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The Modern Expansion of Tort Liability: Its Sources, Its Effects, and Its Reform


  • George L. Priest


This paper reviews the development of tort law during the 20th century with particular attention to the broad expansion of liability since the 1970s. It attempts to explain the origins of the expansion of liability; to present examples of its effects on product and service markets; and to analyze the extensive efforts of the past five to six years toward liability reform, efforts which I conclude have had only a slight relationship to the underlying sources of modern liability problems. Though the empirical evidence is thin, virtually all studies of the effects of specific modern rules demonstrate that modern tort law has substantially dislocated product and service markets, as one might expect of an assertive legal regime founded on largely noneconomic principles. As we shall see, market dislocations, especially for insurance, have increased sharply during the past decade.

Suggested Citation

  • George L. Priest, 1991. "The Modern Expansion of Tort Liability: Its Sources, Its Effects, and Its Reform," Journal of Economic Perspectives, American Economic Association, vol. 5(3), pages 31-50, Summer.
  • Handle: RePEc:aea:jecper:v:5:y:1991:i:3:p:31-50 Note: DOI: 10.1257/jep.5.3.31

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    References listed on IDEAS

    1. P.-Y. Henin & Jean-Paul Pollin, 1983. "Introduction," Post-Print halshs-00288183, HAL.
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    Cited by:

    1. Randy A. Nelson & James N. Drews, 2008. "Strict Product Liability And Safety: Evidence From The General Aviation Market," Economic Inquiry, Western Economic Association International, vol. 46(3), pages 425-437, July.
    2. Ram Singh, 2009. "RISK, INFORMATIONAL ASYMMETRY AND PRODUCT LIABILITY: An Enquiry Into Conflicting Objectives," Pacific Economic Review, Wiley Blackwell, vol. 14(1), pages 89-112, February.
    3. Paul H. Rubin & Joanna M. Shepherd, 2007. "Tort Reform and Accidental Deaths," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 221-238.
    4. Fraser, Clive D., 1996. "On tort as an implicit insurance system with state-dependent utility: The case of child mortality risk," International Review of Law and Economics, Elsevier, vol. 16(4), pages 449-459, December.
    5. Sjur Didrik Flåm & Elmar G. Wolfstetter, 2015. "Liability Insurance and Choice of Cars: A Large Game Approach," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 943-963, December.
    6. Bartsch, Elga, 1996. "Enforcement of environmental liability in the case of uncertain causality and asymmetric information," Kiel Working Papers 755, Kiel Institute for the World Economy (IfW).
    7. Hans-Bernd Schaefer, 2000. "The Bundling of Similar Interests in Litigation. The Incentives for Class Action and Legal Actions taken by Associations," European Journal of Law and Economics, Springer, vol. 9(3), pages 183-213, May.

    More about this item

    JEL classification:

    • K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics


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