The law should be changed in order that compensation for personal injury accidents is not based on the proof of fault - Essay Example

?The law should be changed in order that compensation for personal injury accidents is not based on the proof of fault. Discuss. Introduction The lawof tort is a common law that deals with situations where such acts are committed that are not illegal but cause harm to somebody else. Tort is a civil wrong. Anybody who has suffered a loss from a tortious act is entitled to recover the loss from the tortfeasor, the person who has committed a tortious act.1 One of the major torts is negligence. For an unfair act to become a tort, it is very important that it must cause damage. In UK, it is very important for the party that has suffered a loss to know that it has to prove that the damage caused was a direct result of the action of the defendant i.e. there must be a proximate cause. The plaintiff must prove the defendant's culpable conduct is the proximate cause of the plaintiff's injuries. “Proximate” or “legal” cause adds to the requirement that the defendant's culpable conduct be the actual cause of the plaintiff's injury and will preclude recovery when the causal relationship between the defendant's conduct and the plaintiff's injury does not justify imposing tort responsibility on the defendant. 2 There are three types of damages available under the tort law i.e. nominal, compensatory and punitive damages. Nominal damages are a symbolic reward and are awarded to the plaintiff where no actual harm is proven but liability for a tort is established. Punitive damages are awarded to punish and discourage egregious behavior. These are mostly awarded when a tort is proven to be committed with malice. The compensatory damages are awarded as indemnification for personal injury, property or an economic harm sustained by the victim. Compensatory damages have been under great criticism and are a topic of constant debate as there is no monetary equivalent for mental distress and pain. The “proof of fault” is an important element of tort law. It is an issue that requires attention and review. Before discussing it in detail, some problems of the law of tort are briefly discussed because the change in the system of “proof of fault” might be able to do away with these problems too. One of the major problems is that of lack of adequate damages. It is justifiable to award damages in respect of an economic loss because it is calculable. But there is no scale on which damages for pain and suffering can be calculated. It is probably due to this fact that the Courts award huge sums as damages in such cases. But these damages become excessive liabilities on the defendants. In Young v. Glasgow Tramway and Omnibus Company (Limited)3, the claimant was granted such damages which seemed excessive to the defendant. His motion for a new trial was denied and it was held that the damages were not excessive. In this case, Lord President Inglis explained that in order to grant a new trial for excessive damages, it must be established that the damages awarded are so extravagant that no other jury would repeat it.4 This was not the case here. In this case, it is very difficult for a third party to determine whether justice is served or not because there is no scale which can make a pecuniary measurement of the pain and suffering of a person. Cooter and Porat discussed the issue as to what should be the procedure of measuring the compensation for negligence by doctors and drivers.5 According to them, the Courts often follow a system of probability and percentage. The probability pertains to the probability that harm might be caused. The types of potential harms caused by the two parties are very different from each other as there is a contractual relationship between the doctors and patients and there is no such relation between the drivers and the victims. According to Cooter and Porat, there is a need to bring externalities into consideration while determining the amount of compensation. There is a possibility that there may be some externalities that prevent the defendants from the performance of their duty to care. The more influential the role of such externalities, the lesser should be the compensation awarded. It is because a significant role of externalities makes the defendant’s contribution in accident lesser. For instance, the negligent drivers have to pay more than the careful drivers because the role of externalities is more positive in the case of careful drivers. The Courts need to care as to what would be the effect of the damages that they award. If doctors are made to pay 50% of the harm that they have caused, it might not encourage them to be careful in taking due care.6 It might be argued that the doctors make vow to the Board of Surgeons and Physicians. But another question is whether it is possible to supervise each and every doctor’s practice. The medical field is an intricate area of practice and doctors are human too. They can also make mistakes and such mistakes can be a result of a concentration lapse which can be regarded as negligence. If each and every doctor was sincere to his vow, the number of civil actions brought against them each year would have been much less. Cooter and Porat presented an equation7 based on the argument that “to completely internalize marginal net benefits, the actor’s expected marginal net payoff must equal the net social benefit of the activity to others.”8 Hylton argued that this equation was very helpful and logical but it cannot have a general application because the variable “m”, which refers to the market price of the activity being performed, was given the value of 0 in the case of drivers.9 It is because there is no market price for the driving of a driver who is driving his car to get to some other place. Hylton argued that the drivers do obtain a personal benefit from their driving. He also negated the fact that there is no external benefit from driving; the variable “b” must not be zero. Based on this argument, it is still very unlikely to assign justifiable values to these variables as there is no active market for such benefits.10 It is obvious that a driver obtains a benefit from his driving but it is impossible to calculate the exact monetary value of this benefit. There is a potential in the theory of Cooter and Porat to create new difficulties. They suggest that if the doctors adopt better methods in their practice, their liability would be reduced. For instance, in obstetrics, a doctor has to make a choice whether to make a vaginal or a cesarean delivery. If he makes that choice logically with sufficient reasons, his liability would be reduced. By principle, a tortfeasor must be made to bear the cost of the injury that he has caused. The defendants are potentially at risk only up to the value of their assets.11 In many cases, the value of compensation available from a tortfeasor is much below the value of the harm that he causes. This can lead to the problem of recovery of damages and this is one of the reasons of late recovery of damages. Beard speculated on this fact that the rich take more care than the poor because a higher amount of damages is recoverable from them.12 At one point, mandatory insurance was deemed to be a solution for this problem but the premiums for such insurances were fixed to ensure fairness. This may fix the problem of insufficient compensation for the victims of accidents to some extent but in its essence, it may also make drivers less careful. In practice, it has been seen that various approaches have been applied at one point or the other but there is no specific approach to award damages. It is the biggest strength of common law that it keeps on incorporating each and every novelty that it comes across and keeps on widening its scope. There is always a potential that a case may bring a new set of circumstances which have never been discussed in a Court before. The valuation based on the model explained by Cooter and Porat has been seen in many cases in which the harms were economic in nature and measurements could be made reliably. The English law modified the starting point related to “burden of proof” in 1863. Byrne v Boadle13 culminated in the doctrine of “res ipsa loquitur”. This doctrine did not require the plaintiff to prove the fault of the defendant if the facts of the case were vivid enough to establish the fault. Perhaps, the cases related to strict liability are the best examples. For instance, an owner of a circus has a strict liability if his caged lion causes harm to the audience. There is an implied duty of care on the owner. However, the burden of proof in such cases is reversed and it is for the defendant to prove that he did not commit a breach of duty.14 In order to apply this doctrine, the Courts have to determine first that a duty exists on the part of the defendant and it was in his control to stop the accident from happening. In such cases, it is not essential that the actual cause of the accident should be known. It is enough that the accident occurred due to the defendant’s negligence. It also happens in cases of strict liability in which the circumstances impliedly impose a duty of care on the defendant. In UK, the defendant is often held liable only for the reasonably foreseeable consequences of his or her act or omission. The defendant is, however, provided with a chance to prove that the damage did not occur due to his negligence but due to the plaintiff’s own doing. Another example in which it is unfair to apply the doctrine of “proof of fault” is that of the cases related to defective goods. In such cases, it becomes extremely difficult for the plaintiff to obtain proof of fault because it requires some information from some internal sources of the manufacturers which are very hard to access. In the case of Donoghue v Stevenson15, the plaintiff claimed that there was a snail in her ginger beer bottle that was manufactured by the defendant. The House of Lords established that there was a duty of care on part of the manufacturer. The plaintiff was not asked to prove that the manufacturer was at fault. It was evident from the state of the plaintiff and what she had gone through that the ginger beer bottle was not suitable to be consumed by a human. The doctrine of “res ipsa loquitur” was impliedly in effect. The “proof of fault” still stands at a great importance because it is very closely related to proximate cause. It is very important for the courts to determine the harm caused in a certain case would not have happened if there was no action by the defendant. This is also known as the ‘but for test’. The proof of fault must be made on the balance of probabilities. It means that it must show that “it is more likely than not that the breach was a cause of the damage.” It is easier to deal with the issue of causation in cases where the defendant has done something like giving the wrong dosage of a drug. It becomes difficult in cases in which the defendant has “failed” to do something and this “failure” has caused harm to the plaintiff. Common law requires the jury to consider the following in this case: i. What the natural course of events would have been if the defendant had behaved properly, as in Barnett v Kensington and Chelsea Hospital16; ii. How the defendant would subsequently have behaved if he had done what he should have done in performance of the duty, as in Bolitho v City and Hackney Heath Authority17; iii. How the claimant would subsequently have behaved if the defendant had done what should have been done, as in McWilliams v Sir William Arrol18. One of the basic elements that a case for tort liability requires is the absence of consent. “For example, consent turns trespass into a dinner party; a battery into a handshake; [or] a theft into a gift.”19 In many cases, contractual agreements absolve a party from its liability for negligence because consent is created and the tort duty is negated. In US, the law of tort is quite similar to that of UK in most of the states. The plaintiff is required to show a “proof of fault” but the Courts always consider the doctrine of “proximate cause” which is similar to causation. Over the years, the US has also been trying to solve the major riddle of compensatory damages. “The inherent limitations of compensatory damages could not be more obvious once one looks at the most severe type of injury governed by tort law—wrongful death.”20 Very often, in all the countries of the world, torts are committed that bring much more than an economic harm to the victim. Torts are often committed due to negligence. When torts of such magnitude are committed due to negligence, compensatory damages are awarded to the victim. According to Geistfeld, “Under the negligence rule, the standard of reasonable care is objectively defined by reference to the conduct of the reasonable person...”21 Therefore, the tortfeasor becomes liable for compensatory damages but these damages are inadequate most of the times. Fredrick Pollock said that, “This is one of the least rational parts of our law.”22 If a person fails to comply with the demands of reasonable care, it does not necessarily mean that he is at “fault”. It is because sometimes the defendant is just not able to exercise due care due to some externalities. It is not always possible for a plaintiff to prove that there was a fault. The answer to this problem is the system of no-fault compensation. This system compensates the victim of tort despite his ability to prove the fault of the tortfeasor. New Zealand is the biggest example of the success of this system where this system in effect for nearly 40 years. The number of accidents has been reduced and the number of civil actions has decreased significantly. This system is cost effective and much economical than the court system as the contingent fee of attorneys is out of the equation. The Accident Compensation Corporation (ACC) in New Zealand administers no-fault compensation scheme. The ACC operates under the Injury Prevention, Rehabilitation, and Compensation Act 2001 which came into effect on 1 April 2002. It is funded through a combination of taxes and government contributions. It has: A work account that covers work related injuries and is funded through levies collected from employers; An earners account that covers non-work injuries of income earners it is funded through tax on income and other taxes; A non-earners account that covers non-work injuries of non-earners like children, elders, visitors, unemployed etc. It is funded through government contributions; A motor vehicle account that covers injuries relating to motor vehicles on public road. It is funded through indirect taxation of petrol and diesel, and through motor vehicle license fees; and A treatment injury account which covers injuries as a result of medical treatment. It is funded through a combination of funds from the Earners and Non-Earners accounts. 23 The ACC provides the claimants with eight basic rights. They are: 1. The right to be treated with dignity and respect. 2. The right to be treated fairly, and to have one’s views considered. 3. The right to have one’s culture, values and beliefs respected. 4. The right to a support person or persons. 5. The right to effective communication. 6. The right to be fully informed. 7. The right to have one’s privacy respected. 8. The right to complain.24 Compared to the Court system of tort law, the claimants are not treated fairly merely because they fail to discharge their burden of proof. If, however, they succeed, they are awarded damages of such high amount that is unfair for the defendant. Calculations made by Palmer show that it costs 7 cents for the ACC to provide benefits of $1.25 Howell noted that, “The New Zealand experience with no-fault accident compensation, in the absence of tort action to modify moral hazard behavior, is almost unique. While ensuring certainty of payment, it is far from clear that the scheme has succeeded in balancing the transaction costs and benefits of overt monitoring and enforcement against the costs and benefits of incentive management available from tort action.”26 In US, no-fault compensation plans have been developed in the states of Virginia and Florida for medical accidents related to obstetrics.27 This system has been very cost effective for both states. However, in other states, the damages for tort liabilities arising out of medical malpractice are very high. This makes the doctors extra careful but research shows that it has caused many doctors not to specialize in obstetrics.28 The notion that law should be changed in the UK so that the damages are not dependant on proof of fault has probably arisen from the cases of medical negligence. It is a grey area in law of tort that requires review. A person goes to a hospital for medical treatment. It is obvious that he has a medical condition and there is a chance that he can get cured. The probability of medical recovery is higher in some cases and lower in others. In many cases like Hotson v East Berkshire Area Health Authority29, the Courts are reluctant to grant compensatory damages to the plaintiffs in respect of medical negligence. It is because of the probability that if there was no medical negligence by the defendant, the plaintiff would have suffered anyway. On many occasions it becomes necessary for the plaintiffs to discharge the burden of proof of fault. In the case of Hotson, it was held that the plaintiff was not entitled to compensatory damages because there was a 75% probability that he would have developed avascular necrosis. He had failed to discharge his burden of proof. What is completely disregarded in this case is not only that the plaintiff lost his 25% chance of recovery at the hands of the defendant’s negligence but also what that 25% chance meant to him. It is very different from Chaplin v Hicks30 in which the damages were calculable through probability. In Chaplin, the defendant had breached a contract and stopped the plaintiff from taking part in the final stage of a beauty contest. The plaintiff had a 25% chance of winning a place in a chorus line. Therefore, she was awarded damages for the loss of a chance of winning the competition which was assessed at 25%. The law of tort in UK is under constant development because one of its primary sources is the common law. Its secondary sources include the research articles published in law journals by legal experts. Each new case brings a novelty and gets included in the list of precedents. The law journals provide commentaries on the new developments in law and this helps in improving it further. But the above discussion suggests that the UK system of tort law has to review the system of “proof of fault” as soon as possible because it has been long overdue. In UK, the law of tort seems to be failing in serving the purpose for which it was intended. The basic principle is that the tortfeasor must compensate the injured. But the system of “proof of fault” deprives the injured of justice if he fails to discharge his burden of proof. When a plaintiff succeeds, the damages are not received in a timely manner. This system needs to be reformed. Then there are the contingent fees of the attorneys. Therefore, one way or the other, no party involved in a tort action is able to escape the heavy burden of an outflow of money. It might be argued that the no-fault system also fails to compensate for pain and suffering. Compared to the court system of tort law, it is much more efficient because the court system has a tendency to award no damages at all. No-fault system may not be the perfect solution for inadequacy of damages for pain and suffering but it is much better than the court system when it comes to compensating the injured party. There is a system of no-fault in the UK which has helped in solving most of the cases related to tort liability. The best example is that of Worker’s Compensation scheme that provides wage replacement and medical benefits to employees injured in the course of employment. The injured worker has to relinquish his right to sue his employer for tort liability but this system ensures that every worker gets compensated for his injury. Such systems also exist in police injury cases. Lessons should be taken from this system and New Zealand because their compensation system makes the whole community responsible for accidents indirectly. This has culminated in a much less number of accidents and the whole community behaves more responsibly. If the rights of the people are not protected in this context, the whole economy is affected. The cases related to tort that are brought in Courts of UK each year are in thousands. This takes up the valuable time of the jury and results in waste of money too. The compensation granted through courts reaches the victim after much delay. Also, almost 1/3rd of the compensation has to be paid to the attorney as contingent fee. No-fault compensation system saves money, time and importantly, it is efficient as it ensures that every injured party is compensated. Therefore, it is concluded that a better system must be established in the UK to increase overall efficiency. Bibliography Books: Cooke J., Law of Tort (8th edn. Pearson Longman 2007). Diamond L. J., etal, Understanding Torts, (First Published 1996, Lexis Publishing 2000). Hodgson J., Lewthwaite J., Tort Law, (2nd edn. OUP 2007). Koch A. Bernhard, Koziol H. (eds.), Compensation for Personal Injury in a Comparative Perspective (Springer Wien New York 2003). Pollock F., The Law of Torts: A Treatise on the Principles of Obligations Arising From Civil Wrongs in the Common Law (First Published 1987, Lightning Source Inc., 2009). Case Law and Legislation: Barnett v Kensington and Chelsea Hospital [1969] 1 QB 428 Bolitho v City and Hackney Heath Authority [1998] AC 232 Byrne v Boadle [1863] 2 Hurl. & Colt. 722 Chaplin v Hicks [1911] 2 KB 786 Donoghue v Stevenson [1932] UKHL 100 Hotson v East Berkshire Area Health Authority [1987] 2 All ER 909 McWilliams v Sir William Arrol [1962] 1 All ER 623 Ng Chun Pui v Lee Chuen Tat [1988] RTR 298 Young v. Glasgow Tramway and Omnibus Company (Limited) [1882] 10 R. 242 Injury Prevention, Rehabilitation, and Compensation Act 2001 Journal Articles: Beard T. R., ‘Bankruptcy and Care Choice’,[1990] Vol. 21, No. 4, The Rand Journal of Economics, 626-634. Calabresi G., Melamed A. D., ‘Property Rules, Liability Rules, and Inalienability: One View of the Cathedral’, [1972] Vol.85 Harvard Law Review,1089. Cooter D. R., Porat A., ‘Liability Externalities and Mandatory Choices: Should Doctors Pay Less?’, [2006] Vol. 1, Journal of Tort Law, 2. Geistfeld A. M., ‘Tort Law and the Inherent Limitations of Monetary Exchange: Property Rules, Liability Rules, and the Negligence Rule’ [2011], New York University Public Law and Legal Theory Working Papers, Paper 287, 4 Heidi M. Hurd, (1996) ‘The Moral Magic of Consent’, 2 Legal Theory 121, 123. Howell B., etal,‘No-fault public liability insurance: evidence from New Zealand’, [2002] Vol.9, No. 2, Agenda, 147. Hylton N. K., ‘Liability Externalities and the Law: A Comment on Cooter and Porat’, [2006] Vol. 1, Issue 1, Journal of Tort Law, 3. Palmer G., ‘“The Nineteen-Seventies”: Summary for presentation to the Accident Compensation Symposium’, [2003] 34(2) Victoria University of Wellington Law Review, 240. Robinson P., etal., ‘The Impact of Medical Legal Risk on Obstetrician Gynecologist Supply’, [2005] Vol.105, Issue 6 Obstetrics & Gynecology, 1296. White J. M., ‘An Empirical Test of the Comparative and Contributory Negligence Rules in Accident Law’, [1989] Vol. 20, No. 3, The Rand Journal of Economics, 308-330. Websites: Accident Compensation Corporation ‘Introduction to ACC’ (ACC, 20 December 2008) accessed 4th March 2012. Reports: Chief Medical Officer, ‘Making Amends: A consultation paper setting out proposals for reforming the approach to clinical negligence in the NHS’, (United Kingdom, Department of Health, June 2003) 101. Read More