Class Action Lawsuits and Lawyers

Like the previous two options, unlimited subrogation would reduce the inefficiency associated with bundled insurance for nonpecuniary damages at the cost of reducing the compensation received by victims. Indeed, it would probably go farther than proposals that merely cap such damages, by eliminating them for injuries covered under most, if not all, insurance policies. But unlike the previous options, it would leave injurers liable for such damages--the difference being that the awards and settlements would go to insurance companies rather than to victims.(6) Thus, potential injurers would still have an incentive to consider the full social costs of their risk-related actions, and consumers would continue to see those total costs reflected in the prices of products.
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