There are essentially two ways one can approach the legal system, both criminal and civil. Those are systems designed in terms of consistent principles and systems designed in terms of desired outcomes. In the past, it was an article of faith that the best system should be designed so that it applied the same principles consistently. In modern times, despite some lip service paid to "fairness" and "consistency", the system has effectively become one driven by outcomes.

Let us look at tort and contract laws for examples.

The modern view masquerades as principle driven. It argued that torts should be viewed as "social insurance", not only to ensure "justice" for the injured, but to makes sure those penalized are those "most able to prevent future injuries." However, as they define those most able to prevent the incident as those best able to pay damages, in effect the system is designed to ensure the injured are paid as much as possible by those with the deepest pockets. And so, rather than any real principles, we have an entirely outcome driven tort system.

As an adjunct, as contract law stands in the way of tort law, contract law has largely been redesigned with outcomes in mind, specifically to move cases from contracts into torts, usually by arguing for "unconscionability", that a contract is a contract of adhesion, or due to unequal bargaining power. Whatever the strategy, the basic view is to eliminating any pesky contracts which might assign liability, and move the case into the realm of torts, where outcomes are more important.

This is a massive departure from the past.

In the past, torts were viewed narrowly. The purpose of torts was to handle injuries where the two parties had no preexisting relationship, and their sole purpose was to "make whole" the injured individual. Basically, the view was that when some injury took place, any contractual relation between the parties should control, when there was no contract, then we needed to determine what was the immediate cause of the injury, and, if someone was to blame, to have them make good the damage they had done. It was not intended to "make things right" or punish, only to pay off the immediate damage to make things as close to the original circumstances as possible. In addition, liability was viewed very narrowly, with only the "proximate cause" being liable, which cut off the modern quest for deep pockets. If the immediate cause was poor, well that was too bad. It was regrettable, but the poverty of the wrong doer was not an excuse to seek others who could pay.

Most of modern liability was handled by contract, and contract was viewed expansively. Basically, the assumption was the two parties would contract to cover every eventuality. If they left out anything, it was assumed they meant to. That is at the heart of the maligned principle of "caveat emptor". The assumption was, if the seller intended to sell insurance, or the buyer wanted to buy it, it would be spelled out, otherwise, parties assumed liability. The principle was that two adults were capable of negotiating an agreement and it was not the purpose of the courts to tell them what they meant, they were perfectly able to spell it out for themselves.

So, how did this shift from expansive, unlimited contact law and limited liability to expansive liability law with effectively limited contracts which the courts are free to break or rewrite, what did it mean in practice?

Well, it meant what all such shifts from principle driven systems to outcome driven systems mean. But let us look at the specifics here first, and then move to the general principles.

In terms of liability it means that everyone involved in the sale of any good or service must assume they might be assessed an unknown amount of liability damages, whether at fault or not, and an amount they cannot negotiate away via contract. In specific cases, this means that some goods and services simply are not available, as the potential liability is too great. Even if the buyer is willing to sign away the right to sue, they can't, thanks to breaking of contract law. They have gained a right they may not want, and cannot waive. In addition it means that knowing in advance who is most likely to blame for wrong doing does not ensure any foreknowledge of damages. Though X is to blame, it is still quite possible Y will be assessed the lion's share of the damages. All of which means that a huge amount of uncertainty has entered the system, and contracts no longer are a viable tool to eliminate that uncertainty.

And that is the inevitable result of moving from principles to outcome. Principles are predictable. They may produce outcomes that seem "unfair", but we can always know in advance what the outcomes are likely to be. On the other hand, when we turn to outcomes, we cannot know in advance what will happen, the system becomes arbitrary and unpredictable.

For example, suppose you have a game. Everyone puts in $1 and the pot goes to "the best person". Could anyone predict how this would end? Of course not, the criteria are far too uncertain. And that is the problem with outcome based law, it is simply uncertain. Even when the terms are well defined, and they rarely are, the shift to judging by outcome tends to make it impossible to predict who may appear on either side of the table, making outcomes harder to determine. For example, X may seem likely to pay, but if he can pull in Y, who has deeper pockets, it is possible he may escape scot free. Similarly, as a lot of modern liability law depends on jury sympathy, it is possible that a tactic which portrays a plaintiff in an unfavorable light might change a winning case to a losing one with no change of facts.

And there is the problem of basing law on outcomes, predictability suffers. And with a lack of predictability, everyone suffers. Predictability is essential to a robust economy and a stable society. Once predictability disappears we have situations such as we experience now with medical malpractice, where doctors refuse to perform specific procedures because of uncertain liability, where some regions are impossible for businessmen because of pro-plaintiff judges or juries, and where everyone pays more because of the uncertainty and risk of doing business.

And that is what we need to reform our system, a return to principles rather than outcomes. We need to stop looking for a system that makes everything "fair" for everyone, and produces "just" outcomes by some ill defined understanding, and instead look for a system which we can both understand and predict. As I said in "Utopianism and Disaster", looking for perfection tends to produce disaster. We need to look for a system which is predictable and consistent.

POSTSCRIPT

Of course when I propose a return to the original system, everyone decries how "heartless" caveat emptor was and suggests "modifying" it to be "more customer friendly", which misses the point. Caveat emptor is part of the principle. If you assign liability by default, then why not just incorporate our entire present system? You have to assume the seller is selling only what he contracted to sell, if you force him to sell liability along with every good, you have made a step toward what we have now.

POSTSCRIPT II

For more on the importance of predictability especially as regards the law, I suggest "The Problem With Evolving Standards",  "In Praise of Slow Changes", "Predictability", "Conservatism, Incremental Change and Federalism", "Empathy" Threatens not "Justice" but Predictability", "Sotomayor and Empathy", "Interpretation and Activism", "Why Judicial Activism Hurts",  "The Problem With Tort Reform", "Red Herring", "A True Conservative Platform" and "A Perfect Example".