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Description
9.1 Does Tort Liability Improve the Public's Health?
The answer to the question "Does Tort Liability Improve the Public's Health" is "sometimes, it does and sometimes it does not." Of the applications included in this paper, the clearest evidence on deterrence is for dram shop liability, followed by motor vehicle liability. For dram shop liability, the technology of accident prevention is rather straight-forward--not continuing to serve obviously intoxicated adults and not serving minors. And if patrons are intoxicated, servers are to take other measures such as arranging for transportation home for the intoxicated patron.
What tort liability has to counter is (1) the commercial interests of the alcohol seller and the server to sell more alcoholic beverages and (2) possible reluctance on the part of the server to act in the role of a parent in monitoring alcohol consumption of customers. If the alcohol seller has commercial liability insurance, premiums are likely to be experience rated so that, even if losses are covered by third-party insurance, failure to exercise due care will result in higher premiums subsequently. For those sellers without coverage, many sellers' equity is low (Sloan et al., 2000a) with the consequence that a single lawsuit could result in bankruptcy.
Driving involves many complex decisions. Yet certain intuitively plausible precautions can greatly reduce accident frequency, such as not driving at excessive speeds, and not driving under the influence of alcohol or when excessively fatigued. Although results are mixed, the best evidence indicates that eliminating the threat of tort liability as part of a no-fault program increases accident frequency. Liability insurance is often compulsory and premiums are often experience rated, thus giving vehicle operators an incentive to exercise due care. In this field, police typically fie reports soon after the accident. As in dram shop liability, causation is often not a major issue in legal disputes.
There is no empirical evidence that the threat of tort liability is a deterrent to injuries resulting from actions or inactions of health care providers. There are errors in both diagnosis and therapy. Causation can be very difficult to determine, but sometimes determining causation is straightforward, e.g., operating on the wrong body part, mixing up drugs in a hospital setting so that patients get the wrong drugs, failing to watch for potential drug interactions. On the other hand, there are extremely complex causation issues such as whether or not failure to perform a cesarean-section at birth in a timely fashion resulted in the... |
More articles from Foundations and Trends in Microeconomics
Acknowledgments.(The Law and Economics of Public Health)(Brief article..., November 01, 2007
References.(The Law and Economics of Public Health), November 01, 2007
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