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Book Review
| Kenneth S. Abraham, The Liability Century: Insurance and Tort Law from the Progressive Era to 9/11, Cambridge: Harvard University Press, 2008. Pp. 274. $45.00 (ISBN 978-0-674-02768-8).
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| Each year, Americans spend about $200 billion on the system of insurance claims and lawsuits that makes up the law of torts. This is about the same amount we spend on old-age pensions in the U.S. Social Security system. And it amounts to about 2 percent of the nation's gross domestic product. Tort law in America may operate through the far-flung and decentralized offices of insurance claims adjusters, trial lawyers, and county courthouses, but it is a massive public policy system. |
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Kenneth Abraham's masterful new book offers an illuminating guided tour through the labyrinthine and arcane paths by which tort law has come to play such a distinctively important public policy role in the United States' system of accident law. In particular, Abraham shines a powerful light on one of the most significant features of the American system of accident law: the relationship between tort law, on the one hand, and insurance, on the other. As Abraham sees it, the two have developed hand in hand since their modern beginnings a century ago. Tort liability has spurred the expansion of liability insurance, which in turn has licensed further liberalizations of tort liability. The dynamic interactions of the two fields, Abraham argues, explains the startling speed with which tort law—a backwater of American law as recently as the 1930s and 1940s—has become one of the most prominent and fiercely contested fields of legal practice in the American legal system. |
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As Abraham keenly notes, the field of tort law is really a group of subfields. Workplace injuries, automobile accidents, medical malpractice, and product injuries arise in different social settings. Each poses a different kind of policy problem. Abraham treats each of these areas in turn, deftly sketching the relationship between tort liability, on the one hand, and insurance institutions, on the other. And in each area, Abraham is careful to note the social functions of tort law and insurance. He observes that in areas such as automobile accidents and products liability, tort law has been transformed in the twentieth century into an ersatz insurance institution: a mechanism for spreading the losses from accidental injury. At the same time, liability insurance has begun to look like tort law. Insurers work to improve loss prevention to manage their policy risks, operating as the shock troops of tort law's regulatory ambitions. |
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Tort and insurance have virtues as vehicles for public policy, operating as mechanisms for loss spreading and risk minimization. But Abraham is also keenly attentive to the systemic dysfunctions of tort and insurance. Using torts as an insurance system is horribly expensive. It creates perverse and regressive cross-subsidies in products markets, as poor consumers unknowingly subsidize the insurance of wealthier consumers of the same mass market product. And the loss-spreading function of insurance undercuts the safety effects of tort liability by diffusing the costs of unduly risky behavior. |
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All of this is indispensable stuff for anyone interested in scaling the forbidding terrain of twenty-first century tort law, and Abraham is tort law's most renowned and sure-footed Sherpa. As a historical account of how tort liability changed over time, the book's focus on the intersection between torts and insurance inevitably leaves the reader with only a partial picture of the history of tort law. But as an analytic account of the policy choices we face in the law of torts and insurance as we move forward into the twenty-first century, there can be few better places to start than with Abraham's book. |
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| John Fabian Witt
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| Columbia University |
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