Of Equal Wrongs and Half Rights

52 Pages Posted: 23 Aug 2006 Last revised: 30 Jul 2009

Gideon Parchomovsky

University of Pennsylvania Law School; Bar Ilan University - Faculty of Law

Peter Siegelman

University of Connecticut - School of Law

Steven Thel

Fordham University School of Law

Abstract

With a tiny handful of exceptions, common law jurisprudence is predicated on a "winner-take-all" principle: the plaintiff either gets the entire entitlement at issue or collects nothing at all. Cases that split an entitlement between the two parties are exceedingly rare. While there may be sound reasons for this all-or-nothing rule, we argue in this Article that the law should prefer equal division of an entitlement in a limited but important set of property, tort and contracts cases. The common element in such cases is a windfall, a gain or loss that occurs despite the fact that no ex ante effort to promote, prevent, or allocate it would be cost-justified or reasonable. We show that an equal division of disputed windfalls in these cases promotes both efficiency and fairness, and also has the virtue of clarifying some tortured legal doctrines.

We also address and reject the standard objections to split-the-difference remedies. We demonstrate that using such remedies is unlikely to distort judicial incentives, and that it is likely to improve the integrity of the judicial system. Counterintuitively, we show that giving judges the option to order a compromise remedy in windfall disputes is likely to reduce judicial error, rather than to increase it, and that the valuation problems that attend the introduction of a split-the-difference rule are insignificant.

Keywords: Property, Torts, Contracts, Jurisprudence, Common Law, Winner-Take-All, Split Entitlement, Windfall, Efficiency, Fairness, Judicial Incentives, Judicial Error, Valuation

JEL Classification: K11, K12, K13, K40

Suggested Citation

Parchomovsky, Gideon and Siegelman, Peter and Thel, Steven, Of Equal Wrongs and Half Rights. New York University Law Review, Vol. 82, p. 738, 2007; U of Penn Law School, Public Law Working Paper No. 06-34. Available at SSRN: https://ssrn.com/abstract=926097 or http://dx.doi.org/10.2139/ssrn.926097

Gideon Parchomovsky (Contact Author)

University of Pennsylvania Law School ( email )

3501 Sansom Street
Philadelphia, PA 19104
United States
215-898-1603 (Phone)

Bar Ilan University - Faculty of Law ( email )

Ramat Gan 52900
Israel
972-2-5317078 (Phone)

Peter Siegelman

University of Connecticut - School of Law ( email )

65 Elizabeth Street
Hartford, CT 06105
United States
860-570-5238 (Phone)
860-570-5242 (Fax)

Steven Thel

Fordham University School of Law ( email )

140 West 62nd Street
New York, NY 10023
United States

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