The economics of Covid-19 liability

The more you are interested in test, track, and trace, the more you should favor at least partial liability waivers for business, at least that is how I see it.  Here is an excerpt from a new paper by Daniel Jacob Hemel and Daniel B. Rodriguez:

Ex ante (before an exposure), the specter of liability generates incentives for businesses to take precautions that reduce the risk of virus transmission. Ex post (after an exposure), fear of liability may deter businesses from proactively informing customers and workers that they have been exposed to the virus through the business’s operations. The desire on the part of businesses to spare themselves from litigation may interfere with comprehensive contact-tracing efforts. To minimize the potentially perverse ex-post consequences of liability without sacrificing significant ex-ante benefits, the article proposes a limited safe harbor from liability for businesses that promptly contact customers and workers after learning about a possible exposure.

Again, here is my short liability study with Trace Mitchell of Mercatus.


Just 7.3% of Stockholm’s inhabitants had developed Covid-19 antibodies by the end of April, according to a study, raising concerns that the country’s light-touch approach to the coronavirus may not be building up broad immunity.

The research by Sweden’s public health agency comes as neighbouring Finland warned that it would be risky to welcome tourists from Sweden after figures suggested the country’s death rate per capita was the highest in Europe over the seven days to 19 May.

Sweden’s state epidemiologist, Anders Tegnell, said the Stockholm antibodies figure was “a bit lower than we’d thought”, but added that it reflected the situation some weeks ago and he believed that by now “a little more than 20%” of the capital’s population had probably contracted the virus.

However, the public health agency had previously said it expected about 25% to have been infected by 1 May and Tom Britton, a maths professor who helped develop its forecasting model, said the figure from the study was surprising.

“It means either the calculations made by the agency and myself are quite wrong, which is possible, but if that’s the case it’s surprising they are so wrong,” he told the newspaper Dagens Nyheter. “Or more people have been infected than developed antibodies.”

Yellow card. Off topic

Before we can start to talk about liability, we need a much better understanding of how the virus works, and how to model its effects. It seems that the Swedish public health authorities are as much in the dark as anyone else, with a model that does not reflect reality.

Something this blog has been addressing for a while, pointing out the flaws in various models. In this case, the Swedish modeling framework has also been proven deficient.

Talking about liability concerns in the absence of reliable data is typical of much discussion concerning this virus and how to deal with it. That is, the discussions reflect mood affiliation, not data.

It's pretty rich to claim that the Swedes don't know what's going on when we were supposed to have millions dead by now according to the people you do believe know what they're talking about. Given the choice between their strategy (carrying on as normal) and ours (taking the American experiment behind the woodshed) I'd say they are coming out on top.

Mood affiliation.

What government and who are we?
Most of the governors are anxious to reopen, except a couple who are looking for a better deal.
Then you have the liability of hospitals who sometimes refuse admission for corona victims due to capacity. They have a right to avoid harassment from the 'We' you talk about.
Then your 'we' has another problem, a lot of your 'we' likely doesn't want to go out and get the virus. I think the conspiracy to lock down was not a conspiracy, more like a freak out.

"I'd say they are coming out on top."
I wouldn't. Nor would the dead Swedes.

Prior lives to derail the discussion

+1, he's become a complete troll

Maybe you just didn't like what he said. At least he provided a link, which few others bother to do.

Providing links to tangential subjects does not make it any better.

He was derailing the discussion by first posting something unrelated to the topic. IE he was trolling. Providing a link to an unrelated topic just makes him a well sourced Troll.

If you thought of Sweden as a pork processor who let the virus run wild in the plant you could think of it as a natural experiment using peoples lives to test a model.

Stay at home, old man, so that others may be free.

“test, track, and trace” has two purposes: delay opening and expand control of the population. Once they have this power, do you think Dem governors are going to relinquish this power? Next stop, Chinese social credit.

And, Germany, and South Korea, and New Zealand--all those Democratic governors in those countries will never give up that power either.

The really scary thing is how quickly it evolved from flatten the curve to eliminate freedom and punish those who will not conform to the new rules. At this rate we are but two months from public flogging of those caught on the street without their masks and their hall pass.

The impulse is always there on the left: never let a crisis go to waste. Also, it’s the latest front in the get Trump, BAMN.

The funny thing is, the socialist hell hole I am now living in looks almost exactly the same as the socialist hell hole I was living in before the Coronavirus. You'd think they'd at least put up some posters of Stalin or something.

Save lives, block Rich. He is a blind partisan who wants your parents to die because they are drain on the economy.

Missing in this equation is the liability of local/state governments as well as the feds in ham-fistedly shutting down businesses who clearly have an incentive to find a more precise balance between the risk of spread and financial viability. This is to say nothing of the media/"expert" class who profit from spreading fear that causes others to lose their livelihoods.

My hope now and for the immediate future is that a group of people get together and sue the pants off every level of government in this country for their clearly unconstitutional actions during this manufactured crisis. If they win, let the government pay up or make China pay. If they lose, at least we'll have incontrovertible proof that we're living under an occupation government, and can take the appropriate actions at that time.

I agree with this "Missing in this equation is the liability of local/state governments" (and perhaps just that in your comments).

If, as Tyler says, you want to limit liability of business, as government starts test, track, trace, and quarantine, someone needs to pick that liability up.

I say a COVID payment for every positive test, and every successful (ankle bracelet) quarantine.

More government bribes aren't the answer. That's what caused some states to drive up their numbers in the first place.

Again, the point is not to recompense citizens and businesses. We don't need more bailouts for a problem the government caused in the first place.

What we need is a clear message that our consistitutional rights don't disappear in any crisis, much less a manufactured one.

If the end result of pursuing this through the courts is that they do, and I fully expect the judges who are part of the machine would insist that's the case, then it's clear at that point that the states and the feds no longer exist in accordance to the documents that allow their existence in the first place. That's going to be a problem, mostly for them.

It's a shame, although a completely predictable one, that nominal libertarians like Tyler not only ignore this simple fact but cheer it on via their pie-in-the-sky musings such as the one that prompted this post.

As I mentioned in the past, someone made the quip that as there are no atheists in foxholes, there are no libertarians in pandemics.

We continue to see that that's not the case, that there are some stubborn libertarians who will continue on without any rational plan or meaningful contribution.

When they have nothing that can help, they just declare (in their paranoia) that all help is bad.

Paying people who actually test positive to COVID to stay home is incredibly cheap and effective, but you can't do it, because it's paying people.

And you can do it only because it's not your money you're paying them with. That's r-selection for you

I have paid more taxes in my life than most.

Oh so you're old. I understand your bias now.

I didn't just mean cumulatively.

Hopefully it's in the trillions of dollars, since that is the loss incurred by American workers and business owners in being forced home for two months and counting, among other detriments.

If it isn't, then you're just another example of a person who is all too willing to not only dictate how others live their lives but to force them to use their money how you want then pat yourself on the back for your charity. We don't need that here and that's much of the reason why we'll be evicting leftists from the country.

lol, sure. It was trillions.

Trillions is the cost of poor governance it seems. So really you are saying you want better governance? That seems to have been TC's complaint for a while now.


You start from an unsupported false premise and go from there: it is within the power of the state and local governments to shut down facilities, without liability.

"States—and their cities and counties by extension—possess what has long been known as a “police power” to govern for the health, welfare and safety of their citizens. This broad authority, which can be traced to English common law and is reserved to the states by the 10th Amendment, is far from radical; it justifies why states can regulate at all.

The police power of the states has been invoked on multiple occasions by the Supreme Court, often in contrast to the limited powers of the federal government—for example, in Chief Justice John Roberts’ opinion in the 2012 Obamacare case. This power also has been recognized in the context of public health for decades. In a 1905 Supreme Court case that upheld mandatory smallpox vaccinations, the court observed that “upon the principle of self-defense, of paramount necessity, a community has the right to protect itself against an epidemic of disease which threatens the safety of its members.”

the court observed that “upon the principle of self-defense, of paramount necessity, a community has the right to protect itself against an epidemic of disease which threatens the safety of its members.”

The South Dakota Sioux shouldn't have any problem shutting down the highways going through their reservation, right?

I don't give advisory opinions, but I would look at the Treaty as well as the right to move within the US (commerce clause issues).

But, Chuck, your comment is irrelevant to Shark's claim of state and local governments being sued for damage for activities within their police power.

Ankle bracelets?

Yeah that’s not going to happen.

I'm not talking about treating people like fugitives

I'm just saying wear the bracelet to get the reward.

Frankly it would be pretty bad if we couldn't even use the carrot in this country because we considered it as bad as a stick.

No one is wearing ankle bracelets. This is pure fantasy.

People are hanging up on contact tracers, lmao. And you think they’ll wear an ankle bracelet.

Ok Boomer

Or regular bracelets.

Possibly they aren't ankle anymore because they are smaller now. Moore's Law.

It ain’t happening Boomer. You’re living in a fantasy

Latest news is illegal immigrants are refusing contact tracing, which should surprise no one with a room temperature IQ.

Keep clicking those heels

What is even your game?

Just say "no" to every plan America has?

Do you still plan to leave for Taiwan?

You write: "If, as Tyler says, you want to limit liability of business, as government starts test, track, trace, and quarantine, someone needs to pick that liability up."

That's not the only possible outcome. "The liability," unlike Covid alas, does not have to exist. Not every instance in which someone gets sick necessarily cranks up the creaking machinery of the tort law. To be sure, we may decide that there will be compensation for instances in which tort liability against some private actor is precluded. Or we can decide otherwise. We can decide whether the liability goes anywhere, without presuming the answer to that question by starting out on the further contingent question of where to shift it.

(If anyone thinks COVID payments would be too high .. maybe they really think it is too early to open up.)

>let the government pay up

You mean, let the taxpayers pay up? No thank you.

Personal liability for every Governor who made these decisions. It's the only way to be go.

I like this suggestion, it is reminiscent of Elizabeth Warren's suggestions regarding the private sector.

The money's not important and even if it were it would never be paid out at the scale that would be sought. Plaintiffs would either be awarded a nominal amount ($1) or the respective governments simply wouldn't pay.

The point is formalizing that these actions are unconstitutional and unnecessarily damaging to the American people. Again, if this self-evident fact isn't willing to be acknowledged through the courts then it's clear our governments as agreed upon by the people no longer exist.


Ha ha ha. What an argument. Well-presented and backed by facts and appeals to principles.

Mood affiliation.

Funny how all the public choice libertarians out themselves as loony irrationalists when stressed.

"local/state governments as well as the feds in ham-fistedly"

This is the definition of government action.

Seriously, STFU. You are pure partisan idiocy that must be shunned and isolated.

If you sue a business because you decided to go out and then got the virus, you’re a coward.

If you support that in any way, you’re a coward.

Time to get rid of the health inspectors then. Restaurant owners will be happy to agree with the idea that if you sue a business because you decided to go out to eat and then got food poisoning, you’re a coward.

Don't be an idiot. You gonna sue the restaurant if you get the flu too? No, you're not.

But if you're wondering, if you sued a business for giving you food poisoning you'd also be a coward.

Partial liability immunity? Sure, let's talk about the details. Blanket immunity? No.

Blanket business herd liability immunity has a certain ring to it.

Agree, as long as there are clear requirements businesses need to follow to re-open. If they follow those requirements, give them safe harbor. Lots of words in these CDC guidelines, but the language is awfully squishy. Should be a bit more clear. Hopefully local health depts. are being more clear.


Give clarity of standards and best practices.

That will dispel fear and uncertainty in a far safer (and ultimately more productive) way than liability waiver, which is inevitably misused as a free pass for fraud and abuse.

The nice thing about the state and local mandated shutdowns is it took that uncertainty, risk, and chaos out of the businesses' hands (yes, I know, at a steep cost), and established a single standard of behavior at time when no one had a clue what might happen next. That feature paid off (within that context) in that we are really only now giving scrutiny to those handful of firms who pushed the limits too far on failing to protect their employees at should have been obvious bare minimum levels, rather than in a unsolvable finger pointing sh*tshow about liability. In other words, sometimes uniform top down standards have value.

Kaushik Basu's The Republic of Laws points out how laws prohibiting giving bribes create perverse incentives. If you give a bribe to, say, get a necessary permit, you are now in effect a co-conspirator with the person who demanded it. If you "blow the whistle", you too can be prosecuted. Better to make giving the bribe legal.

Test, track and trace is worthless in nursing homes: by the time the test comes back the facility die-off will already have been set in motion. There should not just be liability for nursing home operators and state regulators, not personal liability for the state governors who have and continue to place infected individuals in their facilities.

A more efficacious solution is mass chemoprophylaxis with hydroxychloroquine.

Consistent with the Texas nursing home experience in which prophylaxis prevented a die-off, in South Korea, hydroxychloroquine was successfully used as chemoprophylaxis for covid-19 prevention in a nursing home:

Sun Hee Lee, et al. “Can post-exposure prophylaxis for COVID-19 be considered as an outbreak response strategy in long-term care hospitals?” International Journal of Antimicrobial Agents, Available online 17 April 2020, 105988. Doi:

From abstract: “After a large COVID-19 exposure event in an LTCH in Korea, PEP using hydroxychloroquine (HCQ) was administered to 211 individuals, including 189 patients and 22 careworkers, whose baseline polymerase chain reaction (PCR) tests for COVID-19 were negative. PEP was completed in 184 (97.4%) patients and 21 (95.5%) careworkers without serious adverse events… Based on our experience, further clinical studies are recommended for COVID-19 PEP.”

Given the long history of use with minimal side-effects, there is no good reason not to implement mass-prophylaxis. As also published in an editorial in the same journal:

“The promising results of chloroquine in treatment of COVID-19 and the low prevalence of side-effects in long-term use indicate a possible use of chloroquine at 100 mg daily or hydroxychloroquine at 300 mg weekly in mass prophylaxis in individuals exposed to COVID-19, and could be part of urgent interventions currently required to help protect frontline healthcare workers combating COVID-19.”

"Chloroquine as a prophylactic agent against COVID-19?":

The evidence is suggestive enough that failure to undertake mass prophylaxis in nursing homes is tantamount to reckless endangerment and as such, should be an actionable tort.

I hear the trial for prophylactic use in hospitals is starting (with results due in August?)
From the 12 April paper you cited:
A double-blind, randomized, placebo-controlled clinical trial (NCT04303507) will be initiated in May 2020 to evaluate the potential prevention of COVID-19 by chloroquine at a loading dose of 10 mg base/kg, followed by 150 mg of chloroquine base (250 mg chloroquine phosphate salt) daily for 3 months in 10 000 healthcare workers or other individuals at significant risk.

The overwhelming majority of liability debate is going to come about not because somebody caught CV-19 due to somebody else's negligence, but rather because some contract didn't get fulfilled because of coronavirus and the response to it.

Unfortunately, there's no easy way out of that one. You can't say "everybody who promised to deliver is off the hook" without grievously harming the entities that expected delivery. A small scale version of this is what happened to local landlords when municipalities declared renters didn't need to pay, but the basic idea is present throughout the economy.

That's going to be a mess to sort out.

Seems like Force Majeure will be the battleground

- the testing system/test results are still somewhat/mostly experimental

yes, perhaps as far as going forward.

my point was that after 4 to 16 weeks of shutdown across a variety of jurisdictions, and the resulting meltdowns in supply chains and distribution, it is going to be relatively easy to point the blame for your nonperformance on government shutdowns.

The second link should go to

Wait a minute. Tort law has always precluded evidence of a defendant's remedial actions intended to limit further damages. Thus, if a restaurant was negligent in allowing an infected person to wait on customers, remedial efforts by the restaurant to notify customers of the infected waiter would not be admissible. The purpose of this rule is to not discourage remedial actions. What's going on here is a deception: the issue is whether the restaurant was negligent by failing to have adequate protocols in place to identify an infected waiter. Should the restaurant have a waiver from liability for its own negligence? Should restaurants be required to have protocols in place to identify potentially infected waiters? Infected by Covid 19? Hepatitis? Leprosy?

Perhaps restaurants are a bad example.

Do they need to protect their customers from sick employees? Yes, they do.

Covid should have been well-covered under existing rules. And in fact, much of the early conversation about the safety of 'take-out' centered around the notion that any restaurant following existing rules ought to be fairly safe, particularly against respiratory viruses.

Here's a different example, one I have mentioned in comments. I represent many ambulatory surgery centers, most of which were closed during the lockdown by the governor's order. Once the governor gave notice he would be lifting the lockdown, I consulted with the ASCs as to their obligation as it relates to covid 19. First, I advised that testing patients and staff alone would not avoid liability for negligence (testing only speaks as of the time of the test), that what's necessary to avoid liability is having in place the protocols that would identify the major symptoms of infection, including fever, coughs, sore throat, sore muscles, etc. My advice is that two or more major symptoms and postpone the surgery (as to the patient) or send the staff person home. Negligence is negligence: no protocols, then liability for damages. Patients should expect a health care facility to have proper protocols in place, so should customers of a restaurant. And the protocols protect not only the patients and customers, but staff as well.

Actually, the protocols should address more than the individual's symptoms, and should include such things as whether the individual has been diagnosed with covid 19 or whether anyone in his family or household has been diagnosed with covid 19 or whether anyone with whom the individual has been in contact has been diagnosed with or has had symptoms of covid 19.


Excellent points.

What is interesting is that employers frequently have to deal with unknown risks.

Say you develop nano particles...What happens is that people report on the best way to handle nanoparticles in the workplace. (A friend of mine has a son, an environmental physical chemist, who studied and worked out how to handle these products.) What then happens is that the industry typically develops guidelines and publishes them; also, insurance carriers send persons into the plant to make sure that guidelines are followed.

This is the way the market for risk reduction works in a legal environment. And, its work that way for many, many years.

Take away the liability, and guess what will happen.

So what's the liability of an infected customer that spreads the disease around the restaurant, perhaps unknowingly, and puts the place out of business?

Public nuisance if you know you have it. If action (eg, no mask) violates law, basis for claiming violation of reasonable standard and probably an inference of unreasonable conduct. I don't know if it is foreseeable that the restaurant would be driven out of business, so there could be a damage limitation there.

Are you aksing about the individual or the restaurant?

In both cases, the answer depends on whether they followed laws and reasonable best practices.

Rayward: It's not clear to me that notifying someone that he caught Covid in your restaurant is a remedial measure within the meaning of tort law. It's not an action that the restaurant could have taken, but didn't, to prevent you from getting Covid in the first place, and your tort law of action -- if you have one -- doesn't claim that failure to notify was the negligence. But, even assuming that the notification is inadmissible in court, it doesn't take away the bad incentive for the restaurant that Tyler was worried about. The restaurant's fear may be not only, not mostly, and perhaps not at all that the plaintiff will use the notification in court. It's that the notification will tell the plaintiff and his attorney whom to sue.

The tort and comp systems are relics of a less-populous, less-scaled time. If we're going to socialize medical casualties, then there are more efficient ways to go about it. Study that instead.

Do we still have a tort system? I sorta thought that had been rendered fairly toothless by now

Heh. Open a business and get sued, and let me know how toothless it is. Or maybe you're commenting on another aspect.

My original comment could of course be more comprehensive. Widespread insurance coverage for first and third party casualty pretty much renders the policy goals and adversarial procedures of tort and comp systems obsolete.

You don't really have evidence for that. It's a fun boogeyman that wasn't even very true three decades ago, and is certainly less true now.

The SCOTUS recently eviscerated class status, as just one example of the ongoing campaign

To be clear; getting sued sucks and is expensive, and anyone going through it quickly realizes that the only winners are the scumbags and attorneys (for both sides), but I just repeated myself...

But is is rare, and difficult, and expensive, and rare.

If it were rare, difficult and expensive, plaintiff attorneys wouldn't offer contingent fee arrangements and there would only be a tiny handful of insurance defense litigators, handling the "rare, difficult and expensive" tort case in between all their real estate closings.

No country that has public, socialized medical care has anything close to the US system, and non-US businesses exposed to it for the first time are shocked.

Can you prove that?

Yes. Personal injury litigation is sufficiently risk-free that the lawyers will happily front their clients' litigation expenses and make their fees contingent on recovery. Insurance defense is a mature, large legal specialty. And there is not a single other country in the world that has anything resembling personal injury litigation in the US, and foreign clients find it hilarious and shocking. If you don't believe any of this, you can go work in any sector of the business and find out for yourself. I concede having a foreign manufacturer-client exposed for the first time to US product liability litigation is something of a novel event.

Yes yes I am quite familiar with the myth of the settlement trolls

Despite the TV PI lawyers and their TV ads about talcum powder, its not nearly as common or easy as you imply (without data).

And as you well know if you are actually sincere, is that in every one of those TV cases, there was ample evidence that the compnany knew of and hide the problems. And people dies as a result.

It's one thing to leave ice out on your sidewalk, it's another to cover it with a thin layer of water and then lie about it. It's the willful cover up and continued activity while people are getting hurt that leads to the really big damages awards.

From an earlier post by Skeptical:

Another great indicator is liability costs as % of GDP
US: 1.7% of GDP
Japan: 0.3% of GDP

Did Skep provide any context as to whether that was a lot or a little?

After all, our system is built around the Libertarian principle of using less regulation and instead relying the courts as the arbiter of all disagreements under a contractual framework.

I would expect that sort of system to have comparatively high usage. By design.

That was the classical liberal theory any way, back when we were litigating the Royal Hunt's damage to Farmer Brown's cabbage crop during a particularly vigorous tally-ho in front of twelve good men and true. Modern industrial society with risk socialized via insurance, not so much.

So why are the vast majority of civil cases in the post-industrial revolution era composed of business vs business?

Contractual disputes aren't socialized via liability insurance and public/private third party-payors.

I am afraid you've lost me on the leap from fox hunts to insurance, and not clear what this has to do with the number of cases of torts in the courts

That's because you don't know what insurance is or how it works and how it distorts a tort system.

The first part is more hilarious than you could ever know.

The second part is a case you have not tried to make here.

The third thing, is to ask yourself, if true, who benefits and why is it structured this way? Please try to do that last part without resorting to a generic rant about omnipotent plaintiff lawyers.

We spend more on liability costs than most countries spend on their entire military

I’m not sure the liability shield results in the desired goal. Businesses do not want to announce a covid infection in large part because it creates a stigma around going there for other customers. The liability risk is a tangential concern and not really a slam dunk case under tort law (as causation would be very hard to establish in court). A liability rule that established a standard of care requiring reporting may, at the margin, cause more business to report than a safe harbor regime.

The usual Way businesses protect themselves from liability is insurance. I have no idea how, let's say, Lloydes would go about providing such coverage. But as does Tyler likes to say there are markets in everything. Corporations are looking for a non-market solution to the problem. The problem they're trying to solve is results of their fuck ups. For example if some business failed to take reasonable precautions and some employee dies. Sure this a never happened before situatiln. so is the solution to give corporations a blank get out of jail free card so they can pass the cost of negligence. I really really doubt it. Almost the only effective deterrent there is to large scale mispractice is litigation. Everyone hates it, and there are better alternatives, but that is our way.

There would also be an exclusion from coverage if a business failed to comply with laws or government regulations.

Yes, this is the protection extended to businesses by building codes, OSHA regulations, ADA standards, professional registration, etc.
Following proscribed standards is a defense against negligence.

One problem with blanket preemptive liability waivers: we are, among other challenges, in a crisis of trust for large institutions.

We are also in a crisis of pathological behavior by large institutions.

So a question you might ask is: how does this policy contribute to building trust?

Tort law is highly fact specific and results are subject to the whims of tryers of fact be they judge or jury. The authors mention the assumption of risk doctrine which also varies by state and by sympathy of the jury. Accidents happen at ballparks and on ski slopes. The admission ticket may require the entrant to assume those risks. Courts may rule the intended assumption invalid.

This area of the law is in need of serious input from economists, says I.
Offer a restaurant patron an option: $X surcharge for Covid insurance with a stipulated payout. Or assume the risk. This option requires the user to value the risk or reject the risk. If you wish to add complexity, let the diner or open table or inspectors submit daily / weekly questionnaires, or whatever.

Second point, many legal subjects like this would be better examined as well as understood through the lens of liability insurance. Insurers are expert at analysing risk: from snowfall at ski resorts, celebrity kidnapping, to hitting half court shots in contests. Insurers can or cannot reasonably assess a risk, if they can, they will price it. This pricing is a more accurate reflection of risk than tort law or user beliefs.

Insurance, in effect, lets the business owners off the hook, if they obtain insurance which states can mandate.

I remember when AIDS really took off. Life insurance actuaries were sh*tting bricks.

Overnight it shattered decades of bankers' hours, rolling in just before their tee time, with the same mimeographed tables from 1952.

As a condition for receiving a government bail out, the recipient should have to agree to comply with all state, local and federal laws concerning public health.

You don't have to take the money if you choose to violate your state's orders. We shouldn't be supporting people who violate the law and make us all less safe.

Liability protection would be useful, but how? The federal government lacks the authority to tell states how they must run their courts, except that Constitutional rights must be respected. Most damage suits are in state courts

People need to be able to seek redress if they are harmed by negligence, etc. That would leave it up to the court system, in which you would have to prove negligence, etc. Otherwise, the government should pay for liability for a short amount of time across the board. I don't know which is best, but I don't like partisan political reasons to decide how we decide the issue, for example, worrying about litigation helping Democrats through helping lawyers. That's pathetic. Indeed, I never would have believed a pandemic could spew out so much partisan political response. This level of partisan rhetoric ie embarrassing. People need to try out principles.No wonder we weren't prepared.

Low trust societies have increased transaction costs.

Eventually the entire system becomes entirely dysfunctional

So true. What builds a culture of trust?

What? Me suffer any consequences?
It's not the American way! We deserve bailouts, free passes, no liabilities, no social mores, no ethical constraints. We deserve to have anything we say be 'true'. We deserve a paycheck when we don't work, we deserve a vaccine, we deserve to have any drug we can think of cure our diseases. We deserve to make a profit, we deserve to go to restaurants when we want bars when we want... we deserve to tell nameless persons they have to go to work to make cars, cut up meat, pick vegetables, work in grocery stores. But not US, the royal US.

If only you were white. Wear the mask but not the veil!

COVID-19 spreading quickly through psychiatric hospitals: Reduction of population a must

Here is a liability moment.

So riddle me this: in a Libertarian system - with no regulatory state, no consumer protection agency, no standard rules of conduct or 'safe harbors', an emphasis on individual action, no way to make contracts for every single human interaction, and the obvious impossibility of perfect universal knowledge - how does this system impose consequences on a party for their recklessness, negligence, and non-criminal malfeasance that leads to the harm of someone else?

Particularly in a system that values monetary consequences as the highest measure and motivator.

What is the recourse?

How do people undertake the pursuit of life, liberty, and happiness, and pursue free flow of commerce with undo fear of harm at the arbitrary misconduct of a stranger, if there is no system for adjudicating blame and remediation?

Seems to me this system would benefit from tort liability, determined through a jury of one's peers.

Libertarians have smaller regulatory states.
You suffer flat earth and think all states are shaped the same, thus asking how a libertarian would shape one state as if the model scales.

By duality there is no real regulatory state in the Swamp. It regulates as randomly as the legislature is unstable, and the legislature was deliberately made unstable so it could not be shaped into a regulatory state.
N does not scale, we cannot make the model state. We can minimize the volatility, but that happens in the legislature not the executive.

Well we could have all kinds of interesting discussions about the swamp, and how, and who, and why, and how Libertarianism might or might not solve that.

But my question was: if you remove the tort system, what do you replace it's funtion with?

It's function, for purposes of this question is: to assign blame for negligence, recklessness, and noncriminal malfeasance that leads to harm. And to set remediation.

If you remove tort you have a mess.
But you are right on one thing, tort and libertarianism are orthogonal. Tort is for denial of a right or a liability based on something other than contract. A public nuisance.

Yes we need tort. Although for government invasion one can sue based directly on government contract in the Constitution.

If you have a mess. You can eat

If you have a mess. You can eat at

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