JIB in the News

[crazy canuck]

This policy encourages widening suits and increasing costs to everyone just in the hope that a lawyer can convince a jury that the Big Bad Business is even 0.0001% at fault, so the lawyer can get his full 40%-of-settlement payment.

That is a separate issue.  If your law does not recognize de minimus acts as being non culpable then that is your real problem.

[Admiral Yi]

But, as pointed out earlier, that creates more deterrent from people acting negligently if they think there is a chance they may be responsible for the whole pot.

Well of course.  If we instituted a trillion dollar fine for hurting people's feelings on the internet that would be a deterrent too.  Doesn't mean it's a great idea.

[DGuller]

Not quite.  All the defendants can look to eachother to work out (through third party proceedings etc) what each of their own share of the lability should be.  The policy decision is to not put that burden on the Plaintiff.

The issue is that here the other defendants wont be able to contribute because they are broke.  But, as pointed out earlier, that creates more deterrent from people acting negligently if they think there is a chance they may be responsible for the whole pot.

IMO, the point of the tort system is to internalize the externality of your action.  However, that point runs the risk of being lost when the externality is over-internalized by a factor of 100.

[grumbler]

This policy encourages widening suits and increasing costs to everyone just in the hope that a lawyer can convince a jury that the Big Bad Business is even 0.0001% at fault, so the lawyer can get his full 40%-of-settlement payment.

That is a separate issue.  If your law does not recognize de minimus acts as being non culpable then that is your real problem.

According to your policy, de minumis acts would still be significant, because otherwise the plaintiff has a dry judgement.  Even in a de minimis case, "why should the burden be on the innocent party who was wronged to go after the other defendants rather than the other parties who did [minimal] wrong?"

[stjaba]

I'm not sure if anyone has pointed this out yet, but in some states that have eliminated joint and several liability (i.e. Florida), courts generally do not permit the apportion of damages between intentional tortfeasors and negligent tortfeasors.  This is significant for "negligent security" cases.

For instance, in negligent security cases(i.e. exactly what the Jib case is) in Florida, a jury is not permitted to assign any fault to an attacker of a patron. So if the Jib case was in Florida, JIB would be responsible for the entire verdict, unless the plaintiff was at fault also. That result actually kind of makes sense even when joint and several liability has been abolished otherwise.

In negligent security cases, the theory of liability against a premises owner is that the owner has some sort of duty to protect patrons, or warn them of security risks, etc. If a jury determines that a premises owner breached its duty to a patron such that the patron was assaulted, and it was reasonably foreseeable that the patron could be assaulted, then it makes sense that Jib should have to pay for the entire amount of damages and not have its liability reduced. A good example of this principle in practice is the following case: http://scholar.google.com/scholar_case?case=15514837030233561497&q=negligent+security+intentional+negligent+apportion&hl=en&as_sdt=4,10. From a practical point of view, plaintiffs would never recover anything in negligent security cases if fault could be apportioned to the actual attacker since those individuals are usually judgment proof.

That being said, if there were other potentially negligent actors (i.e. a security company, a leasing company), then a jury could apportion fault among the negligent actors.

[stjaba]

Not quite.  All the defendants can look to eachother to work out (through third party proceedings etc) what each of their own share of the lability should be.  The policy decision is to not put that burden on the Plaintiff.

The issue is that here the other defendants wont be able to contribute because they are broke.  But, as pointed out earlier, that creates more deterrent from people acting negligently if they think there is a chance they may be responsible for the whole pot.

IMO, the point of the tort system is to internalize the externality of your action.  However, that point runs the risk of being lost when the externality is over-internalized by a factor of 100.

In theory, insurance should account for that. Insurance comes into play probably in 90%+ of tort cases. The risk of facing joint and several liability should be reflected in an insurer's risk assessment and calculations of premiums. I am sure there are studies which look at the impact of tort reform (i.e. elimination of joint and several liability) on insurance premiums.

[Admiral Yi]

In theory, insurance should account for that. Insurance comes into play probably in 90%+ of tort cases. The risk of facing joint and several liability should be reflected in an insurer's risk assessment and calculations of premiums. I am sure there are studies which look at the impact of tort reform (i.e. elimination of joint and several liability) on insurance premiums.

Having a third party insurer doesn't reduce the size of the internalized externality, it just pools it.

[stjaba]

In theory, insurance should account for that. Insurance comes into play probably in 90%+ of tort cases. The risk of facing joint and several liability should be reflected in an insurer's risk assessment and calculations of premiums. I am sure there are studies which look at the impact of tort reform (i.e. elimination of joint and several liability) on insurance premiums.

Having a third party insurer doesn't reduce the size of the internalized externality, it just pools it.

One way or another, the risk of injury is probably being borne by customers, it's just a question of whether one customer will bear the risk of loss or whether all customers share the risk. For instance, consider the JIB case.

In a J&S world, in theory JIB's insurer will account for the risk of J&S liability, and charge JIB premiums accordingly. JIB will account for the cost of insurance and pass it along to its customers. All JIB customers therefore share the risk of loss more or less equally since in essence they are paying for the insurance, albeit indirectly.

In an abolition of J&S world, JIB's insurer will account for abolition of J&S liability. The risk is still with JIB customers, however now the risk is being heavily borne by the customer who is assaulted as opposed to all JIB customers equally.

***
FYI, one area where this model breaks down pretty bad is products liability. A lot of large corporations self-insure, and/or have are faced with overwhelming liability(i.e. beyond policy limits) in mass torts cases. This is particularly the case in instance of long tail liability. A classic example would be asbestos manufacturers. A ton of companies went bankrupt in the 70's and 80's due to asbestos lawsuits arising out of exposure in the 30's and 40's.

Another interesting example are small plane manufacturers(i.e. Piper). A bunch of them stopped manufacturing planes in the 80's because they were faced with defending a lawsuit over every single time a small plane was involved in an accident. Manufacturers were faced with defending lawsuits involving planes that had been manufactured 30-40 years in the past. These lawsuits are quite expensive to defend, as I know from personal experience as my firm defends airplane manufacturers in suits. In any event, Congress stepped in and passed a law called GARA which limited liability of plane manufacturers to planes that were manufactured within 18 years of the accident. Obviously that helps fix the long tail of liability problem.

[merithyn]

It's bullshit.  It's unjust.

Agreed.

[crazy canuck]

This policy encourages widening suits and increasing costs to everyone just in the hope that a lawyer can convince a jury that the Big Bad Business is even 0.0001% at fault, so the lawyer can get his full 40%-of-settlement payment.

That is a separate issue.  If your law does not recognize de minimus acts as being non culpable then that is your real problem.

According to your policy, de minumis acts would still be significant

No.  "My" policy is that tortfeasors should look to co-defendants.  To be a tortfeasor one must have commited a tort beyond a de minimus act.

[crazy canuck]

Not quite.  All the defendants can look to eachother to work out (through third party proceedings etc) what each of their own share of the lability should be.  The policy decision is to not put that burden on the Plaintiff.

The issue is that here the other defendants wont be able to contribute because they are broke.  But, as pointed out earlier, that creates more deterrent from people acting negligently if they think there is a chance they may be responsible for the whole pot.

IMO, the point of the tort system is to internalize the externality of your action.  However, that point runs the risk of being lost when the externality is over-internalized by a factor of 100.

If it is a factor of 100 then by definition the party could not possibly be a tortfeasor unless one buys into Grumbler's absurdity.

[Admiral Yi]

The risk is still with JIB customers, however now the risk is being heavily borne by the customer who is assaulted as opposed to all JIB customers equally.

And that's one of the debated points: whether damages awarded equal or exceed the risk born by the customers.

[alfred russel]

One way or another, the risk of injury is probably being borne by customers, it's just a question of whether one customer will bear the risk of loss or whether all customers share the risk. For instance, consider the JIB case.

In a J&S world, in theory JIB's insurer will account for the risk of J&S liability, and charge JIB premiums accordingly. JIB will account for the cost of insurance and pass it along to its customers. All JIB customers therefore share the risk of loss more or less equally since in essence they are paying for the insurance, albeit indirectly.

In an abolition of J&S world, JIB's insurer will account for abolition of J&S liability. The risk is still with JIB customers, however now the risk is being heavily borne by the customer who is assaulted as opposed to all JIB customers equally.

I disagree on several grounds. Among them, all customers may bear the cost of a beatdown in the parking lot, but it is not equally likely that all customers will be beaten down in the parking lot. In some alternate world where I wanted JiB in the middle of the night, it seems quite unlikely I would have been a victim of this beating, because from the sounds of the scene I would have stayed away, certainly not got out of my car, and likely not done whatever it was that had the jury consider the victim partially to blame.

Also, a likely consequence of higher insurance premiums is to have few restaurants open in the early morning hours. Already the line at 2 or 3 in the morning can be monstrous at McDonald's when it is one of the only places open. I don't know why more fast food restaurants aren't open until those times as there is obviously demand. I do suspect that security concerns and costs play into the decision.

[stjaba]

I disagree on several grounds. Among them, all customers may bear the cost of a beatdown in the parking lot, but it is not equally likely that all customers will be beaten down in the parking lot. In some alternate world where I wanted JiB in the middle of the night, it seems quite unlikely I would have been a victim of this beating, because from the sounds of the scene I would have stayed away, certainly not got out of my car, and likely not done whatever it was that had the jury consider the victim partially to blame.

To the extent the customer in cases this was "negligent," his damages were reduced by the jury, so he bore that risk personally.

Also, a likely consequence of higher insurance premiums is to have few restaurants open in the early morning hours. Already the line at 2 or 3 in the morning can be monstrous at McDonald's when it is one of the only places open. I don't know why more fast food restaurants aren't open until those times as there is obviously demand. I do suspect that security concerns and costs play into the decision.

This sounds like the market is working as expected. If it is riskier for a business to be open at night, then rational businesses should be closed, unless they are willing to protect their customers via extra security or insurance to cover the risk of attack.

Additionally, I realize that different customers have different risk profiles, but once a business allocates the premiums on a per customer per transaction basis the difference has to be nearly meaningless. It would probably be more expensive to figure out and implement a pricing scheme such that items are priced according to a customer risk profile instead of simply treating all customers exactly the same.

[CountDeMoney]

Also, a likely consequence of higher insurance premiums is to have few restaurants open in the early morning hours. Already the line at 2 or 3 in the morning can be monstrous at McDonald's when it is one of the only places open. I don't know why more fast food restaurants aren't open until those times as there is obviously demand. I do suspect that security concerns and costs play into the decision.

This sounds like the market is working as expected. If it is riskier for customers to be open at night, then rational businesses should be closed, unless they are willing to protect their customers via extra security or insurance to cover the risk of attack.

1 Off-Duty Police Officer: $25/hour.