the impact of commercial insurance on the tort law system

1、<p>　　The Impact of Commercial Insurance on the Tort Law System</p><p>　　Abstract. Tort liability and commercial insurance are both important mechanisms for the segregation of the damage in the context

2、of the risk society. Through the investigation of the legal institutions and practice of the western countries， we can learn that insurance has a profound influence and a far-reaching impact on the tort law system. Insur

3、ance has been a shadow factor to determine the tort liability and squeezed the domain of the tort litigation. As a business entity pursuing profit and </p><p>　　Key words： commercial insurance，liability insu

4、rance， tort liability， tort litigation， settlement， impact </p><p>　　Though the rapid development of economy as well as science and technology has greatly satisfied the social demands and improved the dispos

5、ing capacity of human being， we have to deal with its side-effect： the overwhelming risk and the damage of large scale. 1 </p><p>　　Rules of ancient tort law realized the transfer of loss from infringer to a

6、ggrieved party. However， with the growth of the insurance system and the insurance of the third party liability in particular， the socialization of the personal liability is accomplished. As a result， various compensatio

7、n channels， including the systems of tort law and insurance， complement each other while consideration can be given to two basic values： “personal liberty and responsibility” as well as “social security”.2</p><

8、;p>　　In terms of the relation between insurance and tort system， insurance， which is more than just a tool of segregating loss， has， after long-term development， exerted a profound influence and impact on the inner ru

9、les and system of tort law as well as tort litigation system in the context of the risk society. It is more evident in western countries with complete insurance industry and strong awareness of insurance among the public

10、. </p><p>　　1. Insurance has become a shadow factor to determine </p><p>　　the tort liability </p><p>　　Insurance is a shadow factor of the tort liability in the society with relati

11、vely complete mechanism for the segregation of the damage. Though there’s no need to take insurance into account while determining whether a perpetrator should assume the tort liability by virtue of rules of tort law， in

12、surance， especially the factor whether the injurer has ever bought insurance， is the basic factor of the tort liability in the practice of tort litigation. To an experienced lawyer， there are following t</p><p

13、>　　1.1 Reconciliation of the Insurance Company and Clients </p><p>　　Clients used to solve the tort litigation in the court or the law firm. Nowadays， we can see insurance everywhere and the major place t

14、o solve above cases， especially those with small amount of subject， has been replaced by various insurance companies. </p><p>　　Similarly， the insurance company also determines the range and extent of a lawy

15、er’s involving into a case as well as the defending strategies adopted by him during the whole proceeding. Thanks to Wolf Judicial Reform， more and more cases， after the initial reconciliation， are finally resolved witho

16、ut the involvement of the court. It is the insurance company rather than the obligee that determines whether a case should go through the procedure of court trial. Usually this procedure only applies t</p><p&g

17、t;　　1.2 Reconciliation of the Insurance Company and the Infringer </p><p>　　According to the rules of the execution of the subrogation right， the insurer， after paying the premium to the insured， obtains the

18、 right to request compensation from a third party within the limit of the premium. The subrogation right centers on “prohibiting benefits”， i.e. avoiding double indemnity of the insured. In addition， it can prevent the t

19、hird party from avoiding responsibilities as well as reduce the insurer’s burden of paying insurance.4 But in the insurance practice， the insurer ten</p><p>　　With the increasingly fierce competition of the

20、insurance market， a set of claims settlement mechanism with high degree of systemaltization and efficiency， which alters the rules of tort law， has been gradually established on the basis of those former rules by insuran

21、ce companies. </p><p>　　Since a large number of cases， which need to be handled by insurance companies， are usually caused with certain insurance product， the same type of cases are often clarified to the sa

22、me “briefcase” like documents. Therefore， it’s insurance companies’ hope， by further developing rules and reconciliation standards of tort law， to form new rules beyond the interest of certain defendant which can be used

23、 to treat the dispute of the claims settlement of the same kind over and over again. </p><p>　　In the practice of the tort action， one party usually “mould” their tort request through the insurance product o

24、n the basis of the condition and amount of the premium， even though this request doesn’t conform to the fact. Provided the accused buys insurance and the accuser sues to obtain the insurance compensation， the claim for s

25、uch right by accuser， once belonging to exeception clauses of the insurance policy， will receive no support by the repudiation of claims by insurance companies. In lega</p><p>　　In addition， the inequity can

26、 easily be caused by the involvement of the insurer into a tort action even though everything seems completely legal. Taking the liability insurance for example， it usually has clauses of limit of liability which， in ret

27、urn， is a restrain to the tort liability. </p><p>　　4. Potential Impact of Insurance on the Judgment </p><p>　　of the Judge </p><p>　　Before 40’s of last century， judges in western

28、countries often claimed that their judgments were never influenced by such factors like insurance that had nothing to do with cases and， provided they were under such influence， it would not perform directly. For example

29、， an British judge pointed out in his judgment that it’s not a court’s duty to keep an eye on the insurance that appears by chance as it would put on heavier burden to the accused compared with those without insurance. 6

30、 It’s not rar</p><p>　　Germany has experienced the same situation. The discussion， which was about the importance of the guarantee of the liability insurance obtained by tort-feasor in the evaluation of the

31、economic status of person in charge by the court， never stop for a long time. Before 1945， High Court of Justice in Germany believed that no consideration should be given to whether person in charge bought the liability

32、insurance or not， otherwise the court had assumed logically that the insured was responsible for</p><p>　　5. Conclusion </p><p>　　Individuals has no way to realize comprehensive compensation for

33、 damages in current society while， with the help of insurance companies， loss can be segregated and relief can be provided in a better way. </p><p>　　The insurance company， essentially a merchant， can object

34、ively lead to the shrink of the tort system due to its cost deduction and uncertain pursuit. Insurance conflicts with the correction of justice as well as the moral foundation required by mistake responsibility principle

35、s and， meanwhile， it might cause the tension. </p><p>　　Nowadays， the law and judicial reform is carried on vigorously. A tendency is appeared in the proceedings of case by judges in current judgments regard

36、ing insurance in China： insurance companies can’t bear the heavy burden of paying as much as the compensation which restricts the development of this industry. As is known， insurance companies are not NGO but business le

37、gal persons and the commercial insurance contract is in fact an equal commercial contract. However， due to the legislation deviat</p><p>　　1.Zhang Tiewei： Self-conceit and Poverty of Tort Law， P38， No.06.200

38、9 of Journal of Comparative Law </p><p>　　2.（Taiwan） Wang Zejian： Crisis and Development Trend of Tort Law， Civil Law Theory and Case Law Study（Volume II ） written by Wang Zejian， Peking University Press， 20

39、09， Version 1， P123 3.Gerhard Wagner， Tort Law and Liability Insurance （1st edition）， Berlin： Springer， 2006， p. 297. </p><p>　　4.（Taiwan） Liu Zongrong： New Insurance Law： Theory and Practice of Contract Law

40、 of Insurance， Beijing：Renmin University of China Press， January 2009， Version 1， Page 246 to 247. </p><p>　　5.Abraham Kenneth S.， Insurance Law and Regulation： Cases and Materials， New York： Foundation Pres

41、s， 1990， pp.154-155. </p><p>　　6.Viscount Simonds made above opinion in the judgment of Davie v. New Merron Board Mills（1959）. </p><p>　　7.Lord Steyn， Perspectives of Corrective and Distributive

42、 Justice in Tort Law， （2002） 23 Irish Jurist 1. </p><p>　　8.Bundesgerichtshof （BGH） in [1955] Versicherungsrecht （VersR）， 615， 618. </p><p>　　9.BGH in [1955] VersR， 615， 618. </p><p&g