The Medical Liability System: Current Debates

Liability law allocates the costs of accidents among individuals. Accidental injuries are frequent in modern society. One car rear-ends another, damaging property and causing personal injury; a soda pop bottle explodes, injuring a consumer; a physician misdiagnoses a patient’s illness, resulting in medical complications when the illness is ultimately treated. Liability law has two principal goals. The first goal is to provide compensation to parties injured in accidents. The ‘‘compensation’’ goal of liability law attempts to provide a form of social insurance against accidental injuries. The second goal is to provide potential injurers with the incentive to avoid accidents for which the social cost of prevention is less than the cost created by the accident—that is, to induce the best possible deterrence. The ‘‘deterrence’’ goal of liability law is designed to induce individuals to internalize the nega-