No Fault Insurance Means No Moral Responsibility

Ridgway K. Foley, Jr., a partner in Souther, Spaulding, Kinsey, Williamson & Schwabe, practices law in Portland, Oregon. Portions of this article appeared under the title "The Doctrine of Fault: The Foundation of Ex Delicto Jurisprudence" in 36 Ins. Counsel Journal (No. 3) 338346 (July 1969).

Legal systems derived from the Anglo American tradition historically impose liability upon a civil wrongdoer in a manner consistent with the premise that each man, being a morally responsible agent, carries with him the obligation to endure the consequences of his own choices and conduct. In legal parlance, a "tort" consists of a civil wrong done by one man (or association of men) to another, either intentionally or negligently. Thus, if I strike you with my fist (battery) or run over your foot unintentionally with my automobile (negligence), the law decrees that I should reimburse you, to the extent of your injury, in money damages because I was determined, by judge or jury,’ to be at fault and responsible for my acts. This system, which has worked well historically, becomes senseless if men are viewed as creatures not exhibiting the ability to choose, if man is not a purposive, acting being. In invidious ways, the civil law reflects the statist tendency generally permeating society. This essay proposes to expose one aspect of this illiberal trend.

Introduction: Voluntary Means of Risk Distribution

Considering man’s almost infinite capacity to inflict devastating civil injury upon his fellows, with catastrophic results to the victims and to the tortfeasor’s (negligent actor’s) pocketbook, it should come as no surprise that civilization has witnessed a profusion of risk distribution plans and techniques. Private insurance forms the most common and acceptable plan, from the point of view of a voluntarist society. For a stated premium, XYZ Insurance Company contracts with actor A that if A carelessly injures another individual while operating A’s automobile, or any other motor vehicle, within a given period of time, XYZ will not only defend any lawsuits commenced by the injured party against A but also will pay any money judgment the victim might recover from A up to a stated limit. The type and terms of these contracts in a free society find limits only in the imagination of mankind. The XYZ Insurance Company stays in business and makes a profit by choosing its risks carefully, by prompt and fair administration of claims, and by institution of safe driver campaigns and periodic vehicle inspections. A gives up part of his stored up value (capital) to XYZ in exchange for the promise of the latter to distribute the risk of A’s momentary inadvertence among others in society. The victim appreciates the scheme for he is much less likely to come up with an uncollectible judgment against an insurance carrier compared to an individual actor whose assets may be limited.

1. Incipient Revolution in Automobile Insurance and Tort Law

These myriad private insurance plans serve a free society well. As in other enterprises, state intervention disrupts the logic and symmetry of liberty and causes dislocation of resources. In the negligence tort insurance field, state dislocation appears most often in the form of state mandated insurance plans where (1) every actor is required to carry liability insurance and (2) every policy is required to contain certain governmentally imposed provisions. Such policies are often termed "no fault" insurance or "basic protection" plans.

Society cannot rationally demand that every citizen carry insurance. The typical rationale asserts protection of potential victims as a reason. Yet destruction of freedom represents too high a price to pay for potentialities which may never come to pass. If an actor wishes to self insure his own conduct, he ought not be denied this choice.

Likewise, the state should not fit each insurance policy issued onto a Procrustean bed. The beauty of private risk distribution, from its onset at Lloyds Coffee House in London, rests in its infinite variety and man’s ability to tailor coverage to the needs of the day. Policies impelled by the state must be geared necessarily to the lowest common denominator, disparaging insured and victim alike. The actor loses because his freedom flies away and he holds a mandated policy not necessarily representative of his needs and wants, for which he pays a premium beyond that required by the free market. The victim loses because he often finds tortfeasors covered only to the statutory minimum limits, limits which may not fully recompense him for his injuries.

The last decade bears witness to increased attempts to initiate compulsory automobile liability insurance on either state or federal governmental levels under the euphemism of "no fault" insurance. The term misleads. These plans — none of the proponents seem able to agree with one another as to names, nature, or content — represent an immoral and coercive inroad into one of the few remaining citadels of free choice. The plans, by whatever label, are no responsibility insurance plans and should not be dignified by any more prestigious label.

Because of the hodgepodge of proffered plans, "no fault" offers a difficult test of definitional and analytical ability. Simplified, the system would require each individual to carry liability insurance which would reimburse the insured in the event of injury by another up to a specified amount for out of pocket expenses (e.g., medical bills, drugs, lost wages) and (under some plans) a limited specified amount for "pain and suffering" and future loss. No recovery could be effected from the negligent actor, no matter how heinous or careless his conduct, no matter how much harm he inflicted; tort actions against a wrongdoer would be abolished. Under the present system, the tort victim may recover both his out-of-pocket losses and his general damages (pain and suffering, future loss) without limit from one who causes him harm.

2. Inappropriate Reasons Advanced for "No Fault"

This essay focuses upon the myriad "no fault" plans offered but the focus rests upon one aspect most often ignored — the philosophical or moral reason disparaging this intrusion into personal freedom. Nevertheless, at the genesis it seems appropriate to devote cursory attention to some of the reasons most commonly advanced in support of "no fault" insurance plans.’‑

(A) Unclog the Court: Proponents of no fault argue that automobile injury litigation clogs the courts, resulting in unconscionable delays, and that a new and speedy system is required. This claim lacks veracity. Overcrowding generally results from inefficient administration of justice, lazy judges, delaying counsel, and the great volume of non automobile claims including Workmen’s Compensation appeals, criminal cases and the like. About 90 per cent of all automobile claims are settled without suit and less than 2 per cent proceed to verdict; approximately 15 per cent of the court’s time is concerned with vehicle litigation.³ Antitrust cases and protracted criminal proceedings eat up much greater amounts of juridical time. Moreover, substitution of no-fault does not guarantee the end of controversy — victims will still contest about existence and extent of coverage, much as has occurred in Workmen’s Compensation litigation’ in the past half century. Compensation proceedings are normally contested outside the regular court system (with only appeals to the courts remaining) but the iceberg below the waterline manifests a plethora of hearing officers, evaluators, and investigative personnel, quite as tedious, slow, and cumbersome a system as the worst courts of general jurisdiction. One need only look to Multnomah County, Oregon, serving a metropolitan area of approximately one million persons, to put the lie to this argument: the average length of time between filing a case and time of trial rarely exceeds 4 or 5 months. Speedy justice can be done without jarring the system or denigrating individual liberty.

(B) Insurance Rates Must Be Reduced: Proponents claim that rising insurance premiums can be lowered by no-fault plans. Since cost increases largely reflect a governmental increase in the money supply and increased jury awards which reflect, in turn, the inflationary trend, this reason lacks merit.

Furthermore, states with modified no-fault plans experience no dramatic cost reduction. Massachusetts, the first state to adopt such a scheme, "has suffered a severe economic recession as a result of this socialization of automobile liability insurance" according to Kathleen Ryan Dacey, Assistant District Attorney for Suffolk County.⁵ Moreover, the Massachusetts experience demonstrates once again that "there ain’t no such thing as a free lunch": the burden has been shifted and costs continue to skyrocket concomitant with increased losses and governmentally sponsored inflation. Losses may be shifted between kinds of insurance carriers (e.g., from auto liability insurers to health and accident insurers) but someone pays the piper under no-fault

(C) Fault System Discriminates Between Victims: Proponents contend that in roughly equivalent cases, some claimants recover substantial payments, while others receive little or nothing. Yet this fact, if true, does not justify trash canning a system which respects moral choice and has worked well for decades. The entire premise of this argument fails for, properly viewed, the cases cannot be roughly equivalent or they would have been treated as such. The parties, or the judge, or the jury, decided that case A deserved one treatment and case B deserved another. The charm of a flexible system lies in its adaptability and the fact that it works well in a majority of situations.

(D) The Lawyers Get Rich in the Fault System: Proponents claim that most claimants’ cases in the fault milieu proceed under a contingent fee arrangement where the lawyer takes a percentage of the award if successful and nothing if the case is lost. Actually, the plaintiff’s lawyer may suffer an out-of-pocket loss when he advances costs for deposition reporters and expert witnesses for an impecunious client.7

More saliently, the contingent fee system effectively opens the door for claimants to participate in the system even if they lack funds. Absent such a plan, some injured persons would be forced to deal with their adversaries sans lawyers. Here, they diffuse the risk of loss by employing a professional who takes part of the risk. And, almost every lawyer around (and there are a great many around these days) would be more than happy to accept employment in bodily injury cases on a straight time basis where the client pays the lawyer, win or lose, on an hourly basis for the time actually expended on his behalf.

(E) Is the Fault System Inefficient? Proponents argue that the inefficiency and high overhead of the fault system costs too much, and too little of the claim dollar filters down for the victim.

In the first place, the same can be said for much more complex kinds of legal claims: security law violations, professional malpractice, products liability claims. Why single out automobile bodily injury claims for different treatment?

In the second place, recorded history does not provide a single example of a governmental institution which operated a more efficient and less costly operation than a private concern; there is no need to expect lightning to strike the automobile insurance field. Recur to Workmen’s Compensation claims: any fair analysis over the years will reveal that the overhead has not decreased with the imposition of the government system.

3. Advantage of the Present System.8

An individual may seek insurance or not as he sees fit. No-fault would negate this freedom of choice.

An injured party may recover for his or her total loss — for all expenses, for permanent injuries, for disfigurement, for grief. No-fault would impose a rigid and limited recovery.

Fault concepts recompense all persons whether employed or not. One who is not working may recover little or nothing under many no-fault plans; the retiree, the housewife, the college student, all are penalized.

The current system tends to charge premiums and distribute risk based on likelihood of harm. No-fault not only encourages bad driving and negligent conduct but also shifts the bad driver’s cost to the good driver. It discriminates against commercial vehicle owners, against the lower salaried persons who cannot afford maximum insurance coverage, and against those producers who earn more than the maximum. In short, it discriminates against all who fail to fit Procrustes’ bed.

Today, one can present his claim in court, favored with a constitutional right to trial by jury. No-fault would take away the right to have one’s peers decide blameworthiness.

4. Retention of the Fault Concept —A Moral Reason

The reasons advanced for no-fault will not withstand rigorous scrutiny. A system which has withstood the test of time, one which serves a civilization well in most cases, should not be summarily discarded. Yet beyond these reasons exists a much more compelling rationale impelling retention of the present system of personal responsibility — a moral reason which supplies the justification for placing the burden upon the actor. The remainder of this article considers various aspects of this rationale.

As discussed at the outset, a plethora of currently emerging plans seek to revolutionize the settlement of automobile accident claims and, incidentally, to ravage traditional tort concepts. These suggestions vary in detail but are linked by two common denominators: a drastic alteration of tort law by substitution of liability without fault (enterprise liability), and imposition of new, involuntary methods of doing business upon the insurance industry. While the panoply proffered by the theorists of change contain many proposals which are beyond the scope of this paper (alteration of the doctrine of contributory negligence, change of the collateral source rule, compulsory "basic protection" insurance with optional overlays for additional protection are common incidents) literature in the field abounds for the interested reader.9

5. Check Your Premises: Beware of Professors Bearing Plans

The concept of fault must be retained; it would be folly to alter the foundations of our tort system. The attack levied is nothing less than an assault upon the fundamental axioms of individual liberty.

The fault system ultimately rests upon the tenet of individual responsibility for personal action. If an individual is capable of self-determination, and is limited only by his finiteness and the consequences of his own volition, then it follows that the results of human conduct must be visited upon the actor. If one fails to conduct his activities carefully, and as a result injures another, the negligent actor should reimburse the victim for his loss.

These, then are the premises of the fault system of ex delicto jurisprudence: man is a thinking, acting, creative being.¹⁰ Since no sound basis exists to exalt one man’s judgment over that of another where the choice pertains to the affairs of the latter, fairness and common sense demand that, as far as possible, each person be allowed to determine his own destiny. To this end, man reaches his highest level of creativity and productivity when his creative processes are unhampered by external restraints imposed by other men, acting singly or cooperatively. The free man, however, must bear the burden of his liberty, by accepting the legal, as well as the axiological, burden for his conduct. Self-determination requires self-restraint and personal responsibility.¹¹

Oddly, the casualty insurance industry itself is rent asunder by countervailing tenets and inharmonious plans for change, specifically in the field of automobile liability insurance protection.¹² Elimination of the fault concept and substitution of compulsory state sanctioned insurance will destroy an industry which must ultimately thrive or wither upon the basic precepts of private property, limited government, free enterprise and individual responsibility. A voluntarist system permits the insurer to utilize its ingenuity in private risk diffusion by encouraging tailored coverage to fit specific individual needs.

6. Limitations Inherent and Apparent

Two inquiries stand forth: (1) Does any justification exist for treating automobile accident claims differently from other civil injury claims? (2) Would removal of the fault doctrine also obviate deterrence to irresponsible conduct?

Empirical justification was sought for support or assault on these propositions. The undertaking proved fruitless, although there is general evidence available that legal sanctions do affect human behavior in the "desired" (coerced) direction." One searches in vain for reports, studies, charts, graphs, statistics or analyses which "prove" that sanctions under the fault system deter misconduct or that automobile accident cases merit disparate treatment from other accidents.

Moreover, a review of the leading proponents of enterprise liability and "basic insurance protection" reveals a similar lack of usable empirical data; the advocates of change are no better prepared to support their contentions than are defenders of the faith.

As a result, each advocate must assert his proposition and curry support by arguments. Included in the rationale are deductions emanating from assumed empirical proof of the underlying pillars of both doctrine and anti-doctrine.

For example, Flemming James, Jr., denigrates personal blameworthiness in the field of accidents.¹⁴ However, the psychological studies cited in support of his grandiose comments are limited in value, diluted by age, and subject to criticism as to their underlying premises.¹⁵

In final analysis, the issues presented may not lend themselves to "proof" under our present state of knowledge. But that does not inhibit a choice, for the opposing arguments can be analyzed with a view to determine which empirical assumptions most nearly accord with reality.¹⁶

7. Differential Treatment Justified?

No sound reason exists for fragmenting tort law into accident categories.

If negligence "torts" are posited as conduct of the same generic type, then no logical reason appears for segregation and discrimination between the negligent automobile operator and the negligent homeowner who fails to maintain his back steps.

Certainly, as Prosser has indicated, definition and classification of "torts" is not so simple; indeed, it might be less complicated to compartmentalize the various torts as fields of law instead of parts of the same field.¹⁷ Notwithstanding this insight, there is no substantial difference between negligence torts; there is no valid reason to distinguish between negligent operation of an automobile, negligent omission to repair the back steps, and negligent ignition of a neighbor’s hay field.

If there is no substantial distinction between various kinds of negligent conduct, then each tortfeasor should be treated identically, and not favored or disfavored merely because he happens to drive an automobile. Equal treatment of tortfeasors and victims in negligence cases is demanded if the statement "we are a government of laws, not of men" is more than a mere shibboleth, and if" equal protection of the laws" possesses any substantive meaning.

From the victim’s perspective, there is nothing inherently different whether he is injured by auto, by tripping down some stairs, or by a negligently caused conflagration. If a tortfeasor’s conduct is no more nor less reprehensible and the opportunity for harm to the victim is substantially identical, no logical reason appears for discriminatory treatment.

No reason exists supporting differentiation between automobile accidents and other claims. There is no difference meriting diverse treatment from the perspective of victim or tortfeasor. Indeed, it seems unjust and non-egalitarian to accord different sanctions under different rules based only on the instrumentality of the accident.

Nonetheless, there have been proponents of separatism. The advocates of the Keeton O’Connell-type plans, in various guises, fit this mold. One of the more candid writers is Professor Flemming, who advocates retention of the present system for the "residuary area of injury incidental to ordinary, commonplace activities."¹⁸ In this posture he aligns himself with Professor Ehrenzweig, who favors continued conventional negligence rules for "backyard cases" involving little people.¹⁹

No attempt will be made at this juncture to delineate the various social insurance plans, since each varies with the program of the author. Generally, the avant-garde tendency is to carve out particular areas for specific rules, and to leave a residual area for the “little people" to be governed by "conventional" (semantically unclear) negligence concepts. Among the areas most commonly segregated for special attention are automobile accident claims and product liability actions.

What basis exists for specifying that products liability or automobile accident claims shall constitute the areas for blanket "compensation without fault" treatment? In all substantial premises, the justification is identical to the rationale of "enterprise liability." The arguments advanced (including appropriate variations) are nothing less than the juridical equivalent of the fuzzy political thinking which dominates statist political philosophies.

In brief, the enterprise liability proponents suggest that in specified categories (e.g., auto accident and products liability) the victim is unable to protect himself (a questionable premise considering the availability of individual insurance plans^²º and the ability of the individual to avoid dangerous situations), and the enterprise inevitably takes its toll of human sacrifices; therefore, having made the determination that it is a socially utilitarian enterprise with benefits accruing to the enterprise and "society," the enterprise or society (i.e., "the not at fault portions of society who pay taxes") should foot the bill for the unfortunate victim. Large enterprises are able to diffuse losses into relatively palatable chunks, through liability insurance or because of mere size. The cost is allocated to the overhead of the business (but the advocates forget conveniently that the ultimate payment is made by the consumer). The innocent victim ²¹ may have to seek welfare or leave his family destitute through no fault of his own unless the enterprise or society pays him. Isn’t it better that someone else (or many someone elses) pick up $5 (or $50, or $5,000) to ameliorate his loss? Let’s all distribute the risk (let’s all soak the rich). The mind boggles at the fallacies of enterprise liability. A complete dissection of the deception requires effort beyond the temporal and spatial limitations of the treatise.^2² Some of the more flagrant trickeries in "enterprise liability" are obvious:

(1) Is the victim "innocent"? Is it not just as likely that in a given number of cases the injured party is at least partially at fault? Perhaps he was participating in a dangerous but socially useful activity too; shouldn’t he pay for his loss because it is part of his "overhead" and should be economically allocated? In only a few cases are we able to make the assumption that the claimant is truly innocent; only in these cases is the term "victim" semantically valid. In the disputed case, this very value judgment may only occur after the fact of trial.

(2) If the loss is to be diffused, who decides the mode of diffusion? The Court? The legislature? The payer or the recipient? Who has the moral right to decide that C should pay A’s loss: A, B, or C? or ABC? (Notice that ABC can outvote C.)

(3) Is it true that those who benefit from an industry would bear the loss under any or all of the plans suggested for risk diffusion? It is much more likely, given the current scheme of things, that the individuals who bear the loss will be people who have little or no contact with the particular industry, who are faultless in their own conduct, who merely wish to be left alone, and who happen to possess the resources to pay the tab (and lack effective elective voice to prevent plunder of their property). The looter philosophy fails to discern this particular evil which is apparent and inherent in any kind of risk adjusting or social engineering.

Underlying all statist postulates and proposals is the arrogant assumption that A can better live B’s life for B than B can, and the concomitant disregard for the fact that the user benefits most from increased productivity and efficient use of natural resources.

(4) Is it not more consonant with freedom, with the maximization of individual choice and individual responsibility, to permit variation according to individual tastes? There are available or possible, in infinite variety, private insurance plans for personal private protection of the "victim."²³ He can bond with others and seek protection from a group insurer (e.g., major medical coverage, accident and health insurance, disability coverage, income replacement insurance); he can secure private individual health, accident, disability, life and other types of coverage in infinite combinations and kinds. If insurance is not presently available in the desired form, it can be created in a free society. If protection of the individual and his family are important, shouldn’t the individual protect his own instead of seeking state imposed protection? The sole reason for exhorting state activity in any case is simply monetary (cost shifting): A wants the state to act so that A (or B for whom A is concerned) need not pay the cost; instead C will pay most of the cost. It is unjust to penalize the provident; a free system allows free choice to insure or not to insure. Under a compulsory system, payment by the provident tends to benefit the improvident, or those persons who choose not to commit part of their assets to protective devices.

(5) Enterprise liability conveniently overlooks economic reality. As a major premise, the advocates assert that the entrepreneur gains a profit from his enterprise and must pay for the human loss factor involved. A profit motive per se is not evil. The individual engaged in the industry and the consuming public also gain from the enterprise, often more than the entrepreneur. Any other conclusion is either intellectually dishonest or dismally stupid. There is a certain risk in just living and there is no reason to diffuse that risk. The end result of a nationalization scheme would be a distinctly lowered standard of living which would adversely affect the "innocent victims" in their roles as consumer, employee, and inhabitant of the country.²4.

The fault system does not guarantee compensation to all accident victims; it was never intended to effect that result. Each citizen must bear the risk of some loss, without shifting it to third parties. Man can properly diffuse losses by contract or voluntary engagement; he ought not be able to mulct his blameless neighbor unless that neighbor specifically caused the consequences by socially undesirable actions.

The success of the segregation attempt in singling out automobile accident claims for basic ("socialistic" or "nationally imposed") protection, must rise or fall upon the enterprise liability concept in one of its guises. Enterprise liability does not accord with good morals, and fails to consider relevant empirical assumptions which can be perceived by any observant individual possessing a modicum of common sense. Hence, the doctrine is empty.

The retention of a traditional negligence system of identical substance for all types of claims is recommended primarily by the egalitarian concept that each person engaging in substantially similar conduct should, for reasons of justice, be treated similarly. No sound reason exists to deviate from this norm.

8. The Deterrent Factor

Fault based tort liability deters dangerous, irresponsible and socially undesirable conduct. Adoption of a basic protection plan for automobile claims will delete the fault factor from this segment of tort law. Obviation of the fault concept will thereby attenuate or wholly destroy the deterrent factor. Deterrence is an admirable and valid goal of civil jurisprudence and should not be destroyed. These assertions, in simple terms, state the fundamental premises of the traditional tort doctrine. If each statement is true, then it follows that the basic protection automobile insurance plans should be dismissed out of hand.

Each premise has been challenged by articulate purveyors of the liability without fault doctrine. Deterrence has been downgraded or ignored as a reason for imposing responsibility upon an individual for his conduct.

First, what is the position of the advocate of the fault system, stated in simple terms? It is truly no more than an a priori tenet that reward and punishment meted out by a system of liability based upon fault serve (1) to deter the careless actor from acting carelessly again, and (2) to exemplify the pain attendant to carelessness so as to deter others within the ambit of knowledge from doing the same or similar act.²⁵

If I know that it is foolhardy to drive an automobile through the streets of a metropolitan area during business hours at 80 miles an hour, and if I further know that in so conducting myself I hold in my hands the lives and properties of others, as a moral man I may channel my conduct, thwart my own desires and slow my speed to a reasonable pace. But moral suasion may not be enough. If I further know that I am responsible to other parties whose lives, liberties and properties are damaged or destroyed by my unreasonable conduct, and that the law will sanction their claims against me, hopefully I will be persuaded to act more prudently. Moreover, my neighbor, who might like to join in a race through the center of town, will also be dissuaded of the wisdom of such an endeavor if he sees that I am forced to pay a strict penalty to a person who is injured by my misbehavior.

In order for deterrence to work satisfactorily, it is necessary (1) that the standard be clearly specified, if not at the penumbra then at least at the core, and (2) that the penalty be sufficiently severe in contradistinction to the pleasure thwarted so that the ordinary human actor be dissembled with socially irresponsible action. Two further implicit criteria exist, fundamental to all legal order: (3) the conduct deterred must be truly socially irresponsible and dangerous to the activities and lives of other persons—whimsical and useless laws are rarely obeyed, and disregard for law flows naturally from an overabundance of regulations; a few laws, reasonably based and strictly enforced, are generally sufficient for the ordering of society; (4) the standard to be obeyed must be known.26

At present, no studies have been uncovered which factually prove or disprove the primary premise approving the value of deterrence. Little empirical data exists supporting abstract propositions. Moreover, any test, survey, or statistic would be subject to criticism as to, inter alia, sampling technique and coverage.

The second premise appears satisfied. Admittedly, the third premise (a proliferation of laws) has been savaged. Sufficient knowledge of the standard exists to satisfy the fourth premise.

As to the first premise, it may be posited generally that it is just that the penalty extracted from the tortfeasor equal the amount of money necessary to compensate the injured party for his damages. The penalty in this respect does not appear untoward and should be sufficient in the ordinary instance to deter. In criminal law, deterrence is not achieved by $50 fines.^²7 But in civil law, where the actor knows that if his fault causes harm he is liable to the extent of the loss (a sliding scale based upon the foreseeable consequences of his conduct) he is more likely to take adequate precautions. The standard of conduct to which the actor is held may be subject to some salutary challenge, but it encompasses the only workable and just criterion available, given the existent state of man’s knowledge.

Previous allusion has been made to the difficulty of marshalling scientific support for a moral concept.²⁸ Whether or not the fault doctrine provides a direct deterrent effect is a matter of much speculation but little proof.29

While an individual may not necessarily become a more prudent driver solely because he fears the consequences of his negligence, he often purchases insurance to protect himself against the contingency of a loss or lawsuit. By this type of purchase, drivers voluntarily provide a pool out of which an injured party can recover. This type of compensation fund, more consonant with the scheme of freedom, exists without the coercive force of the state’s further meddling in man’s affairs (as would necessarily occur in the basic protection cabal).

Initially, the proponents of the doctrine of basic protection or liability without fault ignore the fact that their type of insurance protection could be purchased by any ready buyer in an open market without state compulsion. Coverage could be tailored to individual needs.30

Harper and James devote considerable time to the problem; in fact, their eleventh chapter is entitled "The Accident Problem and Its Solution."³¹ Without benefit of citation or proof, they charge that the traditional fault system causes court congestion.³² It is unfair and invalid to assign the fault concept in automobile claims as the cause of court congestion.33

Accident proneness also has been proved to the satisfaction of Harper and James.³⁴ In other words, a few individuals tend to have a higher percentage of accidents than random sampling would demand. In brief, the authors conclude that there are many individual causes of accidents, e.g., stress, fatigue, mental or physical inability to reach a careful standard, which are not subject to the deterrent effect of juridical penalties. Once again this contention lacks proof and validity. Reason suggests contrary assumptions and arguments, and empirical proof is nonexistent.35

Further, the proponents of liability without fault are fond of asserting that the fault doctrine worked well in the early nineteenth century and fit the concept of individualistic morality, as if this concept were unfitted for 1973, and as if the two centuries differed so greatly in this regard.36

Advocates of liability without fault assault deterrence on several counts.

First, it is urged that the objective standard of the reasonably prudent individual has attenuated the deterrent factor.³⁷ Many people are assertedly incapable of achieving the status of the "reasonable man"; yet the law calls upon them to act in a manner foreign to their physical, physiological and mental abilities. Application of a subjective standard might deter, but one is undeterred if he is held to a standard with which he cannot comply.

The appropriate rebuttal to this argument is to examine the validity of its premises. Accuracy may exist in a small number of cases. But no one can prove or disprove the ability or inability of the vast majority of the American population to achieve an objective standard of care. The standard is a fluid and shifting one. And does not Professor James miss the point, that the ameliorative effects of the fact finder upon one who "cannot" reach the standard effectively obviate this argument?

Second, Professor James contends that legal fault has already been diluted, and the deterrent factor lessened by the very nature of the jury system." This, too, is an unprovable proposition. It presupposes that juries always assume that defendants in automobile liability cases are insured, that the insurance exists for the purpose of compensating the victim, and therefore the standard of fault is meaningless." The assumption lacks both support and validity. Acceptance of the proposition requires a determination that jurors willfully violate their oath; no practicing lawyer believes that this occurs often.

Third, it is claimed that the deterrent effect of fault has been severely diluted by the advent of the vicarious liability." Those who pay are not the tortfeasors; instead they are the owner of the business, the employer of the negligent servant, or the insurance company which bargains to protect the harm causing driver. To deter A, A must be punished if he does not act in accord with the standards, and A is hardly punished if B pays for A’s conduct.

The argument appeals superficially.⁴¹ However, the assertion oversimplifies the fact. The realities of excess insurance problems which face the practicing attorney belie the validity of the contention. For example, in Oregon, minimum insurance limits have long been $5,000 each person, $10,000 each accident; in 1968 they were raised to $10,000 each person, $20,000 each accident. Yet many serious accident cases are filed each year where the prayer far exceeds minimum limits although many drivers purchase only that required coverage. Certainly there is an exposure to harm and a penalty to the "true tortfeasor" where the prayer or the recovery, or both, exceed available insurance protection. If nothing more, there are additional costs and fees incurred by the driver who secures independent legal counsel to protect his uninsured interest.

Moreover, automobile insurance rates are partially based upon driving records and prior adherence to standards of care. The careless driver will pay a premium proportionately higher than the careful driver in most cases under the fault system. Merit driving rating plans applied by many industries deter, as does the specter of the assignee disk pool. Even so strong an advocate of enterprise liability as John G. Flemming recognizes the existence of this type of deterrent.⁴² He admits that premiums based upon accident rates may well deter, the same as potential loss of assets, loss of driving or automobile privileges, and the suggestions of the accident prevention teams sent forth by insurance companies.

Moreover, inconvenience deters. The allegedly negligent driver is greatly inconvenienced when he is sued, even if the prayer is less than his policy limits, because the tortfeasor must be a named party to the action, he may be deposed, and he may spend days in court in the uncomfortable position of party and witness. As a consequence, he will lose free time or wages, and all in all will find his daily routine disrupted.

Allied with this last argument is the contention that, like vicarious liability, the advent of widespread liability insurance has weakened the deterrent factor because the true tortfeasor does not bear the risk of loss. The foregoing rebuttal applies with equal fervor here. Furthermore, it is unacceptable to assume that normal individuals alter driving patterns from good to wicked because they contract with a third party to pass on the financial burden.

Fourth, proponents of the "non-deterrence" position assert "enterprise liability" arguments to advance their position.⁴³ For example, both James and Calabresi contend that appropriate economic resource allocation demands that the industry bear the cost of harm as a portion of overhead. This sophist argument fails upon analysis of the major premises: the enterprise does not cause the harm — human actors cause the harm because of their conduct, their failure to act reasonably. The resource allocation assertion begs the question and assumes validity of social engineering. Moreover, it is unmeritorious to say that victims of strict liability are "ill equipped" to protect themselves." Who can better determine the desirability of a specific course of conduct than the actor?

Fifth, the liability without fault claque claims, curiously, that the fault system is ineffectual because there is no necessary relation between the extent of fault and the extent of loss." This contention really is not a non-deterrent argument (unless it is intended to mean that one will think the law unjust and therefore not be deterred if he is forced to pay a large amount for a small fault); actually it is an axiological argument, and a faulty one at that. The fault doctrine can be defended on the basic tenet that it is just that a person bear the consequences of his own acts;