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An Overview to Compensation Systems in Tort Law


In tort cases, victims often receive compensation, including monetary judgments. However, some judgments include other factors such as, the accused, publicly admitting guilt. In most jurisdictions, the courts have placed limits, or judgment ranges, which depend on specific factors found in the case.

In most cases, victims that sustain injuries receive a judgment which maxes out, regardless of how painful and permanent the injury may be. However, the courts can award other judgments, in addition to the one made for specific bodily injury. For example, the courts may award an additional judgment for the pain and suffering by the victim which resulted from the actions of the guilty party.

In class action suits, judgments may include a public admittance of guilt by the guilty party. For that reason, class action suits often involve a settlement outside of court, so that the accused company can avoid the public admittance of guilt. Guilt can cause irreparable harm to a companies reputation. If a company believes that they may lose the case, they often settle outside of court.

The courts treat judgments as a means of discouraging similar behavior in the future. Judgments are utilized as a form of punishment against the guilty party. That punishment is meant to discourage others from committing similar acts that cause harm to another.

However, the system, as it stands now, is often abused. There are many frivolous lawsuits in which the alleged victim simply believes that they have an opportunity to make money through judgments, even when there has been no real harm done. There is a current effort aimed at preventing such lawsuits. The courts aim is to keep the courts as a tool for cases in which real harm was done to the victim.

Liability Insurance & Tort Law:

In tort law cases, liability insurance is vital for the accused to protect their assets. Those that are found guilty without the benefit of liability insurance, often find that it takes a lifetime to pay off any judgment made against them. In fact, the courts can garnish wages and take money from bank accounts, when the accused do not meet their payments. Liability insurance is however, fairly common.

Most drivers are required to carry liability insurance in case some one is injured in an accident; including the driver, any occupants, or those driving in another car in which they are involved in an accident with. Liability insurance offers protection against tort law cases, including legal representation in such cases. Malpractice insurance is a specific type of liability insurance, which is utilized by those that are employed in the medical field.

Regardless of the specific type of liability insurance, the purpose remains the same. Should an individual, or business, commit some act which causes harm to another, by accident or willfully, liability insurance protects them if there is a judgement made against them.

Liability insurance is a means for individuals or businesses to protect themselves in cases where they are accused of some wrongdoing that caused harm to another. For professionals, there are specific types of insurance. For example, doctors carry malpractice insurance. That insurance can protect Doctors should one of their actions result in injury or death for a patient. For individuals, there are other types of liability insurance. For example, drivers generally have auto insurance coverage.

Each driver has coverage for many factors, including collision and liability. That liability insurance would cover the driver should one of their actions result in an accident that causes harm to another. There are a variety of ways that victims can seek compensation in liability cases. Generally, the tort case is heard in court. In court, a determination of guilt or innocence will be made.

In cases where the accused are found guilty, they may be required to provide compensation for the victims. Compensation would likely be monetary, but not necessarily. Some cases are also settled before they even reach the court.


The purpose of liability insurance is to protect individuals and businesses from tort cases in which the liability for a negative outcome is questioned. Liability insurance can help the accused meet the financial burden of any judgment incurred against them. Without liability insurance, individuals found guilty in tort cases, often incur a large financial debt, and they are sometimes unable to meet the financial burden on their own.

The reason that an accused person may receive a judgment against them, is to provide compensation to the victim. Compensation is only awarded when it is clear that the accused acted in a manner that caused harm, injury or death to another. Compensations is meant to provide for the needs of the victim, such as medical bills and loss of income.

In addition, compensation is meant to cover mental anguish and other psychological issues that may have resulted form the incident or incidences. Compensation is sometimes not monetary. Many times, victims want the accused to admit guilt so that the victim can enjoy vindication. By having the accused admit guilt, the victim and the courts, hope to prevent similar occurrences in the future by that individual, as well as by others. Compensation awards are meant as a lesson to others, so that they do not commit acts that may harm another.


There are many deficiencies in liability insurance and in tort law cases. First, the victims can not always afford proper legal representation, especially when they are facing big insurance companies with unlimited resources. There are also cases in which the alleged victims take part in a frivolous lawsuit in hopes of getting compensation judgments, even though no real harm was done. For that reason, the courts in many jurisdictions have placed a cap, or maximum on allowable awards. In contrast, the accused may have a benefit in tort liability cases, if they have a liability insurance company representing their case.

The liability insurance companies do everything in their power to avoid large payouts, especially when they believe it can be avoided. In some cases, it is cheaper for the accused and the victim, to settle outside of court. Unfortunately, some tort liability cases include settlements even when the accused is obviously innocent. Liability insurance companies may choose to settle simply because it is cheaper than the costs involved with taking the case to court.


Tort liability cases are meant to provide judgments against the accused when they are guilty. Those judgments often involve financial compensation for the victim. Although many jurisdictions now impose a maximum award amount based on the specifics of the case. Victims can at least recover the cost of medical bills and some financial compensation for pain and suffering. Judgments often include full compensation for medical bills, as well as any lost income that resulted from the actions of the accused.

In some cases, the courts also award financial judgements based on the emotional pain and suffering associated with the incident. The amount of compensation is often considered arbitrary, even when there is a cap on the maximum allowable judgement according to the law. Judgments are meant to show the accused, and other members of society, that certain actions are not acceptable and will be punished.

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