Causation and the Incentives of Multiple Injurers

34 Pages Posted: 19 Apr 2019

See all articles by Henrik Lando

Henrik Lando

Copenhagen Business School - CBS Law

Urs Schweizer

Rheinische Friedrich Wilhelms Universitat Bonn - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 15, 2019

Abstract

Under the but-for requirement of causation, a tort injurer cannot be held liable for more than the difference between the loss the victim would have suffered if the injurer had not been negligent, and the loss that is actually suffered by the victim. We ask whether this causation requirement yields efficient care levels when two or more injurers act simultaneously under the negligence rule. Contrary to a widely accepted view, we find that incentives may be insufficient under but-for causation, since one injurer's negligence may lower the impact of another injurer's negligence, in which case there may exist both an efficient and an inefficient Nash-equilibrium. When standards of due care are set optimally, this can only occur when there is multiple sufficient causation - as when either of two injurers' negligent acts is in itself sufficient for part or all of the injury - and/or when a negligent act confers a benefit to the victim.

Instead of but-for causation, broader notions of causation may be applied; the Third Restatement of Tort Law advocates the NESS-test. We compare this test with the Shapley-value and find that while both yield efficiency when injurers act simultaneously, the latter does so in a less inclusive manner.

Finally, we consider rules adjacent to the concept of causation in the light of our analysis, for example, the rule concerning the burden of proof of divisibility of damages and the treatment of over-determined injury when one of the factors sufficient for the harm is a non-negligent act or occurrence.

Keywords: Law and Economics, Tort, Causation, NESS-test, Shapley-value

JEL Classification: K13

Suggested Citation

Lando, Henrik and Schweizer, Urs, Causation and the Incentives of Multiple Injurers (April 15, 2019). Copenhagen Business School, CBS LAW Research Paper No. 19-16. Available at SSRN: https://ssrn.com/abstract=3372197 or http://dx.doi.org/10.2139/ssrn.3372197

Henrik Lando (Contact Author)

Copenhagen Business School - CBS Law ( email )

Porcelaenshave 18B, 1
Frederiksberg 2000
Denmark

Urs Schweizer

Rheinische Friedrich Wilhelms Universitat Bonn - Department of Economics ( email )

Adenauerallee 24-42
D-53113 Bonn
Germany

Register to save articles to
your library

Register

Paper statistics

Downloads
16
Abstract Views
91
PlumX Metrics
!

Under construction: SSRN citations will be offline until July when we will launch a brand new and improved citations service, check here for more details.

For more information