The Market in Unmatured Tort Claims: Twenty-Five Years Later

In an article in 1989 in the Virginia Law Review, Professor Robert Cooter argued for changes in the law that would facilitate the development of a market in unmatured tort claims. An unmatured tort claim is a potential claim that a potential victim has before any injury has occurred. Cooter proposed that potential victims have the right to sell their unmatured tort claims. That is, Cooter proposed that potential victims be allowed to sell their right to sue even before an accident or injury ever occurs.

Even twenty-five years later, the proposal remains both bold and imaginative, and yet it remains unadopted in any jurisdiction. There is a reason for this. In this Article, I reexamine the proposal as to its likely intended and unintended effects. The unintended effects were overlooked in the original article because of its static analysis.

A dynamic analysis reveals these unintended effects. These effects do not invalidate the proposal. I conclude that Cooter’s proposal continues to have merit, but several modifications are necessary if the proposal is to succeed. Without these modifications, the proposal will fail to accomplish its goals and will have serious adverse unintended effects.

In short, this Article argues for the adoption of measures to permit the development of a limited market in unmatured tort claims. The primary limitation is the exclusion of potential injurers in the market for their own unmatured tort claims. Other modifications include utilizing a different measure of damages and a prohibition on liability limiting agreements.