The Comparative Law and Economics of Pure Economic Loss
University of Minnesota - Law School; University of Bologna
Vernon V. Palmer
Tulane Law School
University of Trieste School of Law
International Review of Law and Economics, 2006
George Mason Law & Economics Research Paper No. 05-12
Minnesota Legal Studies Research Paper No. 07-18
Law and economics shows that a key factor in determining the optimal economic loss rule is found in the relationship between pure economic loss and social loss. Economic loss should be compensable in torts only to the extent that it corresponds to a socially relevant loss. In this paper we undertake a comparative evaluation of the economic loss rule to verify whether modern legal systems, although not formally adopting the economic criterion, define the exclusionary rule in light of efficiency considerations. The comparative analysis reveals that the substantive applications of the economic loss rule in European jurisdictions are consistent with the predicates of economic analysis.
Number of Pages in PDF File: 33
Keywords: Comparative law, Pure economic loss, Economic loss rule
JEL Classification: K12
Date posted: June 14, 2005
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