Fault-based liability - the Roman way

The provocative leader on old Roman times (October 12) gives a lot of room for thought.

Its basic argument is that those who are injured as a result of the carelessness of others collect full compensation while those who are injured in some other way, whether by non-negligent behaviour or natural forces, recover nothing. It is as though one is looking for a reason why contemporary society (or at least those many like us) prefers those who are injured in a certain way.

Let me advance the view that fault-based liability is intended not only to compensate victims but also to induce others to take account of the costs arising from their actions. In the economic tradition, you would normally allow costs to remain where they fall. We shift them to a wrongdoer to induce people to be careful and avoid accidents. Otherwise they pay for their consequences.

So in product liability, damages will be awarded for losses from dangerous or defective goods. Professional firms and individuals are only answerable for breach of their professional duty. An employee would only succeed in his claim where his employer did not take sufficient steps to protect against known workplace perils. And, of course, the same applies to homeowners and motorists.

For all these cases, third party liability insurance is designed to cover a policyholder's payment of damages to third parties for which he is to blame.

I would normally seek own damage insurance when seeking protection from losses for which no one is liable. So to the example mentioned in the leader of a stone slab thrown by a bolt of lightning on to my car, my safest bet would be a comprehensive policy.

The leader suggests that the law should move away from fault-based liability. This would imply that the owner of the opramorta, from where the projectile is dislodged, would have to pay for my car.

I do not think that the time is ripe for such a move.

The leader also suggests that an expansion of liability and higher damages would impact on the cost of insurance. This is a logical inference, as more cash will have to be raised to make additional handouts. After all, insurance is no magic wand but a simple tool by which a group of risk-prone individuals contribute to the loss of any one of their members. Premium is closely correlated to losses and any expansion of liability to a non-fault basis will affect the homeowner whose opramorta is struck by lightning.

So in rejecting the old Roman culture, our politicians will need to tackle other economic and political issues, such as whether innocent motorists, employers, manufacturers, householders or professionals can afford the cost of a liability, whenever they are not at fault.