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Legal damages for losses of chances

  • Schweizer, Urs
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    Traditionally, damages for torts have been awarded on an all-or-nothing basis. In malpractice suits, however, a growing number of courts are holding doctors liable for negligent acts that reduces a patient's chance of survival, even if the patient's chances for recovery have already been less than 50%. For lack of a general principle, a disparate variety of loss of chance rules seems in use. To provide some more systematic guidance, the present paper proposes to look directly at the interaction between the injurer's act and a random move of nature that captures the uncertainty. For any given move of nature, damages are still awarded on an all-or-nothing basis. If however, for lack of observability, moves of nature cannot sufficiently be distinguished, averages of correct damages over observable events are taken. While the scheme aims at compensatory goals of tort law, as a by-product, it also generates efficient precaution incentives provided that due care standards obey the Hand Formula.

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    File URL: http://www.sciencedirect.com/science/article/B6V7M-4TRCYDY-1/2/0bb0982456e2b31f69e9b2395993dda0
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    Article provided by Elsevier in its journal International Review of Law and Economics.

    Volume (Year): 29 (2009)
    Issue (Month): 2 (June)
    Pages: 153-160

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    Handle: RePEc:eee:irlaec:v:29:y:2009:i:2:p:153-160
    Contact details of provider: Web page: http://www.elsevier.com/locate/irle

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    1. Steven Shavell, 1983. "Uncertainty Over Causation and the Determination of Civil Liability," NBER Working Papers 1219, National Bureau of Economic Research, Inc.
    2. R. Myerson., 2010. "Nash Equilibrium and the History of Economic Theory," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 6.
    3. Kahan, Marcel, 1989. "Causation and Incentives to Take Care under the Negligence Rule," The Journal of Legal Studies, University of Chicago Press, vol. 18(2), pages 427-47, June.
    4. Schweizer, Urs, 2005. "Law and Economics of Obligations," International Review of Law and Economics, Elsevier, vol. 25(2), pages 209-228, June.
    5. Urs Schweizer, 2005. "The Pure Theory of Multilateral Obligations," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 161(2), pages 239-, June.
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