Engstrom on Exit and Adversarialism in Compensation Systems

Nora Engstrom (Stanford) has posted her contribution to the O'Connell tribute to SSRN.  Entitled Exit, Adversarialism, and the Stubborn Persistence of Tort the abstract provides:

Serious tort reformers have long tried to divert certain claims from the tort system into no-fault or “replacement” regimes where, it is said, compensation can be more easily, expeditiously, predictably, and simply delivered.  Yet while many continue to champion no-fault’s expansion, surprisingly few have stopped to ask how America’s various no-fault experiments, in place for over a century, have thus far fared.  Taking up that challenge, this Essay, written in memory of no-fault pioneer Jeffrey O’Connell, canvasses America’s four boldest experiments with no-fault legislation.  The investigation — of workers’ compensation, automobile no-fault, the Vaccine Injury Compensation Program, and birth injury funds in Florida and Virginia — reveals that all four of our most ambitious no-fault experiments have, in significant respects, failed.  Seepage from no-fault regimes and into the tort system has been a persistent problem.  Further, even when compensation has been provided within existing no-fault mechanisms, the mechanisms have become bogged down by adversarialism, marked by longer times to decision and increased combativeness, attorney involvement, and reliance on formal adjudicatory procedures.  Showing how and why no-fault has repeatedly fallen short, this Essay seeks to complicate conventional wisdom concerning no-fault’s ostensible advantages.  And, it seeks to honor O’Connell’s proud legacy, for only by identifying what’s gone wrong, might we start anew on a path toward the creation of better and more resilient reforms.

All of the papers in the JTL tribute are now available here.