Document Type
Article
Publication Title
Law and Contemporary Problems
Publication Date
2014
ISSN
0023-9186
Page Number
135
Keywords
torts, liability insurance, law and economics, risk management, tort liability, damages, Calabresi
Disciplines
Law | Law and Economics | Torts
Abstract
Calabresi’s theory of tort liability (1961) as a risk distribution mechanism established insurance as an objective of tort liability. Calabresi’s risk-spreading concept of tort has provided the impetus for much of the subsequent development of tort liability doctrine, including risk-utility analysis and strict liability. Calabresi’s analysis remains a powerful basis for modern tort liability. However, high transactions costs, correlated risks, catastrophic losses, mass toxic torts, shifts in liability rules over time, noneconomic damages, and punitive damages affect the functioning of tort liability as an insurance mechanism. Despite some limitations of tort liability as insurance, tort compensation serves both a compensatory and deterrence role. Tort liability retains a valuable risk-spreading function in many situations and may be superior to alternative institutional mechanisms in fostering incentives.
Recommended Citation
Joni Hersch and W. Kip Viscusi,
Assessing the Insurance Role of Tort Liability After Calabresi, 77 Law and Contemporary Problems. 135
(2014)
Available at: https://scholarship.law.vanderbilt.edu/faculty-publications/692