Tort law serves as a deterrent to tortious behavior by allocating the damages caused by violating the rights of others. The liability principle applied by the court determines the distribution of damages and the deterrent effect of the tort, which is analyzed in law and economics to find the most efficient liability principle. The level of care and standard of care are used to determine whether the perpetrator and victim are negligent or not to allocate liability, and to find ways to effectively deter tortious behavior.
A tort is a violation of another’s rights that causes damage, and tort law functions to deter tortious behavior by allocating the damages caused by the tort to the victim and the perpetrator. Tort law plays an important role in realizing social justice and protecting individual rights. However, depending on which liability principle is applied by the court, the damages caused by the tort are distributed differently and the effectiveness of tort deterrence is different. Therefore, legal economics analyzes the liability principles applied by the court to find a liability principle that can effectively deter tort.
An important concept in analyzing liability principles for torts is the ‘level of care’ and ‘standard of care’. The level of care refers to the degree of attention that the perpetrator or victim pays to deter tortious behavior. The higher the level of care, the greater the cost of care, such as the time and effort required to pay attention, but the lower the probability of the tort occurring and the lower the damages resulting from the tort. The standard of care is the level of care set by a court to allocate damages from a tort between the victim and the tortfeasor. In general, the optimal level of care at which social efficiency is achieved is the point at which the sum of the cost of care to deter torts and the damages caused by torts is minimized. And since this is the level of care that can efficiently deter tortious behavior, courts set it as the standard of care. Based on this, we can analyze the effectiveness of the principle of liability for torts as follows.
Let’s look at liability principles that do not consider whether the victim is liable for the tort, but only whether the perpetrator is liable. Non-liability is the principle that a tort has occurred but the perpetrator is not liable for any damages to the victim. Strict liability, on the other hand, is the principle that the perpetrator is liable for all damages. These two doctrines are similar in that they do not take into account the level of care of the perpetrator when determining whether the perpetrator is liable for damages. In contrast, the doctrine of contributory negligence determines whether a tortfeasor is liable for damages based on whether the tortfeasor was negligent. In this case, negligence is defined as a failure to comply with the standard of care imposed by the court. Under the negligence doctrine, only the perpetrator is held to a standard of care, so if the perpetrator is negligent, he or she is fully liable, and if the perpetrator is not negligent, he or she is not liable.
When a court applies the non-liability doctrine to a tort, the tortfeasor is not liable and the victim bears all the damages, so the standard of care of the tortfeasor under the non-liability doctrine is very low. Therefore, the doctrine is not effective in deterring tortious behavior. Strict liability, on the other hand, requires the perpetrator to pay for all damages at all times, so the perpetrator’s attention level is very high. In this case, the tortfeasor’s level of care is guided to the optimal level of care where the sum of the cost of care to deter the tort and the damage caused by the tort is minimized, i.e., where social efficiency is achieved. And when the court applies the negligence principle, the perpetrator tries to comply with the standard of care set by the court in order to escape liability for damages. In the end, both the strict liability principle and the negligence principle are liability principles that can efficiently deter tortious behavior.
However, there are other doctrines of liability that consider the victim’s liability in addition to the perpetrator’s liability for the tort. Contributory negligence allows courts to impose a standard of care on the victim and define the victim’s failure to comply as the victim’s negligence, allowing the victim’s negligence to be used as a defense against liability for damages. When the negligence doctrine is combined with contributory negligence, the doctrine of contributory negligence applies first, meaning that if the perpetrator is at fault, he or she must pay for the damages in full. However, if the perpetrator’s defense is accepted, i.e., if the victim’s negligence is proven, the perpetrator is released from liability and the victim bears the full burden of damages, even if the perpetrator is at fault. As a result, contributory negligence can be said to be an effective deterrent to tortious behavior because contributory negligence, when combined with the negligence principle, which induces an optimal level of care for the offender, induces an optimal level of care for the victim.
Next, comparative negligence basically applies the principle of negligence, but it is characterized by imposing a standard of care on the victim. If the victim is not at fault, there is no liability, and if the victim is at fault and the perpetrator is not at fault, the perpetrator is liable. And if both the victim and the perpetrator are at fault, they share responsibility for the damages in proportion to the magnitude of their fault. Under this doctrine, both the perpetrator and the victim are held to their respective standards of care. Comparative negligence can hold both parties to a slightly higher standard of care because the more negligent party should bear more damages, even if both parties are at fault. Comparative negligence is therefore an effective deterrent to tortious behavior. This is distinct from the doctrine of contributory negligence, under which the victim’s fault is less than the tortfeasor’s, but the tortfeasor can still escape liability through a defense.
Finally, from a legal and economic perspective, the choice of the liability principle affects the economic efficiency not only of the courts but also of society as a whole. How the liability principle is applied can determine the efficiency of social resource allocation, which can contribute not only to deterring tortious behavior but also to reducing overall economic costs. Therefore, when choosing a liability principle, courts should consider economic efficiency and apply the most appropriate principle.
