The Robustness Case for Proportional Liability

Alexander Stremitzer () and Tabbach Avraham D. ()
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Tabbach Avraham D.: Faculty of Law, Tel-Aviv University, Ramat-Aviv, Tel Aviv 69978, Israel

The B.E. Journal of Theoretical Economics, 2014, vol. 14, issue 1, 371-395

Abstract: In important areas like medical malpractice and environmental torts, injurers are potentially insolvent and courts may make errors in determining liability (e.g. due to hindsight bias). We show that proportional liability, which holds a negligent injurer liable for harm discounted with the probability that the harm was caused by the injurer’s negligence, is less susceptible to these imperfections and therefore socially preferable to all other liability rules currently contemplated by courts. We also provide a result which might be useful to regulators when calculating minimum capital requirements or minimum mandatory insurance for different industries.

Keywords: compliance; uncertain causation; court error; judgment-proof problem; proportional liability (search for similar items in EconPapers)
JEL-codes: K13 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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DOI: 10.1515/bejte-2012-0013

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