Sunday, July 28, 2013

Pros and Cons of Tort Claims

Tort claims are commonly known as "lawsuits", wherein a person sues another for a tort, a wrong.  Living here in Botswana, where there are no tort claims, has made me think about the pros and cons of tort law.

There are no "cons" from the viewpoint of most attorneys.  "Tort Claims are the Fruit tree in the garden of an attorney" a young law student once remarked to me.  A lot of attorneys have made very good livings filing lawsuits on behalf of clients.  Sometimes the claims may be frivolous, sometimes not.

I sometimes do consulting for plaintiff's attorneys, and so I have made some money too, so I have some bias.  Walking around and seeing obvious hazards illustrates the problems of no tort claims.  On the other hand, tort claims add to the cost of doing everything.  I was once told that 80% of the cost of a ladder is liability protection.  Certainly auto insurance premiums are elevated because of torts.  I was told by the president of an arrow-manufacturing company that he pays $200k for a $2million dollars of coverage, with a $200k deductible.  That's some expensive insurance, which his customers must pay.

On the other hand, the threat of legal action makes us more careful to maintain property and mitigate hazards as much as possible.  It likely makes us more careful as drivers, shop owners, and vendors.

I guess there are philosophical lessons to be learned.  We need the threat of punishment to do what we ought to do.  When I sin there are two consequences:  1) the natural consequence of the bad decision, and 2) the pain of feeling separation from G^d.

The problem is, I just forget the cost.  How about you?

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