Tort Liability and Civil Engineering

1. Tort Liability and Civil Engineering Professional Duties Litigation Risk Management Tort Reform

2. Service Liability • Malpractice • Prevailing local standards of practice • Established by expert witnesses • GAAP, GAAS, Codes of Conduct • Tort vs. Contract Liability • Regulatory Liability of Professionals • SEC, NASD, State Bar Assns, Medical & CPA Societies

3. Service Liability • Malpractice • Prevailing local standards of practice • Established by expert witnesses • Codes of Conduct • Tort vs. Contract Liability • Regulatory Liability of Professionals • Professional Conduct Standards

4. Risk Management Methods • Remain Current in Tort Developments • Tort Data Analyses • PennDOT’s Experience • The National Highway Tort Database Project • New York’s Current Experience • Black Box Data as Evidence • Estimation of Damage Awards • Sharing the Increased Liability from ITS

5. Reducing Risk Factors • Standard Setting, Testing & Design Cert • System Testing & Certification • Systems Safety Engineering • Laboratory & Human Factors Testing • Continuous Field Testing • Design revision, warnings, recall • Speculative Analysis of Incident Risks

6. Tort & Product Liability Litigation Crisis • Casualty Insurance Availability • 1980s Destructive Price Competition • Collusion Alleged • Highly Effective Publicity Campaign • Refine the Proof of Scientific Facts • Litigation: US v. Daubert (reasonable basis in scientific evidence required) • Regulation: regulatory reforms • Legislation: only political controls

7. Targeted Methods to Reduce Liability Risks • Safety & Environmental Regulations • Contractual & Negotiated Disclaimers • Automobile & system purchase • Subscription to services • Suppliers & subcontractors • Federal Preemption • Specific Liability Waivers, Exceptions, Exemptions & Limitations

8. Specific Liability Exemptions or Limitations • Swine Flu Act • Federal liability substituted for drug mfg • Statutes of Repose • General products liability - 10 to 15 yr. • Gen.Aviation Revitalization Act ‘94 - 18 yr. • Warsaw Conv. (aircrash liability limit) • Price-Anderson (nuclear pwr. limit) • Jones Act (expands maritime remedy)

9. Mandatory Risk Pooling/ Spreading Techniques • Workers Compensation • Unemployment Compensation • Federal Flood Insurance • Subsidized premiums • Non-market solutions • Assigned Risk Pools

10. Traditional Civil Engineering Conservatism • Redundancy of Safety & Failsafes • Exhaustive Testing • Certification for Permanent Deployment • Demonstration Projects • Affords Time to Assess Sources & Costs of Risks • The “Onion” Layers of Liability

11. Lessons from Other Industries • Crisis Preceeds Major Reforms • Can ITS community convince public & policymakers that needs are crisis-level • Lessons from Federalism • Will inconsistency be perceived between deployment by regional experimentation & an “imperative” for national uniformity • Demand Pull vs. Cost Push

12. General Requirementsto Prove Negligence • Duty of care • Regional & Professional Practice Influential • Breach of duty • Actual & Proximate cause • Injury or Damages • Negligence per se • Violation of statute or regulation

13. Defenses to Negligence • Contributory negligence • Comparative negligence • Assumption of risk • Counter Proof of Negligence

14. Pressures to Reform the Tort & Product Liability • Direct Costs: • Deep pocket theory • Insurance pricing & profitability • Jury awards allegedly rising • Apparent crush of punitive damages • Indirect Costs: • Opportunity costs: time, investment • Lost products • International competitiveness

15. The Reform Movement • Reformers: • Trade associations • Insurers • Reform Efforts: • Publicity campaign in the 1980s • Lobbying individual state legislatures • Guidance given in key cases • Recent refocus on lobbying Congress • Political party platforms

16. General Tort Law Reforms • Joint & Several Liability • Damage Caps • Economic &non-economic damages • Punitive damage reforms • “English Rule,” Litig. Cost Shift, Atty. Fees • Jury Reform • Social Insurance System (Workers Comp) • Preventative: Safety Regulatory Programs

17. Joint and Several Liability • Satisfy Damages from any/all defendants • Potentially pay all ignoring degree of fault • Solvent pay insolvent defendant’s share(s) • Incentive to Sue Deep Pocket Defendant • Several Liability • A form of proportionate liability • Judge/jury assigns % negligence • Private Securities Litigation Reform Act of 1995

18. Reform of Damages • Classification of Damages • Compensatory Damages • Economic Damages • Non-Economic Damages • Hedonic Damages • Punitive Damages • Taxation of Damage Awards • Distinguish Civil vs. Criminal Fines

19. Reform of the Damage Award Process • Structured Payments Rules & Practice • Structured settlements encouraged • The Periodic Payment Method • Reduce Future Loss Projections to PV • Future income stream adjusted for life maintenance costs, inflation • Prejudgment & Postjudgment Interest • Bifurcated Trials

20. Accident Cost Valuation • Discounted Cash Flow Techniques of Financial Economics • Key Variables • Earning Power • Discount Rate on “Safe Investments” • Work Life Expectancy • Adjust by Rates of Failure • Analogs: Aircraft & Prescription Drugs

21. Damage Caps • Maximum Upper Limit on Damage Awards • Constitutional Limitations • Excessive fines, due process deprivation • Remittitur on appeal • the BMW paintjob • Defendant’s Wealth Inadmissible • Collateral Source Rule Modifications • Evidence increasingly admissible • Mandatory setoff

22. Time Limitations on Tort Suits • Statute of Limitations • Time limitation for filing suit after wrong • Accrual: upon sale or discovery • Statutes of Repose • Time limitation after sale: limit on product’s useful life • Six to fifteen year • Civil aviation: 10 years

23. Reforms Aimed at Plaintiff’s Counsel • Plaintiff’s Counsel Compensation • Contingency fee limitations, reviews • Incentive: settle for nuisance value • Limits financially disadvantaged’s access to justice • Discipline Attorney: Litigation Unfounded • English Rule: Loser Pays • Attorney fees & costs, but many exceptions • American Rule • Each party pays own fees, w/ some exceptions

24. Reforms Specific to Product Liability • Traditional Tort Reforms • Particular Defenses (e.g., state of the art) • Limit Growth of Product Liability Theories • Junk Science & Admissibility of Experts • Federal or Uniform Product Liability Laws • Comprehensive Product Liability Reform • IL, LA, MI, NJ, OH, UT • National Product Liability Insurance

25. Setbacks To Reform • Federalism vs. States Rights • Usurping local prerogative • Over 1/2 States Courts Invalidate Some Reforms • State & Federal Constitutional Bases: • Right to remedy, open court • Due process, equal protection • Most Vulnerable Reforms: • Damage caps, statutes of repose, collateral source rule, specific industry exemptions