A basic principle of law is that damages paid by a liable party should equal the harm caused by that party. However, this principle is not correct when account is taken of litigation costs, because they too are part of the social costs associated with an injury. In this article we examine the...

Some legal scholars have argued that the standard modeling of liability rules is inconsistent with the causation requirement of the law of torts. It has been claimed that under the doctrinal notion of causation liability, an injurer is liable only if he was negligent. Moreover, he is liable for...

Confidentiality has long been considered a necessary provision of effective mental health treatment. State mandated breaches of confidentiality required of psychologists when a patient makes a credible threat to the life of another have, many argue, compromised the entire administration of...

When accidents result in noncompensable losses, a monetary payment is not enough to compensate the victim. We study the characteristics of optimal levels of care and distribution of risk under these circumstances and show that care depends on the aggregate wealth of society but does not depend...

The polluter-pays principle stipulates that the person who damages the environment must bear the cost of such damage. A number of developing countries have recently extended this principle to create an obligation on the state to compensate the victims of environmental harm. This variation of the...

Attorney advertising routinely targets tort victims. This paper reviews legal services advertising restrictions in the United States and abroad. A theoretical model is developed which incorporates advertising intensity, litigation costs, and an endogenous number of lawsuits. Since advertising...

This paper provides a framework to evaluate human life based on civil court decisions on damages for pain and suffering. Using judgements from Germany and Austria over the last 25 years, we calculate an average Value of Damages for Pain and Suffering (VDPS) of about EUR 1.79 millions, with a...

Previous literature on frivolous lawsuits has focused on litigation costs and the optimal settlement-trial decision of defendants, but has not examined how they affect deterrence. This paper considers whether there are circumstances under which frivolous suits might actually increase deterrence,...

We consider a monopoly market setup with legal error, where social welfare is negatively related to a firm's expected liability costs. In this context, we investigate the optimal location of the due-care standard vis-à-vis any given desired care level. It is found that when both the due-care...

This paper explores the interaction of private precaution and public safety investments that are determined in a political process. We distinguish between a scenario in which the median-voter victim influences public safety and one in which the injurer lobbies the public agent, analyzing both...