Soft Negligence and Cause in Fact: A Comment on Ganuza and Gomez

Abstract

Lowering the standard of negligence below the first-best socially optimal level has been shown by Ganuza and Gomez (2004) to increase the level of care taken by judgment proof injurers. In this paper, I consider a more complex model of negligence in which cause in fact is taken into account, and I show that this conclusion holds when the injurer's care reduces the magnitude of the accidental harm but not when the injurer's care reduces the probability of the accident. Thus, such soft negligence strategies aimed at tackling the adverse effects of judgment proofness need to be conditioned to the accident prevention technology available to injurers.

Keywords: insolvency, judgment proof, liability, insolvency, cause in fact, soft negligence

JEL Classification: K13, K32