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Legal damages for losses of chances

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  • Schweizer, Urs

Abstract

Traditionally, damages for torts have been awarded on an all-or-nothing basis. In malpractice suits, however, a growing number of courts are holding doctors liable for negligent acts that reduces a patient's chance of survival, even if the patient's chances for recovery have already been less than 50%. For lack of a general principle, a disparate variety of loss of chance rules seems in use. To provide some more systematic guidance, the present paper proposes to look directly at the interaction between the injurer's act and a random move of nature that captures the uncertainty. For any given move of nature, damages are still awarded on an all-or-nothing basis. If however, for lack of observability, moves of nature cannot sufficiently be distinguished, averages of correct damages over observable events are taken. While the scheme aims at compensatory goals of tort law, as a by-product, it also generates efficient precaution incentives provided that due care standards obey the Hand Formula.

Suggested Citation

  • Schweizer, Urs, 2009. "Legal damages for losses of chances," International Review of Law and Economics, Elsevier, vol. 29(2), pages 153-160, June.
    • Handle: RePEc:eee:irlaec:v:29:y:2009:i:2:p:153-160
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    References listed on IDEAS

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    1. R. Myerson, 2010. "Nash Equilibrium and the History of Economic Theory," Voprosy Ekonomiki, NP Voprosy Ekonomiki, issue 6.
    2. Urs Schweizer, 2005. "The Pure Theory of Multilateral Obligations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(2), pages 239-254, June.
    3. Shavell, Steven, 1985. "Uncertainty over Causation and the Determination of Civil Liability," Journal of Law and Economics, University of Chicago Press, vol. 28(3), pages 587-609, October.
    4. Schweizer, Urs, 2005. "Law and Economics of Obligations," International Review of Law and Economics, Elsevier, vol. 25(2), pages 209-228, June.
    5. Kahan, Marcel, 1989. "Causation and Incentives to Take Care under the Negligence Rule," The Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 427-447, June.
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    Cited by:

    1. Parisi Francesco & Singh Ram, 2010. "The Efficiency of Comparative Causation," Review of Law & Economics, De Gruyter, vol. 6(2), pages 219-245, September.
    2. Stremitzer, Alexander & Tabbach, Avraham, 2009. "Insolvency and Biased Standards - The Case for Proportional Liability," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 289, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    3. Jeong-Yoo Kim, 2021. "Burdens of Proof and Judicial Errors in Civil Litigation," Korean Economic Review, Korean Economic Association, vol. 37, pages 5-35.
    4. FRANCESCO PARISI & Ram Singh, 2009. "Efficiency Of Equilibria Under Comparative Causation," Working papers 179, Centre for Development Economics, Delhi School of Economics.
    5. Urs Schweizer, 2015. "Do Physicians Respond to Liability Standards?," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 171(1), pages 83-86, March.

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