The Object of the Law of Torts

4. Loss distribution. Modern tort law increasingly places a loss where it can be spread rather than where fault lies. Vicarious liability puts the loss on an employer who can insure and price it into his business. Compulsory motor insurance under Chapter XI of the Motor Vehicles Act 1988 spreads the cost of road accidents over every vehicle owner in the country. The Environment Relief Fund under the Public Liability Insurance Act 1991 does the same for industrial accidents.

5. Appeasement, or the replacement of private vengeance. Historically the action in tort took the place of the blood feud. A person who has been wronged wants something done about it, and the law provides a court instead of a fight. Aggravated and exemplary damages, dealt with in chapter [Kinds of Damages], are the surviving trace of this object.

Where the objects pull against each other

This is the part almost no set of notes carries, and it is what turns a list into an answer.

Compensation pulls against fault. If the object is to compensate the injured, why should it matter whether the defendant was careless? A victim of an unavoidable accident is just as badly hurt as a victim of a careless one. That tension produced the no-fault schemes: section 164 of the Motor Vehicles Act 1988 gives five lakh rupees for a death without any inquiry into fault at all, and section 3 of the Public Liability Insurance Act 1991 does the same for an accident while handling a hazardous substance.

Deterrence pulls against compensation. If the object is to deter, the award should be measured by the defendant's wealth and wickedness. If it is to compensate, it should be measured by the plaintiff's loss and by nothing else. Indian law resolves this in favour of compensation as a rule, and departs from it in the exceptional case of a hazardous enterprise.

Loss distribution pulls against personal responsibility. Where every loss is insured and spread, the careless driver pays nothing himself and the deterrent disappears. That is the standing criticism of compulsory insurance, and it is why the Motor Vehicles Act keeps the insurer's right to recover from the owner in the cases set out in chapter [The Insurer: Duties, Defences and Pay and Recover].

A worked example

A municipal corporation owns an eighty-year-old clock tower on a busy road. It never tests the structure. The tower falls and kills three passers-by.

Ask what each object would do with those facts. Compensation says the families must be paid what the deaths cost them, which is the multiplier calculation in chapter [Computing Just Compensation]. Deterrence says the award must be large enough that this corporation and every other one starts testing its buildings. Vindication adds nothing here, because real loss has been suffered. Loss distribution says the corporation is exactly the right defendant, because it can spread the cost over the ratepayers rather than leave it on three families. Appeasement says the families must have a forum, or they will believe that a public body can kill with impunity.

Those are the facts of Municipal Corporation of Delhi v. Subhagwanti, AIR 1966 SC 1750.

Facts. The Clock Tower opposite the Town Hall in Chandni Chowk, Delhi, belonging to the Municipal Corporation, collapsed and killed three people. The structure was eighty years old, the mortar in its top storey had a life of forty to forty-five years, and the Corporation had never examined it for latent defects.

Held. The owner of a structure abutting a highway owes a duty to those using the highway to keep it in a safe condition. A properly maintained structure does not ordinarily collapse, so the maxim res ipsa loquitur, the thing speaks for itself, applied and the burden lay on the Corporation to explain the fall. Its failure to test a building long past the life of its materials was negligence, and the decrees for damages were upheld.

Why it matters here. It is the plainest Indian illustration of all five objects working at once, and chapter [Res Ipsa Loquitur] takes the evidential rule further.

Distinctions that carry marks

What it does NOT mean

Compensation does not mean the plaintiff makes a profit. The measure is what he lost, not what the defendant gained, and restitutio in integrum is a ceiling as well as a floor.

Deterrence does not make tort a punishment. Exemplary damages are exceptional. An ordinary award is not a fine, it is not paid to the State, and the defendant's means are usually irrelevant to it.

Vindication does not mean a plaintiff always gets a large sum. A right vindicated without loss is often marked by nominal damages, sometimes a rupee, and the value of the judgment is the declaration, not the money.

Loss distribution does not mean the wrongdoer escapes. An insurer who pays a third party may still recover from the owner where the policy was broken, and an employer who pays for a servant's wrong may in principle claim contribution from the servant.

Quick revision

1. Five objects: compensation, deterrence, vindication of rights, loss distribution, and appeasement.
2. Compensation works by restitutio in integrum: restoration, so far as money can, to the original position.
3. M.C. Mehta v. Union of India, AIR 1987 SC 1086: compensation from a hazardous enterprise must be related to its magnitude and capacity so as to deter.
4. Municipal Corporation of Delhi v. Subhagwanti, AIR 1966 SC 1750: a public body liable for a collapsing structure, the plainest example of the objects at work.
5. Vindication explains why some torts are actionable without proof of loss.
6. Loss distribution explains vicarious liability, compulsory motor insurance and the Environment Relief Fund.
7. The objects conflict, and the no-fault schemes in section 164 of the Motor Vehicles Act 1988 and section 3 of the Public Liability Insurance Act 1991 are where compensation has won over fault.

Test yourself

1. State and explain the objects of the law of torts. There are five. Compensation is the primary object: the injured person is restored, so far as money can do it, to the position he would have occupied but for the wrong, on the principle of restitutio in integrum. Deterrence attaches a price to wrongful conduct so that people take care in advance; the Supreme Court made this explicit in M.C. Mehta v. Union of India, AIR 1987 SC 1086, by tying the award against a hazardous enterprise to its size. Vindication of rights explains the torts actionable without proof of damage, where the object is to declare that a right exists. Loss distribution explains vicarious liability and the compulsory insurance under the Motor Vehicles Act 1988, which spread a loss over those able to bear it. Appeasement is the historical object of replacing private vengeance with an action at law.

2. "The law of torts compensates; it does not punish." Discuss. As a general rule the statement is correct. Damages are measured by the plaintiff's loss and are paid to the plaintiff, not to the State, and the defendant's means are ordinarily irrelevant. There are two qualifications. Exemplary or punitive damages may be awarded in exceptional cases and are avowedly punitive, and in M.C. Mehta v. Union of India, AIR 1987 SC 1086, the Supreme Court held that compensation from a hazardous enterprise must be related to its magnitude and capacity so that the award deters. Both are departures from the compensatory principle and both are treated as exceptional.

3. How do the objects of the law of torts explain the no-fault schemes in Indian law? The compensatory object is concerned with the injured person's loss, and that loss is the same whether or not anybody was at fault. Where the law accepts that reasoning it drops the requirement of fault altogether. Section 164 of the Motor Vehicles Act 1988 makes the owner or insurer liable to pay five lakh rupees for a death and two and a half lakh for grievous hurt, and provides expressly that the claimant need not plead or establish any wrongful act, neglect or default. Section 3 of the Public Liability Insurance Act 1991 does the same for an accident while handling a hazardous substance. Both are also examples of loss distribution, because both are backed by compulsory insurance.

4. Why does the law allow an action where the plaintiff has suffered no loss? Because compensation is not the only object. Where a legal right has been infringed, the object is vindication: a declaration that the right exists and has been broken. If no action lay, a right that nobody could enforce would be no right at all, and the wrongdoer could repeat the infringement at will. The damages awarded may be nominal, and the value of the judgment lies in the finding rather than in the sum. This is the maxim injuria sine damno, which has a chapter of its own.