The studies surrounding tort law tend to be predominantly based around negligence along with considerations regarding blame and fault. This means situations where compensation can be achieved in other ways are often overlooked. As of today, liability for negligence currently involves considerations of fault pertaining to already established legal concepts, which were determined through judicial precedent. Whilst it is aimed at achieving corrective justice, ‘notions of personal responsibility’. These concepts are restricted to the confines of established principles surrounding duty of care, negligence and proximity. This creates a problem whereby more foreign concepts of fault are not protected by the law of negligence. An alternative to the current tort system and the problems that arise with it is the introduction of a no-fault compensation scheme. The concept of such a scheme is derived from the principle of distributive justice, which essentially alludes to victims receiving compensation without the necessity of having to firstly establish both causation and fault. This essay will provide a comparative analysis which will evaluate how the introduction of a no-fault compensation would be preferable over the existing tort system.
There is a range of problems with the current tort system, some being simple and others more complex. The Pearson Report outlined examples of the problems being costs, the unpredictability of cases, and the fact that payments being made were done so in an unbalanced manner. The report highlighted that the administrative costs of compensation by torts was 85% of the total money paid out to victims in 1977. The costs of a no-fault system would differ significantly as seen in a range of Jurisdictions such as the United States, Japan, Ireland and New Zealand. Immediately it is clear to see the advantages of a no-fault system.
The no-fault system entails each car driver paying a premium and every person injured in a road accident is compensated irrespective of the fault of the driver. As a result, people can receive compensation without the need for litigation which is often less efficient, expensive and time consuming. Evidence surrounding the lack of administrative costs in a no- fault system is shown in the work of the Accident Compensation Corporation in New Zealand. The system is funded from public taxation is extremely affordable. Presently compensation awarded for medical injuries is merely $29 million governing a population of around 4 million. There are a range of factors that contribute to this affordability with compensation awarded in no-fault system being much lower than in tort systems. Furthermore, there is a good amount of entitled patients who never seek compensation. The most astounding factor of them all is that the ACC’s costs only account for 10% of total expenditures, contrast this with the regular tort system’s of 50-60%. From these factors alone, it is evident to see a no-fault compensation scheme would be favourable over the current system.
Another problem the current tort system has is the way in which it is implemented from judicial opinion. The main starting point for the concept as negligence was Donoghue v Stevenson. This case was where the principle that a defendant must be in breach of duty of care was created. A breach of this duty of care is defined as an act that a “reasonable person would not do”. This principle does not work in a corrective sense whereby the concept of fault is carried out in a manner far different from the actual definition of fault. To explain, it is possible to look at the case of Nettleship v Weston, when a learning driver was held liable for injuring her instructor due to incompetent driving despite agreement during the case she was driving to the best of her abilities. It would appear ridiculous that a second’s loss of attention could equate to a loss of huge sums of money. This principle can be applied to the case and thus highlights how limited fault-based liability can be, making a no-fault system preferable.
The enaction of the Civil Liability Act 2018 was a reform to negligence surrounding whiplash injuries. Despite this, there does not seem to be a great interest in a total reform of the tort system. With Lord Sumption stating in a recent speech that ‘law of tort is an extraordinary clumsy and inefficient way of dealing with serious cases of personal injury. It often mises the target or hits the wrong target… but I have no doubt it will survive.’
This shows that despite the positives of a no-fault system making it preferable it is unlikely it would come to fruition in the UK in future years. This is because the tort system is considered ‘inherently fair, as they work on the premise that someone who injures another is responsible…provide the injured party with compensation’. However, this can be disputed with there being an argument for how the current tort system is only fair to defendants and not to claimants. With Lord Sumption also stating in his speech that a ‘system which makes compensation dependant on fault makes little sense if the damages are paid not by the persons at fault, but by society as a whole’. He is essentially alluding to the fact that tort law changes from loss-shifting to a mechanism of loss-distribution. It was further stated by Hassan El Menyawi that ‘corrective justice is no longer about correcting the wrongdoer’s wrongful act since many defendants have private insurance’.
To an extent the current tort system could be considered preferable, it obtains justice for claimants whilst deterring people from acting in a careless manner. That is not without saying the current system has no drawbacks. The beforementioned way which tort law tends to distribute loss being an example. Furthermore, many people are not financially capable of litigation, whilst the introduction of a no-fault system completely eliminates this problem. This combined with the cheap costs of system to the current one makes a no-fault system much more favourable. All things considered a no-system is preferable, one only has to look at the effectiveness of the ACC in New Zealand to understand this.