Abstract
The central role of corrective justice in shaping private law has vigorously been challenged by the law and economics movement, and its concept of optimal deterrence. The fierce rivalry between the two competing theories seems to be at a dead end since scholars on each side appear to be deaf to the arguments raised by their counterparts. However, building on Kantian notion of conceptually sequenced ideas, it is suggested that the two theories are not only perfectly compatible, but also necessary complements of each other. Law needs justice, justice needs deterrence, and deterrence without justice is an empty and incoherent exercise.
Highlights
The central role of corrective justice in shaping private law has vigorously been challenged by the law and economics movement, and its concept of optimal deterrence
The fierce rivalry between the two competing theories seems to be at a dead end since scholars on each side appear to be deaf to the arguments raised by their counterparts
At a first glance it might appear that, from an economical perspective, the obvious solution to achieve optimal deterrence at the least cost would be to increase the magnitude of the fines and to introduce that intriguing creature known as punitive damages
Summary
“Prior to 1970 the debate on the purposes underlying the law of torts was either empty or banal” (Schwartz, 1996 p.1802). Law and economics scholars would chase optimal deterrence; it is conventional wisdom that it can be achieved only if damages are equal to the harm times the inverse of the probability that compensation is due (Polinsky & Shavell, 1998). Using a more formal language, a superficial look at deterrence theory might induce one to think that the probability of detection by public authorities should tend to zero (with the consequent introduction of enormous fines), and compensation should always exceed the harm. Neither of these two policies is implied by corrective justice. Two examples will be introduced to ease the exposition: the first involves a case of product liability, the second a hard core cartel
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