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the latter option, it would deprive the worker of the opportunity, existing under the present system, of hoping for a relative bonanaza if he can establish negligence, with all the comparatively glittering benefits which the common law tort system offers in the assessment of damages in contrast to workmen's compensation (pain and suffering, etc.).
Private information supports the impression that the reform will not be seriously opposed by insurance interests, employers' organizations or the present Conservative-oriented government. The unions, on the other hand, maintain an ambivalent attitude, one which (were it to ripen into opposition to the scheme) would undoubtedly influence the Labor Party and therefore seriously impair the chances of the Report's adoption, if the Labor Party were returned to power in the impeding elections at the end of November 1969.
We are therefore confronted with the interesting paradox that so radical a reform, quite unparalleled in the Western world, finds greater support among the conservative elements of society. I am led to believe that all interest groups involved would favor a period of at least three years' gestation before considering legislation of the Commission's report.
John G. FLEMING.
UNIVERSITY OF CALIFORNIA, BERKELEY,
Berkeley, Calif., November 3, 1969. Hon. PHILIP A. HART, Chairman, Antitrust and Monopoly Subcommittee, U.S. Senate, Committee on
the Judiciary, Washington, D.C. DEAR SENATOR HART : In your letter of October 24, 1969 you have asked me to summarize for you for the hearing record of the Senate Antitrust and Monopoly Subcommittee my views concering the pending effort for a reform of automobile insurance. I do not feel qualified to attempt an answer to your questions 3, 4, 5 and 8, which concern problems of regulation, application of antitrust and trade laws, as well as actuarial computations. But I shall try to answer the remaining questions in sequence.
1. Federal and state regulation. While this problem is largely a political and administrative one beyond my experience, I should like to add, for the discussion of experts, a plea for federal regulation which is rarely made. For 23 years now I have been teaching the law of conflict of laws and must note that problems of automobile law in this area have become so serious as to have created a true crisis in our interstate relations. The highly divergent pecularities of the states regarding guest statutes, family and charitable immunities, and limitations in damages, just to menton a few, have led courts, including our most outstanding ones, into theoretical extravagances which are not only threatening even the existing minimum of certainty, but have turned our entire conflicts law into an international curiosity. Only compulsory accident liability on a national level can remove the evil which has caused this admittedly minor symptom.
2. “Industry” or public utility! Before answering this question, I should like to be permitted to make a personal remark regarding my background. My father was Superintendent of Insurance under the Minister of the Interior of AustroHungary and taught me from early childhood about the greatness and crucial function of private insurance in our society as perhaps the most important foundation of a nonsocialist system. With a failure of private insurance, I learned, communism becomes inevitable. It was with the deepest dismay, therefore, that I discovered, when I came to this country over thirty years ago as a refugee frora Hitlers' dictatorship, that the insurance enterprise in this country considered itself, and proudly called itself, an "industry" entitled to egocentric ambitions and self-serving interests, rather than as a public utility with the privileges and duties of a public trust. In innumerable encounters in subsequent years with leaders of the so-called “industry", I unhappily confirmed my fear that the seemingly terminological problem was one with many all too real implications. No antitrust or trade restrictions will achieve a fundamental change without an open and willing change of mind and spirit in this respect.
6. and 7. “Full Aid" Insurance. When devising my voluntary full aid compensation plan in 1954, I was still hopeful that a reform could be achieved by truly imaginative proposals of the "industry." My doubts began when the Nationwide discussed with me their project which, though based on my plan, was clearly doomed. To let the psychoanalyst speak; It was as if the project had been devised (which, of course, it was not) to prove the impossibility of the proposed shift from liability to accident inscurance. It was clear at the outset that the low amounts of accident benefits were bound to invite adverse selection by those traffic victims unable or unwilling to recover on grounds of "negligence," thus defeating the plan's purpose of reducing the incidence and expense of tort claims. For these and other reasons I am now convinced that only a compulsory scheme on a national level can produce an effective remedy.
The Keeton-O'Connell plan, of course, points in this direction. But I strongly disagree with those of its features which seek to preserve a supplementary regime of tort law. I understand that such a preservation responds to a deepseated insistence on revenge by a traffic victim injured by a truly blameworthy act, as well as to society's fear of losing an effective deterrent and thus impairing public safety. But I continue to be convinced that these needs could best be met by what I have described as a system of tort fines, adjusted to gravity of fault and relative wealth and partly accruing to the community of risk rather than entirely to the “lucky" victim who deals with both a solvent injurer and a resourceful attorney. Again, this solution which was originally suggested by a Scandinavian scholar, must be accompanied by an accident insurance scheme which would provide for adequate indemnities making the tort claim economically unnecessary while, being predictable, it would encourage the more demanding victim to protect himself with additional accident insurance.
I regret deeply being prevented by reasons of health from attending your hearings and wish to repeat that I shall always be glad to be of any possible assistance. Sincerely,
ALBERT A. EHRENZWEIG.
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