Constitutional Contract Law

Put simply, tort’ is a term used to describe an injury other than a breach of contract that the law will redress with damages. The proposition that tort law deters wrongful conduct and therefore should be used for this purpose has been empirically tested. Unfortunately, tort has been found inadequate in many respects.

Its historical deterrence role has been degraded by the widespread availability of insurance. While this assists in achieving compensation, it detracts from the important objective of deterrence because tortfeasors do not directly bear the full cost of their activities.

Tort law developed primarily as a means of maintaining the peace. In the 12th century writs of trespass and action on the case (later known as negligence), tort was treated as a complement to criminal law in protecting person and property from intentional and careless harm. This aspect of tort is evident in the remedy of injunction, which if disobeyed, can lead to imprisonment just as in a criminal proceeding.

As a means of corrective justice tort aims to restore a plaintiff to the position they were in before the injury, no more and no less. The deterrence element arises when loss-shifting from the victim to the tortfeasor takes place.

Once it has been determined that the loss was wrongful and the defendant was responsible for that loss, the transfer of material wealth to compensate for the defendant’s behaviour sends a signal to all future actors that such actions are unacceptable. Compensation and punishment may appear to be rolled into one, but deterrence is taken into account separately at the time of damages assessment by means of exemplary damages.

Thus, even if tortfeasors apply economic cost-benefit analysis and determine that the amount of payouts would be less than the cost of preventing a particular risk, a court has power to act in the interests of fairness by awarding punitive damages that go beyond compensatory damages.

Primitive tort law looked to causation rather than fault. In that sense, it was a strict liability system and encouraged maintenance of the highest standards. Fears over a dampening effect on economic activity led to the conception of fault’ as it is known today.

The tort system is not effective as a deterrent. Viewed in its broader social context, tort law complements institutional factors such as the media. But high levels of government welfare reduces the numbers of tort claims and weakens deterrent effects.

There should be a reduction in social welfare and a greater reliance on contract as a more efficient alternative to the tort system. Failing that, there is a need to remove caps on damages to make tort a more potent force for deterrence. Deterrence is the principle aim of tort; promulgation of the message that tort does not pay’ will eventually reduce victims, reducing the need for compensation and punishment. Finally, a balance must be struck between strict liability and negligence. While strict liability has greater deterrent effect, it comes at too great a cost.