Explaining Welfare-Based Torts

Abstract

How relevant is economic analysis of law in legal scholarship and in the teaching of tort law? To shed light on this question, the use of welfare-economic considerations to evaluate and explain decision-making in field of private law and torts is discussed. In particular, the article investigates the support in Norwegian tort law for the claim that welfare economics can improve our understanding of legal rules. After an introduction of the basic ideas and concepts with some illustrations from the “law and economics” literature, it will be focused on the Scandinavian law of negligence and the twin issues of strict liability and the concept of compensable harm. A due care formula dated 1914 which is equivalent to Learned Hand’s well-known version is documented. Moreover, it is shown how Victor Mataja’s 1888 book on the economics of strict liability had, contrary to previous assessments, a great deal of influence in parts of Europe (Denmark and Norway). The exposition shows that important tort doctrines have been discussed in light of an economic approach for more than a century and that this method can work also as a current form of pedagogy. In addition, the discussion indicates both that the legal-dogmatic tradition supports the use of welfare considerations resembling that of the economic approach, and that legal-dogmatic research borrowing ideas, concepts and models from economics is still likely to be fruitful.