Harry Potter and the Trouble with Tort Theory

Scott Hershovitz

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Imagine that upon graduation from Hogwarts School of Witchcraft and Wizardry, Harry Potter goes to law school. As a 1L, he takes torts from a professor with an economist’s view of the institution. She teaches Potter that tort law aims to minimize the sum of the costs of accidents and the costs of accident prevention. Tort law does this, she explains, by giving people incentives to take account of costs they impose on others.

Like many first-year students, Potter is enamored with economic analysis. He appreciates the elegance with which it accounts for central features of tort law, and he finds the normative theory underpinning it attractive. But the more enchanted Potter becomes with the economic account of tort law, the more disenchanted he becomes with tort law itself. “Tort law is awfully expensive,” he thinks. “Surely, there must be a cheaper way to reduce the costs of accidents.” Then, remembering that he is the world’s most powerful wizard, he raises his wand. Potter casts a spell that works like this. Every time a person imposes a cost on another that would be compensable by the tort system (say, by flying carelessly and knocking someone off her broomstick), the spell transfers a sum of money equal to the cost from the bank account of the injurer to the account of the victim and dispatches a message informing the injurer of the debit to his account and the reason for it. Potter eliminates the administrative costs of the tort system with one swoop of his wand, and the results are impressive. The spell pushes accident costs nearer their optimal level than the tort system, because all and only those who are liable are made to pay, they are made to pay immediately, and they cannot avoid paying by investing in lawyers rather than safety.

Potter’s spell does just what economists tell us tort aims to do. It minimizes the sum of the costs of accidents and the costs of accident avoidance, and even better, it does so at no cost to us.  Yet, even if we are concerned only with welfare, the shift from tort to Potter’s spell is not an across-the-board win. This is because tort law generates benefits beyond those that its substantive rules aim at. For example, tort litigation allows plaintiffs to discover facts about their injuries. If you wake up from surgery partially paralyzed, and the doctor will not answer your questions, your only recourse may be to file a lawsuit alleging malpractice.  The answers plaintiffs get through discovery are a collateral benefit of tort law, which Potter’s spell, for all its virtues, would not replicate.

To know whether we should prefer Potter’s spell to tort, we would need an accounting of all of tort’s collateral benefits. However, even that would not be enough to allow us make an informed decision whether to take Potter up on his offer to cast his spell; we would also need to know what is on the other side of the equation. The spell eliminates administrative costs, but tort has other costs—call them collateral costs­—which the spell might mitigate too. Tort liability, for example, may discourage doctors from disclosing injuries they cause. Potter’s spell would not, as hiding medical errors would not be a way of avoiding liability.

One suspects that if we had a full accounting of tort’s collateral costs and benefits, we would prefer Potter’s spell to tort. The savings Potter promises are simply staggering.  But the point of this thought experiment is not to ask whether we’d be better off with Potter’s magic than we are muddling through on our own.  Thinking through the calculus necessary to evaluate Potter’s spell as an alternative to tort reveals a problem with the standard economic analysis of the institution.  The efficiency of any set of tort doctrines is a function of all of the costs and benefits it would generate if implemented. Yet economists focus their analyses almost exclusively on accident costs, costs of care, and administrative costs, overlooking tort’s collateral costs and benefits.

The failure of economists to grapple with tort’s collateral costs and benefits is not a small problem. Indeed, the oversight calls into question just about everything we think we know about the efficiency of tort doctrine. Consider tort damage awards. In many jurisdictions, plaintiffs may recover damages intended to compensate for lost enjoyment of life, sometimes known as hedonic damages. That makes sense, on the traditional view that “optimal ex ante deterrence is best served by requiring injurers who are held liable to pay the actual costs they have imposed.”1 However, Sam Bagenstos and Margo Schlanger argue that “courts should not award hedonic damages for disabling injuries,”2 because they reinforce the view that disability is a tragedy, and thereby make it harder to eliminate “the physical, social, and attitudinal barriers that make some physical and mental impairments disabling.”  If Bagenstos and Schlanger are right, hedonic damages have a collateral cost—they make the disabled worse off. It may, therefore, be optimal for the tort system to provide less deterrence than would have seemed optimal were those costs and benefits left out of the calculus.

This demonstrates that what counts as optimal deterrence is a function of collateral costs and benefits, in addition to accident costs, costs of care, and administrative costs.  And we would find something similar with any tort doctrine we looked at.  The conclusions of any economic analysis that does not account for tort’s collateral costs and benefits are suspect, as the rules that seem efficient when the collateral effects are not factored in may be inefficient when they are.  The result is that economists have a lot of work to do. If they want to place the economic analysis of tort on firmer footing, they have to gather information about tort’s collateral consequences. That will be hard, but the difficulty is not sufficient reason to carry on ignoring them. Until economists do the necessary work, economic analysis has little more relevance to the real world than Harry Potter’s spell. It is a fun game, but it neither tells us whether the tort law we have is efficient, nor what an efficient tort law would look like.

*   *   *

That is bad news for economists, but they are not alone.

Imagine again that Harry Potter leaves Hogwarts and heads to law school. This time, Potter takes torts from a professor who has a corrective justice theorist’s view of the institution. She tells Potter that tort law enforces a moral requirement that those who infringe the rights of others repair the wrongful losses they cause. Once again, Potter is taken with his professor’s account of the institution, but he is struck by the thought that tort law is awfully expensive and slow. “Surely,” he muses, “there must be a cheaper, faster way of doing justice between wrongdoers and their victims.” Then, remembering that he is the world’s most powerful wizard, Potter raises his wand. He casts a spell that works like this: every time a person causes a loss compensable by the tort system (say, by carelessly cracking someone else’s crystal ball), the spell transfers the precise sum of money necessary to repair the loss from the bank account of the injurer to the account of the victim.

Potter’s spell does just what many philosophers tell us tort law aims at—it enforces duties of repair, and it is fast and free.  However, even if we are concerned only with justice, we should have reservations about Potter’s spell. Though it is an open question whether Potter’s spell would do more justice than tort, tort does justice in ways that Potter’s spell does not.

Think for a moment about the ways in which we expect one another to respond to wrongdoing apart from the law. Imagine that Smith and Jones have agreed to meet for breakfast. Smith forgets to set his alarm and sleeps straight through the appointment. When he wakes up well past the appointed hour, what ought Smith to do? Well, it is too late for Smith to do what he promised—have breakfast with Jones at the agreed upon time. And it is probably too late for Smith to have breakfast with Jones at all, at least that day. But that does not mean that Smith should simply roll over and go back to sleep. Even though he cannot keep his commitment to Jones, it still makes demands on him. Once Smith realizes what he has done, he ought to call Jones, explain that he overslept, and apologize for missing breakfast. Jones, for her part, would be within her rights to demand an explanation and apology should she reach Smith first.  It is also possible that Smith should compensate Jones, but there is little doubt that explanation and apology are in order whether or not compensation is.  Of course this is a trivial case, but it is representative; explanation and apology are common ways of making amends for serious transgressions too.

Given that we expect more than compensation from those who wrong us, it should not come as a surprise that tort does more to respond to wrongdoing than enforce duties of repair.  Through pleading and discovery, defendants are required to explain themselves to those who charge them with wrongdoing.  And though apologies are not a tort remedy, the litigation process offers a second-best substitute. A plaintiff’s verdict assigns responsibility to the defendant for the plaintiff’s injury, giving her what she has improperly refused to accept on her own.

Once again, the point of this thought experiment is not to decide whether Potter’s spell would do more justice than tort.  The point is to show that the philosopher’s account of tort is incomplete, just like the economist’s. Philosophers treat lawsuits as instruments for determining whether the defendant committed a wrong for which she must compensate the plaintiff. If Potter could enforce duties of repair with a wave of his wand, so much the better. But there is more in the way of justice at stake in a tort suit, and philosophers’ failure to appreciate that means that they have missed important contributions that tort makes to our lives.

*   *   *

The charm of Harry Potter’s spell is that it does tort law without lawsuits; but lawsuits, it turns out, are part of the charm of tort law. The failure of economists and philosophers to appreciate that has led both to offer theories of tort that are radically incomplete. Economists have ignored tort’s collateral costs and benefits, and because of the oversight we must approach every assertion they make about the efficiency of tort doctrine with a healthy skepticism. Philosophers have missed the fact that tort does more to respond to wrongdoing than enforce duties of repair, and as a consequence, they have given us an impoverished theory of tort. That is the bad news. The good news is that now that Potter has helped us see the trouble with tort theory, we can set about fixing it. 

Acknowledgments:

Copyright © 2011 Stanford Law Review.

About the Author: Scott Hershovitz is an Assistant Professor at the University of Michigan Law School.

Citation: Scott Hershovitz, Harry Potter and the Trouble with Tort Theory, LEGAL WORKSHOP, Aug. 12, 2011, https://legalworkshop.org/2011/08/12/harry-potter-and-the-trouble-with-tort-theory

Based on: Scott Hershovitz, Harry Potter and the Trouble with Tort Theory, 63 STAN. L. REV. 67 (2011).

  1. Samuel R. Bagenstos & Margo Schlanger, Hedonic Damages, Hedonic Adaptation, and Disability, 60 VAND. L. REV. 745, 789 (2007) (emphasis deleted) (citing Steven Shavell, FOUNDATIONS OF ECONOMIC ANALYSIS OF LAW 236-37 (2004)).
  2. Id. at 797.

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