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Tort law: Tort law is a branch of civil law that deals with legal wrongs or injuries that one person causes to another. It aims to compensate those who have been harmed by the wrongful acts of others, deter people from committing harmful acts, and hold wrongdoers accountable for their actions. See also Negligence, Law, Justice, Compensation.
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Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments.

 
Author Concept Summary/Quotes Sources

Billings Learned Hand on Tort Law - Dictionary of Arguments

Parisi I 13
Tort Law/Lerned Hand/Miceli: The use of tort liability to internalize harmful externalities is a straightforward extension of the theory of Pigovian taxation. The main difference is that tort law is administered privately through the judicial system rather than publicly by a regulatory authority. In the context of a simple externality model, however, there is no difference (at least in terms of deterrence) between a tax and an equivalent imposition of liability. Example:
Negligence law/Versäumnisrecht: (...) the first use of an explicitly mathematical model of negligence was by a judge in the famous case of U.S. v. Carroll Towing Co.*
In that case, Judge Learned Hand proposed his eponymous test for determining negligence, which says that an injurer who fails to take care should be found negligent if B Posner: As Posner (1972)(1) argued, this standard, when properly interpreted in its marginal form, creates exactly the right incentives for injurers to invest in efficient accident avoidance. In particular, the PL must be interpreted as the expected marginal reduction in accident costs, and B must be interpreted as the marginal cost of care.
Hand test: To see how the Hand test creates incentives for efficient behavior in this setting, suppose that taking care is efficient in the above sense, or that BPL, the court will not find the injurer negligent if he or she failed to take care and an accident occurs. The injurer therefore has no incentive to invest in care because there is no benefit from doing so. In both cases, the injurer makes the efficient choice.
The key point is that a negligence rule creates efficient incentives for potential injurers regarding accident prevention because it creates a threshold of behavior - the so-called “due care” standard - that shields them from liability if they meet that standard.
Liability/negligence: The importance of [the] distinction in the way negligence and strict liability work becomes apparent when the simple accident model is extended to allow victims as well as injurers to take precaution - that is, by making it a “bilateral” rather than “unilateral” care model. Moral hazard: In bilateral care contexts, imposing strict liability on injurers is not generally efficient because, although it induces efficient injurer care, victims have little or no incentive to be careful due to the moral hazard problem.
Solution: In contrast, the negligence rule potentially creates incentives for both injurers and victims to invest
Parisi I 14
in efficient accident prevention.
Negligence rule: The negligence rule (...) induces efficient prevention by both injurers and victims because it combines the two methods for creating efficient incentives. Specifically, it sets a threshold level of care so that the injurer can avoid liability by meeting the threshold (as described above), and it simultaneously imposes full damages on the victim, thus eliminating the moral hazard problem. >Negligence law/Miceli.

* 159 F.2d 169 (2d. Cir. 1947).


1. Posner, Richard (1972). “A Theory of Negligence.” Journal of Legal Studies 1: 29-96.

Miceli, Thomas J. „Economic Models of Law“. In: Parisi, Francesco (ed) (2017). The Oxford Handbook of Law and Economics. Vol 1: Methodology and Concepts. NY: Oxford University Press.


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Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments
The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition.
Learned Hand, Billings
Parisi I
Francesco Parisi (Ed)
The Oxford Handbook of Law and Economics: Volume 1: Methodology and Concepts New York 2017


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