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Causation and Foreseeability

Research Handbook on the Economic Analysis of Torts, Jennifer H. Arlen, ed., Edward Elgar Publishing, 2013

UCLA School of Law, Law-Econ Research Paper No. 13-03

69 Pages Posted: 21 Feb 2013  

Mark F. Grady

University of California, Los Angeles (UCLA) - School of Law

Date Written: February 19, 2013

Abstract

This paper critiques the theory of causation offered by Steven Shavell and proposes a new theory that more successfully predicts the results of proximate cause cases. Two doctrines of proximate cause exist: “direct consequences” and “reasonable foresight.” We can explain case law best if we assume that both doctrines must be satisfied in order for negligence liability to exist. Thus, the two doctrines do not represent alternative conceptions of proximate cause as some analysts have proposed. Proximate cause limitations are prominent when a party has inadvertently, as opposed to deliberately, omitted a reasonable precaution. Actors cannot efficiently reduce their inadvertent lapses to zero. In situations in which the defendant’s conduct has been “possibly efficient,” causation doctrines truncate liability. This truncation has the effect of preserving efficient activity levels and preventing actors from substituting inefficiently durable precaution for nondurable precaution.

Keywords: tort law, law & economics theory on proximate cause, legal history

Suggested Citation

Grady, Mark F., Causation and Foreseeability (February 19, 2013). Research Handbook on the Economic Analysis of Torts, Jennifer H. Arlen, ed., Edward Elgar Publishing, 2013; UCLA School of Law, Law-Econ Research Paper No. 13-03. Available at SSRN: https://ssrn.com/abstract=2220980

Mark F. Grady (Contact Author)

University of California, Los Angeles (UCLA) - School of Law ( email )

385 Charles E. Young Dr. East
Room 1242
Los Angeles, CA 90095-1476
United States
310-206-1856 (Phone)

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