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ECO320H1 (30)
Lecture

Textbook Notes - Chapter 8 An Economic Theory of Tort

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Department
Economics
Course
ECO320H1
Professor
Robert Barber
Semester
Fall

Description
Chapter 8: An Economic Theory of Tort Law (Textbook Notes) - Economic essence of Tort Law: use of liability to internalize externalities created by high transact costs - Recovery: o 1. Harm Suffered o : Z},K)LL[Z l]o} o 3. Breach of Duty (by defendant) HARM: - Liability laws == compensate for EXPOSURE to risk (e.g. outrage); only REALIZATION of risk - }LZZ]]LI @,[Zl9>[email protected][Z]o] - 9 }KLZ]}LLZ] ]K[ZZ]Z ]}L}}]2]Lo]o] ~D0) o E.g. restores back to (W J W ) to compensate for lost wealth & restores sum equal to o 1 cost of providing (HoJ H1) units of health - Z]}ZK2Z8] ]K L[Z}}L}Ko,oo7D LZ}]L Z]L2 W levels (IF VICTIM SEES A TRADEOFF BETWEEN W & H) TANGIBLE LOSSES: e.g. medication costs, lost income etc. [email protected] >>K^^^9:2:K}]}LoZK7]ZZZ7^]LZ]L2_ - Implementation of PERFECT COMPENSATION = difficult bc hard to observemeasure valuation of intangible loss - LIABILITY DISPARITY J same court awards diff amounts of compensation to victims who suffered the identical injury (causes: confusion over intangible damages) o Across countries o Reduction = increased fairness and efficiency CAUSE: - Even though there is a WRONG and DAMAGE, without CAUSE, no liability - Differentiates tort from morality (e.g. 2 hunters firing, but only one killing J both are MORALLY wrong, but only the one who actually CAUSED the harm is liable) ^ D^-IN- @_J measured by the ^-for-Z_ (if no, YES CAUSE; if yes, NO CAUSE) Problems with the BFT: - e.g. multiple harms J useless and misleading (too many factors) - e.g. when applied to SEQUENCE of events that precede and injury J allows distant causes to have the same weight as proximate causes J does not discriminate between proximate cause and remote cause (e.g. being born) www.notesolution.com
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