COMPENSATION OF AUTOMOBILE ACCIDENT VICTIMS: I* The Measure of the Problem [I]

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1 COMPENSATION OF AUTOMOBILE ACCIDENT VICTIMS: I* The Measure of the Problem During 1951, nation-wide attention was given to the fact that some person would shortly become the nation's one millionth automobile accident fatality. This grisly anniversary was in fact celebrated on December 23, Yet this event symbolized, rather than accurately described, the real magnitude of the automobile accident problem and the resulting problem of compensating the victims of automobile accidents at the present time. It would perhaps be better to describe the problem by noting that in 1950 there were 8,300,000 automobile accidents involving 15,950,000 drivers and resulting in 35,000 deaths, 1.799,000 bodily injuries, and property damage estimated at $7,450,000.1 These figures increased in 1951 when, the record indicates, there were 9,400,000 accidents involving 17,400,000 drivers and resulting in 37,300 deaths, 1,300,000 bodily injuries, and property damage estimated at $8,400,000.2 As the year 1952 draws to a close, no one is prepared to say that the millennium is at hand when this problem can be brought under control or its trend reversed. Thus the very hugeness of the problem may be cited as the first justification for recommending its study to persons interested in regulating human behavior. Although lawyers cannot claim a direct interest (or competence) in the problem of making safer automobiles and more adequate highways, they do have a direct concern with the flood of tort claims which spring from traffic accidents and with the problem of devising an orderly and effective procedure for compensating victims of automobile accidents. In this connection a second justification appears, for at the present time the principal procedures relied upon for assuring compensation to automobile accident victims are embodied in a series of legislative acts which, despite the fact that they are competing for favor among the States, are not widely understood. It is, therefore, the object of this study to explore the problem of compensating automobile accident victims as it has been handled by traditional procedures of common law actions in tort and by the various competing approaches to the problem through legislation. There will be an attempt to see whether these methods and procedures have done the job they were supposed to, and, if they can be improved upon, to see in what direction the improvement lies. * The following study is the result of research done in connection with a Seminar on CoIntemporary Legal Problems held in the Spring Semester, 1952, at the Washington College of Law of the American University. The seminar was conducted by Ross D. Netherton, Lecturer, and was composed of the following students: Edward Cockrell, Samuel Harrell, Rose Mattingly, Samuel Strother. Jerome Sebastian, and Maj. Janna Tucker. For publication, the study has been divided into two parts. Part I is concerned with common law actions in tort, and legislation relating to compulsory insurance, compensation plans, "Safety-responsibility," unsatisfied judgment funds, and the legal problems growing out of such laws. Part I will appear in a subsequent issue of the Law Review and will contain an analysis of the effectiveness of these competing systems and the present trends of state legislation. National Safety Council, Accident Facts, 1951 edition; The Travelers Insurance Companies, Lucky You, The Travelers 1952 Book of Street and Higkway Accident Data. 2 National Safety Council, Accident Facts, 1952 edition. [I]

2 Common Law Actions in Tort Records show that the first automobile accident resulting in a fatality occurred on May 30, But there is no evidence that anyone arose to warn the bench and bar that on this day had been born a legal problem which was destined, within a generation, to grow into a monster. And, looking at events through the eyes of the time, it is too much to expect that anyone would have foreseen anything extraordinary in the legal implications of this type of situation. For centuries the problem of compensating victims of tortious conduct resulting in personal injury or property damage had been handled by common law actions in tort. The horseless carriage appeared analagous to the horsedrawn carriage; the procedure most suitable for determining civil liability in either case appeared to be the same; there was no reason to believe that the problem of realizing a judgment based upon such liability would be any more difficult here than it had been in other types of cases in the past. In such a spirit the first automobile accident cases were sounded in tort. Yet, as the use of automobiles matured and found a permanent place in the industrial structure and private life of the community, troublesome situations arose. Basic to everything else was the standard of care to which a driver must adhere if he was to avoid being negligent. Early in the process of developing doctrine applicable to automobiles, the courts rejected the notion that a driver's liability should be absolute, 3 and, instead, based their reasoning on the assumption that liability should be measured by reference to the common law standard of due care under the circumstances. Such is still the espoused basis of liability today.' But, as Holmes remarked, hard cases make bad law, and hard cases soon grew plentiful where automobiles were concerned. As speeds increased and automobile traffic became -a common-place sight, the chance of finding witnesses who had really seen what happened diminished. As court calendars became congested and resulted in long pre-trial delays, witnesses' memories faded. As liability insurance coverage increased among motorists, juries intended to prefer plaintiffs in awarding damages. Thus the vitality of the common law technique of moving from case to case, deciding each on its own merits, began to wane in the field of automobile accident litigation. And, as this occurred, two processes of reaction became visible: judges tended to take refuge in "rules of law" which crystallized the conduct of reasonable men into maxims, and legislatures tended to create artificial standards of care dictating what their expert knowledge felt reasonable men ought to do.5 At this point, the important questions in this field of law became, first, 3 Lewis v. Amorous, 3 Ga. App. SO, 59 S.E. 338 (1907). ' Southwestern Gas and Electric Co. v. Brown, 197 F. 2d 848 (1952); Bachand v. Vidal, _MAfass. _, 101 N.E. 2d 884 (193S). 5 In this process the courts have naturally contended among themselves over what the rule should be. Holmes, in Baltimore and Ohio Railroad v. Goodman, 275 U. S. 66 (1927), believed so firmly in the "Stop, Look and Listen Rule" for determining negligence at grade crosslngs that he thought the driver should get out of his car and inspect the crossing if he could not otherwise discover whether a train vwas dangerously near. Cardozo, in Pokora v. Wabash Ry., 292 U. S. 98 (1934) refused to apply the rule of the Goodman case because he felt that "caution [should prevail] in framing standards of behavior that amount to rules of law... when there is no background of experience out of which the standards have emerged." Today practically all states have by statute required all vehicles to stop at certain grade croasings and certain vehicles to stop at all grade crossings. See Uniform Vehicle Code, Act V, Failure to comply with such rules is a misdemeanor which, it is commonly held, amounts to negligence as a matter of law. See Morris, Relation of Criminal Statutes to Tort Liability, 46 Harv. L. Rev. 453 (1933).

3 whether the rules of negligence would develop in favor of the plaintiff or defendant, and second, how counsel for the adversary parties could make the most of their cases under these ground rules. Turning first to the various modifications applied to the standard of care, one notes that collision at night involving automobiles and unlighted objects has always been a serious problem. Early cases held that a driver was negligent when he travelled at a speed which prevented him from stopping within the range of vision allowed by his headlights. 6 Such a rule could not remain completely satisfactory however, as traffic became heavy. The logical response of the automotive equipment makers--which would have been to make stronger headlights for faster cars-would have resulted in blinding other drivers on the road and thus creating more havoc than was ended by the rule. Moreover, the so-called "range of vision rule" produced harsh results where adverse weather conditions cut down natural vision 7 and where natural obstacles momentarily obscured vision while driving. 8 Inevitably, the cases began to show a reaction against this "rule of law." However, in some states legislation has resurrected the rule in the form of a provision that motorists must not drive at speeds which render them unable to stop within certain assured clear distances ahead." The frequency with which collisions occur at street or highway intersections has led to the establishment of certain rules which apply to those situations. Here the courts and the legislatures have maintained approximately the same approaches. It is probably well that they have because any rule for such situations is likely to be an arbitrary one, and in such a case, the practical strength of the rule depends much upon the agreement of the arbiters in applying it, However, although right-of-way may be established with fairly good certainty, its legal implications are by no means as clear. Thus, the driver with the right-of-way could not always be sure by reading the decisions whether he has in his favor another combination of circumstances which make it reasonable and prudent for him, under those circumstances, to proceed in using the right-of-way.' 0 Thus, the condition of the street, the number of vehicles at the intersection, the scope of his and other drivers' visibility, and the facility with which each vehicle in this combination can be handled, all determined whether he may, as a reasonable and prudent man, proceed to use his right of way in entering the intersection." In this way, the tendency of juries to inject their own judgment into the application of a rule of law has made the rule, originally so clear, precarious in application. And finally, the tendency of legislatures to superimpose modifications on the rule governing right of way by making the rule always subject to the direction of a traffic officer or signal device must be reckoned with. The night driving and busy intersection situations are, in a sense, not typical of normal highway operations, But the problem of speed is con- * Lauson v. Town of Fond du Lac, 141 Wis. 156, 123 N.W. 629 (1909). Woolner v. Perry, 26S Mass. 74, 163 N.E. 750 (1928); Mechler v. McMahon, 184 Minn 476, 239 N.W. 605 (1931). *Opple v. Ray, 208 lad, 450, 19S N.E. 81 (1935); Jacobs v, Moni, 288 Mass. 102, 192 N.E. 515 (1934). *New York Vehicle and Trafic Law (1952), 56. ' Nixon, Ckanging Rides of Liability in Automobile Accident Litigation, 3 Law and Contemp. Prob., 476, 480. n Rosenau v. Peterson, 147 Minn. 95, 179 N.W. 647 (1920); Chiles v. Rohl, 47 S.D. 580, 201 N.W. 154 (1924); Thrapp v. Meyers, 114 Ne. 687, 209 N.W. 238 (1926). [3]

4 stantly present, and the legal implications of speed law violations in civil liability are important. In this connection it is probable that the "reasonable and proper" standard is preferable to fixed maximum speed limits. It recognizes the human nature of automobile drivers and the attitude of juries in passing upon the question of negligence.' 2 Many states, however, have their speed limits stated in terms of fixed absolutes, with the result that one is never sure in such states whether violation of the speed limit is evidence of actual negligence under the circumstances. Similar troublesome problems are presented by the trivial, obsolete, or unreasonable speed limits and zones which still persist in many places.' 3 Another major area of judicial problems has been concerned with the doctrine of contributory negligence. With respect to injuries to pedestrians, it has always been patently clear that the advantage in any contest for survival lay with the automobile. The pedestrian, unable to move fast enough once a misstep had been made, found himself frequently within the scope of contributory negligence. 14 And similarly, to continue the analogy, in a situation involving two automobiles, the driver who had the initiative frequently had advantages of maneuverability as compared to the other driver who eventually became the injured plaintiff. It was inevitable from the beginning, therefore, that strict application of the doctrine of contributory negligence was not to be.' 0 But, the question was how far and in what cases should modification occur. Part of this question was answered by the doctrine of "last clear chance." Strict application of this doctrine required that the defendant, having noticed that the plaintiff had placed himself in a position of peril, make utmost use of this last clear chance to avoid injuring him; and if he failed so to do he was liable on the grounds that his negligence, not the plaintiff's, was the proximate cause of the injury.' 0 In the actual use of this doctrine, however, fictions frequently replaced some of the vital links in the chain of evidence with the result that the doctrine became a "plaintiff tool." 17 This has been exposed many times by courts, but the approach still persists sometimes under other names, and sometimes in the form of statutory rules which accomplish the same result in particular circumstances. One may cite, for example, the common rule that a rear end collision with a vehicle which has stopped is presumably the fault of the car which is in motion.' 8 It would seem that a true explanation of the "last clear chance" doctrine is a basic dislike and distrust of the defense of contributory negligence which is coupled with a willingness, perhaps somewhat reluctantly, to shift the entire cost of the injury to the defendant even though the actual fault may lie partly with both parties. 19 Because of this it has sometimes been sug- 1 Floch, Speed Law Enforcement in Metropolitan Area, 42 J. Crim. L. & Criminology 833 (1952). 1 3For example, lo. Rev. Motor Vehicle Laws (1948 Ed.), 8383, provides that driving at more than 25 m.p.h. for half a mile is prima fade unreasonable and imprudent. "4 1 2 City of Duncan v. Nicholson, 118 Okla. 275, 247 P. 979 (1926). Loundes, Contributory Negligence, 22 Gen. L (1934); Green, Contributory Negligence and Proximate Cause, 6 N.C.L. Rev. 3 (1927). 10 Prosser on Torts, 408 (1941); 17 Throckmorton's Cooley on Torts, 648 (1930). Nixon, supra note 10, at Uniform Vehicle Code, Act. IV, 28 (6), rule requiring proof of financial responsibility following accident makes exception in favor of person whose car was parked at time of accident. " Cavanaugh v. Boston & Maine R.R., 76 N.H. 68, 79 A. 694 (1911), where the court said: "It may be that neither explanation is strictly logical and that the real foundation for the rule is merely its fundamental justice and reasonableness. The justice of the rule.,. may be a sufficient justification for it."

5 gested that the basis for awarding damages should be comparative negligence. This suggestion has, of course, encountered obstacles ranging from the traditional objection that the common law should not undertake to settle disputes between wrongdoers to the very practical consideration that, in automobile cases, the plaintiff's negligence is usually inadvertent, arising out of his inability to realize that he is placing himself in peril. 20 Moreover, acceptance of the theory of comparative negligence in no way eases the problem of analyzing causation nor improves the ordinary juror's perspective in awarding judgments. Where the doctrine of comparative negligence has taken root, it has been by virtue of statutory fiat. The Federal Employers' Liability Act, the Merchant Marine Act and various state railway labor acts all provide that damages shall be reduced in proportion to plaintiff's negligence. By state law, Virginia and Georgia have applied similar rules to railroad crossing accidents. 21 And in three states, Wisconsin, 22 Mississippi2s and Nebraska, 24 and four Canadian provinces, 25 the comparative approach is used in all negligence actions. In the matter of contribution between joint tortfeasors there has been the same refusal to accept new ideas. However, because the early English case which provided the precedent for no contribution among tortfeasors involved a defendant who had intentionally done wrong, there has been opportunity for later courts to make exceptions to the rule and permit contribution where the tortfeasors were not consciously at fault. 2 6 Application of this exception to the automobile accident field, however, has been rendered difficult because of the tendency of motor vehicle laws to cover so comprehensively the actions of automobile drivers and thus make it rare that any driver involved in an accident will not have been involved in the breach of some rule of which he had notice. Restlessness under the rule continues, and it is not too much to expect that someday there may be a general movement on the part of states to adopt legislation changing the common law rule. Such a development has been pioneered by a few states, 27 but their experience indicates that certain procedural problems involving joinder of necessary parties must be worked out before such statutes provide a real improvement over the present system. Somewhat related to the problem of contribution between joint tortfeasors is the problem of an owner's responsibility for his driver's negligence. In the early days of motoring it was uncommon for an owner to entrust the operation of his vehicle to another. Modem driving practice, in sharp contrast, often involves the operation of vehicles by persons other than the owner. Corporate owners operate huge fleets of trucks over the 3 Haeg v. Sprague, Warner & Co., 202 Minn. 42S, 281 N.W. 261 (1938); 2 Blashfield Encyclopedia of Automobile Law (1927), Va. Code (1930); Norfolk & W. Ry. v. Hardy, 152 Va. 783, 148 S.E. 839 (1929); Ga. Ann. Code (1914); Louisville & Nashville R.R. v. Staford, 146 Ga SME. 29 (1916). ftwis. Stats ; Cameron v. Union Auto Ins. Co., 453 (1933). 201 Wis. 659, 247 N.W. =Miss. Code Ann. if 511, 312 (1930); Frazier v. Hull, 157 Miss. 313, 127 So. 775 (1930). 2Neb. Comp. Stats (1929); Emel v. Standard Oil Co., 117 Neb. 418, 220 N.W. 685 (1928). U British Columbia Stats. c. 8, (1925); New Brunswick, R. S. c. 143 Scotia Stats. c. 3 (1926); Ontario Stats., 1930, 20 Geo. V, c. 27. (1927); Nova ' Merrywedther v. Nixan, 8 Term Rep. 186, 101 Eng. Rep (1799). MThese statutes are reviewed by Lefler, Contribution and Indemnity Between Tortjearors, 81 U. of Pa. L. Rev. 130 (1932).

6 highways; within the family circle, it is often possible that half a dozen drivers will from time to time use the family car; 'Drive-Ur-Self" car rental services are organized on a national basis. All these have added to the problems of determining common law liability of owners when accidents occur. Here, as might have been expected, the master and servant doctrine provided an obvious means for taking care of many cases, and as use of the automobile became more widespread, the implicit authority of the driver was also extended. 28 But with this greater freedom the problem of determining scope of employment was increased. Thus, it frequently occurred that plaintiffs, rather than see the defendant escape because an employment relationship could not be readily proved, would attempt to show that the owner failed to choose a competent driver. 29 This, however, again involved the case with a complicated problem for the jury and left the decisions without any definite pattern. Traces of both these problems are found also in the use of the "family purpose doctrine." Although the "family purpose doctrine" appears not to have been developed as a logical extension of the master and servant rule, it has inherited many problems analogous to the questions of responsibility and control which arose in the agency cases. 80 Thus, the automobile owner who permits a member of his household to drive the family automobile for pleasure or convenience is regarded as making such a family purpose his business so that the driver is treated as acting in response to his remote control. Fictions have been devised to supply a substantial portion of both the elements of control and the owner's interest in the purpose of the vehicle's operation. But this has not deterred acceptance of the "family purpose doctrine" by about half of the American courts. 81 In a few states the "family ptrpose doctrine" and other forms of vicarious liability have been supported by legislation making automobile owners liable for injuries to third persons caused by the negligence of any person, whether a member of the family or not, who is operating the car on the public highway with his consent. One final item which might be mentioned among the highlights of doctrinal change which are attributable to the automobile cases concerns the treatment of the automobile guest. Under the common law, the first automobile guests were entitled to the duty of ordinary care enjoyed by their horse and buggy counterparts. 8 2 As one early decision put it, the automobile guest enjoyed "a species of hospitality which should be encouraged... and the law should not couple with the friendly act a duty which makes its exercise an unreasonable hazard." 8 3 However, starting in the 1920's, automobile host-guest litigation began to increase. There was reason to believe that many suits were collusive, and brought for the purpose of taking advantage of casualty insurance. 84 In rounding out the picture of the common law technique for compensating automobile accident victims, it is necessary to turn to the question of trial tactics. Here a number of developments have had a significant effect upon the general problem. Consider first what has happened to the jury. 2 Smith v. Wells, 326 Mo. 525, 31 S.W. 2d 1014 (1930). =Robextson v. Aldridge, 185 N.C. 292, 116 S.E. 742 (1923). 8Lattin, Vicarious Liability and the Family Automobile, 26 Mich. L. Rev. 846 (1928). a Prosser, ap, t. supra note 16, at Massaletti v. Fitzroy, 228 Mass. 487, 118 N.E. 168 (1931). = O'Shea v. Lavoy, 175 Wis. 456, 185 N.W. 525 (1921). U White, The Liability of an Automobile Driver to a Non-Paying Passenger, 20 Va. L. Rev. 326 (1934).

7 It is implicit in the operation of the common law jury system that the judgment of the jurors will reflect the attitude of the community on the problems involved in a law suit. It was therefore inevitable that as the use of motor vehicles became not merely widespread but indeed universal in American society, the attitude of juries hearing automobile accident cases was influenced by the unconscious identification of the juror with one of the parties in the case, More often than not the juror identified himself with the injured person, thinking there but for the grace of God am I. Sympathy followed identification with the result that defendants' counsel many times preferred to have his case tried by a judge rather than a jury. 35 Added to this was the inevitable influence of good times and bad times upon the mind of the jury. 36 The inflationary spiral of the national economy within recent years has left its trail in the field of jury damage awards as well as the field of commodity prices. The tendency of the great majority of motorists to carry liability insurance has also not escaped the notice of jurors, and there is a widespread feeling among juries that the award of damages will really not be a hardship on the defendant personally but in all likelihood will come from the purse of some insurance company. Moreover, even the slightest suggestion that a corporation is the defendant will often have the effect of impersonalizing the defendant and leading the jury to be more than ordinarily generous with the defendant's money. These natural tendencies of jurors have been skillfully cultivated by counsel for both plaintiff and defendant. In 1946 there was founded the National Association of Claimant's Compensation Attorneys which openly avowed as one of its objectives the promotion of higher verdicts. The Association offers courses which train plaintiff's counsel in the use of techniques and tactics which, based upon the experience of pioneers in this field, have been tried and found successful. Thus the impact of the plaintiff's case is often heightened by the use of skeletons, photographs, medical testimony, statistical data of all sorts, and background material of an economic and engineering nature designed to give the juror a feeling of confidence that his own sympathies and personal reactions are in fact justifiable on impersonal terms. 3 7 Of course, in this matter defendant's counsel is not inactive. The same energetic development of techniques to make the most of weaknesses in the plaintiff's case is undertaken by associations of insurance companies and their attorneys. And, since insurance companies defend the vast majority of automobile accident compensation cases, the organization of their efforts in response to the challenge of plaintiff's counsel maintains a rough balance in the development of trials, techniques, and tactics. It is not possible in a short space to thoroughly analyze the effect which our experience with the automobile during the last 30 years has had upon the minds of common law juries. In many respects Professor Ernest Carman drew a blueprint of the future in 1919, 88 and the developments in this field of law since that time have merely been ramifications of the same basic 36 Velie, And Then - Sudden Ruin, Nations Business, June 1952, reprinted in Reader's Digest, September 1952, p Brewster, Why Are Auto Rates Higher? The Casualty and Surety Journal, September 151, p Velie, supra note 35. MCarman, Is a Motor Vehicle Accident Compensation Act Adviabl? 4 Minn. L. Rev. 1 (1919).

8 problems which he described. However, with the passage of time the problem appears to have become intensified. Reliance upon the common law action of negligence to secure compensation of automobile accident victims has become less and less attractive in the face of congested court calendars, high costs of litigation, the inability to develop any certain pattern of decisions upon which a theory of recovery or defense can be based, and finally the ever present possibility of an uncollectible judgment. The result in general has been to search for new ways of bolstering the structure at the points where weaknesses have developed and where the initiative of the common law technique has not been able to respond with a solution. If one were to single out what is wrong with the common law technique, or specifically what types of situations are not now being dealt with satisfactorily, the following list might be made: 1. Cases where victims cannot get relief because negligence cannot be proven. Typical of this situation is the case in which the contributory negligence rule operates to prevent the plaintiff from proving his case despite the fact that the great part of the fault for the accident lies with the defendant. 2. Cases which are not started because of the high costs of litigation and the delays which prevent speedy settlement of claims through court procedure. 3. Cases where suits cannot be brought because the defendant cannot be fouind or brought into court. This class of cases includes the case involving the hit-and-run driver, the out-of-state driver who is permitted to return to his home state and cannot be brought back to answer the plaintiff's claim. 4. Cases where a judgment, once obtained, means nothing. This includes the perennial problem of the "judgment-proof defendant," and also the case where the vehicle causing the injury in question was driven without the consent of the owner and the driver is not financially responsible. In any effort to improve or strengthen the common law techniques of dealing with automobile accident compensation cases, these rank high on the list of legislative targets. Competing Theories for Meeting the Problem I. Compulsory Insurance There is an obvious appeal about compulsory insurance since it implies that all drivers who use the highways must carry insurance as a pre-requisite to obtaining their right to drive. In this way the financially irresponsible driver should be eliminated from the highways. It would seem to be well within the police power of the states to require compulsory insurance of all drivers and also within the scope of the general moral obligation of automobile owners to the public, both motoring and pedestrian. 3D This obvious appeal is attested by the great number of bills introduced into state legislatures during recent years calling for the creation of a compulsory insurance system. In the United States, however, there is only one laboratory in which experiments have been conducted with compulsory insurance 4In re Opinin of the Justices, 251 Mass. 617, 147 N.E. 681 (1925); In re Opinion of the Justices, 271 Mass. 582, 171 N.E. 294 (1930); Poresky v. Registrar of Motor Vehicles, 319 Mass. 717, 67 N.E. 2d 407 (1946).

9 laws, and therefore the experience of Massachusetts provides almost the only basis for drawing conclusions about the effectiveness of the compulsory insurance approach to the problem of compensating automobile accident victims. To briefly describe the Massachusetts law, 40 it is a system of compulsory liability insurance for motor vehicles generally, supplemented by provision for suspension of operators' licenses upon failure to satisfy property damage judgments, and provisions authorizing courts to require uninsured non-residents to furnish security after accidents. With respect to the scope of the Massachusetts law, it is provided that, with minor exceptions, no motor vehicle shall be registered unless applications are accompanied by a certificate of an insurer or a surety; no motor vehicle may be operated under an out-of-state registry for more than 30 days in any one year unless insured. The insurance so required must protect the insured and any person responsible for the operation of the insured's motor vehicle with his express or implied consent against liability to pay damages for bodily injuries or death at any time resulting therefrom or consequential damages incurred by spouse, parent or guardian for medical services in connection with such an accident. 41 Guest occupants or employees of the owner or registrant of a vehicle or any other person responsible for such vehicle need not be included within the scope of the insurance coverage. 42 The amount of coverage required is at least $5,000 on account of injury or death to any one person and at least $10,000 on account of any one accident resulting in injury or death to more than one person, and such coverage must be for a period at least as long as the duration of the registry of the vehicle in Massachusetts. In the administration of this law the Insurance Commissioner is authorized to fix rates on policies and surety bonds. By statute, the Commissioner must establish insurance rates annually, after hearing and investigation, in the course of which it is customary for insurance carriers to file such data as has been gathered during the previous year relating to the reasonableness of classifications of risks and the adequacy of premium rates. 43 Persons or companies feeling aggrieved by any action of the Commissioner in this regard have recourse to the courts for review of the administrative action, and the courts have power to modify or amend such action. In the application of the law thus established. th-ere is a Board of Appeal empowered to decide whether cancellation of or refusal to issue insurance to any applicant is reasonable and proper. The filing of a petition before the Board of Appeal automatically continues a policy of insurance in effect. If, however, the Board upholds the insurance carrier's cancellation or refusal to issue insurance, and the Board is affirmed upon review of the case in the courts, there is no method by which a driver can acquire the necessary insurance and thus qualify for registration of his vehicle. By this means, it is expected, the most dangerous drivers will be ruled off the road, and the remainder will be covered by insurance or surety bonds. 1 "General Laws of Massachusetts (1951), c. 90, 1, 1A, 3, 3G, 22A and 34A-34y; c. 26, SA; c, 175, 1 112, 113, 113A-113G, 182 and For judicial interpretation of this provision see: Caron v. American Motorists' Insurance Co., 277 Mass. 166, 178 NXE. 286 (1931); Mullen v. Hartford Accident Co. 287 Mass. 262, 191 NE. 394 (1934); Wheeler v. O'Connell, 297 Mass. 549, 9 N.E. 2d 544 (1937); Stuntzner v. Brassor, 301 Mass. 10, 16 N.E. 2d 50 (1938). 'i Westgate v. Century Indemnity Co., 309 Mass. 412, 35 N.E. 2d 218 (1941). isamerican Employers' Insurance Co. v. Commissioner of Insurance 298 Mass. 161, 10 N.E. 2d 76 (1937).

10 Other provisions of the Massachusetts law provide that in an action against a non-resident motorist for damages resulting from ownership or operation of a vehicle, plaintiff may move for an order requiring defendant to furnish security to satisfy any resulting judgment. Such security must be in an amount fixed by the court, not exceeding $5,000 for death or injury to one person, $10,000 for death or injury to more than one person, and $1,000 for property damage arising out of any one accident. Security required in this manner may be in the form of cash, bonds, or certification that the defendant carries insurance to provide evidence of financial responsibility which entitles the court to order suspension of the defendant's right to operate a motor vehicle in Massachusetts. 44 Similarly, the operating privileges of a defendant are suspended upon failure, for sixty days after rendition, to satisfy a property damage judgment of a Massachusetts court. A close reading of the Massachusetts compulsory insurance law and observation of the system as it actually works out in practice reveals that the degree of financial responsibility among motorists which results from this law is not as far-reaching as might be supposed simply from the name. First, there is no provision for compulsory insurance against liability for property damage; this results in a situation where, like the legendary common-law dog who was entitled to one bite, the motorist is entitled to one accident involving liability for property damage before the law compels him to prove financial responsibility. Moreover, the minimum required compulsory insurance for liability resulting from personal injury or death only covers accidents occurring on accepted streets or highways of the Commonwealth. 45 Most motorists therefore pay extra for "extra-territorial" coverage, which includes accidents occurring in alleys, driveways or parking areas and all highways outside of Massachusetts. 4 6 For another premium, motorists may obtain insurance to cover liability to guests riding with the driver on Massachusetts highways; and for still another premium guest liability coverage on extra-territorial accidents. Naturally most motorists prefer to obtain this additional coverage for their own protection, however, the probability that the irresponsible fringe of drivers do not do so renders the completeness of the protection offered by this system illusory. Moreover, even in the area of personal injuries and deaths the protection of compulsory insurance in Massachusetts is not entirely complete because it cannot guarantee accident compensation for victims of hit and run drivers, out-of-state drivers who do not carry insurance, or drivers who operate vehicles without the express or implied consent of the owner and who themselves are judgment-proof. To the credit of Massachusetts in 25 years of experience with compulsory insurance laws, it should be pointed out that the number of cases in which personal injuries or deaths due to automobile driving which have gone uncompensated are extremely small by comparison to other states. And also, possibly due to the consciousness of safe driving which compulsory insurance inspires, Massachusetts now has an enviable record of cutting "Opinions of the Attorney General (1926). OSleeper v. M.assachusetts Bonding Co., 283 Mass. 511, 186 N.E. 778 (1933); Birnbaum v. Pamoukis, 301 Wass. 559, 17 NE. 2d 885 (1938); American Fidelity and Casualty Company v. Sterling Express Co., 91 N.H. 466, 22 A. 2d 327 (1941). isn. Y. Times, Jan. 5, 1952, p. 16.

11 down its record of highway deaths. 47 But it would be a misstatement to say that these factors, plus the comfort which Massachusetts drivers have felt because of the presence of some degree of universal protection, have made the over-all balance of factors a favorable one for the cause of compulsory insurance. High on the list of obvious undesirable results of the experience in compulsory insurance is the fact that insurance claims and insurance litigation have increased markedly. In May. 1952, a study made by the New York Times revealed that in Boston, bodily injury claims per 100 insured vehicles, amounted to 14.3 as compared to 7.4 in New York, the city with second highest rate. While it is true that the average cost of bodily injury claims in Boston was $319 as compared to $601 in New York, these figures indicate an apparent tendency on the part of Bostonians to pursue any and every claim to the full extent of its capabilities against the insurance carriers. 48 Correspondingly there has been an increase in litigation which has been attributed to the presence of compulsory insurance. Even with due allowance for the increased use of automobiles, it is striking that for the year ending June 30, 1920 (prior to compulsory insurance) 15,638 new cases involving automobile insurance claims were entered in the Superior Courts of Massachusetts, whereas for the year ending June 30, 1925 (the year compulsory insurance was instituted) 23,090 cases were entered, and 5 years later, for the year ending June 30, 1930, a total of 35,190 new cases at law were filed. 49 How many of these suits were fraudulent or collusive is impossible to say, but the opinion has long been held that the presence of compulsory insurance has not increased the moral honesty of the community. It is the opinion of some that if this tendency to "make the most" of compulsory insurance attests a lack of respect for the system, it is because the compulsory insurance system lends itself to political domination in an undesirable manner. The Massachusetts law provides for an "assigned risk" plan under which a driver who has a record of many accidents may still obtain insurance from companies who otherwise would not undertake the risk. While the "assigned risk" plan makes it possible for otherwise uninsurable risks to be shared by all the insurance companies participating in Massachusetts insurance business, it also lends itself to use by politicians whose friends might otherwise be ruled off the road because of their recklessness or accident-prone tendencies. 50 Thus, the reasoning goes, if the reckless driver is preserved on the road by compulsory insurance, then the victim of the reckless driver is justified in making the most of every conceivable way he has for tapping the compulsory insurance funds. Nor is the assignment of risks the only matter which has been subject to political pressure in Massachusetts. The problem of establishing insurance premium rates is the responsibility of the Insurance Commissioner in Massachusetts and, from time to time, the action of the state agency in reconciling the pressure of the insurance carriers for higher rates with the pressure of the voters for lower rates, has caused embarrassment. In 1928, as a *T According to the National Safety Council's findings, Massachusetts in 1949 had a motor vehicle accident death rate of 10.9 per 100,000 population. This compares with the national average of 21.3 per 100,000 population. National Safety Council, Accident Facts (1952 edition). p N. Y. Times, May 27, 1952, p Carpenter, Compulsory Motor Vehicle Insurance and Court Congestion in Hassachusetts, 3 Law and Contemp. Prob. 254, N. Y. Times, Jan. 5, 1952, p. 16.

12 result of an impasse with respect to the proposed compulsory insurance rates, the Insurance Commissioner resigned, stating: "Either I must promulgate the rates as computed by me and the Department or I must resign my office.... If I promulgate the rates as proposed to me, I am placed in a position of defying the chief executive of this commonwealth.... As I view the whole matter now, this unusual situation of an under-executive having to contest with his superiors in authority, is the result of an attempt to solve a mathematical problem by the introduction of a factor of political expediency. This is neither right nor proper." r" In 1931, the proposal to introduce higher rates was the subject of a special legislative session. In 1936, reduction of rates was held out as an election promise by one of the candidates for governor. In 1937, the question of rates had to be finally decided by litigation in the courts. In 1950, the question of establishing premium rates according to a state-wide flat fee instead of computation by territorial differentials was the subject of a referendum. And throughout the entire Massachusetts experience with compulsory insurance, there has been a steady stream of bills introduced into the legislature dealing with revision of the law. 5 2 All this might lead one to expect that Massachusetts should be about ready to abandon compulsory insurance in favor of the type of financial responsibility law which has been adopted by her sister States. However, there is no evidence of such sentiment, and, on the contrary, certain signs indicate that other states are beginning to favor the compulsory automobile liability insurance idea, in at least a limited form. It is significant that in the 1951 legislative sessions New York, 53 Connecticut and Rhode Island 5 4 adopted laws requiring proof of financial responsibility as a prerequisite to registration of vehicles owned or operated by minors. 55 If. "Safefy-Responsibilify Laws" Except to the degree found in Massachusetts, Connecticut, Rhode Island and New York, the various states have appeared to prefer handling the problem of compensation for automobile accident victims by means of the so-called Safety-Responsibility Laws. At the present time all states (except Massachusetts), the District of Columbia and nine Canadian provinces 50 have adopted this type of law as the basic framework for attempting to assure financial responsibility of automobile drivers. The original prototype for this type of legislation was drafted in 1928 by the American Automobile Association. This model law was based in large part on a Connecticut statute enacted in as a compromise with S Report of the Insurance Industry Committee on Motor Vehicle Accidents Relating to the State of New York, November 1951, p Id. at WN. Y. Laws, c. 296; Vehicle and Traffic Law, Sac. 11a. In 1952 this act was amended to increase the required amount of coverage from $S,000/10,000/1,000 to $10,000/20,OO/S,000, N. Y. Laws 1952, c U Rhode Island, Reg. Ses. 1952, S.B. 58, 36; Conn. Gen. Stats. 1949, 2363, m In Connecticut a bill requiring proof of financial responsibility for driver licensing of minors was introduced but did not pass. Conn. Reg. Ses. 1952, S.B an Connecticut a bill requiring proof of financial responsibility for driver licensing of minors was introduced but did not pass. Corn. Reg. Sea. 1952, S.B. 809.,6 Alberta, British Columbia, Manitoba, New Brunswick, Nova Scotia, Ontario, Prince Edward Island, Quebec, Saskatchewan. 7 Conn. Laws 1925, c. 183.

13 proposals for compulsory insurance, and which provided that motor vehicle owners must prove their ability to respond in damages arising out of convictions for reckless driving, driving while intoxicated, evasion of responsibility, or accidents resulting in death or personal injury or property damage exceeding $ Following adoption of this Connecticut law, similar statutes were enacted in New Hampshire, 58 Vermont, 5 9 Maine 6o and Rhode Island, 61 and a substantially similar statute was adopted in Minnesota 62 with respect to reckless driving or driving while into-acated. The philosophy of the so-called Safety-Responsibility Laws approach to the problem of compensating automobile accident victims adopts as a premise the assertion that only a portion of the total number of automobile drivers are responsible for accidents. 63 To this assumption is added the further proposition that it is unwise and unfair to burden automobile operators with responsibilities having no justification in fact. From this, the conclusion then follows that the most desirable type of legislation on this subject is a law which singles out and subjects to regulation those persons who belong to the "accident prone fringe" of the motoring public, and leaves the remainder of motorists free to protect themselves from public liability as their own judgment dictates. In the mechanics of providing protection for the public, safety responsibility thinking differs from compulsory insurance thinking in that the former permits the posting of bond or money or securities as an alternative to insurance, and provides that in the case of persons owning more than 25 vehicles, it is possible for such persons to qualify as "self-insurers." Having thus departed from the line of thinking which led to compulsory insurance, the proponents of Safety-Responsibility Laws are compelled to clearly specify in their proposal a method for weeding out from the general mass of motorists those individuals who are to be regarded as "accident prone." This is accomplished by applying the regulatory provisions of the law to persons who are convicted of driving while intoxicated, leaving the scene of an accident, driving recklessly so as to cause personal injury, or failing for 30 days to satisfy a judgment for personal injury or property damage as a result of driving. These, it is thought, are sufficient indices of accident proneness to justify imposition of a legal obligation to demonstrate financial responsibility. It was, of course, apparent from the beginning that this system fell short of completely protecting automobile accident victims, since it permitted an accident-prone driver to cause an injury and then go freely on his way until an unsatisfied judgment or a conviction was obtained against him. This was clearly a case of permitting the common law dog one first bite. Numerous cases remained uncompensated because they were abandoned before proceeding to judgment, or because, after judgment, the impecunious judgment debtor could neither pay his judgment nor post evidence of financial responsibility. Nor was this problem solved by requiring proof of financial responsibility upon the rendition of judgment instead of waiting a specified time for satisfaction. Therefore, in 1937, New Hampshire, again pioneering in this field of M N. H. Laws 1937, c. 161; recodified as c. 122 of N. H. Rev. Laws wvt. Acts 1927, No. 81. ew Maine Laws 1927, c R. I. Laws Minn. Laws, 1927, c * BraUn, Finaacia Resposibilily Law, 3 Law & Contemp. Prob. 505, S06. [13]

14 legislation, adopted the so-called "Security Feature" of Safety-responsibility. 64 This feature was an advancement over the old type of safetyresponsibility in that it made it no longer necessary for injured persons to obtain non-collectible judgments in order to put the law into operation. The "security-type" law provided that the Motor Vehicle Department, upon receipt of an accident report, should determine the amount of security sufficient in its judgment to satisfy any awards of damages resulting from such accidents, recoverable against either driver or owner involved. After making such a determination, and giving prescribed notice, such security would have to be posted by the parties involved in the accident. Suspension of driving privileges was the penalty for non-compliance. After so providing, exceptions were made in favor of drivers or owners who could demonstrate financial responsibility according to standards laid down in the law. This security feature was introduced as a supplement to the already existing regulations which provided for demonstration of financial responsibility in the event of conviction for certain offenses or the rendering of a judgment imposing civil liability. The New Hampshire experiment was followed by similar legislation in five more states within the next five years, 65 and based on this experience, the security feature was incorporated into the American Automobile Association's Model Safety Responsibility Bill in In 1944 the National Conference on Street and Highway Safety (now reorganized as The National Committee on Uniform Traffic Laws and Ordinances) adopted the AAA model bill as Act IV of the Uniform Vehicle Code.6 7 Since 1944, Act IV of the Uniform Vehicle Code has been available for a model for state legislation relating to financial responsibility and has been revised and brought up-to-date in 1948 and Thus, at the present time, the Safety-Responsibility approach, as embodied in the Uniform Vehicle Code, may be summed up as follows: 0 8 Administration of the law is invested in the Motor Vehicle Commissioner of the State, with recourse to judicial review of any order or act of the Commissioner, at the instance of any party in interest. Under the law, it is required that reports of accidents involving death, personal injury or property damage in excess of $ be filed with the Motor Vehicle Commissioner by all drivers involved in such accidents. Following receipt of an accident report, it is the duty of the Motor Vehicle Department within 20 days to determine the amount of security sufficient, in its opinion, to satisfy any judgment for damages resulting from such accidents, as may be recovered against any driver or owner involved. Security must thereupon be deposited by the persons specified and such security remains on deposit until the depositor shows a release from liability or, upon the expiration of one year, that no action for damages arising out of the accident has been made against him Exception from the obligation to post security is made for nine classes of drivers: (1) the driver or owner who is covered by automobile liability insurance or bond at the time of an accident; (2) the "N. H. Laws 1937, c. 161; later codified as N. H. Laws 1942, c ea7laine (1941), R.. S. Maine 1944, c. 19, 64-E1; New York (1941), N. Y. Vehicle and Traffic Law, 94-94nn; Aficbigan (1943), Mich. Pub. Acts 1949, No. 300; Indiana (1943), Ind Acts 1947, c. 159; Vermont (1941), Vt. Stats. (1947 ed.), 10, , American Automobile Association, Salety-Responsibilily Bill (1944 ed.), Washington, D. C. t "Act IV, Safety-Responsibility Law," Uniform Vehicle Code, Bureau of Public Roads, Washington, D. C. (1944). 63American Automobile Association, Safety-Respomillity Bill (1952 ed.) [141

15 driver, if not the owner of the vehicle involved in the accident, if the vehicle being driven was covered by automobile liability policy at the time of the accident; (3) the driver or owner whose liability for' damages is, in the judgment of the Commissioner, covered by some other form of liability insurance policy or bond; (4) persons qualifying as "self-insurers;" (5) the driver or owner of a vehicle involved in an accident wherein no injury or damage was caused to any person or to the property of anyone other than such driver or owner; (6) the driver or owner of any vehicle which, at the time of the accident, was parked lawfully; (7) the owner of a vehicle, if at the time of the accident, such vehicle was being operated without his permission, expressed or implied, or was parked by a person who had been operating such vehicle without such permission; (8) The United States, the State, or any political subdivision or municipality thereof, or any person leasing such vehicle to one of these governmental units, or to the driver of such vehicle; or (9) the driver or owner of a vehicle in the event that at the time of the accident the vehicle was being operated by or under the direction of the police officer in the performance of his duties. The form of automobile liability insurance policy or bond referred to in the first exception of the above must, by law, have as its limits not less than $5, for personal injury or death of one person in any one accident and not less than $10, because of personal injury or death of two or more persons in any one accident, and not less than $ because of injury or destruction of property of others in any one accident. If cash or securities are posted, the total cash or market value of the deposit must be $11, Persons may qualify as self-insurers when more than 25 vehicles are registered in their names, and when their self-insurance plan has been approved by the Motor Vehicle Department as adequate. Act IV of the Uniform Vehicle Code retained the earlier developed provisions relating to proof of financial responsibility following convictions for certain offenses under the Motor Vehicle Laws for failure to pay judgments upon causes of action arising out of ownership or use of vehicles. Under this portion of the law, whenever the driver's license of a person is suspended or revoked by reason of a conviction or forfeiture of bail in connection with a violation of the Motor Vehicle Laws, the Motor Vehicle Commissioner must also suspend the registration of the vehicle until proof of financial responsibility is given. Similarly, upon receipt of a certified copy of a judgment entered against the owner or driver of a vehicle, the Department must suspend the judgment debtors driver's license and all registrations in his name until proof of financial responsibility is made. In both cases, the same list of exceptions already cited in connection with the security feature are applied. With respect to non-residents, there is the same obligation as upon residents to report accidents and demonstrate financial responsibility. Failure so to do results in revocation of the non-resident driving privileges enjoyed by such persons. Among its general provisions, the model law provides for an optional assigned risk plan under which appropriate state agencies are authorized to apportion among insurance companies applicants for insurance who are unable to procure such policies through ordinary methods. Rulings on the assignment of risks may be appealed by any parties in interests to appropriate courts for modification, affirmation or reversal of the action of the state agency. It is also provided that no vehicles, the registration of which

16 has been suspended, may be transferred to another owner, unless the Motor Vehicle Department is satisfied that the transfer is proposed in good faith, and not for the purpose or with the effect of defeating the law. Critics of the Safety-Responsibility approach to the problem of compensating automobile accident victims, may point out that these laws, like compulsory insurance, still leave an accident victim with no assurance of relief in cases where the vehicle causing the accident was driven without permission of its owner, or where the driver causing the accident cannot be identified, as, for example, a hit and run situation. In addition, relief is still uncertain where government owned or leased vehicles are involved or where non-resident drivers return to their home states before the law has an opportunity to reach them. Moreover, on the face of the law, it appears that it is still possible for the motorists to inflict an injury before any attempt can be made to assure the victim of the motorist's financial responsibility. It is no comfort to a suffering victim, they say, to know that the motorists involved must either show financial responsibility up to the minimum standards, or else have their driving privileges and vehicle registrations suspended for a period of time. Certain of these objections, which have been voiced for many years, were dealt with in the 1952 revision of Act IV of the Uniform Vehicle Code. In the field of administration, the authority of the Motor Vehicle Department to determine the amount of security required was extended to permit the Department to forego the deposit of security for the benefit or protection of any person who fails to report or submit information on an accident in which he was involved. 69 Prior to this change, the obligation of the Motor Vehicle Department was to require deposit of security for the benefit of all persons involved in an accident, regardless of the extent to which those persons complied with their duties to report and to give information. Further discretion was also permitted the Motor Vehicle Department correcting inappropriate action relating to the determination of security requirements, where such action had been based upon inaccurate or incomplete information. 70 Also, the provision relating to review of action taken by the Motor Vehicle Department was qualified so as to permit any state enacting the law to adapt the review procedure to their existing law relating to court review of administrative action. 71 In connection with the regulatory provisions of the law, attention was given to the problem of non-resident drivers. Prior to 1925, a driver involved in an accident outside his home state was subject to no further penalty than the revocation of his non-resident driving privileges in the state where the accident occurred. If he returned to his home state before posting security in the state where the accident occurred, he could not be reached for purposes of compelling proof of financial responsibility. The 1952 revision of the law, however, places upon the state where the accident occurs, the responsibility of transmitting a certified copy of its action in connection with the case to the official in charge of licenses and registration in the non-resident's home state. And it also provides that upon receipt of such certification that the operating privilege of a motorist has been sus- 0 Uniform Vehicle Code (1952 revision), 25(b). "Id % Id. Sec. 16. Also see Escobedo v. State Department of Motor Vehicles, 35 Cal. 2d 870, 222P. 2d 1 (1950); Doyle v. Kahl, --- Iowa 46 N.W. 2d 52 (1951); Ragland v. Wallace, 80 Ohio App. 210, 70 N.E. 2d 118 (1946). [161

17 pended in another state for failure to deposit security under the law of that state, the Motor Vehicle Department of such drivers' home state shall suspend his driving privileges and the registration of all vehicles owned by him until he has complied with the Safety-Responsibility Law of the state in which the accident occurred.7 2 Obviously, the effectiveness of this procedure depends upon adoption of these portions of the law by both states in question, and critics of this law will point out that uniform adoption is not yet present. But, assuming that adoption of these most recent provisions becomes widespread, these amendments plug one loophole which has heretofore existed in the law. With respect to transfer of registration in order to defeat the purpose of the law, the language of the act prior to 1952 merely stated that the act did not prevent the owner of a vehicle, the registration of which had been suspended, from making a bona fide sale of such vehicle. In the 1952 revision, the language was turned into a positive restriction on any transfer of vehicles, the registration of which had been suspended until such time as the Department "is satisfied that such transfer of registration is proposed in good faith and not for the purpose or with the effect of defeating the purposes of the act." 7a Turned in this fashion, the language now provides specific authority for the Motor Vehicle Department to check such transfers, and prevent their registration by a new owner. With respect to the classes of owners and drivers who are excepted from the requirement of proving financial responsibility, the 1952 revision added exceptions in favor of the United States, the State, or any political subdivision, or municipality thereof, and also the driver of any vehicle when such vehicle was operated under the direction of a police officer, who, in the performance of his duties, assumed custody of such vehicle. 7 4 It appears to have been thought that the exception of these classes of owners and drivers would not add materially to the assuring financial responsibility in the cases where it was most needed. Assessment of the effectiveness of the Safety-responsibility approach to the problem of compensating automobile accident victims, and the degree to which the 1952 revisions have increased the chances of achieving the ultimate objectives sought by this law, is obviously difficult to do. At the present time, 41 states have laws containing the security provision. Two states require proof following judgment, but not prior security. Four states and the District of Columbia still retain the original version of the Safety- Responsibility Law which became applicable after conviction for certain offenses or failure to satisfy a judgment. It would therefore appear that progress in improving the safety-responsibility technique has been steady, and, in performance, it has recommended itself as the most satisfactory plan yet devised. Ill. Unsaisfied Judgmenf Fund Law The history of Unsatisfied Judgment Fund Laws begins with the Manitoba and Prince Edward Island laws of 1945, 75 continues through the adop- Uniform Vehicle Code (1952 revision) 36. SId And see Garford Trucking Co. v. Hoffman, 114 N.J. L. 522, 177 A. 882 (1q35), r'uniform Vehicle Code (1952 revision) r Rev. Stats, 'Manitoba 1949, c. 93, 1 128L; Prince Edward Island Laws 1945, c. 17. [17]

18 tion of similar laws in Alberta, 70 British Columbia 77 and North Dakota 78 in 1947, Nova Scotia 79 in 1949, Ontario in 1950,80 and most recently, the New Jersey law of Essentially the purpose of these laws is to supplement existing safety-responsibility legislation by providing a statecontrolled fund out of which can be paid judgments which have been rendered in connection with automobile accidents and which, despite the operation of the safety-responsibility law, remain unsatisfied. Recourse to the fund is limited in terms of the amount which may be paid to a judgment creditor, and is surrounded with procedural requirements designed to protect the fund from unnecessary use. Portions of judgments paid in part by the fund are generally assigned to the State or Province for possible further proceedings against the judgment debtor, and invariably the judgment debtor's vehicle registration and driving privileges are suspended until the fund is reimbursed and financial responsibility is shown. In these essentials all these laws are the same. There are, of course, differences in administration and detail. 82 The creation of Unsatisfied Judgment Funds in Canada and North Dakota is accomplished entirely by the imposition of additional fees upon all vehicle owners at the time of annual registration, and such fees generally are placed in trust until they aggregate a specified total, at which time collection is discontinued until the fund drops below a specified total. Fees are fixed by the State or Provincial Treasurer, sometimes in his discretion and sometimes with statutory maximums. In the New Jersey law, the initial levy is arranged so that insured motorists pay $1.00 and uninsured motorists pay $3.00, and, in addition, insurance companies writing automobile liability insurance in the State are assessed one-half of one per cent of the net direct premiums for the previous calendar year. After such initial levy, the New Jersey Treasurer annually determines the amount estimated as necessary to meet demands for payment during the next year, and fixes the fee to be collected for that year from vehicle registrants and the contribution of the insurance companies, with such goal in mind. In prescribing procedure for recourse to the fund, all laws specify that the judgment must exceed a certain amount, that the claimant on the fund must qualify by showing a court that he has unsuccessfully exhausted the procedures of levy and execution on the property of the judgment debtor and made diligent search for hidden assets, that no settlement of the claim has been made and that there is no other party or insurer to whom he has recourse in the matter, and, in short, that unless the Unsatisfied Judgment 7 ealberta Laws 1947, c. II. IT British Columbia Laws 1947, c Rev. Stats. N. D. 1947, c. 39, wnova Scotia Laws 1949, c Rev. Stats. Ontario 1950, c. 167, M. N. J. Reg. Sess. 1952, H.B Certain differences in detail are illustrated by the following comparison: Maximum Province Assessment Suspension for B. 1. P. D. Minimum State Maximum Level Payment Coverage judgment Alberta $1.00 Not stated 5,000/10,000 $1,000 $100 Br. Col. $1.00 $250,000 5,000/10,000 None $100 Manitoba $1.00 $175,000 5,000/10,000 None $100 New Jersey $1.00-$3.00 Not stated 5,000/10,000 $1,000 $200 N. Dakota $1.00 $175,000 5,000/10,000 None $300 Ontario $1.00 Not stated 5,000/10,000 $1,000 No min. Pr. Edw. Isl. $1.00 $50,000 2,000/4,000 None $100 [18]

19 Fund is made available, the judgment creditor is certain to go without relief. In all cases the State or Province is authorized to intervene in any proceedings on the application for use of the fund and to show cause why it should not be used for the benefit of the claimant, and, in New Jersey, the insurance carriers directly involved have the same right. Special concern has been shown in the New Jersey law over the handling of claims on the fund arising out of default judgments and the possibility of fraudulent and collusive suits. Thus the New Jersey law provides for the creation of an Unsatisfied Claim and Judgment Board, composed of the State Treasurer and four representatives of the insurance industry. To this Board notice of intention to file claims must be given, and in all cases arising out of default judgments and "hit-and-run" situations the Board must assign such claim to an insurer for investigation and defense. In North Dakota somewhat the same concern is shown over default judgments and it is there provided, that no claim arising out of a default judgment may be finally adjudicated until 30 days' notice had been given the State Highway Commission and Attorney General and they have had an opportunity to appear and defend against the claim. Where the identity of the owner or driver responsible for the accident is unknown, as in "hit-and-run" cases, provision is made in the Alberta, Manitoba, New Jersey and Ontario laws for suit against the State or Provincial Treasurer as normal defendant. Thereupon, the case proceeds in the same way as with claims where the defendant is known. Upon recovery of any judgment against the State or Province in such proceedings, the State or Province is subrogated to the claim of the judgment creditor and, in the event that the identity of the responsible party is subsequently discovered, action may be instituted against him. If, upon such action, it develops that more is recovered than was paid to the judgment creditor from the fund, that balance is turned over to the judgment creditor. Naturally, whether suit by the subrogee is brought or not, the registration and driving privileges of the responsible party are suspended as soon as his identity is discovered. As was pointed out in the beginning, all unsatisfied judgment fund laws now in existence have been adopted as supplements to existing safetyresponsibility legislation. By providing a source of relief for otherwise uncollectible judgments and situations where no defendant could be brought into court, they have at least assured automobile accident victims a recovery of $5,000 up to $10,000 for deaths and personal injuries, once such claims have been reduced to judgment. At present, New Jersey, Ontario and Alberta provide coverage of $1,000 for property damage. In this respect critics of the law may point out that the bulk of automobile accident litigation involves property damage. It is further apparent from the texts of these laws that they are in no sense "compensation" laws, but rather depend, in all cases, upon the obtaining of a judgment through ordinary civil litigation, with all the delays and costs and unpredictability of verdicts which attend such suits. Perhaps the most emphatic criticism has come from the fact that the funds depend for their creation and maintenance upon money obtained through additional levies on the motoring public generally. In New York, where 90 per cent of the motorists carry insurance, this would mean that insured motorists would be called upon to pay the great part of some $14,500,000 damage which is now caused by uninsured drivers. And, assur- [19]

20 ing that 6 million drivers would contribute to the creation of an unsatisfied judgment fund in that State, the per capita levy would have to be fixed at about $2.50 per year. 83 Not only is such a figure high, but such a levy contains an element of inequity which can not be overlooked. Moreover, prior to the adoption of the New Jersey law, the typical unsatisfied judgment fund law was not strongly protected against institution of fraudulant and collusive claims, and, as yet there is no experience from New Jersey to indicate effectively such claims can be suppressed. As an answer to these criticisms, it has been suggested that the levies for the fund be made upon oftly the uninsured motorists, since they, after all, are responsible for the damage which is covered by the fund. An analysis of this suggestion by the New York Department of Insurance Report, however, leads to the observation that probably the fees which the State would have to charge uninsured motorists in order to build up the fund would closely approximate what it costs to pay insurance premiums. 8 4 Hence the system would become tantamount to compulsory insurance from the motorists' point of view. Yet, despite the criticism which has been found with the Unsatisfied Judgment Fund laws, they do appear to be a constructive step toward developing a system of dealing with financially irresponsible motorists. Their progress in Canada has been steady, and there are signs that considerable interest exists in the United States.m5 Within another decade, further experience with them may lead many States which are now unwilling to embrace compulsory insurance to seriously consider the combination of safety-responsibility laws and Unsatisfied Judgment Funds. IV. Impounding Laws Manitoba, which led in the creation of unsatisfied judgment funds, alst was the first to experiment with so called "impounding laws." In 1945, as an amendment to the Manitoba Highway Traffic Act, 88 the province adopted legislation requiring persons involved in automobile accidents resulting in personal injuries or more than $50.00 property damage to immediately report their involvement to the local police, whereupon it became the duty of the police to ascertain whether the drivers possessed motor vehicle liability insurance cards or financial responsibility cards. If the drivers were unable to produce such cards, it became the duty of the police to impound the vehicles in question and store them in garages at the driver's expense. Impoundment continued until one of three things happened: either (a) the driver gave to the provincial Registrar of Motor Vehicles security deemed sufficient to satisfy any judgment resulting from the accident, or (b) he showed that 6 months had elapsed without the filing of any action against him arising out of the accident, or (c) he showed that suit had been filed and terminated in his favor or else to the satisfaction of the other parties involved.8 7 Non-resident motorists were also made subject to these duties to report and the procedure of impoundment if unable to show financial 83 See "The Problem of the Uninsured Motorist," A Report by the Insurance Department, State of New York, 1951, p. 36. R8Id. at The following bill proposing the creation of unsatisfied judgment fund Is referred to: New York 1950 Sea., Uit. Bill s Rev. Stats. Manitoba 1949, c. 93, Secs. 128-H & 128I. BrId. 120 & 128-K.

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