Negligence Rule Research Articles

Activity-Level Externalities and the Failure of Decoupling Liability

In the literature we find unanimous consensus on the analysis of bilateral accident models. In bilateral accident models, indeed, it is usually held that both with the negligence rule and with strict liability with contributory negligence, the residual bearer adopts an efficient level of precaution and efficient activity levels; the party that is not the residual bearer, on the other hand, chooses an excessive activity level since once the due precautions have been taken, they do not answer for the damage, regardless of the activity level adopted. One of the possible solutions put forward in the doctrine to achieve a first-best situation in the bilateral accident model is that of decoupling liability, in which both the parties are residual bearers: therefore, this is the idea of a Pigovian tax, under which the injurer pays the State a tax equal to the expected damage and the victim is not compensated for the damage suffered. In this way both the parties have an interest in acting diligently in order to reduce the costs which they incur and in choosing an efficient activity level. In our view, the common doctrinal assumptions are based on an erroneous belief. By building on an idea of Coase’s that is not held in sufficient regard by the doctrine, we intend to show that the residual bearer also maintains an excessive activity level in bilateral accidents, since he does not consider the precaution costs of the counterparty. He therefore tends to act even when his benefits are greater than the total expected damage and the cost of his precautions, but lower than the total social costs, in the sense of the sum of the expected damage, the cost of his precautions and the cost of the counterparty’s precautions.

Pathology and Medical Malpractice

This study examines whether the assumptions that pathologists understand the medical malpractice negligence rule and have a clear single standard of care are reasonable.Two hundred eighty-one Texas academic pathologists and trainees were presented 10 actual pathology malpractice cases from publicly available sources, representing the tort system's signal.Of the respondents, 55.52% were trainees, and 44.48% were pathology faculty. Only in two cases did more than 50% of respondents correctly identify the behavior of pathologists as defined by legal outcomes. In only half of the cases did more than 50% of pathologists concur with the jury verdict.This study provides further evidence that physicians do not understand the legal rule of negligence. Pathologists have a poor understanding of negligence and cannot accurately predict a jury verdict. There is significant divergence from the single standard of care assumption. Alternative methods to provide appropriate compensation and to establish physician accountability should be explored. Additional education about medical negligence is needed.

Jurors, Judges, and the Mistreatment of Risk by the Courts

A sample of almost 500 jury-eligible citizens considered a series of experimental situation involving accidents. The juror sample did not properly apply negligence rules, as their errors were particularly great for low probability-large loss cases. They also penalized corporations for undertaking corporate risk analyses that seek to trade off cost versus risk reduction benefits. Jurors' damages assessments were also more prone to error than were responses by a sample of state judges. Judges were less prone to erroneous risk beliefs and less subject to the zero risk mentality.

Ambiguous Beliefs on Damages and Civil Liability Theories

This paper analyzes the meaning of comparing the economic performance of strict liability and negligence rule in a unilateral standard accident model under Knightian uncertainty. It focuses on the cost expectation of major harm on which the injurers form beliefs. It shows first that, when the Court agree with the regulator, whatever the liability regime, the first best level of care is never reached but under both regimes the tortfeasors define the same level of care. Second, when, judge and regulator disagree, it is impossible to discriminate among liability standards because the issue depends on the injurer's optimism degree.

Innovative Negligence Rules

Often, injurers or victims (or both) can adopt a new technology that reduces the social costs of accidents. When adoption costs are not verifiable in court, optimal adoption decisions cannot be induced by means of an appropriate determination of negligence. Hence the parties might either over- or under-adopt. We study how due-care standards should be conditioned on the technology adopted by the parties in order to improve adoption decisions. We demonstrate that standards should be biased upwards or downwards, depending on whether the new technology reduces or increases expected harm. (JEL: K13, K32)

Second-Best Liability Rules, Loss-Prevention Incentives, and Efficiency

The paper compares two liability rules, strict liability and the negligence rule, in terms of loss-prevention investment and social welfare when individuals are risk-averse and policymakers do not have lump-sum transfers at their disposal. If the damage payment made by the injurer to the victim fully compensates for the loss, loss prevention is higher under the negligence rule but social welfare is higher under strict liability. If the damage payment partially compensates for the loss, loss prevention and social welfare both tend to be higher under the negligence rule.

Relative performance of liability rules: experimental evidence

We compare the performance of liability rules for managing environmental disasters when third parties are harmed and cannot always be compensated. A firm can invest in safety to reduce the likelihood of accidents. The firm’s investment is unobservable to authorities. The presence of externalities and asymmetric information call for public intervention in order to define rules aimed at increasing prevention. We determine the investments in safety under No Liability, Strict Liability, and Negligence rules, and compare these to the first best. Additionally, we investigate how the (dis)ability of the firm to fully cover potential damage affects the firm’s behavior. An experiment tests the theoretical predictions. In line with theory, Strict Liability and Negligence are equally effective; both perform better than No Liability; investment in safety is not sensitive to the ability of the firm to compensate potential victims. In contrast with theory, however, prevention rates absent liability are much higher and liability is much less effective.

Evaluating the quality of informed consent and contemporary clinical practices by medical doctors in South Africa: an empirical study.

BackgroundInformed consent is a legal and ethical doctrine derived from the principle of respect for autonomy. Generally two rights derived from autonomy are accorded legal protection. The constitutional right to bodily integrity followed by the right to bodily well-being, protected by professional negligence rules. Therefore healthcare professionals treating patients' without valid consent may be guilty of infringing patients' rights. Many challenges are experienced by doctors obtaining informed consent in complex multicultural societies like South Africa. These include different cultural ethos, multilingualism, poverty, education, unfamiliarity with libertarian rights based autonomy, and power asymmetry between doctors and patients. All of which could impact on the ability of doctors to obtain legally valid informed consent.MethodsThe objective of this study was to evaluate whether the quality of informed consent obtained by doctors practicing in South Africa is consistent with international ethical standards and local regulations. Responses from 946 participants including doctors, nurses and patients was analyzed, using a semi-structured self-administered questionnaire and person triangulation in selected public hospitals in Durban, KwaZulu-Natal, South Africa.ResultsThe median age of 168 doctors participating was 30 years with 51% females, 28% interns, 16% medical officers, 26% registrars, 30% consultant/specialists. A broad range of clinical specialties were represented. Challenges to informed consent practice include language difficulties, lack of interpreters, workload, and time constraints. Doctors spent 5-10 minutes on consent, disclosed most information required to patients, however knowledge of essential local laws was inadequate. Informed consent aggregate scores (ICAS) showed that interns/registrars scored lower than consultants/specialists. ICAS scores were statistically significant by specialty (p = 0.005), with radiologists and anaesthetists scoring lowest, while internists, GPs and obstetricians/gynaecologists scored highest. Comparative ICAS scores showed that professional nurses scored significantly lower than doctors (p ≤ 0.001).ConclusionsThis study shows that though doctors had general knowledge of informed consent requirements, execution in practice was inadequate, with deficiency in knowledge of basic local laws and regulations. Remedying identified deficiencies may require a 'corps' of interpreters in local hospitals to assist doctors in dealing with language difficulties, and continuing education in medical law and ethics to improve informed consent practices and overall quality of healthcare service delivery.

Holding Distribution Utilities Liable for Outage Costs: An Economic Look

Storm-related service outages in electricity and telecommunications have created public controversies regarding the adequacy of ex ante efforts to prevent outages and ex post efforts to restore power. Product liability rules, used to promote quality of service throughout the economy, might seem to offer a solution to this problem in the utility context. Strict liability rules avoid the need for determining whether utilities were appropriately careful but increase ratepayer costs because of moral hazard and, in effect, force ratepayers to buy outage insurance from the utility. By leaving customers exposed to damage, negligence rules can avoid these shortcomings but force upon regulators and courts the need to make difficult decisions regarding efficient care levels. Profit regulation, risk aversion, regulatory commitment failures, and distributional considerations add further complications. Still, the consideration of liability rules may provide worthwhile reminders that increased reliability is neither free nor guaranteed by public provision of service.

A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation

Regulation and the negligence rule are both designed to obtain compliance with desired standards of behavior, but they differ in a primary respect: compliance with regulation is ordinarily assessed independently of the occurrence of harm, whereas compliance with the negligence rule is evaluated only if harm occurs. It is shown in a stylized model that because the use of the negligence rule is triggered by harm, the rule enjoys an intrinsic enforcement cost advantage over regulation. Moreover, this cost advantage suggests that the examination of behavior under the negligence rule should often be more detailed than under regulation—as it frequently is in fact.

Comparative Tort Law and Economics: Strict Liability in Brazilian Legal Practice

Law and economics has been received skeptically outside of the United States. Attributing this phenomenon to the parochialism, Nuno Garoupa suggests that the change in such a framework requires the development of academic works that use comparative methodology and that perform the integration of law and economics to local legal doctrines. Tort law provides fertile ground for law and economics comparative studies. Contemporary phenomenon is the existence of a dualistic system of liability, performing the coexistence, in relative harmony, of the basic rule of negligence with the strict liability, applicable in cases specifically provided for. In legal practice, however, it is a complex issue, revealing the existence of a gray area that makes it difficult to establish a and consistent dividing line. Michael Faure consigns that among the few attempts to establish a clear cut test, highlight those performed by William Landes and Richard Posner that use economic analysis, specially the fundamentals crystallized in the Hand formula.The basic working hypothesis of this paper is that it is possible to apply fundamentals of economic analysis of law with a view to establish a borderline between negligence and strict liability in Brazil. The paper is structured in to two parts. The first part presents fundamentals of strict liability doctrine, exploring the traditional legal theory and economic analysis of law. The second part presents empirical evidence of the application of the fundamentals of economic analysis of law as criterion to apply strict liability in comparative law and in Brazil, giving emphasis to the innovative general clause of strict liability for the risk of the activity of the sole paragraph of article 927 of the Brazilian 2002 Civil Code. The conclusion performs a synthesis of the principal ideas developed.

Victim Fault and Victim Strict Responsibility in Anglo-American Tort Law

Anglo-American tort doctrine pays considerable attention to the conduct of the victim as well as the conduct of the injurer. A symmetrical standard of care for victims and injurers is also common: just as injurers are liable for failure to use reasonable care, victims frequently have their compensation reduced insofar as they, too, failed to use reasonable care. The advent of comparative fault, replacing the all-or-nothing rule of contributory negligence, has made the symmetrical approach seem inexorable and unremarkable. But symmetry is usually the wrong perspective for the legal system to take towards victim and injurer conduct. That perspective also misdescribes legal doctrine. Courts often depart from symmetry, even in comparative fault jurisdictions. Thus, courts recognize several categorical doctrines that permit full recovery without regard to the possible fault of the victim (e.g., where the defendant’s duty is to protect the victim from his own vulnerability or incapacity, or where the defendant is engaged to provide medical care or other services to the victim necessitated by the victim’s own prior fault). Courts also recognize categorical doctrines that automatically preclude any recovery despite the supposed presumptive status of comparative fault (e.g., the illegality doctrine, the mitigation of damages doctrine, and the defense of voluntary assumption of risk). Moreover, even when victim conduct is compared to injurer conduct, the way in which victim conduct is relevant to tort liability is frequently qualitatively different than the way in which injurer conduct is relevant. Often, when we characterize a victim as being “at fault,” we do not mean that the victim should have acted differently, but only that he should be strictly responsible for his choice or action (e.g. because he justifiably forfeited his right to full damages). Indeed, sometimes, even though a victim has a moral or legal right not to take a precaution, it is appropriate to deny him full damages for the harm that the precaution would have averted. To be sure, symmetry is sometimes appropriate, especially when the actor’s unreasonable conduct creates substantial risks both to others and to himself. But in many other cases, symmetry is much less defensible, at least if one endorses a nonconsequentialist rather than utilitarian account of tort law. The law could do more to address the unjustifiable use of symmetrical criteria — e.g., the fact-finder could be instructed, or the judge could be advised, to treat risk to others as a more serious type of fault than risk to self.

Relative Fault and Efficient Negligence: Comparative Negligence Explained

This paper shows that the rule of comparative negligence with relative fault – a sharing of the loss proportional to the parties’ relative departures from due care – induces the parties to an accident to be efficiently negligent. Comparative negligence is more efficient than simple or contributory negligence regimes because it serves as a buffer against excessive due-care standards. If due-care standards are too high, comparative negligence facilitates efficient negligence, inducing parties to violate excessive due-care standards only when this is socially desirable. If due-care standards are too low, all negligence rules perform in the same way. Of all possible comparative negligence rules, relative fault provides for the sharing rule that maximizes this effect. The same principle also applies to the contribution rule among multiple tortfeasors.

Prévention des risques technologiques à l’aide de la responsabilité civile en présence d’une innovation à double impact

Cet article vise à reconsidérer l’analyse économique de la prévention des risques technologiques (majeurs) via la responsabilité civile, dans une perspective de changement technologique : les firmes peuvent innover pour améliorer l’efficacité de leur technologie de prévention. Nous nous inspirons de travaux en économie de l’environnement d’Endres et alii (2006, 2008) tout en intégrant deux spécificités de l’analyse des risques majeurs : l’insolvabilité ex post et la possibilité de concevoir des innovations “ à double impact” (réduisant le coût de prévention et la probabilité d’accident). Contrairement à Endres et alii, nous montrons que, dans ce contexte, responsabilité sans faute et règle de négligence induisent des comportements différents, l’efficience de cette dernière dépendant du type d’innovation et du comportement du régulateur.

Damages Regimes, Precaution Incentives, and the Intensity Principle

This paper revisits the accident model at its roots and shows that the intensity principle provides a powerful analytical tool to handle a variety of issues in a unifying frame and based on common intuition. If courts impose inefficient standards, if a cap on liability exists, or if the principal must pay an information rent to induce precaution, the exact method of quantifying damages matters. The intensity principle allows comparing the intensity of precaution incentives under different damages regimes, such as strict liability, proportional liability, and the negligence rule. Moreover, it requires less restrictive assumptions than the more traditional approach.

Innovative Negligence Rules

We study how due-care standards can be conditioned on the technology adopted by the parties. We demonstrate that standards should be biased up or downwards, depending on the impact of the new technology on expected harm. Strict liability should be applied if new technologies that are able to reduce expected harm are available to the injurer; negligence should be selected if they are available to the victim. Finally, the negligence standard should be primarily based on safety (outcome) rather than precautionary expenditures (effort), so as to allow the benefits of innovation to be appropriated by the party bearing its cost.

A Fundamental Enforcement Cost Advantage of the Negligence Rule over Regulation

Regulation and the negligence rule are both designed to obtain compliance with desired standards of behavior, but they differ in a primary respect: compliance with regulation is ordinarily assessed independently of the occurrence of harm, whereas compliance with the negligence rule is evaluated only if harm occurs. It is shown in a stylized model that because the use of the negligence rule is triggered by harm, the rule enjoys an intrinsic enforcement cost advantage over regulation. Moreover, this advantage suggests that the examination of behavior under the negligence rule should tend to be more detailed than under regulation (as it is).

Excessive-Activities Externalities

It's a common opinion among law and and economics scholars that with a regime of strict liability or a regime of negligence rule one party (but just one party) adopts an efficient level of activity. It's also a common idea the with a regime of strict liability and a tax on the victim equal to expected damage both parties take an efficent level of activity. We expalin in this paper why this opinions are wrong. The basic fact is that it is not considered by these opinions that, in order to have an efficient level of activity, it's necessary a complete internalization of social costs, but the solutions proposed don't consider that must be internalized also parties' costs of precaution. We state for this reason that it's possible to have an efficient level of activity by the injurer, for example, if there is a regime of strict liability and it is introduced on the injurer a tax equal to victim's cost of precaution. We also say the, if it's desirable to have an efficient level of activity on the part of the victim, it'a necessry a regime of negligence with a tax on the victim equal to the injurer's cost of precaution. The paper ends analyzing the possibility to put on both parties a tax equal to the other party's cost of precuation. But the resarch on this peculiar topic is left for other works.

Who Should Be Immune from Tort Liability?

Tort law is generally considered to be an instrument that improves incentives. Yet many people and groups (including firefighters and police officers) enjoy some form of immunity. I show that those who enjoy immunity typically externalize the precaution costs to some degree. I analyze an extension of the standard unilateral accident model (with risk neutrality and fixed activity levels) that includes parameters that capture the degree to which the injurer internalizes precaution costs and expected harm. I find that when injurers externalize precaution costs, strict liability should not be used (as it leads to overprecaution), and negligence rules should be more lenient (because too high due care levels are less likely to be corrected) and more predictable (because uncertainty has a much stronger chilling effect). Therefore, negligence may need to take the form of gross negligence (for example, firefighter liability) or qualified or good-faith liability (for example, constitutional torts).

The Equivalence of Strict Liability and Negligence Rule: A Trompe L'oeil Perspective

This paper analyzes the difficulties of comparing the respective effectiveness of two among the most important liability regimes in tort law: rule of negligence and strict liability. Starting from the standard Shavellian unilateral accident scheme, I show that matching up liability regime on their capacity to provide the highest level of safety is ineffective. This demonstration lies on two components. The first one gathers some results drawn from literature that introduces uncertainty. The second one takes into consideration the beliefs of agents and their aversion to ambiguity. The model applies uncertainty to the level of maximum damage. This demonstration reinforces the previous result. Hence, both regimes apply on specific tort question and comparing their individual efficiency needs to call for other components as the transaction costs associated to the burden of evidence, the fairness between victims and injurers, etc.