1、1The Impact of Commercial Insurance on the Tort Law SystemAbstract. Tort liability and commercial insurance are both important mechanisms for the segregation of the damage in the context of the risk society. Through the investigation of the legal institutions and practice of the western countries， w
2、e can learn that insurance has a profound influence and a far-reaching impact on the tort law system. Insurance has been a shadow factor to determine the tort liability and squeezed the domain of the tort litigation. As a business entity pursuing profit and efficiency， insurance industry changes tor
3、t rules in claim management， and even exerts influences on the court， judge and legislature. In conclusion， insurance industry has been playing an increasingly important role in the law reform. Key words： commercial insurance，liability insurance， tort liability， tort litigation， settlement， impact T
4、hough the rapid development of economy as well as science and technology has greatly satisfied the social demands and improved the disposing capacity of human being， we have to deal with its side-effect： the overwhelming risk and the 2damage of large scale. 1 Rules of ancient tort law realized the t
5、ransfer of loss from infringer to aggrieved party. However， with the growth of the insurance system and the insurance of the third party liability in particular， the socialization of the personal liability is accomplished. As a result， various compensation channels， including the systems of tort law
6、 and insurance， complement each other while consideration can be given to two basic values： “personal liberty and responsibility” as well as “social security”.2 In terms of the relation between insurance and tort system， insurance， which is more than just a tool of segregating loss， has， after long-
7、term development， exerted a profound influence and impact on the inner rules and system of tort law as well as tort litigation system in the context of the risk society. It is more evident in western countries with complete insurance industry and strong awareness of insurance among the public. 1. In
8、surance has become a shadow factor to determine the tort liability Insurance is a shadow factor of the tort liability in the society with relatively complete mechanism for the segregation 3of the damage. Though theres no need to take insurance into account while determining whether a perpetrator sho
9、uld assume the tort liability by virtue of rules of tort law， insurance， especially the factor whether the injurer has ever bought insurance， is the basic factor of the tort liability in the practice of tort litigation. To an experienced lawyer， there are following three aspects that he should pay a
10、ttention to： tort liability of the injurer， damage result of the aggrieved party and the possibility of receiving compensation. The possibility of receiving compensation will be laid in the first place， followed by the damage result of the aggrieved party and the tort liability of the injurer. The f
11、irst aspect is determined by both the personal property of the injurer and other channels of the damage segregation. Therefore， as for the attorney of the persecutor， “The most perfect case is a traffic accident that causes huge damage while the accused has a insurance policy of a large amount. On t
12、he contrary， the most pathetic case is that the principal fall down from the furniture at home without any homeowner insurance.”3 2. Insurance “Reconciliation” Squeezes the Domain of the Tort Litigation 1.1 Reconciliation of the Insurance Company and Clients 4Clients used to solve the tort litigatio
13、n in the court or the law firm. Nowadays， we can see insurance everywhere and the major place to solve above cases， especially those with small amount of subject， has been replaced by various insurance companies. Similarly， the insurance company also determines the range and extent of a lawyers invo
14、lving into a case as well as the defending strategies adopted by him during the whole proceeding. Thanks to Wolf Judicial Reform， more and more cases， after the initial reconciliation， are finally resolved without the involvement of the court. It is the insurance company rather than the obligee that
15、 determines whether a case should go through the procedure of court trial. Usually this procedure only applies to some atypical and special cases through insurance companies. 1.2 Reconciliation of the Insurance Company and the Infringer According to the rules of the execution of the subrogation righ
16、t， the insurer， after paying the premium to the insured， obtains the right to request compensation from a third party within the limit of the premium. The subrogation right centers on “prohibiting benefits”， i.e. avoiding double indemnity of 5the insured. In addition， it can prevent the third party
17、from avoiding responsibilities as well as reduce the insurers burden of paying insurance.4 But in the insurance practice， the insurer tends to give up their subrogation right for the third party， which is highlighted in the liability insurance. The reasons are mainly as follows. Regardless of the co
18、ntinental or the anglo-american law system，5 the system of the subrogation right of insurance is made only in terms of the substantive law while the influence of the litigation cost sharing in the procedural law on the execution of the subrogation right is not considered， which causes the neglect of
19、 this right by the insurer. An insurer， while designing insurance products and evaluating the rate of premium， wont consider whether to execute the subrogation right to the person in charge in future. Even if the insurer doesnt execute the subrogation right after loss occurs， therell be no more dama
20、ge because the premium paid to the insured is related to the rate of premium and the damage is reimbursed by the premium. Provided the insurer executes this right， in addition that the compensation made by the injurer can reimburse the premium， insurance expenses can also be obtained by the insurer.
21、 Therefore， a smart insurer usually doesnt execute the right 6of subrogation. 3. Transformation and Breakthrough of rules of Tort Law by Insurance Claims With the increasingly fierce competition of the insurance market， a set of claims settlement mechanism with high degree of systemaltization and ef
22、ficiency， which alters the rules of tort law， has been gradually established on the basis of those former rules by insurance companies. Since a large number of cases， which need to be handled by insurance companies， are usually caused with certain insurance product， the same type of cases are often
23、clarified to the same “briefcase” like documents. Therefore， its insurance companies hope， by further developing rules and reconciliation standards of tort law， to form new rules beyond the interest of certain defendant which can be used to treat the dispute of the claims settlement of the same kind
24、 over and over again. In the practice of the tort action， one party usually “mould” their tort request through the insurance product on the basis of the condition and amount of the premium， even though this request doesnt conform to the fact. Provided the accused buys insurance and the accuser sues
25、to obtain the insurance compensation， the claim for such right by accuser， 7once belonging to exeception clauses of the insurance policy， will receive no support by the repudiation of claims by insurance companies. In legal proceedings， however， exeception clauses in the liability insurance， which i
26、s against the accuser， push the tort liability known to the accuser lawyer even far. No lawyer would get the tort liability involved as they are aimed to help their agent obtain the premium by any kind of means. In addition， the inequity can easily be caused by the involvement of the insurer into a
27、tort action even though everything seems completely legal. Taking the liability insurance for example， it usually has clauses of limit of liability which， in return， is a restrain to the tort liability. 4. Potential Impact of Insurance on the Judgment of the Judge Before 40s of last century， judges
28、in western countries often claimed that their judgments were never influenced by such factors like insurance that had nothing to do with cases and， provided they were under such influence， it would not perform directly. For example， an British judge pointed out in his judgment that its not a courts
29、duty to keep an eye on 8the insurance that appears by chance as it would put on heavier burden to the accused compared with those without insurance. 6 Its not rare at that time. Its hard for judges to discuss the insurance factor in certain case in public even though they do think that it has someth
30、ing to do with the case because getting insurance involved in the judgment requires the lawyer to consider the case in a wider range. Besides， if a judge admitted that insurance is one of the determinants that might influence the judgment in public， people would think that such judgment is merely ma
31、de according to the properties of both parties. That is to say， the rich or person that bought insurance were subject to lose to the poor or person that needed money. However， changes have taken place in the last several years of last century. More consideration is given to the social policy by Brit
32、ish judges while treating cases. 7 Germany has experienced the same situation. The discussion， which was about the importance of the guarantee of the liability insurance obtained by tort-feasor in the evaluation of the economic status of person in charge by the court， never stop for a long time. Bef
33、ore 1945， High Court of Justice in Germany believed that no consideration should be given to whether person in charge bought the liability 9insurance or not， otherwise the court had assumed logically that the insured was responsible for the damage.8 However， according to Supreme Federal Court of Ger
34、many， compared with people that indemnified for damage by themselves， the responsible party under the protection of the liability insurance was surrounded by a better economic environment， which also influenced the obligation scope of the responsible party to the person claiming for rights.9 Ever si
35、nce this decision was made by Supreme Federal Court， Germany courts began to consider into account the fact whether the responsible party bought the liability insurance， regardless of compulsory or voluntary insurance， or not. 10 5. Conclusion Individuals has no way to realize comprehensive compensa
36、tion for damages in current society while， with the help of insurance companies， loss can be segregated and relief can be provided in a better way. The insurance company， essentially a merchant， can objectively lead to the shrink of the tort system due to its cost deduction and uncertain pursuit. In
37、surance conflicts with the correction of justice as well as the moral foundation required by mistake responsibility principles and， meanwhile， 10it might cause the tension. Nowadays， the law and judicial reform is carried on vigorously. A tendency is appeared in the proceedings of case by judges in
38、current judgments regarding insurance in China： insurance companies cant bear the heavy burden of paying as much as the compensation which restricts the development of this industry. As is known， insurance companies are not NGO but business legal persons and the commercial insurance contract is in f
39、act an equal commercial contract. However， due to the legislation deviation and the excessive intervention of the executive power， the characteristic of “public welfare” is overly highlighted in the judicial practice while justice tends to be random in the exeception clause as well as the sharing of
40、 interpretation of obligation to disclose and burden of proof. When it comes to the legislation， the insurance company plays an increasingly critical role owing to the stronger function it performs in society. As a result， the legislative branches gradually pay more attention to the coordination of legislation and to the insurance factor in legislation. References 1.Zhang Tiewei： Self-conceit and Poverty of Tort Law， P38， No.06.2009 of Journal of Comparative Law
