Accident Liability Reconsidered: The Impact of Liability Insurance

During the formative period of most of the current doctrines of negligence law, liability in tort was looked on as shifting a loss that had already occurred from one individual to another--generally from the person who suffered the loss to the person who caused it. It is against the background of this way of looking at things that nearly all of our conventional reasoning about the objectives of tort law has developed and that nearly all of our conclusions have been drawn and our rules formulated. But society has no interest in the mere shifting of a loss between individuals just for the sake of shifting it. The loss, by hypothesis, has already happened. A has been killed, or his leg broken or his automobile smashed up. If the only question is whether B shall be made to pay for this loss, any good that may come to society from having compensation made to one of its members is exactly offset by the harm caused by taking that amount away from another of its members. In that view of the problem there had to be some additional reason for a defendant to compensate a plaintiff for his injury before society would compel compensation. These reasons might be (a) a feeling of what is fair or just; (b) a desire to discourage dangerous conduct, or of course a combination of both