One of the principal results in the economic theory of liability is that, assuming litigation is costless, the rule of … reexamines this result when litigation is costly. It is shown that strict liability with compensatory damages generally leads to … a socially inappropriate level of care and to excessive litigation costs. Social welfare can be increased by adjusting …

This article examines a model of strict liability with costly litigation and presents conditions under which (1 …) potential injurers take optimal precautions, (2) increasing the cost of litigation enhances precaution and social welfare, (3 …

One of the principal results in the economic theory of liability is that, assuming litigation is costless, the rule of … reexamines this result when litigation is costly. It is shown that strict liability with compensatory damages generally leads to … a socially inappropriate level of care and to excessive litigation costs. Social welfare can be increased by adjusting …