Thinking Historically about American Accident Law

Thinking Historically about American Accident Law

Photo: Library of Congress

How do we account for the peculiar features of American accident law? Make no mistake, our accident law is peculiar, as recent developments make abundantly clear. The $28 billion damages verdict against Philip Morris in early October for one person's death (though virtually certain to be reduced) reminds us of the extraordinary and exceptional power - virtually unique to the United States - of tort juries. In perhaps the most widely discussed tort phenomenon over the past several years, American tort lawyers have begun to aggregate tort claims in mass tort class actions in areas ranging from pharmaceuticals and asbestos to tobacco and handguns. At the same time, the progress of the September 11 Victim Compensation Fund has touched off debates ranging from the fairness of accident law's disparate treatment of the equally faultless victims of different kinds of physical harm, to the distributive justice of higher economic-damages awards for high-earning tort victims and their families than for low-earning tort victims and their families.

Indeed, few features of the American legal system are as distinctive as American accident law institutions. The United States relies much more heavily than most other developed legal systems on private law and tort litigation to compensate accident victims and deter potential causers of harm. It is well known, for example, that tort litigation rates are considerably higher in the United States than in Western Europe. Where the U.S. system is characterized by juries, contingency fees, and relatively high damage awards (including punitive damages), other developed systems of accident law tend to be characterized by more systematic social insurance systems, comparatively low damage awards (including damages caps on non-pecuniary damages), loser-pays attorneys' fee rules, limitations on group litigation, and professional judges rather than juries. In world-comparative terms, ours is (as Judge Jack Weinstein has described it) an "exotic" system of accident law.

Conventional explanations of these features of American accident law often look to the ostensibly long Anglo-American tradition of individual privatized dispute resolution. As U.S. Supreme Court Justice David Souter recently explained, "our deeply rooted historic tradition" holds that "everyone should have his day in court." Liberal values of individualized due process, the story goes, have committed us to individualized tort inquiries in which judge and jury do corrective justice as between the litigants before them. An important corollary to the story of our torts tradition is the notion that during the 20th century, private sector institutions and interest groups - insurance companies, the plaintiffs' bar, the tort reform lobby, etc. - have formed around the core of tort law, cementing American accident law's tort law mold.

It should surprise no one, however, that we lawyers have a kind of selective amnesia for paths not taken, for abandoned lines of precedent. As a profession, we are great writers of winners' histories, crafting legal arguments out of the dominant strands of cases that have come before, while leaving out the lines of institutional development that might have been. We thus take it as a matter of faith in our casebooks and in our classrooms that experimental alternatives in accident law are not an American phenomenon, but rather a feature of truly exotic accident law regimes in remote places like New Zealand, which in 1974 famously established a comprehensive compensation system for accident victims.

As a result, we have encountered our present dilemmas of mass torts class actions and catastrophic 9/11-like risks with little more than the slightest recollection of one of the world's great experiments in alternative legal institutions for dealing with accidents. Between the Civil War and World War I, the United States experienced a personal injury crisis as exceptional in world-historical development as our accident law system is today. At the turn of the last century, students of American industry estimated that industrial accident rates in key industries such as coal mining and railroading were three to five times higher than industrial accident rates in France, Germany, and Great Britain. Labor unions decried the wanton butchery and the mangled and bleeding bodies cast off by industrialized production processes. And by 1911, journalists described the accident problem as "one of the most extraordinary conflicts in our industrial history."

In response, a wide array of Americans developed remarkably innovative experimental institutions designed to address the accident crisis. Labor organizations founded sophisticated cooperative insurance mutuals, to which as many as one in three adult white men belonged. Leading employers in industries like railroading and steel manufacture developed novel contractual accident benefit arrangements that represent the nation's first systematic experimentation in the field of employee benefits. And by the turn of the 20th century, progressive reformers were actively involved in trans-Atlantic policy debates over social insurance systems such as workers' compensation statutes. Indeed, it is too little acknowledged that the common law field we now know as tort law is itself largely an experiment of the decades surrounding the Civil War.

The turn of the 20th century presented what political scientists have come to label a "critical juncture" in the development of our accident law institutions: a moment before the rise of organized interest groups, a moment in which the basic structures of our accident law regime were highly plastic and open to multiple lines of historical development. Not surprisingly, many Americans in 1910 were quite certain that alternative approaches to dealing with accidents would expand outside the field of work accidents. Indeed, many believed that experimentation in accident law would be but the first chapter in the development of the kinds of modern social policy institutions that Western European nations had put in place by World War I, but which in the United States would ultimately await the New Deal or fail enactment altogether. Outside of work accidents, the social policy ferment of the late 19th and early 20th centuries fizzled out. By 1920, the basic foundations of our contemporary accident law regime had been set in place: compensation statutes covered work accidents; tort (with its attendant private insurers and interest groups) remained dominant throughout the remainder of the field.

What is the relevance of these now forgotten experiences to our contemporary accident law conundrums? For one thing, their history holds the answers to how it is that our accident law institutions developed along the historical path they did. Workingmen's cooperatives fell victim to a contemporaneous transformation in the nature of the firm along hierarchical, scientifically managed lines. Employer benefit plans succumbed to perceived competitive pressures from those firms that refused to adopt them. Workers' compensation statutes, in turn, were deflected away from their supporters' broadest goals by judicial review's constitutional constraints, as well as by the structure of American federalism, which caused many states to draw back from changes that might have added to the costs of in-state industries. These factors, among others, helped to contain experimentation in the field of accident law. And within a few decades, strong plaintiff- and defense-side lobbies inhibited further systematic reform, cementing in place existing institutions and vested interests.

The striking thing about the decline of the first great American experiment in alternative accident law institutions is that its wane was not so much because the institutions had any inherent limitations as a matter of policy or justice. The decline of eclecticism in American accident law was contingent on historical factors such as the constitutional strictures, the timing of changes in the nature of the firm, and the political economy of competition among firms in the United States. Our question now is whether we find ourselves at a new critical juncture for institution-building in the law of accidents. New developments such as health maintenance organizations, mass tort class actions, and federal compensation funds for terrorism victims all auger the beginnings of a new period of institutional experimentation, though - to be sure - a period that is already experiencing growing pains. Our peculiar tort system may yet turn out to be a rich source of innovative mechanisms for providing compensation to accident victims and deterring unduly dangerous activities. As we debate such issues, however, it behooves us to remember that we've been here before. We have in the United States a grand (if largely forgotten) tradition of experimentation in the field of accident law - one that ought to empower us in the search for new alternatives in our own moment of possibilities.

-- John Fabian Witt, associate professor of law, is completing The Accidental Republic: Crippled Workingmen, Destitute Widows, and the Remaking of American Law, to be released by Harvard University Press in January 2004.

Photographer Lewis Hine documented this Pittsburgh family in 1908. The man's arm was lost as a result of a factory accident.