Abstract

http://ssrn.com/abstract=2422042
 


 



The Robustness Case for Proportional Liability


Alexander Stremitzer


UCLA School of Law

Avraham D. Tabbach


Tel Aviv University

April 7, 2014

The B.E. Journal of Theoretical Economics (2014 Forthcoming)
UCLA School of Law, Law-Econ Research Paper No. 14-06

Abstract:     
In important areas like medical malpractice and environmental torts, injurers are potentially insolvent and courts may make errors in determining liability (e.g. due to hindsight bias). We show that proportional liability, which holds a negligent injurer liable for harm discounted with the probability that the harm was caused by the injurer’s negligence, is less susceptible to these imperfections and therefore socially preferable to all other liability rules currently contemplated by courts. We also provide a result which might be useful to regulators when calculating minimum capital requirements or minimum mandatory insurance for different industries.

Number of Pages in PDF File: 27

Keywords: compliance, uncertain causation, court error, judgment-proof problem, proportional liability

JEL Classification: K13

Accepted Paper Series


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Date posted: April 7, 2014  

Suggested Citation

Stremitzer, Alexander and Tabbach, Avraham D., The Robustness Case for Proportional Liability (April 7, 2014). The B.E. Journal of Theoretical Economics (2014 Forthcoming); UCLA School of Law, Law-Econ Research Paper No. 14-06. Available at SSRN: http://ssrn.com/abstract=2422042

Contact Information

Alexander Stremitzer (Contact Author)
UCLA School of Law ( email )
405 Hilgard Avenue
Box 90095-1476
Los Angeles, CA 90095-1476
United States
HOME PAGE: http://www.law.ucla.edu/faculty/all-faculty-profiles/professors/Pages/Alexander-Stremitzer.aspx
Avraham D. Tabbach
Tel Aviv University ( email )
Ramat Aviv
Tel Aviv 69978, IL
Israel
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