Ring in Torts:Making People Pay for Negligence
The Times of India,
Jun 18, 2004
There was a horrible accident on the sets of director
Kaizad Gustad’s new movie the other day, in which an assistant director
perished. The police have registered a case of culpable homicide not
amounting to murder and India’s infamous criminal justice system is on
Gustad's back. My question is: Is there a better way to ensure proper,
The notion of justice demands that, if found guilty, Gustad should be
punished. But it leaves open the notion as to exactly how that punishment
is to be meted out. According to the Indian criminal justice system, the
only punishment Gustad will me-rit is imprisonment. His negligence has
cost someone her life, and he should go to jail for it. Such a doctrine of
punishment is based on notions of 'retribution'. This is a very old and
very unsophisticated doctrine, harking back to the proverbial 'eye for an
A far more sophisticated doctrine is that of 'restitution', under which
tort laws are based, as per which, if found guilty, Gustad would have to
pay financial compensation to the deceased's family. There are many
advantages of treating a case such as this under tort law than under
criminal law, which I will enumerate below:
First: Tort laws are civil cases, where the burden of proof is lower. That
is, in a criminal trial, to be found guilty, the prosecution would have to
convince the judge of Gustad's guilt 'beyond any reasonable doubt'.
However, in a civil case, under tort law, all that is required is the mere
'preponderance of evidence'. So, tort cases can be settled fast and
compensation paid quickly.
Second: It has been repeatedly seen in India, from the Bhopal gas tragedy
to the Uphaar fire case, that criminal law fails to deliver compensation
to the victims in time. It also fails to deliver retribution to the
perpetrators of the crime/tort. Thus, there is no justice at all. In the
Uphaar case, compensation was ordered after five years, and that too in a
Third: If this approach is followed in all cases of injury or death
arising out of negligence — preferring restitution to retribution — then
the role of the police in investigating such 'crimes' can be drastically
reduced. All those who are booked for 'causing death due to rash and
negligent driving' would be forking out compensations instead of getting
squeezed by the criminal justice system.
Fourth: Once compensation through torts is established, it sends out a
powerful signal to all players in the market economy (as well as the
state) to be extremely careful. There is a powerful incentive towards
caution. Thus, we see a "Caution! Wet Floor" sign in every McDonald's
restaurant around the world when the floor is being cleaned. This is
standard international practice at McDonald's simply because torts are
king in the US. If you slipped in a restaurant there and the floor was
wet, and there was no warning, you would be very rich very soon!
Fifth: Tort laws bring insurance companies into the picture. For example,
builders of apartments would know that they would be sued to the bone if
their buildings collapsed in an earthquake. They would therefore insure.
Private insurance companies would ensure building quality better than any
government agency today. Similarly, doctors would insure against
malpractice suits — and quacks would get weeded out.
Sixth: Tort laws will turn lawyers into negligence entrepreneurs. They
will go scouting around for victims and make sure that they get their due
far better than any social worker.
Seventh: Tort laws would be extremely effective against adulterated food
and drinks which cause death or injury. For every 'liquor tragedy' there
would be compensation. For every 'adulterated mustard oil causes dropsy'
case there would be compensation. For every death caused by spurious drugs
there would be compensation. That would be justice.
There are three pillars of a 'rule of law' society: property rights,
contracts and torts. The Peruvian economist, Hernando de Soto, has won the
battle for property rights. All over the Third World, from Thailand to
China to Africa and South America, there is widespread awareness that
property rights unlock the 'mystery of capital'. We in India suffer from a
weak property rights regime, it is true, but we also suffer from weak
contract enforcement — as for example in debts — and from a total absence
of relief under torts. We have none of the pillars of a rule of law
society. This is frightening!
Two small points in conclusion: One, that the lower burden of proof in
torts has been found to be economically 'efficient' by those who undertake
the economic analyses of law. In a criminal case, where the criminal, if
found guilty, is imprisoned, society suffers a net loss and it makes sense
to see that such cases are decided upon only after thorough scrutiny of
the evidence. But under tort law, there is only a transfer of resources,
society suffers no net loss, and it makes sense to decide these cases
Two: When torts came into vogue in the cities of ancient times, a part of
the money was used for fortifying the walls of the city! That is, when a
tort claim was settled, the polis also gained. That is the way of the
future. India's criminal justice system does not deliver justice at all.
It only effects a financial squeeze on the alleged perpetrator. Instead of
treating them as criminals, if the law treated them as tortfeasors, the
cause of justice would triumph.
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