A Review of Keating’s ‘Distributive and Corrective Justice in the Tort Law of Accidents’

Gregory C. Keating

[1] is a professor of Law and Philosophy at the University of Southern California and teaches legal ethics, seminars and torts in political and legal philosophy. He is also an editor of a torts casebook and writes on torts, legal theory and professional responsibility. In his Article ‘Distributive and corrective justice in the tort law of accidents'[2], Keating explains that the theoretical foundation of tort theory is torn between two competing conceptions, the justice conception and the economic conception, where the former takes tort law of accidents to be continuous with our ordinary notions of ‘agency and responsibility, carelessness and wrongdoing, harm and reparation'

[3] and the latter supports that tort accident law should express an appropriate scientific conception of human welfare. Keating argues that theorists in the justice conception have generally supported that, in tort law, justice is a matter of corrective justice, concerned all but exclusively with the rectification of losses wrongfully inflicted and although he supports that this is an attractive position, since rectification is central to tort accident law, he challenges that belief, arguing that the advantages of corrective justice have however come at a cost[4]. He firstly supports that ‘the rhetoric of tort law is rife with appeals to fairness'

[5] and the arguments about fairness have been difficult to fit into a corrective justice framework. Secondly he argues that theorists of the corrective justice conception have been led to place great weight on the concept of wrongdoing, which has led to overemphasizing the attractiveness and importance of negligence liability and has made strict liability difficult to justify, whereas distributive justice helps to justify and explain the existence of strict liability in tort law.

[6] Keating therefore supports that tort law should be only secondarily matter of corrective justice and primarily a matter of distributive justice, a matter of the fair apportionment of the burdens and benefits of risky activities. As Keating presents, distributive justice views the law of torts from the point of view of those affected by it and has its roots in the social contract tradition[7], asking what they might reasonably expect of each other in the way of reparation and precaution. On the other hand, Keating supports that there is not a single agreed-upon account regarding corrective justice and therefore he uses the corrective justice conception of Jules Coleman

[8] as his touchstone, concluding that corrective justice consists of four elements[9], firstly it applies to human agency, secondly it is concerned with repair or rectification, thirdly it is concerned with rectifying a kind of wrongdoing, with ‘wrongful losses’ in Coleman’s case, and fourthly, it involves correlativity. Keating argues that the tort law of accidents, on the fairness conception[10], is only secondarily a matter of corrective justice and primarily a matter of distributive justice. He goes on to say that, the tort law of accidents, implied by the idea of fairness, is and should be concerned with the fair distribution of the benefits and burdens of mutually beneficial but harmful activities. Fairness requires that those who impose risks also bear the accident costs which issue from those risk impositions and this conception of fairness gives rise to a presumption in favor of strict liability.

Therefore, the corrective dimension of strict liability, which is the reparation for harm reasonably inflicted by the injurer to the victim, is the offspring of a deeper distributive dimension, which is also the case in negligent liability. Keating further argues that the link between disrespect and negligence makes negligence liability[11] an instance of corrective justice since the duty to repair a negligently inflicted injury is a duty to make right a harm wrongly inflicted. However, Keating underlines that even here corrective justice is embedded in distributive justice firstly, because negligent liability is fully justified only when it is distributively fair and secondly since the norms of due care strike a fair balance between the competing claims of liberty and security, when negligence liability is properly articulated. Keating argues that negligence upsets this fair distribution of precaution and risk and supports that the upshot of this[12] is that victims’ claims to reparation, even when those claims sound in corrective justice, rest at bottom on a conception of distributive justice. Keating concludes that a law of accidents[13] which attends to the distribution of the benefits and burdens of risky activities is more just than one which attends only to the rectification of injuries wrongly inflicted. In other words, a law o accidents which is not only distributively fair, but also correctively just, is more just than a law of accidents which is only correctively just. The controversy concerning the appropriate purpose of tort law continues to rage[14] with some scholars advocating that tort rules should minimize accident costs as an instrument for maximizing social welfare and wealth and others arguing that, as a matter of corrective justice, tort rules should fairly protect the individual’s right to physical security. These two conceptions of tort law are both fundamentally incompatible and mutually exclusive and therefore, it seems that the tort system has to choose between efficiency and fairness. The economic analysis of tort law, throughout its history, has focused almost exclusively in one main question regarding how should tort rules be formulated in order to minimize the social cost of accidents.

Although, the economic analysis of tort law is controversial,[15] since it is highly questioned whether tort law should minimize accident costs to the exclusion of fairness concerns, it can play an important role in formulating tort rules designed to protect fairly individual rights. By identifying such a role, it can be showed that it is possible to conceptualize tort law in a unified manner, one that fully accounts for the central tenets of welfare economics and the fair protection of individual rights. The controversy associated with the economic analysis of tort law was first stirred up by the provocative work of Richard Posner. Although he was not the first to apply economic analysis to tort law, Posner strongly influenced the newly developing field by forcefully propounding the claim that tort law should maximize wealth by minimizing accident costs[16]. The approach subsequently foundered as scholars, including Posner, recognized that cost-benefit analysis cannot determine initial entitlements, the basic architecture of any legal rule.[17] This limitation of economic analysis was then addressed by Louis Kaplow and Steven Shavell, who have constructed a proof showing that a “fair” tort rule can make everyone worse off than the welfare-maximizing tort rule.[18] This outcome violates the Pareto principle, which requires any change in liability rules that would make at least one person better off and no one worse off. By showing how a principle of fairness can block a change in rules that would make everyone better off, Kaplow and Shavell provide a reason for rejecting a fair tort system in favor of one that maximizes welfare consistently with the Pareto principle. A welfare-maximizing tort system ordinarily relies upon cost-minimizing liability rules, thereby reestablishing the single role for economic analysis in tort law.[19] All issues of concern to the tort system ought to be resolved in the cost-minimizing manner, the general method for maximizing social welfare and wealth. Not surprisingly, the claim that tort law ought to be nothing more than an exercise of welfare economics has provoked an equally extreme response from critics.

The most forceful critique has come from those who maintain that tort liability is best justified by the principle of corrective justice.[20] The principle is grounded in a conception of individual rights and obligations, giving one who is responsible for the wrongful losses of another a duty to repair those losses.[21] This justification ‘rules out the economic analysis of [tort] law.'[22] Despite the claims of exclusivity made by the proponents of efficiency and fairness, each conception of tort liability is included in the common understanding of tort law. The most widespread understanding of tort law, developed by the work of a large number of the most influential tort scholars in the Twentieth Century, maintains that the purpose of tort law is to compensate and deter.[23] The compensatory function relates to fairness concerns, and the deterrence function relates the economic rationale for tort liability. This understanding of tort law has been adopted by the Restatement (Third) of Torts, which justifies negligence liability “as remedying an injustice inflicted on the plaintiff by the defendant” and “providing the defendant with appropriate safety incentives [which] improves the overall welfare of society, and thereby advances economic goals.”[24] Rather than solve the dispute regarding the appropriate roles of efficiency and fairness in tort law, the compensation-and-deterrence rationale may merely restate the problem. The rationale, in other words, may embody a problematic conception of tort liability. A cost-minimizing tort system is incompatible with the adequate protection of individual rights.[25] The deterrence rationale for tort liability also appears to be incompatible with the compensatory rationale.[26] The compensation-and-deterrence rationale therefore may embody conflicting rationales rather than providing a unified conception of tort liability.

Such a ‘mixed’ understanding of tort law is problematic. “Understood from the standpoint of mutually independent goals, [tort] law is a congeries of unharmonized and competing purposes.”[27] In order for the deterrence-and-compensation rationale to offer a unified conception of tort law, it must find justification in a theory capable of explaining the compensation and deterrence functions of tort law. Such a unified conception must also be capable of explaining the varied roles of efficiency and fairness concerns in tort law. A unified conception cannot depend on the conventional economic analysis of tort law due to its exclusion of fairness concerns. A unified conception must instead depend on some other form of economic analysis, one appropriate for a fair tort system. It is an open question whether a rights-based fairness norm like the principle of corrective justice can be complemented by economic analysis.[28] No doubt, many believe that this question has been ignored for good reasons. The conventional economic question is forward-looking: Would liability in this case minimize accident costs by deterring accidents in the future? That inquiry seems to be utterly irrelevant to the backward-looking normative question: Is compensation in this case warranted because the defendant was responsible for violating the plaintiff’s right? Despite superficial appearances, the idea that economic analysis is incompatible with or irrelevant to a principle of fairness is probably mistaken. Economic analysis can have an important role to play in a fair tort system, one that significantly differs from its role in an efficient tort system. Top of Form Bottom of FormThis unified conception incorporates economic analysis into a fair theory of tort law.

Under this approach, the individual right to physical security constrains the ability of the tort system to promote social welfare. The constraint yields rights-based tort rules that are consistent with the Pareto principle and satisfy the equity-efficiency criterion, the two central tenets of welfare economics. The approach is illustrated by a rights-based conception of fairness that adequately describes the important tort doctrines while unifying the compensation and deterrence functions of tort law. As this example illustrates, the constraint imposed by a rights-based principle does not make welfare considerations irrelevant. It merely defines the conditions under which tort rules can appropriately rely upon welfare considerations. Further analysis shows why any rights-based tort system is likely to provide an important role for economic analysis, one that operates within the constrained space of welfare concerns.

The economic inquiry no longer exclusively focuses on the minimization of costs. Freed from such a limited and controversial role, economic analysis becomes integral to a unified conception of tort law.

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[1] George Conk, ‘ Nishida v. Pharmacia/Monsanto Torts Scholars Amicus Brief ‘ (2013) < https://www.scribd.com/doc/124667443/Nishida-v-Pharmacia-Monsanto-Torts-Scholars-Amicus-Brief#scribd > accessed 25 February 2015

[2] Gregory C. Keating, ‘Distributive and Corrective Justice in the Tort Law of Accidents’ [ 2000 ] Vol. 74:193

[3] ibid 193

[4] ibid 195

27] ibid

27] ibid

[7] ibid 196

[8] ibid 197

[9] ibid [10] ibid 200 [11] ibid 201 [12] ibid [13] ibid 224 [14] Mark Geistfeld, ‘Economic Analysis in a Unified Conception of Tort Law’ (2003) < https://escholarship.org/uc/item/9wh2w92c# > accessed 25 February 2015 [15] Jules L. Coleman, ‘The Grounds of Welfare’ (2003) 112 YALE L. J. 1511 < https://www.yalelawjournal.org/review/the-grounds-of-welfare > accessed 25 February 2015 [16] RICHARD A. POSNER, ‘THE ECONOMICS OF JUSTICE’ (1981) < https://www.jstor.org/discover/10.2307/828232?sid=21105453566871&uid=2129&uid=60&uid=3&uid=70&uid=388953301&uid=2 > accessed 25 February 2015 [17] Lewis Kornhauser, ‘The Economic Analysis of Law’ (2011) < https://plato.stanford.edu/entries/legal-econanalysis/ > accessed 25 February 2015 [18] Louis Kaplow & Steven Shavell, ‘The Conflict Between Notions of Fairness and the Pareto Principle’ (1999) < https://www.researchgate.net/publication/24104346_Any_Non-welfarist_Method_of_Policy_Assessment_Violates_the_Pareto_Principle_Reply > accessed 25 February 2015 [19] LOUIS KAPLOW & STEVEN SHAVELL, ‘FAIRNESS VERSUS WELFARE’ (2002) < https://www.law.harvard.edu/faculty/shavell/pdf/32_J_Legal_Stud_331.pdf > accessed 25 February 2015 [20] JULES L. COLEMAN, THE PRACTICE OF PRINCIPLE: IN DEFENCE OF A PRAGMATIST APPROACH TO LEGAL THEORY (first published in 2001, Oxford University Press Inc., New York) [21] ibid [22] ERNEST WEINRIB, THE IDEA OF PRIVATE LAW (First Edition Published in 2012, Oxford University Press Inc., New York ) [23] Mark Geistfeld, ‘Economic Analysis in a Unified Conception of Tort Law’ (2003) < https://escholarship.org/uc/item/9wh2w92c# > accessed 25 February 2015 [24] ibid [25] ibid [26] ERNEST WEINRIB, THE IDEA OF PRIVATE LAW (First Edition Published in 2012, Oxford University Press Inc., New York ) [27] ibid [28] Robert Cooter, ‘Torts as the Union of Liberty and Efficiency: An Essay on Causation’ (1987) < https://scholarship.law.berkeley.edu/cgi/viewcontent.cgi?article=2301&context=facpubs > accessed 25 February 2015

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