Negligence, Hand Formula, and Compensation
21 Pages Posted: 22 Jan 2012
Date Written: January 20, 2012
The Hand formula is recognized as an important criterion for fault assessment. Landes and Posner draw attention to the fact that the importance of the Hand formula goes beyond the area of culpability, qualifying it as an algorithm which can be employed for deciding tort questions generally. One of the main difficulties in legal theory lies in the establishment of objective criterion allowing for quantitative assessment of the reduction or increase (punitive damages) in the amount of indemnification relative to damage. The present study develops the basic hypothesis that it is possible to apply the Hand formula as a criterion for assessing the fault of both injurer and victim so as to aid in establishing the amount of indemnification. The paper is structured into four parts. The first part presents the Hand formula, exploring its potential for application as a criterion for fault assessment. The second part explores the potential use of the Hand formula as a criterion for fault gradation. The third part turns to the question of determining indemnity, presenting the theoretical elements of damage and indemnity. The fourth part develops the application of the Hand formula as a criterion for fault gradation in order to set the amount of indemnity. The conclusion highlights the fact that the application of the Hand contributes to the systematization and rationalization of the decision-making process in the complex and multi-faceted cases encountered in the field of torts, increasing the predictability of judicial decisions.
Keywords: Law and economics, Tort, Hand formula, Fault, Damage, Indemnity, Brazil
JEL Classification: K13
Suggested Citation: Suggested Citation