Price and Prejudice
It is a truth rarely acknowledged by tort theorists that personal injury lawyers in possession of good plaintiffs must also be in want of insured defendants. Tom Baker acknowledges that truth in What is Insurance for Tort Law?, and follows it to some bracing conclusions. Baker’s article is a welcome rejoinder to Kenneth Abraham and Catherine Sharkey’s recent call to treat insurance as a constitutive part of tort doctrine and practice.1 Abraham and Sharkey embrace liability insurance as an economically “beneficial” aspect of tort practice that “spreads the risk of tort liability, []helps to promote safety, ensures compensation for some tort victims who would otherwise not be compensated, and enables planning and budgeting . . . by potential defendants.”2 Not so fast, Baker warns. When an insurance eminence like Baker issues a warning, it’s a good idea to listen. Yes, he agrees, tort and insurance are in the symbiotic business of distributing compensation. But Baker argues that tort should aspire to non-economic goals like corrective justice, and then artfully demonstrates how yoking injury outcomes to insurance pricing mechanisms can hobble that goal.
Baker begins with a frank and comprehensive look at how liability insurance influences tort in action. Because insurance “provides the money that changes hands through tort claiming,” (P. 8) lawyers who earn contingency fees are reluctant to sue uninsured defendants and insured defendants typically cede control over litigation to insurers. And because the universe of tort cases is determined by the infrastructure of insurance, tort doctrine has developed in ways that reflect and amplify the interests of insurers. For example, insurers who manage large pools of litigation are positioned to cherry-pick cases as vehicles for friendly changes to procedural and doctrinal rules. (Pp. 12-15.) Further, by tracing verdicts back to centralized insurers rather than to decentralized defendants, lobbyists can depict plaintiff compensation as an “insurance crisis” that justifies anti-plaintiff legislative reforms like damage caps, the restriction of joint and several liability, and limits to the collateral source rule. (Pp. 17-18.) Most notably, plaintiffs lawyers fill their rosters with clients whose claims can “plead into” existing insurance. Consequently, they prioritize cases involving premises liability, bodily injury, and property damage and devalue cases involving pure emotional or economic loss. (P. 15.) Continue reading "Price and Prejudice"
