The original question was how could liability be limited in an AnCap society. And yes, it's highly likely that an arbiter would be asked to solve the problem rather than merely determine liability. However, these involved parties -- coop, LOL, Bobby -- have all agreed to ask the arbiter solely about liability. This is Sv. Sandfort's way of asking you, dear reader, where you think the liability lies. He did NOT ask you to solve the problem; he only asked, Where is the liability and why?
Maybe once we sort out where the liability is and why, THEN we can go on to solve their problem for them? I understand the impulse to solve the problem; it was my first reaction, too. But it isn't the question, and there's really no way even to offer a solution until you've determined liability (or the lack of it).
Essentially, Counselor Sandfort has used an "Enter at Your Own Risk!" admonition to give the farmers participating in his hypothetical co-op a "hold harmless" escape clause, the notice defining to their customers the extent of the compensation for which they have decided to make themselves liable should a tortious act - intentional or negligent - take place on their property as the result of actions undertaken by themselves or their hired agents.
As I'd said, it's a "Tough luck, lady!" way of dismissing a customer's demand for restitution or compensation for damages suffered because of the co-op operators' direct or indirect failings in the discharge of their responsibilities to their customers.
As arbiter, I'd have to ask: "Would Bobby be doing
anything in that co-op which might have resulted in this little old lady's injury?"
The answer, almost certainly, is "No." Bobby was working as an employee of the co-op, a hired hand, performing tasks dictated by the management, most of whom are themselves co-op employees. Ultimately, the responsibility - the "
liability" - for whatever happens in the co-op as the result of action on the part of the co-op's agents has to rest upon the co-op owners, who set purpose and policy and procedure. As Counselor Sandfort so contemptuously snarked,
respondeat superior.
There can be some distribution of "
liability" in the sense that Bobby and his manager(s) and even the injured customer might be determined to hold some responsibility for contributory negligence, and this may be said to reduce the "
liability" of the co-op owners. That's one of the reasons why an arbiter to whom this case is brought for no purpose other than to rule on Counselor Sandfort's "
liability" fixation subject has to know a helluva lot more about the purposes, policy, and procedures under which Bobby - the co-op employee - was working when he had the accident that precipitated the customer's slip-and-fall.
Counselor Sandfort wants much (if not most) of the "
liability" for the injuries sustained by the customer to be accorded the customer herself. She was notified, before she walked into the co-op, that the operators of this place of business were by summary ukase limiting their "
liability" for damages to the extent stipulated by Counselor Sandfort, and if anybody wanted to contest that assertion, they're screwed.
Might we call this the "Nyaah-Nyaah-N'-Nyah-Nyah!" defense?
So what the hell need is there for
anybody reading Counselor Sandfort's hypothetical to say how that reader might allocate "
liability" were he (or she) to have the case brought before him as an arbiter?
Unless he's able to deal the cards from a stacked deck, Counselor Sandfort doesn't want the game to be played.
Maybe the grownups in the room want to work out their own solution, and it's only the question of liability they want someone else's opinion on. Or do you want to require everyone to use only the solutions offered by arbiters?
Do you have the grace to say, oops, sorry, I misread the question? Hey, I misread it myself, at first.
Because the "
liability" determination has to take into consideration the concepts of contributory negligence, "chain of command" (
respondeat superior), and intentional tort (among other things), an arbiter's decision to let the co-op owners off the hook - which is what Counselor Sandfort is angling for in his quest for "limited liability in an AnCap society," without the privileges and immunities accorded by government thugs - is an unlikely outcome.
Moreover, as I'd observed, were that to be the case, the owners of the co-op would find themselves with a public reputation so damned bad that they lose custom. In fact, some other person - not at the request of the injured little old lady but out of his own rage - might well burn the co-op down, particularly if he thought he could get away with it.
The farmers could go broke just trying to mount 24-hour guard on the place.
The kind of "Tough luck, lady!" attitude toward the co-op's visitors embodied in Counselor Sandfort's "Enter at Your Own Risk!" notice would tend to alienate customers and vendors alike. Given other options, people might prefer to take their money someplace other than Counselor Sandfort's unwelcoming "Screw You, Buddy!" farmers' co-operative.
All other things being equal, the provision of liability insurance offers a better solution, with customers paying the "built in" cost of that business expense to have both the surety of restorative compensation should they suffer some inadvertent injury
and a less adversarial relationship with the proprietors when they visit.
By aggregating expertise on the subject of "
liability," the insurance carriers not only help the co-op owners with the establishment of procedures to achieve usual-and-customary standards of risk mitigation but also participate in arbitration, when and if such becomes necessary.