative. Richard Posner and Ronald Dworkin debated this issue. It involves the old philosophical saw that an ‘is’ does not imply an ‘ought’. See Jules Coleman, Markets, Morals and the Law (1988) at 112-132; Richard Posner, The Economics of Justice (2nd ed, 1983) at 60-115.

[71] ‘Now an assertion of the integrity of private law supplies no gound for preferring private to public law: both modes of ordering can have their own integrity. Affirmation of the coherence of private law in terms of corrective justice is in no way inconsistent with the advocacy of the replacement of tort law by a comprehensive compensation scheme on the New Zealand model’: Ernest Weinrib, ‘The Insurance Justification and Private Law’ (1985) 14 J Leg Stud 681 at 687.

[72] Ibid.

[73] Palmer, above n28.

[74] See David Owen, ‘The Moral Foundations of Products Liability Law: Toward First Principles’ (1993) 68 Notre Dame L Rev 427.

[75] Partlett, above n50.

[76] John Wade, ‘Tort Law as Ombudsman’ (1986) 65 Or L Rev 309; A M Linden, ‘Tort Law as Ombudsman’ (1973) 51 Can B R 155. The argument as a rationale is controversial; James Henderson, ‘Expanding the Negligence Concept: Retreat from the Rule of Law’ (1976) 51 Ind L J 467. But Linden has retorted: A Linden, ‘Reconsidering Tort Law as Ombudsman’ in F Steel & S Rodgers-Magnet (eds), Issues in Tort Law (1983) 1. In respect of the principle of democratic self-governance, see Heidi Feldman, ‘Prudence, Benevolence, and Negligence: Virtue Ethics and Tort Law’ (2000) 74 Chicago-Kent L Rev 1431 at 1464-1465.

[77] David Partlett, ‘The Republican Model and Punitive Damages’ (2004) 41 San Diego LR 1409. Note that the jury has been criticized because of its expense and/or error proneness, without a proper examination of the alternative non-economic advantages of the jury. The scope of the jury’s function and appellate review was canvassed by the Australian High Court in Swain v Waverley Municipal Council [2005] HCA 4; (2005) 213 ALR 249.

[78] Sloan, Githern, et al, above n48.

[79] Idat 20.

[80] Id at 72-91.

[81] See Timothy Lytton, ‘Using Litigation to Make Public Policy: Theoretical and Empirical Challenges in Assessing Product Liability, Tobacco, and Gun Litigation’ (2004) 32 J of L Medicine & Ethics 556, discussing the use of tort litigation for public health policy ends. For example, public nuisance actions have been brought in respect of two blights in modern American urban life, urban street gangs and the proliferation of guns. In the former category the California Supreme Court, in People ex rel Gallo v Acuna, 929 P 2d 596 (1997), enjoined, at the suit of city of San Jose, a widely described number of street gang members from conducting their violent and intimidating gang-like activities in a San Jose neighborhood. The court found that citizens had suffered particular damage through the gang activities that constituted a public nuisance. In the latter category of gun liability suits, cities have brought public nuisance actions against the handgun industry seeking reimbursement for police, emergency and medical costs stemming from accidental shootings and homicides. Victims who suffered either physical trauma resulting from an assault with a gun or emotional distress upon experiencing and witnessing the events could bring a public nuisance claim against gun manufacturers for the manufacture, marketing and distribution of the firearms, Ileto v Glock, Inc [2003] USCA9 763; 349 F 3d 1191 (9th Cir 2003), but compare, City of Philadelphia v Beretta USA Corp 277 F3d 415 (3d Cir 2002) holding that even though illegal use of firearms may constitute a public nuisance, defendant was not liable because the firearms were no longer under his control. For a critical appraisal of the litigation see Richard Ausness, ‘Public Tort Litigation: Public Benefit or Public Nuisance’ (2004) 77 Temple L Rev 825. Congress recently (July 2005) enacted the Protection of Lawful Commerce in Arms Act, prohibiting the filing of lawsuits against manufacturers and dealers of firearms or ammunition for damage caused by the criminal or unlawful misuse of the product. The President has indicated he will sign the legislation.

[82] The cases on privileges as defenses to the torts are particularly effective tools in showing the elementary rights protected by the common law. Schwartz, Kelly & Partlett, above n161 at 91

[130] . They have been extended to reflect modern concerns such as protection from sexual harassment. Anita Bernstein, ‘Reciprocity, Utility, and the Law of Aggression’ (2001) 54 Vanderbilt L Rev 1, at 64 (tort allows for finding of wrongfulness).

[83] Gerald Postema, ‘Coordination and Convention at the Foundations of Law’ (1982) 11 J of Legal Studies 165. Peter Cane has nicely explained the theoretical agenda as one based on ‘interpersonal responsibility’: Peter Cane, ‘The Anatomy of Private Law Theory: A 25th Anniversary Essay’ (2005) 25 Oxford Journal of Legal Studies 203 at 212–214.

[84] [1932] AC 562.

[85] Id at 619.

[86] The private bill in Parliament was eclipsed in the 19th century. See generally David Lieberman, The Province of Legislation Determined: Legal Theory in Eighteenth-Century Britain (1989).

[87] Michael Oakeshott, ‘The Concept of a Philosophical Jurisprudence’ (1938) 203 Politica, describing a process of historical and philosophical argumentation as supporting a concept of law. Some scholars argue that the process of common law decision-making results in efficient legal rules. See Todd Zywicki, ‘The Rise and Fall of Efficieny in the Common Law: A Supply-Side Analysis’ (2003) 97 Northwestern University L Rev 1551. For a summary of the scholarship in the area, see Paul Rubin, ‘Why Was the Common Law Efficient?’ (2004) Emory School of Law, Law & Economics Research Paper Series, No 04–06.

[88] Common law systems with judicial review of legislative actions effectively combine fidelity to tradition with innovation to accommodate social change. Brian Cheffins, ‘Our Common Legal Heritage: Fragmentation and Renewal’ (1999) 30 Law Librarian 3.

[89] Anita Bernstein, ‘Restatement (Third) of Torts: General Principles and the Prescription of Masculine Orders’ (2001) 54 Vanderbilt L Rev 1367 (describing the presumptions against codification in the common law tradition).

[90] As I argue the full social costs of abolition are poorly recognised.

[91] If the search is for revenues to support a new social welfare scheme, the source may be found in a myriad of places. It may be expensive to enforce certain contractual rights. Social costs generated may be allocated to a social welfare scheme. It is difficult to see why one should stop at the destruction of tort rights. If the rationale of tort and compensation is the same, the argument is open that policy makers could choose the more effective. But the aims are quite different for most supporters of compensation schemes, like Geoffrey Palmer, who see no real role for deterrence and certainly see process values as anathema to the efficiency of a state compensation scheme. Social reform is at its safest for individual liberty where it proceeds from traditions imbedded in the society. Michael Oakeshott, Rationalism in Politics and Other Essays (new and expanded ed Timothy Fuller) (1990) 61 at 66.

[92] Alan Derickson, Black Lung: Anatomy of a Public Health Disaster (1998).

[93] G Marcus Cole, ‘A Calculus Without Consent: Mass Tort Bankruptcies, Future Claimants, and the Problem of Third Party Non-Debtor “Discharge”’ (1999) 84 Iowa L Rev 753. In the Australian context, see Peta Spender, ‘Blue Asbestos on Golden Eggs: Evaluating Bankruptcy and Class Actions as Just Responses to Mass Tort Liability’ [2003] SydLawRw 11; (2003) 25 Syd L Rev 223. The Australian Securities and Investments Commission has also taken steps to compensate those suffering from the effects of asbestos. See Elisabeth Sexton, ‘Directors: To Whom Do They Owe Care?’ Sydney Morning Herald (4 July 2005) at 36. Speaking from first-hand experience, Luntz explores the effectiveness of the class action litigation involving defective heart valves. He sees it as costly and not information forcing in establishing culpability. Harold Luntz, ‘Heart Valves, Class Actions and Remedies: Lessons for Australia?’ in Nicholas Mullany (ed), Torts in the Nineties (1997). Australia has recently focused on issues of compensation for victims of asbestos. See David Jackson QC, Report of the Special Commission of Inquiry into the Medical Research and Compensattion Foundation (2004).

[94] It is remarkable that tort law is now at the center of Presidential politics. The Republican party roundly attacked ‘plaintiffs’ lawyers’. George Bush blamed tort liability for reducing the availability of vaccines to children. It has been cited as a prime reason for the decline in America’s individual competitiveness. Waves of ‘tort reform’ hit state legislatures, promoted unabashedly by industry. The organised medical profession has waged an incessant war against “tort”, without examining its own house. The impact of the myriad reforms is difficult to discern: Kip Viscusi & Patricia Born, “Medical Malpractice in the Wake of Liability Reform,” (1995) 24 J Leg Stud 463; Kenneth Thorpe, ‘The Medical Malpractice “Crisis”: Recent Trends and the Impart of State Tort Reforms’ (2004) Health Affairs Web Exclusive (21 Jan 2004). For a brief description of legislation now enacted in about half of the United States states and judicial reactions, see Schwartz, Kelly & Partlett, above n16 at 539.

[95] Patricia Danzon, ‘The Frequency and Severity of Medical Malpractice Claims: New Evidence’ (1986) 49 Law & ContempProbs 57. Sloan, Mergenhagen & Bovbjerg, ‘Effects of Tort Reforms on the Value of Closed Medical Malpractice Claims: A Microanalysis’ (1989) 14 J Health Politics, Policy and Law 663.

[96] J L R Davis, ‘Damages for Personal Injury and the Effect of Future Inflation’ (1982) 56 ALJ

[168] . The problem is a product of the common law damages remedy being awarded in a lump sum, once and for all. The catastrophically injured will incur uncertain costs into the future; the slightly injured will benefit from the interest of the insurance company in ridding from its portfolio of claims those that are low in value but are costly to process.

[97] See also Thomas Eaton & Suzette Talarico, ‘A Profile of Tort Litigation in Georgia and Reflections on Tort Reform’ (1996) 30 Georgia L Rev 627, at 691–692 (calling for reliable data to inform policy making). Advocates of tort reform maintain that ‘[w]e have become a crazily litigious country’ in which plaintiff win rates and verdicts are ‘skyrocket[ing],’ ‘awards for punitive damages … [have] spiraled into the millions, not to mention billions of dollars,’ and the entire tort system is ‘out of balance, tilted to favor plaintiffs and reward their lawyers.’ Our data, together with the findings of every researcher who has systematically examined tort verdicts, solidly refute these claims. There are problems in the tort system, just as there are difficulties in every complex organisation, but the crisis described by most tort reformers does not exist. Deborah Jones Merritt & Kathryn Ann Barry, ‘Is the Tort System in Crisis? New Empirical Evidence’ (1999) 60 Ohio State LJ 315 at 396; Marc Galanter, ‘Real World Torts: An Antidote to Anecdote’ (1996) 55 Maryland L Rev 1093; Michael J Saks, ‘Malpractice Misconceptions and Other Lessons About the Litigation System’ (1993) 16 Just Sys J 7.

[98] The authors of the Harvard Medical Practice Study concluded that ‘the problem is not a litigation surplus, but a litigation deficit. The gap between torts occurring in American hospitals and tort suits being filed in American courts is far greater than has ever been supposed.’ Paul Weiler, Howard Hiatt, Joseph Newhouse, William Johnson, Troyen Brennan & Lucian Leape, A Measure of Malpractice: Medical Injury, Malpractice Litigation, and Patient Compensation (1993) at 140–141. This assessment, based on careful statistical analysis, is in marked contrast to the philippic of critics like Peter Huber, Liability: The Legal Revolution and its Consequences (1990) and Walter Olson, The Liability Explosion: What Happened When American Unleashed the Lawsuit (1990). For an effective rejoinder to critics of punitive damages, see Daniels and Martin, Civil Juries and the Politics of Reform (1995).

[99] See Barbara McDonald, ‘Legislative Intervention in the Law of Negligence: The Common Law, Statutory Interpretation and Tort Reform in Australia’ in this issue.

[100] Gary Schwartz, ‘Waste, Fraud, and Abuse in Workers’ Compensation: The Recent California Experience’ (1993) 52 Maryland L Rev 983.

[101] Thomas Eaton, ‘The Bargain is no Longer Equal: State Legislative Efforts to Reduce Workers’ Compensation Costs Have Impermissibly Shifted the Balance of the Quid Pro Quo in Favor of Employers’ (2002) 37 Georgia L Rev 325 (arguing that destruction of the quid pro quo of the system makes necessary enhanced employers’ tort exposure).

[102] Eaton & Talarico, above n87, at 629 (summarising state and federal initiatives). It is more costly and problematic for industry to push reform at the state level in the United States. Note that there is no federal common law of tort. The Bush administration has pushed for national legislation, 108th Congress, HR 4280, ‘Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2004.’ Australian tort law is also state-based but in a context where the jurisdictions are few and the common law may be declared by the High Court of Australia. Compare Powers, above n19.

[103] Hugh Collins ‘Political Ideology in Australia: The Distinctiveness of a Benthamite Society’ (1985) 114 Daedalus 147.

[104] Peter Schuck, ‘The Role of Judges in Settling Complex Cases: The Agent Orange Example’ (1986) 53 U Chicago L Rev 337.

[105] See Goldberg above note 24.

[106] In 1984, the Veterans’ Dioxin and Radiation Exposure Compensation Standards Act (PL 98– 542) was signed into law. It required the Veterans Administration to establish standards and criteria for resolving claims for benefits from death or disability as a result of exposure to Agent Orange and atomic radiation. Years later, the Agent Orange Act of 1991 (PL 102–4) called for a study on the effects of exposure to Agent Orange by the National Academy of Sciences. In 1996, the Agent Orange Benefits Act, which would have provided health care and compensation to children of Vietnam Veterans suffering from spina bifida was introduced, but never passed into law.

[107] See George Rutherglen, ‘The September 11th Victim Compensation Fund and the Legacy of the Dalkon Shield Claimants Trust’ University of Virginia Law School, Public Law and Legal Theory Working Paper Series, Paper 20 (2005).

[108] Describing the trend, see Francis McGovern, ‘Settlement of Mass Torts in the Federal System’ (2001) 36 Wake Forest L Rev 871; Peter Schuck, above n34.

[109] See Feldman, above n69.

[110] Steven Sugarman, Doing Away with Personal Injury Law (1989) was a relatively lonely voice. Sugarman and John Fleming formed a Berkeley bulwark against the tenor of the times.

[111] The Air Transportation Safety and System Stabilization Act (PL 107– 42, HR 2926) was signed into law on 22 September 2001.

[112] See Virgilio v Motorola Inc, 307 F Supp 2d 504 (2004), concluding that, under the Air Transportation Safety and System Stabilization Act, plaintiffs who had filed claims with the September 11 Victim’s Compensation Fund could not file a civil lawsuit against the manufacturer of radios used by fire fighters who were killed when the World Trade Center towers collapsed.

[113] Michele Landis Dauber, ‘The War of 1812, September 11th, and the Politics of Compensation’ (2003) 53 DePaul L Rev 289 (such a response is historically goverened as in compensation for the hardship caused by the British sack of Washington in the War of 1812).

[114] The victims of a crime in upper Manhattan that morning would have no recourse. See Saul Levmore & Kyle Logue, ‘Insuring Against Terrorism – And Crime’ (2003) 102 Mich LR 268, (arguing that compensation for 9/11 victims may act as a stimulator for insurance for victims of crime).

[115] Gillian Hadfield, ‘The September 11th Victim Compensation Fund: “An Unprecedented Experiment in American Democracy”’ in University of Southern California Law School Law and Economics Working Paper Series, Paper 29 (2005) at 16.

[116] Id at 16; Tom Tyler & Hulda Thorisdottir, ‘A Psychological Perspective on Compensation for Harm: Examining the September 11th Victim Compensation Fund’ (2003) 53 DePaul L Rev 355.

[117] Hadfield, above n116 at 24. 118 Ironically, the demand in some mature areas for compensation systems is less urgent where the outlines of the common law are well settled as highway accidents. Liability claims are highly routinised, reducing transaction costs. Most of the demand comes in areas of perceived high claim frequency and severity, like medical malpractice, where the perceived social costs of tort liability are high.

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