First Principles of Business Law

1. The role of tort law

1.3. The wider effect of tort law

Although providing compensation for harm may be the primary effect of tort law, it is not the only one. Tort law also provides a way of encouraging or discouraging particular behaviour.

This happens because a breach of tort law results in liability for the harm caused, and because individuals (and corporations) usually want to avoid that liability. For example, if an employer is liable in tort for injuries suffered by employees because of an unsafe workplace, the employer is likely to make the workplace safer. In other words, people will generally make an effort to comply with the standards of behaviour implicit in the rules of tort law. Tort law thus becomes a powerful tool of social regulation.

Another important example of behaviour encouraged by tort law is the use of insurance to spread the risk of liability for harm. Manufacturers of potentially dangerous products often insure against liability, thus sharing the costs between all users while ensuring that sufficient funds are available to meet individual claims that may arise.