The inefficiency of the no-duty-to-rescue rule and a proposed 'similar risk' alternative.

• Author: Grush, Eric H.
• Position: Response to William M. Landes and Richard A. Posner, Journal of Legal Studies, vol. 7, p. 83, 1978

INTRODUCTION

One of the most settled and basic common-law rules that all law students learn is that there is no general duty to rescue someone. Although there are many exceptions to this general rule,(1) the basic principle has been widely accepted. It is unclear, however, whether the rule is based on liberty or social-utility concerns. Perhaps common-law courts feared the undue interference with an individual's liberty that would result from imposing a seemingly limitless duty to rescue every person in danger. Alternatively, these courts might have felt that the costs of imposing liability for failure to rescue were generally greater than the benefits to be derived.

This Comment analyzes various efficiency(2) arguments that have been presented in support of the "no duty" rule and proposes a new rule that promotes both efficiency and personal liberty. Specifically, the Comment addresses Professor William Landes and judge Richard Posner's argument that the no-duty rule is efficient because potential rescuers will avoid rescue situations if a liability rule exists.(3) For example, someone who swims well might avoid beaches where poor swimmers are known to swim. By questioning the assumptions behind Landes and Posner's economic model, and by extending their model, this Comment demonstrates that the no-duty rule is, in fact, socially inefficient, at least in some contexts.

Recognizing that the liability rule is sometimes efficient and sometimes inefficient, this Comment proposes a "similar risk" rule which better promotes efficiency. The similar-risk rule would impose liability for failure to rescue only if a potential rescuer is subject to a risk similar to the risk that the potential victim faces. If the potential rescuer is faced with a similar risk, she would benefit from a liability rule because she could also be a potential victim in need of the rule's protection at some point in the future. This rule is efficient because each person would benefit under the rule.(4)

Part I summarizes the common-law no-duty-to-rescue rule and its exceptions. Part II analyzes the general efficiency argument against a liability rule and details Landes and Posner's argument that substitution of potential rescuers away from rescue situations may militate against the utility of a liability rule.(5) Part III explains Professor Richard Hasen's response to the Landes-Posner model. Hasen argues that since potential rescuers may also be potential victims, they should favor a liability rule.(6) Part IV extends Hasen's analysis to provide additional arguments for why the no-duty rule is inefficient. Recognizing that the no-duty and liability rules may each be inefficient in different contexts, Part V proposes the similar-risk rule discussed above. This Comment argues that the similar-risk rule satisfies both utility and liberty concerns in all contexts.

1. THE COMMON-LAW NO-DUTY-TO-RESCUE RULE

   There is no affirmative duty to rescue another person who is in danger.(7) In addition, there is no general duty to warn potential victims of danger.(8) There are, however, exceptions to this general rule which do impose liability for failure to rescue in some situations. For example, if there is a special relationship between the rescuer and the victim, such as that between a parent and a child, the rescuer may have an affirmative duty to rescue.(9) Additionally, an affirmative duty exists to rescue someone who has fallen overboard while on the seas.(10) Other exceptions include situations in which a potential rescuer already has voluntarily undertaken a rescue,(11) or in which a potential rescuer creates the situation that puts the victim in danger.(12)

   The policies that underlie these rules are not certain. Although these rules may be based on notions of justice, fairness, or liberty, they may also be explained on social efficiency and utility grounds.(13) The next Part offers a general explanation for why the no-duty rule may be inefficient.

2. IS THE NO-DUTY-TO-RESCUE RULE EFFICIENT?

   The no-duty rule may be inefficient since it is applied even if the cost to the potential rescuer is trivial. Judge Learned Hand's well-known "BPL" analysis(14) demonstrates how inefficient the law may be: The burden (B) to the potential rescuer can be slight; the loss to the potential victim (L) is probably great; and the probability of the loss occurring (P) can also be large.(15) In other words, the harm to the potential victim, discounted by the probability of the harm occurring, can outweigh the trivial cost to the potential rescuer. At a simplistic level, then, applying the no-duty rule can often contradict judge Posner's argument that the common law is efficient.(16)

   Landes and Posner argue that the common-law no-duty-to-rescue rule is efficient because potential rescuers will avoid areas in which potential victims reside if a liability rule is imposed.(17) This substitution effect assumes that there are two nonoverlapping groups in society--potential victims and potential rescuers.(18)

   Landes and Posner use a differential-equation model to explain this substitution effect.(19) Their model assumes that there are two activities (A and B) that a potential rescuer may choose. Activity A is assumed to have potential victims, while activity B is assumed to have no potential victims. Under a system that uses a liability rule, a potential rescuer would decide whether the potential cost of rescuing someone by staying in activity A outweighs her loss in utility by switching to activity B.(20) If potential rescuers switch to activity B, then the liability rule would be ineffective--if there are no potential rescuers in activity A, then a potential victim, and thus society in general, would not gain from the rule. Additionally, by switching to activity B, a potential rescuer may lose utility. Since she chose activity A without regard to the liability rule, it is fair to assume that she preferred activity A to activity B. By switching to activity B, she engages in an activity that she would not normally choose.

   For example, suppose Beth swims very well and prefers to go to Deep End Beach, a very popular place for tourists. Unfortunately, the tourists tend to swim poorly and frequently call on Beth to save them from drowning. Beth knows that if she does not save the tourists she may be liable to them under a liability rule. Instead of subjecting herself to potential liability, Beth decides to substitute to Seclusion Beach, a place where there are only locals who swim well. In this situation, the liability rule has created inefficiency because Beth loses utility from switching to a location she does not prefer.

3. HASEN'S MODEL: A PERSON As BOTH POTENTIAL RESCUER AND POTENTIAL VICTIM

   Professor Richard Hasen argues that the classes of potential victims and potential rescuers are overlapping.(21) He claims, therefore, that potential rescuers will each gain utility under a liability rule since they receive value from the possibility of being rescued themselves. For example, pedestrian A could warn pedestrian B of a falling bowling ball, just as pedestrian A could be warned about falling objects by pedestrian B or someone else. In contrast, Landes and Posner implicitly assume that a potential rescuer receives no benefit from the imposition of a liability rule because the rescuer could not be a potential victim.(22)

   Let U be a person's utility independent of the rescue issue, P be the probability that a person will be involved in a rescue situation (either as a potential rescuer or potential victim), [p.sub.1] be the probability that the person would be a victim (conditioned on the event that she is in a rescue situation), V be the value that the person places on her own life, and C be the cost of undertaking a rescue. Hasen argues that a person who could be either a rescuer or a victim will prefer a liability rule if. U - P(1 - [p.sub.1])C [is greater than] U - P([p.sub.1])V, or when [p.sub.1] [is greater than] C/(V + C).(23)

   The idea behind Hasen's inequality can be demonstrated with an example. Suppose Beth, the beachgoer who swims well, has a 1% chance of being in a rescue situation. Further, suppose Beth recognizes that if she is in a rescue situation, she will be a potential rescuer 80% of the time (1 - [p.sub.1] = 0. 8), while 20% of the time she will be a potential victim because she is drowning ([p.sub.1] = 0.2). Finally, suppose she values her life at $1,000,000, but the cost of rescuing someone else is only $100. Using Hasen's inequality, the amount she would lose under a liability rule is the $100 cost of rescue, discounted by the probability that she will have to rescue someone (1% x 80%, or 0.8%). Under a liability rule, the cost per swimming excursion would be 80 cents ($100 x 0.8%). In contrast, the amount she would lose under a no-duty rule is the $1,000,000 value of her life, discounted by the probability that she would lose it--1% x 20%, or 0.2%. Under a no-duty rule, Beth's cost per swim would be $2000 ($1,000,000 x 0.2%). Comparing Beth's per swim cost of 80 cents under a liability rule to her $2000 per swim cost under a no-duty rule, Hasen's inequality demonstrates that Beth would prefer a liability rule.

   Using the simplified inequality stated above, a person would prefer a liability rule if [p.sub.1] [is greater than] C / (V + Q. Analyzed under this simpler formula, Beth still prefers a liability rule because the probability that she would be a potential victim in a rescue situation (20%) is greater than the ratio of the cost of rescue ($100) to the value of her life plus the cost of rescue ($1,000,000 + $100), or 0.001%.

   The previous example not only demonstrates how Hasen's inequality works; it also demonstrates that the conditions which favor a liability rule are often met. Since C, the cost of rescue, generally will be quite small in comparison to V, the value of the rescued potential victim's life, the right side of the simplified...