Reform Of Modern Tort Law Under The Influence Of Liability Insurance

In recent years, for the liability insurance industry expanded rapidly and took a larger proportion in tortious compensation in China, its influence on China’s tort law became increasingly remarkable. However, the Tortious Liability Law of China did not considered the influence of insurance liability enough with a relatively conservative philosophy; and the connection of two mechanisms is still a problem to resolve for legislation. In a booming liability insurance market and with misconceived policies in Tortious Liability Law, the conflict between liability insurance and tort law is also remarkable in juridical practice of China. Besides, in global view, the influence of liability insurance on tort law and the reform of tort law under such influence are also an important and frontier subject in most countries and districts nowadays.This dissertation studied all the issues in two backgrounds:modern risky society and modern comprehensive compensation system. Modern society is a risky society dominated by tool-reason. The fact and situation of risky society are the basic causes of the defects of modern tort law, and are social conditions of the formation of modern comprehensive compensation system. Modern risks are technical, systematic and calculable, which are different from traditional risks. Those characters of modern risks determine that socialized compensation mechanisms, including liability insurance, first party insurance and social security, have important status in modern society, and that modern comprehensive compensation system has been formed at last. There are several available models of comprehensive compensation system, which consists of tort law, liability insurance, first party insurance and social security. However, the model with a core of tort law and liability insurance is the one practically chosen by most of countries in the world. In the whole modern comprehensive compensation system, tort law and liability insurance have a most affinitive relationship, and the influence of liability insurance is also the most important for tort law.Liability insurance influences tort law systematically, with aspects from its justice foundation to special mechanisms, and mainly through three ways:(1) the direct influence of liability insurance as a parallel mechanism on tort law; (2) the potential or indirect influence of liability insurance as a balancing element on tort law; (3) as a prior compensation mechanism, and by virtue of the affinitive relationship with tort law, liability insurance needs tort law to rectify its mechanisms, regulations, rules and their applying manner in the interests of insurance market. Under the influence of liability insurance, some aspects of tort law had been changed objectively, and other aspects should be reformed subjectively.This dissertation studied the influence of liability insurance on tort law, and the changes or reforms in tort law under such influence with a relatively systematic view. It includes following points mainly:First, how does liability insurance influence on the justice foundation of tort law. This dissertation reviewed the basic theories of distributive justice and corrective justice, and redefined the statuses and roles of distributive justice and corrective justice in tort law. Before the springing up of liability insurance, corrective justice as a foundation of tort law did never been changed, and what is called that the theoretic foundation of no-fault liability is distributive is a totally wrong judgment. What impaired the corrective justice of tort law is not no-fault liability, but liability insurance. Liability insurance has changed the idea that damage facts are abnormal, and let the relationship of tortious compensation no more limited between two parties, which have destroyed the inner philosophy and outer structure of corrective justice in tort law. The destructive influence of liability insurance on the foundation of corrective justice of tort law is also a necessary condition for jointing and harmonizing of both. However, while liability insurance "destroyed" the corrective justice of tort law, it tried to "repair" the corrective justice of tort law also. While liability insurance divided the corrective justice of tort law into two parts, compensation justice for victims and retribution justice for tortfeasors, it tried to repair them separately also. Furthermore, in the situation of risky society, liability insurance has a function to promote the distributive justice of risks.Secondly, how does liability insurance influence on the basic functions of tort law. In the view of legal relationship of torts, the basic functions of tort law only include compensation and prevention (or sanction, deterrence, and punishment). It is known that liability insurance strengthened the compensation function of tort law, and weakened its prevention function. The study in this dissertation indicated:(1) While tortious compensation is limited by the components of tortious liability, delay in claiming, solvency of the tortfeasors and etc, liability insurance just can be a "deep pocket" for tortious compensation, and can overcome its limitations. Nevertheless, liability insurance also has its limitations in compensation: for its scope of compensation is limited by tortious liability; for insurance coverage cannot cover all tortious liability, for it influenced by moral hazard and converse option, and for the influence come from insurance market. (2) Although liability insurance cleared up the prevention function of tort law, it designed several mechanisms, such as experience rating, limit of indemnity, deductible excess, uninsured risks and subrogation, to prevent perils. Through analyzing the connection of those basic prevention mechanisms and the prevention function of tort law, it is found that the limit of indemnity, deductible excess, uninsured risks and subrogation are transformed from the prevention function of tort law, and only experience ration is a special prevention function in liability insurance. For there should be ingredient of flat rate in real rating, the negative influence of liability insurance on the prevention function of tort law is inevitable and unavoidable. The degree of such negative influence depends on the level of experience rating or flat rate in real rating.Thirdly, how does liability insurance influence on the constitution and components of tortious liability. (1) An actor could disperse risks through liability insurance, which makes him in an advantaged status in the tortious legal relationship, and as the most suitable risk undertaker. Therefore, as a balancing element, liability insurance influences on the interests relation in the constitution of tortious liability, and makes the ideology of "taking liability for the result of fault actions" changing into the ideology of "taking liability for the result of risky actions". The "insurability" of tortious liability has been or should be a new element of the constitution of tortious liability. (2) Liability insurance may lead to "twisted facts", influence on the judgment of the court while there are "vague facts", and make some tort cases "need not to find out the fact". (3) Liability insurance changed the actual meanings of care duty, and extended the range of care duty. Liability insurance also promotes courts to be inclined to adopt standards which are favorable for victims. (4) For the sake of liability insurance, courts always like to adopt looser standards of legal causality, which leads to the expansion of legal causality. Moreover, liability insurance has delicate and complex influences on minor’s liability, family member’s liability and the liability of tortfeasors with nonfeasance.Fourthly, how does liability insurance influence on special mechanisms in tort law, and what should be reformed under the influence. There are too many special mechanisms in tort law and we cannot discuss all those mechanisms here. This dissertation mainly analyzed the influences of liability insurance on punitive compensation, joint and several liability, and non-economic damages. In fact, those three mechanisms are also mechanisms influenced by insurance liability most remarkably and typically. (1) Through reflecting on problems in punitive compensation itself, this dissertation analyzed the phenomena of the removal of its deterrence function, theoretical bugs and etc. After that, several suggestions about reforming punitive compensation in China were given, based on its original functional goals and the influence of liability insurance. (2) This dissertation analyzed the nature of joint and several liability, namely (part tortfeasors’) transfer of unaffordable risk, and re-explained the relationship of joint and several liability, supplementary liability and unreal joint and several liability. Then, it discussed several issues caused by liability insurance, such as complication of compensation relations, advantages and disadvantages for the tortfeasors (dispersing risks and attracting claims), and excessive protection for victims. At last, it suggested that joint and several liability should be limited or abolished according to the developing situation of the liability insurance in China. (3) This dissertation also discussed the "matching" of noneconomic compensation and liability insurance, judge’s attitude towards noneconomic compensation under the influence of liability insurance, the characters of noneconomic compensation and the demand of certainty for liability insurance, and gave several humble suggestions for the reform of noneconomic compensation according to the reality of China. Although a lot of mechanisms which may also be influenced by liability insurance have not been discussed, for the typical meanings of those three mechanisms, the studying accesses, methods and partial conclusions in this dissertation are also meaningful for others not discussed herein.