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REGARDING Book Review: Liability If you have read Peter Huber's recent _Galileo's Revenge_, or Walter Olson's _The Litigation Explosion_, or if you've been following some of the recent pushes for legal reform (spearheaded by Quayle???), or if you're like me and you like watching "L.A. Law" just because you know you're going to disagree with most of the cases they keep on winning all the time, or if you've heard the joke where the lawyer is talking to someone on the street and an ambulance speeds by and he suddenly says, "Sorry, gotta run!", then you may be interested in Peter Huber's first book on legal reform, _Liability_. Peter Huber; _Liability: The Legal Revolution and its Consequences_; 1988; Basic Books; 260 pages. Peter Huber's _Liability_ is an intellectual history of the long, slippery slope that is recent tort law. The strength of Huber's book lies in quickly identifying a central fallacious judicial policy and then tracing its history of unforeseen consequences and inverted logic from the late 50's up to the present time. It's extremely well written, so it lends itself to a quick summary. The problem started when a group of "progressive" judges and legal scholars determined that consumers don't take risk into account adequately and fail to demand sufficient safety from products. The courts adopted a progressively hostile attitude towards producers, applying arbitrary standards of risk to all products, regardless of individual preferences expressed in the form of a contract. The courts did this in order to force producers to be more careful, to provide consumers with a kind of secondary insurance, and to create a hidden tax on unsafe products. According to this philosophy, it didn't really matter if the product caused the injury, what mattered was that producers take responsibility for the percentage of accidents that inevitably result from its use. Don't blame whoever was at fault, blame whoever could have avoided the accident at the lowest cost, the one with the deepest pockets. For these goals to be achieved, many legal standards had to erode. The very sanctity of contracts came into question, and contract law rapidly yielded to more contentious torts. If you didn't specifically warn against the risk of heart palpitations when selling "happy fun ball," a broad disclaimer was nullified. If you counter by putting in specific warnings, courts would counter by saying the warning wasn't conspicuously placed even if it was in the contract, that the contract was not negotiated properly, that the producer violated an unrelated minor point of the contract, that one of the parties wasn't competent to enter into the contract with the big bad corporation--what we tend to call "loopholes" when the results are not so auspicious. The standards for ordinary prudence and negligence also shifted. Courts that previously had only ruled on manufacturing defects (a single item from the assembly line) now ruled mainly on design defects (the entire production run). A "design defect" is a vague concept, and juries got into the business of rearranging priorities and second-guessing engineers. If you received an injury from operating a Yugo that may have been prevented if it were designed more like a Volvo, that can construed as a design defect. The fact that you expressed a preference for the cheaper, riskier car does not matter, since consumers are assumed to be innocent and ignorant of safety information when entering into the bargain. Some products, such as effective drugs, are inherently risky, and juries started drawing comparisons between existing products and hypothetical, ideal products. Although regulatory agencies and trade associations are no doubt more knowledgeable in developing standards, judges and juries regularly subvert those standards in order to make them arbitrarily more strict. [To be fair, at least the courts were efficient in making their decisions and left a fairly clean wound, unlike regulatory agencies, which require large bureaucracies to arrive at their arbitrary decisions. :>) ] Still, manufacturers have little way to determine what the "law" really is, or is going to be tomorrow, so they adopt a policy of extreme defensiveness, often withholding potentially valuable products and services from the market. Under the new liberal rules, the statute of limitations was loosened and then dispensed with. Discovery rules were changed so that it didn't matter when the injury took place; when you discovered it many years later you were still entitled to sue, when the defendant's ability to gather evidence or even remember who you are is sharply reduced. Plaintiffs sued in anticipation of injuries that may not actually have occurred, but for which a plausible case could be made that they would at some point. Once plausibility broke down, cases rested on unsupported fears of future harm, fear being considered itself an injury. The link between cause and effect was severely eroded when any "scientist" willing to be an "expert witness" could promulgate quack theories. [This aspect of the problem is dealt with comprehensively in Huber's follow-up book, _Galileo's Revenge_.] At the end of all this activism, life is made no less risky. Huber uses the example of a cole slaw machine in which you put pieces of cabbage in an opening at one end and cole slaw comes out the other end. Suppose a child's hand is caught in the machine one day. The court determines that the opening was too wide to be safe, and insists that it be made narrow. Fine. Now, for the cabbage to fit through the opening, the chunks have to be smaller, and for that you have to use a knife, which is at least as likely to cause injury. But what are you going to do, sue the manufacturer of the knife for your clumsiness? So the net result is not that risk is reduced, but that the specific behavior that gets people sued is reduced or diverted. New technologies suffer disproportionately. The tragic consequences of flexible liability can be seen in its effects upon health care. Medical services become so expensive as a result of the exorbitant malpractice insurance rates and entry barriers to decent health care are so high that calls are made for drastic measures, such as universal health care and no-fault insurance, that hide costs and diffuse individual responsibility. On the one hand you can say that flexible liability is more effective in preventing dangerous products from ever coming to market. The reality, though, is that the first products that are selected against are those high-risk products that people need most, such as vaccines and birth control devices. This condensation cannot convey how reasonable the logic sounds at each point as it goes by, even if you haven't consciously accepted the initial assumption that producers implicitly accept responsibility for all damages. Many of the plaintiffs described in the book were no doubt wronged on some level, and indeed deserving, but the book steps back and examines the legal seduction that was necessary to entertain these cases in the first place. Often Huber's tone makes it seem as if the judges and lawyers destroyed legal standards consciously, for the hell of it. Of course, the truth is far worse-- they genuinely wanted to do good. Huber is very good at digging a hole and leading us down into legal hell, but not as good leading us out of it. I found his "What's Wrong" section far more convincing than his "What We Can Do About It" section, and you'll sympathize with such pessimism by the time you reach the end of the book. Huber calls for a resurgence of contract law, not the primitive sort of catch-all disclaimers that existed before tort law took over, but flexible agreements that take consumers' advanced expectations into account. Interestingly, Huber implicitly bases his argument on the idea that the "market" for contracts initially failed to take new consumer expectations into account, resulting in a takeover by the Judiciary. If there was an inherent weakness in the market that led to such government zealousness, then what caused it, and how might the mistaken policy have been avoided in the first place? Unlike Walter Olson's _The Litigation Explosion_, Huber does not spend much time describing the symptoms-- a society permeated with ambulance-chasers. I suspect that Olson's book is more likely to be useful if you are interested in specific reforms. Huber's book is a short history of ideas that will help you understand how we got to this point. 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