Fundamental Reform of Tort Law

This paper was published in Regulation in 1995, Number 4. It is an argument in favor of replacement of tort with contract for harmful events where the parties have a pre-injury relationship. It provides some speculation about what such law would look like. In particular, I argue that parties would probably not want to be able to sue for nonpecuniary damages (e.g., pain and suffering) and would want limited options for punitive damages. The paper also discusses the magnitude of the U.S. tort system and compares it with the U.S. tort system in the past and also with foreign tort systems. This suggests that excess tort costs (in 1995) were between $500 and $900 per household. This paper may be viewed as a summary of my 1993 AEI book, Tort Reform by Contract.