Do Presumptions of Negligence Incentivize Optimal Precautions?

Abstract

In most jurisdictions, the burden of producing evidence on a contested issue traditionally falls
on plaintiffs. In a tort claim, this de facto creates a presumption of non-negligence in favor of
injurers. Some legal systems in Europe placed renewed attention on “presumed liability” rules,
which instead create a presumption of negligence against injurers. In this paper, we analyze the
effects of alternative legal presumptions on parties’ care incentives in the presence of discovery
errors. Differently from what was suggested in prior research, we show that legal presumptions
do affect primary behavior: presuming that the injurer was (not) negligent strengthens (weakens)
his care incentives in situations where the plaintiff faces probatory difficulties. We analyze how
these effects should inform the choice of evidence regimes to improve the robustness of liability
rules, and to minimize the dilutive effect of imperfect discovery on individuals’ care incentives.

Keywords: legal presumption; presumed liability; care incentives; discovery errors

JEL Classification: K13, D83