Multiple Injurers and Victims

Abstract

This chapter investigates the structure of liability rules from the efficiency perspective when there are multiple injurers or victims. When there are one victim and multiple injurers, it is shown that the condition of collective negligence liability is sufficient for efficiency. A liability rule defined for one victim and multiple injurers satisfies the condition of collective negligence liability iff its structure is such that whenever some individuals are negligent, no nonnegligent individual bears any loss in case of occurrence of accident. The question whether this condition is necessary for efficiency is an open question. Unlike the case of one victim and multiple injurers, in the case of multiple victims and one injurer, it turns out that there is no liability rule which is efficient for all applications. We consider the important subclass β ′ of applications such that the expected loss of a particular victim depends only on the care level taken by that victim and the care level taken by the injurer. We show that a sufficient condition for a multiple-victim one-injurer liability rule to be efficient with respect to subclass β ′ of applications is that its structure be such that: (i) whenever the injurer is negligent and a particular victim is nonnegligent, the entire loss incurred by that victim must be borne by the injurer; and (ii) whenever a particular victim is negligent and the injurer is nonnegligent, the entire loss incurred by that victim must be borne by the victim himself. For an important subclass of multiple-victim one-injurer liability rules, characterized by the condition that the proportions in which the loss incurred by a particular victim are to be borne by the injurer and that victim must depend only on the nonnegligence proportions of the injurer and that victim, the above condition ((n, 1)-negligence liability) is both necessary and sufficient for efficiency with respect to subclass of applications β ′ . In view of the fact that there is no liability rule defined for multiple victims and one injurer which is efficient for all applications, it follows that there does not exist any liability rule defined for multiple injurers and multiple victims which is efficient for all applications.