Social Insurance and Tort Liability: The Problem of Alternative Remedies

Beginning with workmen\u27s compensation in 1910 and getting great impetus from the depression of the 1930\u27s, social insurance legislation has grown apace in America. Such legislation is based on a faith that the general welfare is best served by protecting individuals from the consequences of pecuniary loss through such vicissitudes of life as accident, old age, sickness, and unemployment. The chief pecuniary losses are destruction of earning power and the expenses of medical care and cure and rehabilitation. Under these schemes, such losses are met (or partly met) without regard to questions of personal fault in causing them and are distributed over a wide segment of society. So much all this legislation has in common, but beyond this there are differences. The broadest possible scheme would largely disregard the source of loss and distribute its cost either by general taxation or by tax contributions levied on a flat rate upon a very large group (e.g., all employers). The philosophy of workmen\u27s compensation, on the other hand, is that losses should be allocated to the enterprise that creates the hazards that causes the losses, and ultimately distributed among those who consume its products. Under such a system there is room for private insurance, and most of our states permit it to be handled that way. Still a third type of scheme seeks to distribute its costs among its beneficiaries, much as voluntary accident or health insurance does. And these variant notions are often found in combination