A New Positive Economic Theory of Negligence

The conventional theory of negligence law compares the injurer's level of precaution with the level that would minimize social costs. The formal negligence rules characterized by this theory are discussed; they do not lead to minimum social cost under conditions of uncertainty. A new formal rul...

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Bibliographic Details
Published in:The Yale law journal 1983-04, Vol.92 (5), p.799-829
Main Author: Grady, Mark F.
Format: Article
Language:English
Subjects:
Accidents
Breach of duty
Causation
Civil negligence
Cost benefit analysis
Defendants
Economic theory
Financial liabilities
Full
Law
Legal liability
Liability
Negligence
Plaintiffs
Rules
Social costs
State court decisions
Strict liability
Torts
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Summary:The conventional theory of negligence law compares the injurer's level of precaution with the level that would minimize social costs. The formal negligence rules characterized by this theory are discussed; they do not lead to minimum social cost under conditions of uncertainty. A new formal rule is proposed that compares the costs and benefits of an untaken precaution that was a ''but for'' reason for the injury. This alternative is the better choice because: 1. As a formal economic model, it seems more likely to encourage the minimization of social costs. 2. It is more in accord with actual court practice. From the standpoint of criteria meaningful to the evaluation of the positive economic theory of tort, the alternative method performs better than the conventional theory.
ISSN:0044-0094
1939-8611
DOI:10.2307/796145