Table of Contents

Research Handbook on the Economics of Torts

Research Handbook on the Economics of Torts

Research Handbooks in Law and Economics series

Edited by Jennifer H. Arlen

This pioneering Handbook contains specially-commissioned chapters on tort law from leading experts in the field. This volume evaluates issues of vital importance to those seeking to understand and reform the tort law and the litigation process, taking a multi-disciplinary approach, including theoretical economic analysis, empirical analysis, socio-economic analysis, and behavioral analysis. Topics discussed include products liability, medical malpractice, causation, proximate cause, joint and several liability, class actions, mass torts, vicarious liability, settlement, damage rules, juries, tort reform, and potential alternatives to the tort system. Scholars, students, legal practitioners, regulators, and judges with an interest in tort law, litigation, damages, and reform will find this seminal Handbook an invaluable addition to their libraries.

Chapter 22: No-fault accident compensation systems

Michael Trebilcock and Paul-Erik Veel

Subjects: economics and finance, law and economics, law - academic, law and economics, law of obligations


The tort system has for centuries been the primary mechanism of compensation for victims of accidents in the Western world. Over time, however, no-fault insurance schemes—where insurance programs provide compensation on proof of loss without any need to identify another party that caused the loss or prove their fault—have replaced, in whole or in part, the tort system’s compensation mechanisms. Workers’ compensation schemes are the oldest and most widespread of such regimes. However, no-fault schemes now also provide compensation for automobile accidents in much of Canada and the United States, injuries stemming from vaccinations in a number of jurisdictions (Ridgway1999), neurological injuries for newborns in Virginia and Florida (Horowitz and Brennan1995; Bovbjerg and Sloan 1998), and medical malpractice more generally in Sweden(Danzon 1994). Additionally, New Zealand has a general no-fault accident insurance scheme that has largely replaced the tort system (Schuck 2008). Thus, no-fault schemes are increasingly seen as a credible alternative to the tort system.

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