Kenneth Abraham explores the development and interdependency of the
tort liability regime and the insurance system in the United States
during the twentieth century and beyond, including the events of
September 11, 2001.
From its beginning late in the nineteenth century, the
availability of liability insurance led to the creation of new
forms of liability, heavily influenced expansion of the liabilities
that already existed, and continually promoted increases in the
amount of money that was awarded in tort suits. A
"liability-and-insurance spiral" emerged, in which the availability
of liability insurance encouraged the imposition of more liability,
and, in turn, the imposition of liability encouraged the further
spread of insurance.
Liability insurance was not merely a source of funding for
ever-greater amounts of tort liability. Liability insurers came to
dominate tort litigation. They defended lawsuits against their
policyholders, and they decided which cases to settle, fight, or
appeal. The very idea behind insurance--that spreading losses among
large numbers of policyholders is desirable--came to influence the
ideology of tort law. To serve the aim of loss spreading, liability
had to expand.
Today the tort liability and insurance systems constantly
interact, and to reform one the role of the other must be fully
understood.
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