Comparing All-Or-Nothing and Proportionate Damages: A Rent Seeking Approach

Jef De Mot and Thomas Miceli
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Jef De Mot: University of Ghent

No 2014-30, Working papers from University of Connecticut, Department of Economics

Abstract: This paper compares the all-or-nothing and proportionate damage rules for allocating damages in tort cases under evidentiary uncertainty. The focus is on how the two rules affect litigation expenditures by plaintiffs and defendants. The results of simulation experiments show that the expected judgment at trial is higher under the all-or-nothing rule for cases where the defendant did not take adequate care, but the judgment is higher under the proportionate rule when the defendant took more than adequate care. As for litigation expenditures, assuming equal costs of litigation, overall expenditures are higher under the all-or-nothing rule, except for very weak and very strong cases.

Keywords: All-or-nothing rule; proportionate damages; litigation costs; rent-seeking (search for similar items in EconPapers)
JEL-codes: K13 K41 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2014-10
New Economics Papers: this item is included in nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:uct:uconnp:2014-30

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