Mark Geistfeld, ‘The Coherence of Compensation-Deterrence Theory in Tort Law’

Courts and commentators regularly analyze tort law in the functional terms of compensation and deterrence, despite the apparent shortcomings of doing so. Why is the function of compensation only furthered in cases of negligence? Why not compensate a larger number of injured plaintiffs under a rule of strict liability? Is the function of compensation instead somehow tied to the function of deterrence? If so, what determines the relation between these two functions? What is the social policy that courts rely on to answer these questions in a principled manner? As these questions suggest, the functions of compensation and deterrence do not obviously cohere into a viable theory of tort law, making the approach incoherent and unprincipled in application according to numerous critics. In contrast to this line of criticism, this article argues that the functions of injury compensation and deterrence can be unified by an abstract tort norm of compensation, one that does not limit liability to violations of conventional morality or customary practices in the community. For historical and other reasons, compensation plausibly provides the norm by which tort law defines the obligation running between dutyholders and rightholders. When risky interactions threaten the irreparable injury of physical harm, the compensatory damage remedy does not adequately protect the rightholder’s interest in physical security. Consequently, the compensatory tort norm redirects the dutyholder’s compensatory obligation from the payment of compensatory damages to the exercise of reasonable care, yielding a default rule of negligence liability that is formulated to deter the irreparable injury of physical harm without imposing undue hardship on the dutyholder. A compensatory tort norm justifies the manner in which negligence liability furthers the function of deterrence, unifying compensation and deterrence within a coherent rationale for tort liability.

Geistfeld, Mark, The Coherence of Compensation-Deterrence Theory in Tort Law (July 12, 2013). DePaul Law Review, Vol. 61, 2012; NYU School of Law, Public Law Research Paper No. 13-38; NYU Law and Economics Research Paper No. 13-22.

First posted 2013-07-14 07:53:53

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