Tort Law as Risk Allocation Contract
Some Critical Remarks on the Regulatory Deterrence Model
Keywords:
tort liability, accident costs, liability rules, private autonomy, complexity systemAbstract
The standard economic analysis of law has modelled tort liabilities as the state’s instruments to reduce accident costs, comprising prevention costs and damages. This regulatory deterrence model (RD model), however, does not fit with the private autonomous nature of tort law (PA model). This is why the RD model has to resort to numerous ad hoc elements to explain it. Nevertheless, given that private law is not some policy-instrument; rather, it is a complex system of norms with courts being independent adjudicators of legal disputes arising, amongst others, from contractual arrangements, legal dogmatics, rather than standard economics, seems to be a more appropriate approach to the economic analysis of private law. As such, in this paper, I am presenting an economic analysis of tort law that is closely associated with the PA model.
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