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COMPENSATION FOR OCCUPATIONAL ILLNESS

As society has become more aware of the extent to which exposures in the workplace to toxic substances result in illness and death, a number of suggestions have been made for new schemes by which the victims of such illness can be compensated for their losses. Although, as we shall see, the proposed compensation schemes are varied in nature, they generally embrace the principles of a “no fault” approach to compensation. The most important of these principles are that (1) economic recovery by the worker is limited to some fraction of pecuniary loss; and that (2) the worker’s rights of recovery are not subject to the requirement that the employer be found to have been negligent. The suggestions for “no fault” approaches to compensation for occupational illness parallel the historic responses to workplace injuries that resulted in the creation of the state workmen’s compensation programs, as well as to the introduction of “no fault” auto insurance plans and the Federally mandated “black lung” program. We are urged to adopt this approach in order that workers who suffer illness or death be more adequately compensated, on average, for their losses by being guaranteed more certain and/or more generous forms of compensation than those to which they now have access. It is the purpose of this paper to suggest that the successes of the no-fault approach in providing adequate compensation are not so clearly demonstrated that the no-fault approach should be uncritically accepted as the preferred mode of compensation for occupational illness. In addition, we consider the question of whether the advantage gained from the no-fault approach outweighs the losses of incentive to reduce the use of toxic substances in the workplace that might be provided by some other mode of compensation. We consider the following alternative mechanisms for providing compensation for occupational illness: (1) voluntary transactions; (2) litigation; and (3) social insurance. The discussion of the advantages and disadvantages of each alternative is then used as the basis for evaluating some of the major current proposals for new compensation programs. Before we begin the discus-