All‐or‐Nothing versus Proportionate Damages

Leshem, Shmuel; Miller, Geoffrey P.

doi:10.1086/593153

Cited by 7 publications

(5 citation statements)

References 19 publications

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“…Offsetting this, however, is that the AON rule will generally lead to larger overall litigation expenditures per trial compared to the PD rule. This result reinforces the finding of Leshem and Miller (2009) that the AON rule results in more cases going to trial compared to PD, and arises for the same reason -namely, that the AON rule creates a situation in which more is at stake at trial. However, this disadvantage of the AON rule decreases when access to evidence is less costly for the party with the stronger case.…”

Section: Resultssupporting

confidence: 86%

“…Leshem and Miller (2009) showed that the AON rule has an advantage over the PD rule in terms of increasing legal compliance. Our analysis complements this conclusion by showing that the expected judgment at trial will typically be larger under the AON rule when the defendant did not take adequate care, and smaller under that rule when the defendant took adequate care.…”

Section: Resultsmentioning

confidence: 99%

“…1 Most recently, Leshem and Miller (2009) compare the AON standard and the PD standard by analyzing their incentive effects on the plaintiff's decision to settle the case ex post and on the defendant's decision to comply with the legal standard ex ante. They show that the AON rule generally induces a higher rate of compliance, although it may result in a higher level of litigation.…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

Comparing All-or-Nothing and Proportionate Damages: A Rent-Seeking Approach

Mot

Miceli

2015

Review of Law &Amp; Economics

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This paper compares the all-or-nothing and proportionate damage rules for allocating damages in tort cases under evidentiary uncertainty. The focus is on how the two rules affect litigation expenditures by plaintiffs and defendants. The results of simulation experiments show that the expected judgment at trial is higher under the all-or-nothing rule for cases where the defendant did not take adequate care, but the judgment is higher under the proportionate rule when the defendant took more than adequate care. As for litigation expenditures, assuming equal costs of litigation, overall expenditures are higher under the all-or-nothing rule, except for very weak and very strong cases.

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Section: Resultssupporting

confidence: 86%

Section: Resultsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Comparing All-or-Nothing and Proportionate Damages: A Rent-Seeking Approach

Mot

Miceli

2015

Review of Law &Amp; Economics

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“…12 Our paper is organized as follows: Section 2 sets up the model and derives a few useful benchmarks. Section 3 describes the different negligence-based lia-12 In a recent paper, Leshem and Miller (2009) compare full liability and proportional liability in a model of costly litigation. They recommend full liability on the ground that it leads to higher rates of compliance (conceding that it will also lead to higher rates of litigation and therefore to higher litigation cost).…”

Section: Introductionmentioning

confidence: 99%

The Robustness Case for Proportional Liability

Stremitzer¹,

Tabbach

2014

The B.E. Journal of Theoretical Economics

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In important areas like medical malpractice and environmental torts, injurers are potentially insolvent and courts may make errors in determining liability (e.g. due to hindsight bias). We show that proportional liability, which holds a negligent injurer liable for harm discounted with the probability that the harm was caused by the injurer's negligence, is less susceptible to these imperfections and therefore socially preferable to all other liability rules currently contemplated by courts. We also provide a result which might be useful to regulators when calculating minimum capital requirements or minimum mandatory insurance for different industries.

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“…In a recent paper,Leshem and Miller (2009) compare full liability and proportional liability in a model of costly litigation. They recommend full liability on the ground that it leads to higher rates of compliance (conceding that it will also lead to higher rates of litigation and therefore to higher litigation cost).…”

mentioning

confidence: 99%

Insolvency and Biased Standards - The Case for Proportional Liability

Stremitzer

Tabbach

2009

SSRN Journal

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We analyze liability rules in a setting where injurers are potentially insolvent and where negligence standards may deviate from the socially optimal level. We show that proportional liability, which sets the measure of damages equal to the harm multiplied by the probability that it was caused by an injurer's negligence, is preferable to other existing negligence-based rules. Moreover, proportional liability outperforms strict liability if the standard of due care is not set too low. Our analysis also suggests that courts should rely on statistical evidence and bar individualized causal claims that link the harm suffered by a plaintiff to the actions of the defendant. Finally, we provide a result which might be useful to regulators when calculating minimum capital requirements or minimum mandatory insurance for different industries.

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All‐or‐Nothing versus Proportionate Damages

Cited by 7 publications

References 19 publications

Comparing All-or-Nothing and Proportionate Damages: A Rent-Seeking Approach

Comparing All-or-Nothing and Proportionate Damages: A Rent-Seeking Approach

The Robustness Case for Proportional Liability

Insolvency and Biased Standards - The Case for Proportional Liability

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