Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 4. Negligence Standard
In response, Professor Jennifer Arlen argues that wealth must matter if we care about
achieving optimal deterrence. Using an economic analysis assuming that individuals are riskaverse
instead of risk-neutral, she finds that a defendant’s wealth should be taken into account in a
negligence case, effectively calling for wealthy people to adhere to a higher standard of care than
poor people:
Consider a very wealthy potential defendant contemplating an additional $100
expenditure on care. The $100 expenditure on care will not affect the wealthy
individual’s ability to purchase necessities and may little affect his ability to
purchase other goods. The expenditure will accordingly not adversely affect his
total utility. A very poor defendant, however, will probably have to pay for a $100
expenditure on care with money set aside for necessities such as food and shelter.
Thus, the $100 expenditure on care will have a substantial adverse effect on the poor
individual’s utility. The cost to society of this $100 expenditure on care is
minimized by allocating most of it to the wealthier individual since the wealthier
individual bears this expenditure at a lower cost to himself. . . . [T]he optimal duecare
standard must vary with the wealth of the defendant: wealthy defendants should
be required to take more care than less wealthy defendants. . . . Accordingly, if
individuals are risk averse, current law, by which wealth differences are excluded
from the assessment of due care, will not induce optimal deterrence.
Jennifer H. Arlen, Should Defendants’ Wealth Matter?, 21 J. LEGAL STUD. 413, 422-23 (1992).
Does it matter that poor actors are almost never worth suing in tort because they are effectively
judgment proof? Does it matter that liability insurance is widely available to working- and
middle-class people, and required for the most common dangerous activity people engage in
(namely driving)?
Would a negligence standard that takes wealth into account function mainly to redistribute
wealth? Or are there non-redistributive reasons to take wealth into account?
Does Arlen’s argument resonate with a corrective justice understanding of the tort system
or only a deterrence framework? What about a framework that focuses on expressing community
norms and values? How would her theory work in a case with a poor plaintiff and a poor
defendant—or a rich plaintiff and a rich defendant? Whose argument—Arlen’s or Abraham and
Jeffries’s —do you find more persuasive?
2. Seavey’s Paradox
Almost a century ago, torts jurist Warren Seavey observed a paradox in the way tort law
handles intentional torts in comparison to negligent torts:
[I]f, to save his life, A intentionally destroys ten cents worth of B’s property, A must
pay; if, however, he takes a ten per cent chance of killing B in an effort to save his
own life, his conduct might not be found to be wrongful, although obviously B
would much prefer, antecedently, to lose ten cents worth of property than to submit
to a ten per cent chance of being killed.
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