Offsetting risks

Michigan Law Review

Volumn 106, Issue 2, 2007, Pages 243-276

  Porat, Ariel ^a,b  

^a TEL AVIV UNIVERSITY   (Israel)

^b UNIVERSITY OF CHICAGO   (United States)

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EID: 36049015845     PISSN: 00262234     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (119)

1. See infra Part IV.
2. ERNEST J. WEINRIB, THE IDEA OF PRIVATE LAW 3-21 (1995).
3. In other cases, courts wrongly ignore the injurer's self-risk when they set the standard of care. Robert Cooter & Ariel Porat, Does Risk to Oneself Increase the Care Owed to Others? Law and Economics in Conflict, 29 J. LEGAL STUD. 19 (2000). This mistake was corrected in a recent draft of the Third Restatement.
4. See RESTATEMENT (THIRD) OF TORTS: LIAB. FOR PHYSICAL HARM § 3 cmt. b (Proposed Final Draft No. 1, 2005).
5. Note that one of the treatments could be an omission, such as not operating on the patient or not administering a certain medicine.
6. For actual cases illustrated by Example 1, see Hutchinson v. United States, 915 F.2d 560 (9th Cir. 1990), where a doctor chose one asthma drug over a more conservative drug with lesser side effects,
7. and Taylor v. Rajani, No. 256058, 2005 Mich. App. LEXIS 2607 (Mich. Ct. App. Oct. 25, 2005), where a doctor chose surgery over the less invasive procedure of biopsy.
8. See infra Part III.
9. For the sake of simplicity, this Article does not discuss cases in which the difference between the two courses of action emanates not from their risks but from their different expected utility. For example, let us assume that in Example 1, the risks accompanying the two courses of action are identical, but there is a difference of 100 between their respective expected utilities. Presumably, if the doctor were to choose the course of action with the lower expected utility, he would be considered negligent and his liability would be set to reflect the difference between the two expected utilities. Under this approach, the doctor's expected liability should be 100. Similarly, Jennifer Arlen and W. Bentley MacLeod have argued that a physician's liability should amount to the difference between the patient's expected benefit from the optimal treatment and her actual benefit from the erroneous treatment that she received. Assuming underenforcement, that difference should be divided by the probability that the doctor is found liable when negligent. See Jennifer Arlen & W. Bentley MacLeod, Malpractice Liability for Physicians and Managed Care Organizations, 78 N.YU. L. REV. 1929, 1984-85 (2003).
10. This rule has some exceptions, the most important and prevalent of which precludes the deduction of insurance benefits from damages. For the rule and its exceptions, see 1 DAN B. DOBBS, LAW OF REMEDIES § 3.8, at 372-79 (2d ed. 1993).
11. H.L.A. HART & TONY HONORÉ, CAUSATION IN THE LAW 249-53 (2d ed. 1985).
12. See id. at 109-29.
13. See WEINRIB, supra note 2, at 63-66.
14. Similarly, in the case of Steele v. Ft. Sanders Anesthesia Group, 897 S.W.2d 270, 273 (Tenn. Ct. App. 1994), operating on a patient while he was seated added the risk of ischemic injury to the regular risks of anesthesia and thus the risk of quadriplegia to the normal risk of partial paralysis. As I explain in the text that follows, had the regular risks been realized, liability under prevailing tort law should not have been imposed.
15. Guido Calabresi, Concerning Cause and the Law of Torts: An Essay for Harry Kalven, Jr., 43 U. CHI. L. REV. 69, 71 (1975).
16. Cf. HART & HONORÈ, supra note 9, at 121-22 (discussing when speeding is causally connected to an accident). Similarly, in a case where a tree fell on a car as it was speeding, the Supreme Court of Pennsylvania held that the causal relationship between the accident and the defendant's speeding was insufficient for the imposition of liability: That his speed brought him to the place of the accident at the moment of the accident was the merest chance, and a thing which no foresight could have predicted. The same thing might as readily have happened to a car running slowly, or it might have been that a high speed alone would have carried him beyond the tree to a place of safety.
17. Berry v. Sugar Notch Borough, 43 A. 240, 240 (Pa. 1899).
18. In a decision rendered by the British House of Lords, Chester v. Afshar, [2004] UKHL 41, [2005] 1 A.C. 134 (appeal taken from Eng.), the majority of the Lords decided to depart from established causation principles. The plaintiff had undergone an operation that had failed and resulted in harm. Id. at [11], 1 A.C. at 142. She could not prove that the doctors had been negligent in executing the operation. Id. The plaintiff was able to prove, however, that she had not been fully warned of the risks of the operation by her doctors, and so her consent could not be deemed informed. Id. at [5], 1 A.C. at 140. To establish the doctors' liability for her injury, it was necessary for the plaintiff to show that but for the lack of due warning, the harm would not have occurred. Id. at [29], 1 A.C. at 147, The Court held for the plaintiff, reasoning that the plaintiff would have asked for a second opinion had she been adequately warned by her doctors. Id. at [11], 1 A.C. at 142. The second opinion would have recommended the same operation, but it would have delayed the procedure by a few days, at which point the plaintiff would have probably undergone the operation without suffering any harm. Id. The minority, in holding for the defendants, reasoned that the lack of due warning had not increased the risks to the plaintiff, even though it had constituted a but-for cause of the harm. Id. at [7]-[10], 1 A.C. at 141-42.
19. The outcome under prevailing tort law would be different, however, if we were to assume instead that the risks entailed by the treatments are correlated. Ruling out the noncorrelation assumption would yield the following threefold factual argument: (a) Treatment A would harm 10 out of 100 patients exposed to this course of treatment, (b) Treatment B would harm 8 out of 100 patients exposed to the treatment, and, most importantly, (c) the same 8 people who would have suffered harm under Treatment B would have suffered identically under Treatment A. Under this argument, the probability that the doctor's negligent choice caused the patient's harm is only twenty percent. Courts applying a preponderance of the evidence standard would dismiss the action against the doctor, while courts applying the probabilistic recovery principle would award damages for only twenty percent of the patient's harm.
20. B.
21. Cf. Stephen Marks, Discontinuities, Causation, and Grady's Uncertainty Theorem, 23 J. LEGAL STUD. 287, 288 (1994) ("Increasing the precaution level not only lowers the expected cost of accidents but also changes the types of accidents that occur and changes the identities of those at risk.") Marks makes this point to criticize one of Grady's arguments with respect to the optimal negligence rule, but does not take it further to propose the adoption of the ORP.
22. Cf. Ariel Porat, The Many Faces of Negligence, 4 THEORETICAL INQUIRIES L. 105 (2003) (presenting the various categories of such instances and arguing that the necessity of imposing liability varies among the categories).
23. For examples of actual cases, see supra note 5.
24. See, e.g., McMahon v. Shea, 688 A.2d 1179, 1182 (Pa. 1997) (affirming lower court ruling upholding plaintiff's cause of action for malpractice where an attorney advised his client to settle but failed to explain the consequences of settling); Saetz v. Braun, 116 N.W.2d 628, 632-34 (N.D. 1962) (finding a livestock carrier who chose to cross an unsafe bridge instead of taking a steeper and longer route negligent and liable for the full amount of harm).
25. At this stage, I ignore the third-party benefits of universal inoculation enjoyed by the majority of the inoculated population who do not suffer from the vaccine's side effects. Cf. Jonathan Baron & liana Ritov, Intuitions about Penalties and Compensation in the Context of Tort Law, 7 J. RISK & UNCERTAINTY 17, 18 (1993) (arguing that high liability for harms resulting from vaccines and birth-control devices produces negative incentives to develop them, even though they are beneficial to society). These benefits are third-party offsetting risks.
26. See infra Section II.B.
27. Cf. Hebert v. Perkins, 260 So. 2d 15 (La. Ct. App. 1972) (imposing liability for injuries sustained by his sick passenger on a driver who drove through a red light and collided with another car while rushing that sick passenger to the hospital.) Needless to say, no offsetting risks were taken into account in the decision.
28. See Baron & Ritov, supra note 22, at 18.
29. Every state has adopted a Good Samaritan statute that reduces the standard of care for "licensed health care providers when they are rendering certain professional assistance at the scene of an emergency accruing outside the professional's regular practice." DAN B. DOBBS, THE LAW OF TORTS, §252, at 663 (2000). Some states also extend the statute to any person who renders emergency assistance.
30. See id. at 664. The ORP could serve as a possible mean to reduce liability in such cases at the damages - rather than at the standard of care - level.
31. Cf. Hebert, 260 So. 2d at 17. In Hebert, the court also imposed liability on the rescuing driver for injuries sustained by the driver of the vehicle with which the rescuing driver collided. No offsetting risks were considered in this context either.
32. Von Bergen v. Kuykendall, 400 P.2d 553, 554-56 (Or. 1965) (imposing liability on the slow driver for the full harm inflicted on the victim). A similar example is the negligent failure of the state to maintain safety on the highway by lighting flares. See Whitehouse Trucking Co. ex rel. Hanover Fire Ins. Co. v. State, 22 111. Ct. Cl. 126, 135 (Ct. Cl. 1955). Lighting flares is known to be hazardous. Sff Ott v. Washington Gas Light Co., 205 F. Supp. 815, 817 (D.D.C. 1962) (describing how a small child was burned by the open flame of a flare pot set out in the street to warn of a barricade protecting an excavation).
33. Cf. Caterpillar Tractor Co. v. Beck, 593 P.2d 871 (Alaska 1979) (holding that, in order to avoid liability for its defective design, a tractor manufacturer should prove by a preponderance of the evidence that, on balance, the benefits of the challenged design outweighed the risk of danger inherent in the design); Green v. Smith & Nephew AHP, Inc., 617 N.W.2d 881 (Wis. Ct. App. 2000) (finding a manufacturer of latex gloves liable for an allergic reaction triggered by exposure to the cornstarch powder with which it lined its gloves but giving no consideration to the possible benefits of the addition of cornstarch powder). Another noteworthy case in this context is that of an automobile bumper manufacturer who designed a higher bumper, making it safer for the driver of the car to which it is attached but more dangerous for other drivers on the road. Beatty v. Trailmaster Prod., Inc., 625 A.2d 1005 (Md. 1993) (holding that the mere fact that the truck's bumper was higher than that of the decedent's car did not render the truck defective or unreasonably dangerous).
34. 551 P.2d 334 (Cal. 1976).
35. An analogous example is the negligent release of a mental patient who poses a threat to his family. See, e.g., Durflinger v. Artiles, 563 F. Supp. 322 (D. Kan. 1981), aff'd, 727 F.2d 888 (10th Cir. 1984).
36. 10A.2d 673 (N.H. 1940).
37. In a third case, decided by the House of Lords, the police were not held liable for their failure to hold a person in custody who, after his release, murdered the plaintiffs' relative. The Lords ruled that the police owed no duty of care in the circumstances under discussion. Hill v. Chief Constable, [1989] A.C. 53 (H.L.) (appeal taken from Eng.). Had the Court imposed liability and applied the ORP, the liability would have been reduced due to the fact that by releasing the alleged murderer, the police had eliminated the risk of holding an innocent person in custody.
38. In yet another case, the House of Lords ruled that a public authority operating a liberal rehabilitation camp with less supervision than commonly practiced owed a duty of care to people injured by inmates who had escaped from custody. Home Office v. Dorset Yacht Co., [1970] A.C. 1004 (H.L.) (appeal taken from Eng.). Here, too, imposition of liability and application of the ORP would have resulted in a reduction of damages due to prevention of the harm, or risk of harm, the inmates would have suffered had they been held in a less liberal rehabilitation camp.
39. An analogous example is that of a dam operator who fails to balance the interests of landowners along the lake created by the dam and landowners below the dam. See, e.g., Trout Brook Co. v. Willow River Power Co., 267 N.W. 302, 306 (Wis. 1936); Boyington v. Squires, 37 N.W. 227 (Wis. 1888); Hackstack v. Keshena Improvement Co., 29 N.W. 240 (Wis. 1886). None of these cases imposed liability on the dam operator.
40. Another explanation is that recognizing the entitlement of victims to compensation (as opposed to the state) provides them with an incentive to bring actions and enforce the law against transgressors. Absent such entitlement, victims would lack incentive to report the harms they suffer. See RICHARD A. POSNER, ECONOMIC ANALYSIS OF LAW §6.10, at 192 (6th ed. 2003).
41. Saul Levmore, Explaining Restitution. 71 VA. L. REV. 65, 68-82 (1985).
42. Cf. Abraham Bell & Gideon Parchomovsky, Givings, 111 YALE LJ, 547, 554 (2001) ("[T]he efficiency rationale for takings compensation also dictates that the state properly measure the benefits of its actions. Just as the state's failure to internalize the cost of takings creates fiscal illusion and inefficiency, the state's failure to internalize the benefit of givings creates fiscal illusion and inefficiency.").
43. See also Robert Cooter & Ariel Porat, Should Courts Deduct Nonlegal Sanctions from Damages?, 30 J. LEGAL STUD. 401 (2001) (arguing that when a breach of contract or a wrongdoing triggers nonlegal sanctions that confer benefits on third parties, efficiency requires deducting those nonlegal sanctions from damages).
44. One could argue that preserving the landscape and environment is a goal the tour guide should ignore, since his only task is to ensure the hikers' safety. Under this argument, others (like the Environmental Protection Agency) should take care of preserving the landscape and environment. Obviously my stance on this issue is different.
45. See Daily Times Democrat v. Graham, 162 So. 2d 474 (Ala. 1964); Barber v. Time, Inc., 159 S.W.2d 291 (Mo. 1942) (finding a newspaper liable for invasion of privacy after it published a picture of the plaintiff without her consent).
46. Heidbreder v. Northampton Twp. Trs., 411 N.E.2d 825 (Ohio Ct. App. 1979) (imposing full liability on the police officer).
47. Heidi M. Hurd, The Deontology of Negligence, 76 B.U. L. REV. 249, 258-59 (1996) (examining the notion of negligence as engaging in an activity in which those who bear the risk of being harmed are not those who stand a chance of reaping the benefits);
48. Gregory C. Keating, Distributive and Corrective Justice in the Tort Law of Accidents, 74 S. CAL. L. REV. 193, 196-97 (2000);
49. Tsachi Keren-Paz, The Limits of Private Law: Tort Law and Distributive Justice 356 (Dec. 2000) (unpublished D. Jur. dissertation, Osgoode Hall Law School, York University) (on file with author) ("The public benefits from the activities of the public authority, and therefore the public should bear the costs of this activity. When the public authority harms the plaintiff, liability should be imposed, and the public would ultimately bear the costs of the activity that benefited it and harmed the plaintiff.").
50. ARIEL PORAT & ALEX STEIN, TORT LIABILITY UNDER UNCERTAINTY 116-29 (2001).
51. In this context, the principle is known as the "lost chances of recovery principle." See e.g., Delaney v. Cade, 873 P.2d 175 (Kan. 1994) (holding that, in order to recover damages for the loss of chances for a better recovery, the diminished degree of recovery must be substantial one);
52. Falcon v. Mem'l Hosp., 462 N.W.2d 44, 56-57 (Mich. 1990), superseded by statute, MICH. COMP. LAWS § 600.2912a(2) (1993); Perez v. Las Vegas Med. Ctr., 805 P.2d 589, 592 (Nev. 1991) (holding that a 10% probability constitutes a substantial diminished degree of recovery);
53. Herskovits v. Group Health Coop, of Puget Sound, 664 P.2d 474 (Wash. 1983);
54. see also 2 DOBBS, supra note 8, § 8.1(7), at 406-11;
55. Joseph H. King, Jr., Causation, Valuation, and Chance in Personal Injury Torts Involving Preexisting Conditions and Future Consequences, 90 YALE L.J. 1353 (1981). Some courts have extended the principle to other areas of the law, such as civil rights.
56. See e.g., Doll v. Brown, 75 F.3d 1200 (7th Cir. 1996) (Posner, J.) (supporting the extension of the lost chances principle to areas beyond malpractice and instructing the trial court to consider the possibility of awarding the plaintiff in an employment discrimination suit damages calculated according to the chances that his not being promoted was due to illegal discrimination).
57. See PORAT & STEIN, supra note 40, at 126-29.
58. Another way to put it is as follows: the expected harm that would have been caused had the doctor acted reasonably should be deducted from the harm of 5000. This expected harm is .1 × 4000 = 400. and therefore under the PRP the doctor should be liable for 5000 - 400 = 4600.
59. Cf. Claire Finkelstein, Is Risk a Harm?, 151 U. PA. L. REV. 963, 967-74 (2003) (claiming that the chance of benefit is in itself a benefit).
60. ROBERT COOTER & THOMAS ULEN, LAW & ECONOMICS 334-35 (4th ed. 2003). Or, in more popular terms, he must invest in precautions so long as one additional dollar in precautions will reduce the expected harm by more than one dollar.
61. Note that if liability is for the exact amount of actual harm incurred by the injurer (assuming his risk neutrality), he will not invest excessively in precautions; indeed, there is no reason for him to invest an additional dollar in precautions when it will reduce the expected harm by less than one dollar.
62. See Alec Shelby Bayer, Comment, Looking Beyond the Easy Fix and Delving into the Roots of the Real Medical Malpractice Crisis, 5 HOUS. J. HEALTH L. & POL'Y 111, 114 (2005);
63. Chandler Gregg, Comment, The Medical Malpractice Crisis: A Problem with No Answer?, 70 MO. L. REV. 307, 318-19 (2005);
64. Kristie Tappan, Note, Medical-Malpractice Reform: Is Enterprise Liability or No-Fault a Better Reform?, 46 B.C. L. REV. 1095, 1096 (2005).
65. Lowering the cesarean rate in the United States has been a goal for the past twenty-five years. U.S. DEP'T OF HEALTH & HUMAN SERVS., NAT'L INST. HEALTH PUB. NO. 82-2067, CESAREAN CHILDBIRTH: REPORT OF A CONSENSUS DEVELOPMENT CONFERENCE 4 (1981). Cesarean delivery rates in the United States rose dramatically from 4.5 per 100 births in 1965 to 24.1 per 100 births in 1986.
66. A.R. Localio et al., Relationship between Malpractice Claims and Cesarean Delivery, 269 J. AM. MED. ASS'N 366, 366 (1993). In response to the growing concerns in the 1980s about the rising cesarean rate, the U.S. Department of
67. Health and Human Services established decreasing cesarean deliveries as one of the Healthy People Year 2000 objectives. U.S. DEP'T OF HEALTH & HUMAN SERVS., HEALTHY PEOPLE 2000 § 14.8 (1990).
68. National efforts to decrease the cesarean delivery rate now focus on low-risk women as defined in the Healthy People 2010 objectives, aiming for a rate of no more than 15 per 100 births. U.S. DEP'T OF HEALTH & HUMAN SERVS., 2 HEALTHY PEOPLE 2010, AT 16-9 (2d ed. 2000), available at http://www.healthypeople. gov/Document/pdf/Volume2/16MICH.pdf.
69. Obstetricians are experiencing an ever-increasing rate of malpractice claims against them. Roger A. Rosenblatt et al., Why Do Physicians Stop Practicing Obstetrics? The Impact of Malpractice Claims, 76 OBSTETRICS & GYNECOLOGY 245, 249 (1990). The frequency of such claims has increased such that, in 1999, 76.5% of obstetrician- gynecologists surveyed by the American College for Obstetricians and Gynecologists reported having been sued at least once.
70. Sarah Domin, Comment, Where Have All the Baby-Doctors Gone? Women's Access to Healthcare in Jeopardy: Obstetrics and the Medical Malpractice Insurance Crisis, 53 CATH. U. L. REV. 499, 504 (2004).
71. In fact, "fear of being sued if complications arise in a vaginal delivery has contributed to the rising number of Cesarean sections." Elizabeth Swire Falker, The Medical Malpractice Crisis in Obstetrics: A Gestalt Approach to Reform, 4 CARDOZO WOMEN'S L.J. 1, 15 (1997).
72. Studies have examined the impact of the risk of a malpractice claim on the incidence of cesarean deliveries and found that a significant relationship exists between the rate of cesarean procedures and malpractice claim frequency. Michael Daly, Comment, Attacking Defensive Medicine Through the Utilization of Practice Parameters: Panacea or Placebo for the Health Care Reform Movement?, 16 J. LEGAL MED. 101, 105 (1995);
73. see also Antonella Vimercati et al., Choice of Cesarean Section and Perception of Legal Pressure, 28 J. PERINATAL MED. 111, 116 (2000) ("[T]he perception of legal pressure was directly related to the rate of cesarean section in each unit.").
74. Nonlegal sanctions could also trigger defensive medicine practices. For example, a doctor might tend to choose a course of treatment whose failure would be less discernible to colleagues and thus free from condemnation by those colleagues.
75. See infra Section IVB.
76. Theoretically, the practice of defensive medicine could be eliminated through the market by compensating doctors who must choose the courses of action that poses a greater risk to them. Doctors will be compensated through the price paid by their patients, and their bias towards the less risky course of action will disappear. Market imperfections, however, often preclude such arrangements. See TOM BAKER, THE MEDICAL MALPRACTICE MYTH 64-65 (2005) ("[P]hysicians have little or no ability to raise prices in response to increased costs. When a malpractice insurance crisis hits, the burden falls disproportionately on physicians in high-risk specialties and locations, who cannot raise their prices in response.");
77. Michelle M. Mello & Carly N. Kelly, Effects of a Professional Liability Crisis on Residents' Practice Decisions, 105 OBSTETRICS & GYNECOLOGY 1287, 1293-94 (2005);
78. Peter Eisler et al., Hype Outraces Facts in Malpractice Debate, USA TODAY, Mar. 5, 2003, at 1A (claiming that the cause of doctors' inability to pass higher costs to patients is the limitations on reimbursements set by managed care insurers, Medicare, and Medicaid).
79. B are their risks.
80. To understand the distortion in its most extreme form, suppose that Treatment A entails a risk of 500 and Treatment B entails a risk of 499. This raises the anomaly of a doctor's great willingness to choose Treatment B even if the additional costs necessary to administer that treatment are much higher than 1. The ORP prevents this anomaly.
81. At first glance, one could mistakenly confuse the argument made in this Article-that ignoring the ORP burdens injurers with liability for more harm than what they actually caused-with another argument-that injurers who do not satisfy the standard of care could be liable for harm that was not caused by their negligence, thereby resulting in overdeterrence. Under the latter argument, a rule of negligence creates discontinuity or a sudden jump in liability, because the expected liability of an injurer who satisfies the standard of care drops to zero, while any deviation from that standard results in full liability for any harm that occurred. This discontinuity and its behavioral consequences were originally explained in Robert D. Cooter, Commentary, Economic Analysis of Punitive Damages, 56 S. CAL. L. REV. 79, 80-89 (1982), with Cooter later explaining that the discontinuity is due to incomplete information available to the courts or the probabilistic nature of the causal connection.
82. See Robert D. Cooter, Punitive Damages for Deterrence: When and How Much?, 40 ALA. L. REV. 1143. 1155 (1989).
83. Mark Grady and Marcel Kahan also have demonstrated that the discontinuity of liability as well as the risk of burdening the negligent injurer with liability for more than the harm he caused completely disappear when causation rules are properly applied so that the injurer is liable only for those harms that would not have been created had he behaved reasonably. Mark F. Grady, A New Positive Economic Theory of Negligence, 92 YALE L.J. 799, 812-13 (1983);
84. Marcel Kahan, Causation and Incentives to Take Care under the Negligence Rule, 18 J. LEGAL STUD. 427, 427-29 (1989). In contrast, the argument made in this Article for adopting the ORP holds regardless of the information available to courts or juries and even when the prevailing causation rules are properly applied: ignoring offsetting risks will result in liability for much more than the harms negligently caused by injurers.
85. In fact, this assumption does not always hold. See supra note 52.
86. See supra note 52;
87. infra Section V.D.
88. Note that the underlying assumption of the discussion in the text above is that the law prohibits injurers and victims from opting out of the prevailing liability regime. See infra Section V.D.
89. See WEINRIB, supra note 2, at 19-20.
90. It is possible to conceive of cases falling into the second category where the victim's ex ante interests are less clear. Take, for instance, the example of the emergency room doctor who must decide which patient to treat first. See supra text accompanying note 32. A threat of high liability in the absence of the ORP could encourage the doctor to treat the patient more likely to bring a suit against him. Applying the ORP will result in lower liability and a decrease in the practice of this kind of defensive medicine.
91. See supra Section IVA. Patients less inclined to sue the doctor may prefer such a liability regime.
92. See infra Section V.D.
93. Porat, supra note 19, at 112-16.
94. See supra Part I.
95. Cf David Lewis, The Punishment That Leaves Something to Chance, 18 PHIL. & PUB. AFF. 53 (1989) (arguing that retributive justice mandates that criminals be exposed to the same risk to which they expose their victims);
96. Jeremy Waldron, Moments of Carelessness and Massive Loss, in PHILOSOPHICAL FOUNDATIONS OF TORT LAW 387 (David G. Owen ed., 1995) (applying the same argument to tort law). It is possible to reconcile the PRP with principles of corrective justice. In Example 1 cases, applying the PRP would result in a damages award of 4600 rather than 5000.
97. See supra Part III. The PRP is reconcilable with principles of corrective justice because the PRP is more about evidence than substance, and corrective justice is generally indifferent to evidence. Moreover, the PRP is aimed at overcoming the uncertainty of the specific interaction between the plaintiff and the defendant, whereas the ORP has a different objective.
98. See supra discussion accompanying note 44. One of the tenets of corrective justice is its focus on the specific interaction between the injurer and the victim.
99. See JULES L. COLEMAN, RISKS AND WRONGS 354-60 (1992);
100. WEINRIB, supra note 2, at 64-66;
101. Stephen R. Perry, The Moral Foundations of Tort Law, 11 IOWA L. REV. 449, 507-14 (1992).
102. The risk that poor people would not be able to purchase insurance is a general problem that can be solved in our context either through mandatory first-party insurance or social insurance.
103. But sometimes the problem is overenforcement. See Richard A. Bierschbach & Alex Stein, Overenforcement, 93 GEO. L.J. 1743 (2005) (discussing when overenforcement arises and how the law of evidence and procedure handles it).
104. See BAKER, supra note 52, 22-44 (arguing that there is a huge underenforcement problem in medical malpractice, because many patients injured by medical malpractice do not sue).
105. But see id. at 63 (presenting evidence of the magnitude of the underenforcement problem).
106. David S. Bloch & William Robert Nelson, Jr., Defining "Health": Three Visions and Their Ramifications, 1 DEPAUL J. HEALTH CARE L. 723, 731 (1997) ("Commentators who consider health a non-marketable good contend that there are elements of health which, though valuable, are unquantifiable, such as hope, compassion, and the extension and preservation of life.... Health's social benefits are not fully realized by the market price it commands.") (footnote omitted);
107. Maja Campbell-Eaton, Student Article, Antitrust and Certificate of Need: A Doubtful Prognosis, 69 IOWA L. REV. 1451, 1459 (1984) ("Moreover, health care usually is viewed as a 'merit good,' with benefits extending beyond its economic value, This view is reinforced by the ethical mandates of the health professions and by a widespread belief that 'more is better' in the provision of medical services."):
108. T.R. Marmor et al., Medical Care and Procompetitive Reform, 34 VAND. L. REV. 1003, 1009 (1981) ("Improved health, the anticipated outcome of medical care, has positive externalities. This makes medical care a merit good, and, unlike many other economic goods, one that should not be allocated solely on the basis of ability to pay.");
109. See also Stuart H. Rome, Medicine and Public Policy: Let Us Look Before We Leap Again, 41 MD. L. REV. 46, 48 (1981) (listing a number of potential benefits of medical care that possibly escape reflection in market prices).
110. See supra text accompanying note 17.
111. Another issue relating to the courts' lack of information is that, under certain circumstances, the ORP encourages potential injurers like doctors to artificially raise the offsetting risks in order to reduce their liability should harm occur. When such a measure is verifiable, courts can refrain from offsetting the enhanced risks and deduct only the risks that would have existed even absent the injurer's artificial production of risks.
112. Since the price patients pay does not capture all benefits created by medical treatments (positive externalities) and since it is difficult for physicians to raise prices to cover their increased costs, under strict liability physicians will charge much less than necessary to respond to the broad liability imposed on them. See supra notes 53, 69.
113. See e.g., Tunkl v. Regents of Univ. of Cal., 383 P.2d 441 (Cal. 1963);
114. Health Net of Cal., Inc. v. Dep't of Health Servs., 6 Cal. Rptr. 3d 235 (Cal. Ct. App. 2003);
115. Richard A. Epstein, Contractual Principle Versus Legislative Fixes: Coming to Closure on the Unending Travails of Medical Malpractice. 54 DEPAUL L. REV. 503, 505-06 (2005).
116. See Porat, supra note 19, at 126-28, 131-35, 138-40.
117. See STEPHEN D. SUGARMAN, DOING AWAY WITH PERSONAL INJURY LAW: NEW COMPENSATION MECHANISMS FOR VICTIMS, CONSUMERS, AND BUSINESS 40, 184 (1989).
118. Id. at 169.
119. Gary T. Schwartz, Reality in the Economic Analysis of Tort Law: Does Tort Law Really Deter?, 42 UCLA L. REV. 377 (1994).