This article has been written by Kumar Sparsh, a student of Amity Law School, Amity University Jharkhand.
Origin and evolution of modern tort law
Judicial decisions are the mould in which laws are shaped under the common law tradition. The law pertaining to civil wrongs (or torts, as known afterwards) originated similarly under this tradition, the cornerstone being the writ of trespass vi et armis, though the distinction of torts as a legal category occurred much later in the history. Before turning to the discussion on the footprints of the modern tort law under the common law tradition through the course of time, a brief mention of tort norms should be made. The presence of such norms which bear proximate resemblance, but little congruency, to the modern tort law is longstanding. As a scholar observed, at the core of all such norms, there had been “a group desire that disputes be resolved without retaliation and escalation.”
Men have been witnesses to torts like assault and battery since the times of Demosthenes. In the action against Conon, brought by Ariston, the Greek statesman and orator observed: “[In] cases of battery; these, I am told, exist in order that no one, when losing, should defend himself with a stone or anything of that sort, but he should await the legal case… The most trivial offence, I suppose, that of abuse, has been provided for to [ensure]… that homicide should not be committed,… but [that] there should be a legal case for each of these, and they should not be decided by the individual’s anger or whim.” Under Roman Law, the Institutes of Justinian included rules that reveal numerous restrictions against the imposition of one’s will over the rights of a neighbour. In another notable example, pertaining to what would today be called the law of private nuisance or trespass, a provision goes so far as to detail a preference that “adjoining landowners bargain in advance for agreement as to contemporaneous uses of land that might trigger dispute”.
A trace of the historical development under the common law tradition is essential to understand the various interpretative accounts penned on the subject of the nature of obligations under this branch of private law. Legal history of the law thus, shall be the point of origin in this work. Starting in the late 1200s, the Chancery, an office of the English royal government, began making available a document called the writ of trespass vi et armis to the victims of wrongs involving force. If the victim successfully pleaded before a judge, he was entitled to recover damages. The term ‘trespass’ implied any wrongful act in general, as opposed to the sense it is used today– “any direct and forcible injury to person, land or chattel”. This trespass writ was defined in terms of directness and forcibleness, and not in terms of any intention to do harm on the part of the defendant, a consequent of which many accidental physical injurings were actionable under the writ as batteries. In Weaver v. Ward, the court rejected the argument of the defendant who argued that he should not be held liable because he was engaged in a lawful activity and had acted without any intention of harming the plaintiff. The English Court of Common Pleas rejected this argument, explaining that the writ of trespass covered forcible harms committed accidentally.
A second breed of writ, writ of trespass on the case, came to be recognised as an independent form of action by early 1400s. Such a fission of the forms of action as ‘trespass’ and ‘case’ had occurred because of the limited jurisdiction which the royal courts had. This writ permitted actions against carriers for losing or destroying property, against medical practitioners and veterinarians for incompetent medical treatment, against neighbours for carelessly allowing fire to spread to the homeowner’s property. By 1500s, a person could recover damages on being slandered or libelled by other. A crude likeness with the nature of tortious obligations under the modern tort law can be observed at this point. With the slowly developing judicial process of recognition of new torts, the idea of tortious obligation– legal responsibility to practise due care so as to refrain from harming others– began to settle. However, at the same time, where there was no writ, there was no right. And since an obligation would arise solely if there is a corresponding right, it would be safe to conclude that unlike the modern tort law, the variety of tortious obligations were largely deficit because the existent writs were available only for a sparse number of tort situations.
With the collapse of the writ system in entirety in the early 1800s, framing of the victim’s claims under of one of the two writs prior to bringing the suit to the court would no longer be necessitated. At the same time, lawyers were increasingly inclined to place obligations into a separate category defined by voluntary agreements as opposed to obligations that accompany activities and occupations irrespective of agreement. The former sorts of obligations were assigned to the new category of “contracts.” (Previously, breaches of contract had been sued upon primarily under the writ of trespass on the case.) These developments paved the way for the adoption in the late 1800s of the old but sparsely used term “torts” to refer to wrongs involving the breach of obligations not to injure others, apart from obligations determined by agreement. A simultaneous occurrence was the increasing influence of Natural law on the English law, which peaked in the 1800s as philosophers of the likes of John Locke and Jean-Jacques Rousseau highlighted it’s significance. The first writer to elevate the duty to take care (obligation) into a central position was Samuel Pufendorf, and it was largely through him that it came into English law.
Theories of tortious obligations
What are tortious obligations? Are obligations and duties same? Per Ramaswamy J, in Rajkot Municipal Corporation vs Manjulben Jayantilal Nakum & Ors: “Duty is an obligation recognised by law to avoid conduct brought with unreasonable risk of damage to another”. Theorists and courts have drawn an assortment of classifications of such duties, with respect to different baselines. Duties can be either “relational or non-relational, depending upon the type of norm that imposes the duty”. Then there are duties of ‘non–injury’ and ‘non–injuriousness’. And the duty of non–injury can itself be bifurcated to ‘qualified duties’ and ‘unqualified duties’.
Predominantly American, the economic theory of tort law gained acclaim in the 1960s and 1970s. In 1960, British economist Ronald Coase published the article ‘The problem of social cost’, which sparked off the ‘economics and law movement’. An article by Guido Calabresi, then of Yale University, titled ‘Some thoughts on risk distribution and the law of torts’, was the first systematic attempt by a lawyer to examine the law of torts from an economic perspective. Richard A. Posner published a ground-breaking treatise in the year 1973, “Economic Analysis of Law”, where fundamental concepts of economics were employed for analysing all areas of law, including tort law. The first economic model was developed by J P Brown, which addressed the question of “how various liability rules (more particularly strict liability and negligence) could achieve the social goal of the minimisation of accident costs. Henceforth, a large volume of scholarship has caused economic reasoning of law to crystallise into a mainstream line of thought in the course of deciding cases.
Tortious obligation to practise care is interpreted as an obligation to take precaution under the economic approach to tort law. A precaution is reasonable when it is rational; a precaution is rational when it is cost-justified; and a precaution is cost-justified when the cost of the precaution is less than the expected injury (the latter being the cost of the anticipated injury discounted by the probability of the injury’s occurrence).
The Hand Test was put forth by federal Second Circuit Judge Learned Hand in United States v. Carroll Towing Co. It was aimed at resolving the cases of fault-based liability, primarily negligence. Also known as the BPL test (Burden, Probability, Loss), it was adopted in the First Restatement. Qualitatively put, the test dictates that if the cost of taking due care (i.e., cost of obligation) is less than the expected injury costs that could be avoided by practising due care, the actor should be encouraged to take due care in order to reduce overall social costs. In other words, social welfare is higher when actor takes care, than when he does not take care. However, if the cost of taking care is greater than the expected injury costs of not taking care, it would be economically inefficient to take care.
The following is an explanation of tortious obligation in case of fault liability, as per the economic theory: “If I can spare you some injury by taking precautions less costly than your expected injury, my failure to take such precautions would be irrational, hence, unreasonable and thus negligent. Should you be injured as a result of my failure to take those precautions, then I would be at fault for your loss; and under the rule of fault liability, I would be required to make good your costs. By the same token, if I can spare you some injury only by taking precautions costlier than your expected injury, my failure to take these precautions is not irrational, hence, not negligent. If the injury is governed by the rule of fault liability, its costs will be yours, not mine, to bear”.
The interpretation of tortious obligation in tort situations where fault is absent, i.e., where the rule of strict liability applies, is rather unsuccessful. In Indiana Harbor Belt Railroad Co. v. American Cyanamid Co., Judge Posner iterated the explanation of tortious obligation in case of strict liability as spelled in the works of Stevel Shavell, Guido Calabresi and himself. When the care taken is insufficient in eliminating the possible injury, as the scholars have said, the rule of strict liability should be adopted. Economic approach thus, barely offers any understanding in this regard.
The inability of economic theory in expanding the principle of tortious obligation, except in case of fault liability, has caused objections to arise. For illustration, let us develop the argument set forth on strict liability by the theory. A person is under obligation by virtue of tort law to practise due care while committing an act, so that the act does not injure any other person. Suppose that the care taken by the person is insufficient, and the act causes injury to another person. The theory seeks to apply the rule of strict liability in such case. But, due care is never sufficient to eliminate injury. More importantly, the theory aims to correlate the sufficiency of care taken and the consequent liability in case of insufficiency, which is itself violative of the general principle of the law of tort- liability arises when there is a breach of obligation, irrespective of the quantum of breach made, partial or full. In fact, a breach cannot be characterised as either partial or full in the law of tort, unlike in the law of contract.
Besides the position on strict liability, the theory offers a “questionable interpretation of the legal duty to behave reasonably” and it incorrectly equates ‘reasonability’ and ‘rationality’. It fails in providing an intrinsic reason to a victim to sue the person who injured him, or to argue in court that the defendant wronged him, let alone the only incentive that the defendant is in a better position to reduce overall costs.
Corrective justice theory
Corrective justice is the idea that liability rectifies the injustice inflicted by one person on another. This theory explicates tort law as an embodying a system of first and second order duties. First order duties prohibit conduct (e.g., assault, battery, and defamation) or inflicting an injury (either full stop or negligently). Second order duties are duties of repair, which arise as a consequence of breach of the first order duties.
In Aristotelian terms, the ‘rectificatory’ function is the spirit of the principle of corrective justice. Justice is achieved in the truest sense only when rectification operates on both the parties. The remedy for a tort consists in “simultaneously taking away the defendant’s excess and making good the plaintiffs deficiency. Justice is thereby achieved for both parties through a single operation in which the plaintiff recovers precisely what the defendant is made to surrender”.
As stated earlier, tortious obligation as explained in this theory, are of two kinds – first and second order duties. The first kind is a duty to adhere to the substantive norms under the tort law, i.e., to refrain from conducting oneself in a manner which either would violate the legal right of another or, could possibly violate such right. Tortious obligation of one doesn’t cease to exist here. If a person violates the first order duty, he owes a further duty to the victim, the duty to repair the injury caused to the victim. Therefore, the theory explains why tort law links victim and injurer, since it takes the injurer to have the duty to repair the wrongful losses that he causes.
As opposed to the economic viewpoint, tortious obligation is foremost a responsibility to practice care, irrespective of the cost incurred in the process. It denies the notion of weighing the benefits and costs of practising care, before care is actually taken. It settles that a person is simply under a series of obligations under the law of tort.
Civil Recourse theory
The economic theory is the product of an intellectual movement which has subsisted for decades, turning nearly into a school of thought. Brainchild of John C.P. Goldberg and Benjamin C. Zipursky, the civil recourse theory, however, doesn’t enjoy such a position. This theory is in partial consonance with corrective justice theory. It agrees to the notion under the corrective justice theory that the law of tort is structured as a variety of first-order duties, duties whereby norms of conduct are settled. It regards torts as relational wrongs in that their commission entails a relationship between the doer and the victim of the wrong, similar to corrective justice. Yet it maintains a different view of the legal consequence of a breach of a first order duty. As stated earlier, a duty of repair is imposed on a defendant as a consequence of breach under the corrective justice theory, civil recourse theory holds that no further imposition of duty exists. Rather, the breach of a first-order duty endows the victim with a right of action: a legal power to seek redress from her injurer. Briefly put, civil recourse insists on the importance of distinguishing between the basis of the victim’s claim against the tortfeasor and the nature of the remedy to which the victim is entitled.
Civil recourse theory has substantial explanatory power. Perhaps most obvious, it explains why tort suits have a bilateral structure— why the victim of a tortious wrong seeks redress from the wrongdoer herself instead of drawing on a common pool of resources. It also explains why tort suits are privately prosecuted— why the state does not act of its own accord to impose liability on those who breach first-order duties.
Though this theory is an invention of two scholars only, as opposed to the corrective justice theory to which many theorists have contributed, it has been wonderfully successful in accommodating core features of tort law:
(i) “the fact that tort offers a variety of different remedies, only some of which are designed to restore the plaintiff’s antecedent holdings”;
(ii) “the fact that the defendant incurs a legal duty to pay damages only upon a lawsuit’s successful conclusion (either by settlement or by the final judgment of a court), rather than immediately upon the breach of a first-order duty”.
Critique exists for every theory, and this theory is no exception. Professor Martha Chamallas points out in her paper, that the endowment of the right to action on the victim creates a privatized image of tort law. As propounded in Legal Realism, the response to a private injury is made by the law, and not the individual, the response thus, being of public nature. “In civil recourse theory, by way of contrast, the role of the tort victim overshadows the role of the state, even though the state is the entity responsible for the creation and implementation of the rules and machinery of the civil justice system”.
Theories of contractual obligation
It is the traditional theory which answers the analytic question on contractual obligations – what contractual obligation is. The modern discussion of this theory was triggered by the immensely popular book on the subject by Charles Fried in 1981, ‘Contract as promise’. Though Stephen A. Smith’s interpretative account, promissory obligation can be understood as follows: the first pillar is the existence of a genuine intention to perform an act; the second is the communication of such an intention to the other party; and finally, the structure of a promise stands on the two pillars – the communication of intention to “not merely perform a particular act but to undertake an obligation” to perform. Thus, as the name suggests, a promissory obligation is a promise to undertake obligation of performance. Therefore, all the elements of a contract revolve around the duty to perform, and not the performance itself.
The illustration of validity of this theory can be made using the doctrine of promissory estoppel. The doctrine ‘estops’ both the parties of a contract from retracting on their respective promises. Such a prohibition exists in the form of doctrine, as the promissory theory has explained, because the nature of promise is to bear and discharge the duty of performance, and not singly to perform.
Despite the wide acclaim and acceptance, this theory too faces criticism. One objection that is often made to promissory theory is that they are inconsistent with the objective that objective approach that the common law adopts for determining the existence and content of a contractual obligation. Critics say that this objective approach shows that contract law aims to enforce not those obligations that parties intend to impose upon themselves, but instead obligations that parties outwardly appear to intend to impose upon themselves.
The second variety of objection is raised with respect to implied contracts. This theory fails to reconcile with intentional acts such as handing over goods, getting on a bus, putting money into a machine, etc. and other ‘simultaneous transactions’, since “it is impossible to find anything resembling a promise or an agreement”.
However, the most prominent objection of promissory theory of contractual obligation is not one based on ‘fit’ criterion but one based on ‘morality’. Voiced by scholars like Fuller, Perdue, Atiyah and Benson in slightly different forms over the years, this objection is raised because the theory is in conflict with the ‘harm principle’.
According to the harm principle, it is illegitimate for the state to interfere with an individual’s liberty unless that individual has harmed, or is about to harm, another individual. The promissory theory, as stated earlier, explains promises as “obligation to benefit other rather than not to harm other”. Since, failure to discharge obligation has not been characterised as a harm inflicted on another person under the theory, the state shall have no right to interfere when the breach of obligation occurs (which is absurd to say). Hence, the theory becomes inconsistent with the principle.
Reliance theory had developed as response to the objections against the promissory theory. Though the theory falls short in terms of the volume of literature backing it as compared to promissory theory (even the most fundamental work on this theory, Fuller’s and Perdue’s article ‘The Reliance Interest in Contract Damages’, focuses on explaining damages on the basis of this theory, rather than propounding a general theory of obligation), this theory is known to many since it is often entangled with the promissory theory in practice. A contractual obligation has been defined under this theory as “obligations to ensure that others whom we induce to rely upon us are not made worse off as a consequence of that reliance”. An illustration: Suppose that a vendor agrees to provide a machine to a buyer for the purpose of usage in a factory, in exchange of a Rs. 10000 paid in advance. The buyer’s payment of Rs.10000 is induced by the vendor’s agreement to deliver the machine. If the vendor fails to deliver, and also keep the sum paid, the buyer would be in a worse position than he was prior to paying Rs.10000. The buyer will have suffered a ‘reliance loss’ of Rs. 10000. Significantly, the reliance interest may be at risk even if no payments are made under a contract.
The early advocates of this theory have detailed about the “secondary contractual obligation” (remedies for breach of duty) but have maintained silence on how it understands the “primary contractual obligation” (duty to perform). The only plausible way of understanding the primary contractual duty is in the form a ‘conditional duty’: “if you do not do what you said you would do, then you have a duty to pay to the replying party a sum equivalent to their reliance cost”.
Briefly put, the theory says that a duty is cast on the person is of the nature of reimbursement of reliance cost to the other party in cases of non- performance, and not of the nature to perform the promised action.
The remedies objection to this theory is posed by the orthodox common law. The remedy for breach of contract in orthodox common law is either specific performance or, payment of the monetary value of performance (i.e., expectation damages) as perceived by the wronged party. The theory however, declares the payment of a sum equal to reliance cost of the plaintiff to be the remedy. Difficulty arises for the theory to explain both the remedies under orthodox common law. A specific performance order by the court makes the defendant duty- bound to perform the action not performed, in cases of breach. But as the theory puts forth, there exists no such duty to perform in the very first place. As for the objection to the conflict between expectation damages and reliance costs, theorists have argued that “expectations damages are a proxy for what the court really care about, which is reliance costs”.
An underdeveloped and lesser known theory falling in the set of of non- promissory theories of contract is the transfer theory which is known to have originated in the works of Hugo Grotius. This theory, like the reliance theory, lacks in comprehensive discussion and is more or less a model. It propounds that an executory contract is a simply a transfer of “intangible rights to the performance of future acts”. None of the elements of contract – promise, reliance or act affects the transfer of rights; intention to transfer the rights and the intention to receive the rights are enough.
An illustration: A goldsmith promises to deliver a ring to a customer at a future point of time in exchange of a sum Rs.25000. From the viewpoint of this theory, at the moment of contracting, the goldsmith transfers the existing performance right to deliver the ring to the customer in the future.
There is some degree of similarity between the promissory theory and the transfer theory– in both the theories, the contractual right is a right that other party would do the same thing which he said he would do. Difference, however, lies in the matter of how the ownership of such rights is achieved. While transfer theory says that a contract brings about the transfer of already existing rights, the promissory theory regards contracts as creation of new rights by way of promise.
Theories are created by scholars of with the aim of explaining the existing body of law. When the process is broken down, one sees that the theories are attempts to answer two kinds of questions pertaining to law- analytic and normative. Analytic question of law is a question of what constitutes such law. With reference to this work, analytic question could be what is contract law or tort law? What are the essential characteristics of a contract or a breach of tort? More specifically, what is a contractual obligation or tortious obligation? On the other hand, normative questions are larger questions. These require theories to address the question of why. Why should an element of be given the backing of law? What is the plausible justification for the existence of a particular body of law? With respect to this work, why is the weighing of costs and benefits of taking precautions justified under economic theory of tortious obligations? The answer to these questions are not clear cut, since every theory has shortcomings in one or another aspect. Many times, two independently developed theories blend together to answer the questions. But every theory does successfully explain at least one part of the law – and that is the reason for their acclaim and acceptance in legal circles.
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