The role of insurance in the adjudication of multiparty accidents

Ulrich Hege and Eberhard Feess ()

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Abstract: This paper considers the case where adequate negligence standards cannot be defined because actions of defendants before an accident are imperfectly observable. Negligence-based liability rules, which are often considered as the only efficient liability rule in the presence of multiple tortfeasors, are not feasible in this environment. We propose an insurance-based liability rule as a remedy: Damages are apportioned according to the insurance policies of the defendants. The adjudication is made dependent on the requirement that the injurers have taken out insurance coverage setting the right incentives. The liability rule is easy to characterize, efficient, and avoids the use of punitive damages. Insurance-based liability could also be helpful to mitigate the problem of unobservable avoidance costs.

Keywords: design education; design cognition; design knowledge; conceptual design; computational models (search for similar items in EconPapers)
Date: 1999-03-01
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Citations: View citations in EconPapers (1)

Published in International Review of Law and Economics, 1999, Vol.19, n°1, pp. 69-85. ⟨10.1016/S0144-8188(98)00029-5⟩

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Related works:
Journal Article: The role of insurance in the adjudication of multiparty accidents (1999)
Working Paper: The Role of Insurance in the Adjudication of Multi-Party Accidents (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00481706

DOI: 10.1016/S0144-8188(98)00029-5

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