1. I will not discuss the laws of other losses caused by negligence, but I will state that I believe that the argument of this paper can easily be extended to cover not only personal injury, but also medical malpractice.

2. I understand this term very broadly so as to include health services, social care and so on. I will not enter into any discussion – much less defence – of social security provision, but it may help the reader if I say that my thinking on the issues discussed in this paper is based on Beveridge's principle of ‘adequacy of benefit’: ‘The main feature of the Plan for Social Security is a scheme of social insurance against interruption and destruction of earning power … The scheme embodies six fundamental principles … The fourth fundamental principle is adequacy of benefit in amount … The flat rate of benefit proposed is intended in itself to be sufficient without further resources to provide the minimum income needed in all normal cases. It gives room and a basis for additional voluntary provision, but it does not assume that in any case’: Sir William Beveridge Social Security and Allied Services (Cmd 6404, 1942) paras 17, 307.

3. [1978] AC 728 (HL).

4. [1990] 2 All ER 908 (HL).

5. Perhaps a new dimension of unsatisfactoriness has been explored by Lord Hoffmann's recent admission that the decision in Fairchild v Glenhaven Funeral Services Ltd and Others [2002] UKHL 22; [2003] 1 AC 32 was flatly wrong:Google Scholar Hoffmann, L ‘ Fairchild and after’ in Burrows, A et al (eds) Judge and Jurist: Essays in Memory of Lord Rodger of Earlsferry (Oxford: Oxford University Press, 2013) p 68. I understand that Lord Hoffmann had previously made this confession in a lecture given in Canada in May 2011 and subsequently published as ‘Fairchild in retrospect’ (2012) 39 Advocates Q 257. I was not alone in regarding this decision as very costly nonsense when it was handed down, but for this very reason unsurprising. I was, however, surprised by this admission by Lord Hoffmann.Google Scholar

6. Getzler, J ‘Patterns of fusion’ in Birks, P (ed) The Classification of Obligations (Oxford: Clarendon Press, 1997) pp 191–192.Google Scholar

7. Beever, A Rediscovering the Law of Negligence (Oxford: Hart Publishing, 2007) p 187.Google Scholar

8. Weinrib, E The Idea of Private Law (Oxford: Oxford University Press, rev edn, 2012) ch 6.CrossRefGoogle Scholar

9. In respect of the specific issue addressed here, see BC Zipursky ‘Civil recourse, not corrective justice’ (2003) 91 Geo L J 695 (and see also EJ Weinrib ‘Civil recourse and corrective justice’ (2011) 39 Fla St U L Rev 273). The modern statement of this type of argument can be traced at least to Linden's claim that a proper law of tort ‘helps to keep the peace … because it permits an aggrieved person to recover money in court rather than to spill blood on the streets’ (one of a number of rhetorically striking ways in which Linden framed this claim): AM Linden ‘Auto accident compensation in Alberta: toward peaceful coexistence’ (1968) 6 Alberta L Rev 219, 224. I myself do not see what civil recourse theory fundamentally adds to views such as these of Linden's.

10. Robertson, A ‘Policy-based reasoning in duty of care cases’ (2013) 33 Legal Stud 119. This argument must be put in the context of the general reflections on the role of policy in adjudication inGoogle Scholar Robertson, A ‘Constraints on policy-based reasoning in private law’ in Robertson, A and Tang, Hang Wu (eds) The Goals of Private Law (Oxford: Hart Publishing, 2009).Google Scholar

11. On Robertson's attempt to draw on the interesting, so far largely Australian, theory of ‘civil peace’, which also allows an argument that, even though it cannot be justified or even explained in terms of ‘compensation, deterrence or standard setting … by doing justice between individuals, the law of negligence serves a broader community welfare purpose … the maintenance of civil peace’, see Robertson, A ‘On the function of the law of negligence’ (2013) 33 Oxford J Legal Stud 31, 42, 32.CrossRefGoogle Scholar

12. Robertson also does not believe that the fact that these cases have turned on policy considerations to the extent that they may be described as political in the pejorative sense necessarily has to lead to the chaos to which it unarguably has led, and in his paper in this journal he summarises an argument he has previously advanced for a change of approach that he believes would make such policy considerations justiciable: Robertson, A ‘Justice, community welfare and the duty of care’ (2011) 127 Law Q Rev 370.Google Scholar

13. Robertson ‘Policy-based reasoning in duty of care cases’, above n 11, at 121.

14. Ibid.

15. Ibid, at 122; quoting Donoghue v Stevenson [1932] AC 562 (HL(SC)) at 580 (emphasis added by Robertson).

16. No doubt the distinction between community welfare and interpersonal responsibility central to Robertson's argument is open to criticism for misrecognising abstract negligence liability principles (and, behind this, for its application of a broadly Dworkinian jurisprudence to these principles). I should make it plain that I myself find it generally unpersuasive, and the claim that foreseeability and proximity as they inform the neighbour principle are ‘two considerations that clearly fall on the justice side of the line’ (Robertson ‘Policy-based reasoning in duty of care cases’, above n 11, at 122) breathtaking. Having read all of Robertson's cases from England and Wales, I have found it difficult to usefully separate them into his two classes. But I leave all this to those better versed in the formal law of negligence.

17. Ibid, at 121.

18. Robertson, above n 12, at 42.

19. Robertson ‘Policy-based reasoning in duty of care cases’, above n 11, at 121.

20. Donoghue v Stevenson, above n 16, at 580.

21. Ibid.

22. Published in 2001, Baker, T ‘Blood money, new money, and the moral economy of tort law in action’ (2001) 35 Law & Soc'y Rev 275 appeared too late for inclusion inCrossRefGoogle Scholar Harris, D et al Remedies in Contract and Tort (Cambridge: Cambridge University Press, 2002) ch 24. This is the only at all recent contribution that, in my opinion, does say something fundamentally novel about the operation of the personal injury system. I hope it should go without saying that I do not mean to disparage those contributions that either deal with new developments or that – like, indeed, Robertson's – have put forward a fresh way of looking at facts that are nevertheless now well known.Google Scholar

23. Ibid. Non-pecuniary loss is discussed in this chapter. Quantification generally is discussed in chs 22 and 23, written by Roger Halson. In the subsequent decade, the principal change that has taken place has done much to confirm my observation that ‘[i]t is very hard to conclude that a system which cannot be made to run better without imposing a welfare loss is other than indefensible’ (ibid p 449). Changes in fee arrangements and in the handling and publicisation of the claims process have led to a worrying increase in motor accident claims that call the integrity of the claims process into doubt and are reflected in a serious rise in insurance premiums: House of Commons Transport Committee Fourth Report: The Cost of Motor Insurance HC 591 (2010–2012). (The Committee has published three subsequent reports, all to the same effect.)

24. The role of legislation in tort law has recently been most interestingly re-examined in Arvind, TT and Steele, J (eds) Tort Law and the Legislature (Oxford: Hart Publishing, 2012).Google Scholar

25. Lewis, R and Morris, A ‘Tort law culture: image and reality’ (2012) 39 J L & Soc'y 562, 576–567.CrossRefGoogle Scholar

26. Harris et al, above n 23, p 409.

27. The value, or otherwise, of this concept is authoritatively reviewed in Lewis, R. et al ‘Tort personal injury statistics: is there a compensation culture in the Uk?’ (2006) 14 Torts L J 158;Google Scholar Morris, A ‘Spiralling or stabilising? the compensation culture and our propensity to claim damages for personal injury’ (2007) 70 Mod L Rev 349;CrossRefGoogle Scholar Morris, A. ‘The compensation culture and the politics of tort’ in Arvind and Steele (eds), above n 25, and Lewis and Morris, above n 26, 579–591.Google Scholar

28. See eg Bartip, Pwj and Burman, SB The Wounded Soldiers of Industry (Oxford: Clarendon Press, 1983) andGoogle Scholar Bartrip, Pwj Workmen's Compensation in Twentieth Century Britain (Aldershot: Gower, 1987). But on the justifiability of the current position seeGoogle Scholar Lewis, R ‘Employers' liability and workmen's compensation: England and Wales’ in Oliphant, K and Wagner, G (eds) Employers' Liability and Workers' Compensation (Berlin: de Gruyter, 2012).CrossRefGoogle Scholar

29. Harris et al, above n 23, p 461.

30. Lord Pearson (Chair) Report of the Royal Commission on Civil Liability and Compensation for Personal Injury Cmnd 7054, 1978. The shortcomings of the Pearson Commission's findings were thoroughly exposed in Allen, DK et al (eds) Accident Compensation after Pearson (London: Sweet and Maxwell, 1979).Google Scholar

31. Stapleton, J Disease and the Compensation Debate (Oxford: Oxford University Press, 1986) p 178.Google Scholar

32. Stapleton, J ‘Tort, insurance and ideology’ (1995) 58 Mod L Rev 820. The extraordinary implications of this article for the consideration of the actually existing relationship of personal injury law and liability insurance are criticised inCrossRefGoogle Scholar Lewis, R ‘Insurance and the tort system’ (2005) 25 Legal Stud 85;CrossRefGoogle Scholar Morgan, J ‘Tort, insurance and incoherence’ (2005) 67 Mod L Rev 384; andCrossRefGoogle Scholar Merkin, R ‘Tort, insurance and ideology: further thoughts’ (2012) 75 Mod L Rev 301. The whole subject has recently been extensively reviewed inCrossRefGoogle Scholar Merkin, R and Steele, J Insurance and the Law of Obligations (Oxford: Oxford University Press, 2013) nb ch 13.CrossRefGoogle Scholar

33. Atiyah, PS ‘Personal injuries in the twenty-first century: thinking the unthinkable’ in Birks, P (ed) Wrongs and Remedies in the Twenty-First Century (Oxford: Clarendon Press, 1996); andGoogle Scholar Atiyah, PS The Damages Lottery (Oxford: Hart Publishing, 1997). Atiyah's omission of motor accident insurance from his proposals on what he believes are grounds of practical politics (ibid, pp 185–888) is highly damaging to those proposals, in my opinion completely undermining them. Cf R Lewis ‘No-fault compensation for victims of road accidents: can it be justified?’ (1981) 10 J Soc Pol'y 161.Google Scholar

34. The closest the UK Parliament came to doing so was, of course, some 14 years after Donghue v Stevenson, when the Labour government that introduced the universal welfare state considered the possibility: Sir Walter Monckton (Chair) Final Report of the Departmental Committee on Alternative Remedies Cmd 6860, 1946, para 25. The decision to retain the damages system, though in a form that was perhaps intended to lead to its withering away, divided the Committee, and was taken despite the Committee as a whole finding that ‘substantial advantages would be gained were it found possible to abolish the remedy by action and to substitute for it rights to benefits under national insurance’.

35. In the provision of evidence about claims to insurance investigators, in the attempt to criminalise fraudulent claims, in the calculation of benefit payments in light of insurance claims and so forth. The policy relationship between welfare legislation and tort is most perceptively analysed in R. Lewis ‘Recovery of state benefits from tort damages: legislating for or against the welfare state’ in Arvind and Steele (eds), above n 25. At p 288, Lewis repeats the argument he has made many times about the principal way in which the state supports tort in the UK. Were it not for the existence of social security as a relatively effective way of dealing with incapacity caused by accident, which props up the relatively extremely ineffective way of doing so by tort, ‘it is unlikely that the action for common law damages … would have survived long into the twentieth century’.

36. Law Commission Damages for Personal Injury: Non-pecuniary Loss [1998] EWLC 257, app B.

37. Robbins, L The Nature and Significance of Economic Science (London: Macmillan, 2nd edn 1969) chs 1–3.Google Scholar

38. Schmidt, EA ‘The missing squirm factor in Amartya Sen's capabilities approach’ in Esquith, SE and Gifford, F (eds) Capabilities, Powers and Institutions (University Park, PA: Penn State University Press, 2010).Google Scholar

39. Myrdal, G The Political Element in the Development of Economic Theory (London: Routledge and Kegan Paul, 1953) ch 7.Google Scholar

40. A comment on a draft of this paper by Professor Lewis leads me to emphasise at this point that I write this paper as a socialist whose main criticism of the personal injury system is that its existence makes rational and just welfare provision for incapacity impossible: Harris et al, above n 23, pp 449–461. My thinking relies heavily on the criticisms of the existing personal injury system by those, represented in the UK by Lewis, who postulate a welfarist alternative something like the New Zealand scheme, but I cannot agree with their making what seems to me to be an indefensible special case for accidents.

41. Behind the question of how well insurance markets conceived along broadly conventional lines operate or could plausibly be made to operate lies the more profound question of how far such markets represent the optimum range of institutions for handling risks not borne publicly. The legal literature has recently been comprehensively reviewed (albeit the focus is on US materials) in LA Fennell ‘Unbundling risk’ (2011) 60 Duke L J 1285. I will not discuss this at all.

42. R Abel ‘General damages are incoherent, incalculable, incommensurable and inegalitarian (but otherwise a great idea)’ (2006) 55 DePaul L Rev 253, 324: ‘If people really value general damages enough that they want to insure them, the state should correct the market imperfections that prevent this and, as a last resort, sell such loss insurance itself.’ On this particular occasion, I cannot resist breaking my self-denying ordinance about exploring the history of the discussion of the issues by pointing to Beveridge's 1942(!) discussion of the ways in which the state might, ‘by regulation, by financial assistance or by itself undertaking the organisation of voluntary insurance’, set the framework for the provision of first-party insurance, in part to ensure ‘that in buying life assurance persons of limited means should be guided by advice from a seller which is wholly disinterested’: Beveridge, above n 3, paras 375, 188.

43. Very considerable confusion has been created because the views of Judge Posner (and Professor Landes) on negligence are typically identified with ‘the market’: WS Landes and RA Posner The Economic Structure of Tort Law (Cambridge, MA: Harvard University Press, 1987) chs 3–5. Their reasoning for a negligence regime, based on Posner's concept of wealth maximisation, is in fact an alternative to allocating goods by voluntary exchange: D Campbell ‘Welfare economics for capitalists: the economic consequences of Judge Posner' (2012) 33 Cardozo Law Rev 2233, 2261–2265.

44. A comment on this paper by Professor Murphy leads me to say that my point is not that liability insurance is currently only dubiously attractive to insurers, though I understand it is. (C Parsons ‘Moral hazard in liability insurance’ (2003) 28 Geneva Papers on Risk and Insurance 448). It is that a first-party insurance market in non-pecuniary loss would be completely unattractive to premium payers.

45. I believe that my point survives the pointing out of the incontrovertible fact that deceiving customers into doing exactly this has been a large part of the business of the financial services industry since the Big Bang.

46. Clarke, M Policies and Perceptions of Insurance Law in the Twenty First Century (Oxford: Clarendon Press, rev edn, 2007) p 330. The dicta cited was that of Stephen J inGoogle Scholar Caltex Oil (Aust) Pty Ltd v Dredger ‘Wilhelmstad’ (1976) 11 ALR 227 (High Court of Australia) at 265. I hope not to put words in his mouth when I claim that Clarke effectively admits the argument I seek to make generally for some specific commercial situations: loc cit, pp 330–331.

47. In the UK, 80% of claims are motor accident claims and 8% of claims are employer liability claims. Insurance is legally compulsory in both areas. There is a full account of the compulsory duties to insure in this sense in R Merkin and S Dziobon ‘Tort law and compulsory insurance’ in Arvind and Steele (eds), above n 25, and Merkin and Steele, above n 33, pp 257–260. It would not, in my opinion, unduly stretch this more direct sense of compulsory to describe the forms of provision for negligence claims by public authorities in this way and, to move to an essentially similar issue, also to include medical malpractice in the NHS.