The Comparative Law and Economics of Pure Economic Loss

33 Pages Posted: 14 Jun 2005  

Francesco Parisi

University of Minnesota - Law School; University of Bologna

Vernon V. Palmer

Tulane Law School

Mauro Bussani

University of Trieste School of Law

Abstract

Law and economics shows that a key factor in determining the optimal economic loss rule is found in the relationship between pure economic loss and social loss. Economic loss should be compensable in torts only to the extent that it corresponds to a socially relevant loss. In this paper we undertake a comparative evaluation of the economic loss rule to verify whether modern legal systems, although not formally adopting the economic criterion, define the exclusionary rule in light of efficiency considerations. The comparative analysis reveals that the substantive applications of the economic loss rule in European jurisdictions are consistent with the predicates of economic analysis.

Keywords: Comparative law, Pure economic loss, Economic loss rule

JEL Classification: K12

Suggested Citation

Parisi, Francesco and Palmer, Vernon V. and Bussani, Mauro, The Comparative Law and Economics of Pure Economic Loss. International Review of Law and Economics, 2006; George Mason Law & Economics Research Paper No. 05-12; Minnesota Legal Studies Research Paper No. 07-18. Available at SSRN: https://ssrn.com/abstract=742104 or http://dx.doi.org/10.2139/ssrn.742104

Francesco Parisi (Contact Author)

University of Minnesota - Law School ( email )

229 19th Avenue South
Minneapolis, MN 55455
United States

University of Bologna ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

Vernon Valentine Palmer

Tulane Law School ( email )

6329 Freret Street
New Orleans, LA 70118
United States
504-865-5978 (Phone)

Mauro Bussani

University of Trieste School of Law ( email )

Piazzale Europa 1
Trieste, Trieste 34100
Italy

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