Center for Contract and Economic Organization
Aloof and insular as corporate law often seems, it cannot remain uninfluenced for very long by developments in the mainstream of American civil law. In that mainstream, there is today flowing a strong, swift current called "tort reform."1 As currents go, this one is remarkably broad and perhaps a little shallow, but on it floats a number of diverse legislative proposals - ceilings on liability, restrictions on attorneys' fees, greater reliance on alternative methods of dispute resolution, restrictions on joint and several liability and contribution, and the curtailment of punitive damages.2 All of these proposals flow from the same wellspring: a broad public perception that there is today a liability crisis, which has increased the volume of litigation, dried up the availability of liability insurance, and exposed many to the threat of bankrupting litigation. The accuracy of this perception of a liability crisis is open to serious question,3 but is largely beyond the scope of this article - in part, because the perception itself may be the important phenomenon, one that can become self-fulfilling.
John C. Coffee Jr.,
No Exit?: Opting Out, The Contractual Theory of the Corporation, and the Special Case of Remedies,
Brook. L. Rev.
Available at: https://scholarship.law.columbia.edu/faculty_scholarship/532