Market-Share Allocations in Tort Law: Strengths and Weaknesses

Abstract

IN a conventional tort suit the legal system tries to link the harm suffered by a particular plaintiff to the actions of a particular defendant. In one class of cases, however, such individualized determinations serve no deterrent function and are simply a waste of social resources with only distributive effects. Individual plaintiffs in such cases should have to prove only their level of exposure to the hazard. These tort suits, in pure form, have the following characteristics: (1) The products supplied by all producers are homogeneous with respect to risk. Thus, pills may be red, white, or yellow, but so long as their formula is a chemical constant, their riskiness is identical. (2) Potential victims are all equally at risk ex ante, or, if they differ, the differences in risk can be measured accurately. (3) The harm caused by the tortfeasors may also be produced by natural causes, but ex post there is no way to tell if a victim exposed to the hazard would have been harmed even without exposure. The background level of risk can be estimated with a high degree of accuracy.' If lawsuits are to be used to regulate such harms, a single class-action suit should be brought by all victims against all manufacturers.2 Even if