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Does Risk to Oneself Increase the Care Owed to Others? Law and Economics in Conflict

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  • Cooter, Robert D.
  • Porat, Ariel

Abstract

As applied by courts, the Hand Rule balances the injurer's burden of precaution and the victims' reduction in risk. In this application, risk to oneself does not increase the duty owed to others. Economists, however, use the Hand Rule to minimize social costs, which requires balancing the burden of precaution against the reduction in risk to everyone. For economists, risk to oneself counts in determining the duty owed to others. In cases where precaution reduces joint risk (risk to oneself and others), the usual legal interpretation underestimates the reduction in risk relative to the economic interpretation, often by 50%. The consequence is a lower standard of legal care than required to minimize social costs. Judges should reconceptualize the Hand Rule so that risk to oneself increases the care owed to others.

Suggested Citation

  • Cooter, Robert D. & Porat, Ariel, 2000. "Does Risk to Oneself Increase the Care Owed to Others? Law and Economics in Conflict," Berkeley Olin Program in Law & Economics, Working Paper Series qt8c41q4fm, Berkeley Olin Program in Law & Economics.
    • Handle: RePEc:cdl:oplwec:qt8c41q4fm
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    Cited by:

    1. Dari-Mattiacci, Giuseppe & Langlais, Eric, 2012. "Social Wealth and Optimal Care," International Review of Law and Economics, Elsevier, vol. 32(2), pages 271-284.
    2. Deffains, Bruno & Espinosa, Romain & Fluet, Claude, 2019. "Laws and norms: Experimental evidence with liability rules," International Review of Law and Economics, Elsevier, vol. 60(C).
    3. Sproul, Thomas W. & Zilberman, David, 2011. "Accidents Happen: The Effect of Uncertainty on Environmental Policy Design," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103927, Agricultural and Applied Economics Association.

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