The Long-tail Liability Revolution: Creating the New World of Tort and Insurance Law

Very few developments have ever transformed either tort or insurance law. One development -- as important in our time as the adoption of liability for negligence was in the 19th century or the rise of strict products liability was in the 20th century -- transformed both. That is the rise of long-tail civil liability. A long-tail claim involves tortious or other liability-creating conduct that causes latent bodily injury or property damage that then manifests itself only many years after the harm-causing conduct occurred. Exposure to asbestos, and the storage of hazardous waste that slowly leaches into an aquifer, are paradigm examples. Beginning about fifty years ago, long-tail liability, and claims against liability insurers for insurance coverage of long-tail liability, have generated the vast majority of cutting-edge issues facing these two related fields. It is precisely the length of the tail on certain tort claims that is responsible for most of the fundamental developments in these fields over the past fifty years. Without long-tail liability, tort and insurance law, and many of the fundamental structural features of these fields, would look today much like they looked fifty years ago, and indeed, fifty years before that. But because of long-tail liability, features of both fields that simply did not exist fifty years ago are now central to these fields. Almost all of this involved common law change. In an era dominated legally by federal legislation and the administrative state, the long-tail liability revolution was the exceptional instance in which judge-made, state-law rules governing tort law and insurance were central. The long-tail liability revolution took decades to occur, largely because it occurred through the common law process. It is also an example of what the legal system may face in the 21st century, if and when common law litigation over injury and loss caused by many new technologies that are coming onto the current scene begins to occur. This Article is an effort to understand how the long-tail liability revolution occurred, by analyzing the influence of this new form of liability on tort and insurance law, as well as the consequences that these changes in the law have produced.