Charles Korsmo, ‘Lost in Translation: Law, Economics, and Subjective Standards of Care in Negligence Law’

The law and economics movement has been a victim of its own success. Over the past four decades, it has generated an enormous specialist literature, often explicitly intended for other specialists. As is so often the case with increased specialization, the result has been escalating technical complexity accompanied by forbiddingly formal mathematics and a tendency to retreat into abstraction. As a result, economic analysis has often failed to provide general legal audiences with insight into important legal questions, even where the tools of economics would be appropriate and useful. This Article examines – and rectifies – just such a failure. In particular, this Article examines departures from a uniform reasonable person standard in negligence law. From an economic standpoint, individuals might be held to different standards of care because: (1) they differ in their costs of taking precautions (e.g., a good driver can take additional precautions more cheaply than a bad driver); or (2) they differ in the accident costs they generate when exercising a given amount of care (e.g., a good driver causes fewer accidents than a bad driver who is exercising the same precautions). Though the two possibilities lead to sharply different prescriptions, the law and economics literature has focused almost entirely on the former scenario, while neglecting the latter. By examining both possibilities, I provide a new and superior explanation of how tort law treats disabilities and professional skill, with the potential to change the way these important topics are conceptualized, taught, and ultimately adjudicated. In doing so, I also demonstrate the extent to which important legal insights can remain unappreciated when buried in an overly abstract mathematical literature.

Charles R Korsmo, Lost in Translation: Law, Economics, and Subjective Standards of Care in Negligence Law, 118 Penn State Law Review 285 (2013).

First posted 2014-01-06 09:43:52

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