Friday, June 2, 2006

Compensation: Fair vs. Full

In an article (SSRN, forthcoming in the DePaul Law Review) that could have significant implications for debate over damage caps, John C.P. Goldberg argues that the current conception of damages -- as aiming for full "make-whole" compensation -- is inconsistent with history.  The abstract:

This article argues against the now-conventional idea that the remedial concept of make-whole compensation - understood to refer to a damages payment that corresponds to the losses a tort victim has suffered - is somehow an essential feature of substantive tort law. The article proceeds mainly by reviewing historical materials, including judicial decisions and treatises. These suggest that the prevailing notion of tort damages was until the late Nineteenth Century one of “fair” rather than “full” compensation. They also suggest that the modern tendency to equate tort with the idea of making whole rests on a subtle but critical re-characterization of the concept of injury, which once predominantly referred to a doing - a wronging of the victim by the tortfeasor - but now predominantly refers to an outcome - a loss suffered by the victim. Appreciation of these contrasts, I argue, sheds light on various contemporary debates, including those concerning the propriety and purposes of punitive damages. It also helps us to see that the tendency of modern academics, starting with Holmes, to define tort in terms of a notion of indemnification or restoration is in fact an attempt to impose a particular and controversial theory of tort onto tort doctrine and practices. Finally, I argue that a recovery of the traditional division between substantive tort law and the law of remedies, as well as an appreciation of the fair compensation conception of tort damages, will help academics grasp more clearly what tort law is and what sort of work it is well-suited and poorly-suited to do within our legal system.

http://lawprofessors.typepad.com/tortsprof/2006/06/compensation_fa.html

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