Showing papers on "Damages published in 1983"

Optimal Sanctions for Antitrust Violations

Abstract: Although economic analysis of the common law, crime, and legal decision making are relatively recent areas of research in the field of law and economics, economic analysis of antitrust, particularly the analysis of business practices described in antitrust cases, has been widespread and uncontroversial for many years. What has received less attention is the use of economics to examine antitrust enforcement itself.' This involves analyzing, for example, what is an antitrust injury, the appropriate sanctions for such an injury, the choice between public and private enforcement of antitrust laws and related questions on standing to sue, and the relevance of the antitrust victim's conduct to his ability to recover damages. In this paper I apply economics to some of the above issues. Economic analysis of antitrust enforcement builds on the pioneering papers of Gary Becker and Ronald Coase.2 Becker's paper was the first formal analysis of optimal penalties and probabilities of apprehension and conviction for criminal offenses. He showed

Regression Estimates of Damages in Price-Fixing Cases

Abstract: In an antitrust price-fixing case, damages are measured by the difference between the prices paid by the plaintiff purchasers and the prices they would have paid in the absence of defendants' conspiracy. Even small variations in the determination of these differences may become significant because plaintiffs are entitled by statute to receive three times their actual damages.1 Moreover, in a class action there may be thousands of purchasers whose recoveries are based on an industrywide overcharge formula. The difficulty of course lies in estimating the \"but for\" prices. An obvious idea is to assume that competitive prices during the conspiracy period would have been the same as they were before or after the conspiracy or in interludes of competition within the conspiracy period. Thus, the difference between the conspiratorial price and the actual price from other periods measures the damage. This estimate, however, meets the immediate objection that it is likely to be incorrect because changes in factors affecting price other than the conspiracy would have produced changes in competitive prices if there had been competition during the conspiracy period. These arguments may be illustrated by Ohzo Valley Electrc Corp. v. General Electric Co., 2 one of the well-known antitrust cases involving electrical equipment manufacturers. Plaintiffs contended that the purpose and effect of the manufacturers' conspiracy was to keep transaction prices for large steam turbines close to book prices; they proposed to measure damages by the difference between the average 11% discount during the conspiracy period and the average 25.33% discount that prevailed after the conspiracy had been terminated. Defendants replied that economic conditions for the sellers had worsened in the postconspiracy period and that these conditions accounted for the increase in the discount. They pointed to the presence for the first time of effective foreign competition, an increase in the manufacturers' capacity to produce steam turbine generators (which caused an oversupply), a lessening of growth in demand, and a drop in manufacturing costs (which permitted defendants to offer their products at a lower price). After a bench trial, District Judge Feinberg initially found that these factors did account for some of the increase in the discount in the postconspiracy period. He then confronted the question of how much. Treating the matter as one of

Risk Sharing through Breach of Contract Remedies

Abstract: This paper examines the sharing of risk under three different remedies for breach of contract. The risk considered arises from the possibility that, after a seller and buyer have entered into an agreement for the exchange of some (not generally available) good, a third party who values the good more than the original buyer may come along before delivery has occurred; the seller will want to breach. It is shown that this risk is optimally allocated by the expectation damage remedy if the seller is risk neutral and the buyer is risk averse, by the specific performance remedy if the opposite is true, and by a liquidated damage remedy if both parties are risk averse. The level of damages under the liquidated damage remedy is also shown to be bounded by the expectation measure of damages and a "damage equivalent" to the specific performance remedy. By means of a numerical example, it is shown that use of the prevailing remedy for breach of contract -- the expectation damage remedy -- may plausibly cause a welfare loss of as much as 20% due to inappropriate risk sharing.

A Note on Private versus Social Incentives to Sue in a Costly Legal System

Abstract: This article presents a game-theoretic model of costly litigation. The model shows that where an injurer can calibrate the level of damages done to other parties, it sacrifices in profits an amount related to the victim's litigation costs by inducing suit. Thus the structure of the legal system implicitly internalizes the costs of litigation. Whether complete internalization occurs depends on such considerations as the information of the parties and the injurer's ability to control damages precisely.

A Note on Private versus Social Incentives to Sue in a Costly Legal System

Abstract: THIS note analyzes whether the costs of litigation result in a nonoptimal number of suits. Litigation costs cause too many or too few suits by creating a divergence between the private and the social incentives to sue. This issue has been studied previously by Shavell.' An implication of Shavell's analysis is that, in the absence of a divergence between the private and social benefits to sue, there will be a tendency toward excessive litigation.2 This results because plaintiffs bear only their own litigation costs (and not the litigation costs of other parties) when they sue. This paper demonstrates that the tendency toward excessive litigation implied by Shavell's analysis is overridden by the injuring party's ability to influence the likelihood of suit. The approach taken here is to focus on the injurer's choice of damage level. The key observation is that it is possible for the injurer to preclude suit by setting the level of damages below the victim's litigation costs; that is, the victim will have no incentive to sue when his litigation costs exceed his expected gain from suit (recovery of damages). Therefore, the injurer can harm the victim up to the value of the victim's litigation cost without inducing suit. Consequently, when the injurer provokes suit, he sacrifices in profits that do not have to be paid out to the victim as damages an amount equal to the victim's litigation costs. Thus the injurer will induce

Disasters and Fiscal Policy: Hurricane Impact on Municipal Revenue

Abstract: This study investigates the fiscal impact of Hurricane Frederic on the city of Mobile, Alabama. The hurricane caused damages of about $1.6 billion in property and other losses in the state, led to an influx of $670 million in recovery funds, and resulted in a $2.5 million increase in municipal revenue for the next 12 months. The long-term impact was negative, however.

Cost of Completion or Diminution in Market Value: The Relevance of Subjective Value

Abstract: In contract cases-typically construction or mining cases-courts frequently measure the damages of the innocent party either by the diminution in the market value at the time of breach from less than perfect performance or by the cost of rendering performance perfect. The diminution measure is objective; that is, observers external to the contract, such as the judge or jury in a lawsuit, can ascertain its amount with reasonable accuracy at a tolerable cost. Yet this objective measure can undercompensate the aggrieved party, thereby contradicting contract law's principle that damages should place the injured party in the same position as if the contract were performed. For example, consider construction of a family dwelling that deviates from the contract specifications by changing the location and size of some of the rooms while leaving the total square footage of the house unchanged. This breach need not diminish market value: preferences for housing style vary considerably, and the builder might simply sell the house to another buyer at the price the original purchasing party had offered. Nevertheless, the original purchaser may value the house promised more highly than the house actually delivered. Because market value did not decrease, there is no damage by the objective measure. Nevertheless, damage does exist, albeit of a nonpecuniary or subjective nature.

Assessment of damages for personal injury and death

Abstract: The year 2002 saw much debate over the assessment of damages for personal injury, leading to a review by a Panel of Experts resulting in the Ipp Report and initial steps for reform. As no Australian jurisdiction is moving towards a no-fault compensation scheme, but appear content to modify the common law through legislation, this text is still very relevant despite the recent changes to the assessment of damages.

Design Liability in the Construction Industry

Abstract: The problems of design Principles of law Professional negligence and designer's general duties Detailed duties and liabilities of designers Delegation of design duties Negligent inspection Liability to contractor and third parties Design and build contracts Damages and contribution Professional indemnity insurance Limitation of liability Limitation of actions Arbitration or litigation.

The law and liability: A guide for nurses

Abstract: The legal process. Development of the legal status of the nurse. Standard of care. Breach of duty. Causation. Damages. Defenses. Informed consent. Intentional torts. Disciplinary actions. Documentation. Alternatives to malpractice litigation. Ethical/legal issues. Criminal law. Wills. Employment issues. Speciality nursing. Index of cases by state. Index.

Law, Economics and Risk-Taking

Abstract: SUMMARY The law shifts the risks borne by individuals in society and thereby influences the allocation of resources in society, the distribution of income and economic growth. Consequences for economic efficiency of the legal sanctioning of risk spillovers or externalities are analysed using the Kaldor-Hicks criterion. Examples are given in which the law encourages excessive risk-taking from a social point of view along with a few cases in which it leads to an excessive reduction in risk-taking. It is observed that the legal practice of compensating for actual damages sustained, rather than for the risk or possibility of damage, is least costly to parties creating the risk. Product liability is discussed. It is argued that the distribution of income rather than gains in economic efficiency provides the main rationale for strict product liability.

Charlesworth & Percy on negligence

Abstract: The meaning of negligence the duty to take care principal defencer and discharges from liability damages discovery, evidence, trial, proof of casual negligence the standard of care dangerous premises persons professing some special skill highways and transport employment at common law liability for breach fo statutory duty dangerous things, Ryladt versus Fletcher animals product liability death insurance and other compensation schemes.

Optimal multi-period insurance contracts

Abstract: In multi-period insurance contracts (such as automobile insurance contracts), unlike single-period ones, the premiums that the insured must pay increase whenever he files a claim. Hence, the buyer faces a problem that is absent in one-period models, namely: he must determine for which damages he should file a claim and for which he should not. The optimal claims policy of the buyer is presented for a large class of insurance contracts. It is shown that the buyer will file a claim only if it is larger than some critical value. Based on this it is shown that the buyer prefers a contract that provides full coverage above a deductible for damages that exceed his critical value. In this case the optimal contract is not unique since the buyer is indifferent to the form of the contract for damages below his critical value. It is shown, however, that as in one-period models (Arrow (1963, 1974)) there exists an optimal contract that provides full coverage above a deductible. In multi-period setting, however, the buyer will file a claim only if the damage is sufficiently higher than the deductible. It is also shown that the buyer prefers a strictly positive deductible. Unlike the one-period case (Mossin (1968)), this result holds true even if the premium rates equal the expected payments.

Protection of Diffuse, Fragmented and Collective Interests in Civil Litigation: English Law

Abstract: If a pebble is dropped into a pool of water, ripples will spread on the surface of the water; how far the ripples will spread and with what strength depends on a variety of factors, but there will always be a ripple of some kind. The same is true of a decision of a court of law. Notwithstanding what Professor Chayes has accurately described as the “bipolar” character of traditional civil litigation, it is almost inconceivable that the outcome of a civil action will affect no one but the parties to it: unless an exception can be found to John Donne's famous axiom that "No man is an Island, entire of itself”—and such a man, if he exists, is unlikely to bring an action in the first place—the ripple effect even of, say, a simple decision that an individual defendant must pay a sum of money by way of damages to an individual plaintiff will extend to their respective families and beyond. It is not wholly absurd to say of such a case that, for example, the retail traders, the banks, and so on with whom the parties have dealt or may deal in the future have an “interest” which an action by an injured individual may “protect” and, if they do, that interest is certainly "diffuse" and "fragmented" even if it is not “collective.”

Theories of recovery for DES damage. Is tort liability the answer

Abstract: An estimated 1000 individual or class action products liability lawsuits have been filed against the pharmaceutical manufacturers of diethylstilbestrol (DES). The field of potential plaintiffs is estimated at 500000-6000000 and there are 150-300 potential defendant manufacturers. This article addresses the question of whether the current system of tort liability dispenses fair timely and uniform justice both to DES claimants and manufacturers and presents a historical perspective on the basis for liability. Traditional theories of tort recovery are based on negligence breach of warranty and strict liability. They place the burden of proof on the claimant to specifically identify the product manufacturer and establish proximate causation. Novel theories of recovery have had to be applied in DES lawsuits including concert of action and alternative liability. Most of these theories have been unaccepted by trial and appellate courts because of the inability to identify the manufacturer. Even if DES manufacturers were to be held liable under a theory of industry-wide or market share liability defendants would be called upon to allocate liability among themselves. Many believe that any departure from traditional tort principles should be accomplished by the legislature not the judiciary. There is not currently a bill before the US Congress dealing specifically with compensation for damages to DES victims. Any model toxic tort legislation should aim to eliminate the benefit inequities as between claimants and the cost inequities in delivering benefits to qualified recipients by the responsible parties. The claimants burden of establishing fault should be eliminated in exchange for a claimants surrender of a right to sue a third party and a standardization of compensatory damages. The requirements of specific product identification duration of exposure and degree of fault would be eliminated. Jurisdictional requirements and statues of limitation must be drafted to permit recovery for previously unknown injuries. Finally there should be an overall goal of promptness in recovery. The most equitable solution to problems with the tort system is legislation which deals with the toxic tort problem as a whole and not just on a case-by-case basis.

Potential Malpractice Liability of Civil Engineers

Abstract: Civil engineers and surveyors are not by law insurers of the correctness and accuracy of their work. They can, however, be held liable in damages for negligence, mistakes and misrepresentations in the performance of their work. Liability can extend to parties with whom the engineer did not have a contract, but who can be reasonably foreseen to rely on the work. Damages may include compensation for out of pocket expenditures and, if the action is determined to be taken with a willful and wanton disregard for property rights, punitive damages may be assessed. Liability is determined by considering the standard of care and competence expected of a civil engineer, the legal liability to those affected by the engineer’s work but not in a contractual relationship, legal liability to non-contracting parties when the engineer has guaranteed the accuracy of his work, and the affect of statutes of limitation.

Paying the Piper in Federal Civil Rights Litigation

Abstract: It long has been noted that Americans are prone to litigate almost any dispute, private or public. For the public administrator in the 1980s, there will be little cause to doubt the accuracy of such a portrait of the American political process. Sweeping changes in the law of government liability which occurred in the 1970s all but guarantee that the current decade will see a continued expansion of suits against governmental entities and officials on a wide variety of issues. From a public manager's viewpoint, it is almost as if the federal courts and Congress have decided to declare an "open season" on the public treasury. Particularly in a period of declining revenues for many state and local programs, it is imperative that those responsible for the administration of public programs be fully aware of these changes in the law in order to manage their programs effectively to make best use of limited resources. The line of judicial decisions opening the governmental treasury to the grasp of successful plaintiffs has been the subject of analysis in articles by Rosenbloom and Groszyk and Madden which have appeared in Public Administration Review.1 Briefly stated, these articles called attention to the fact that the rulings by the United States Supreme Court in Monell v. New York City Department of Social Services (1978) and Owen v. City of Independence, Missouri (1980) have almost completely redrawn the map of local governmental liability for damages in federal civil rights litigation.2 In what amounted to a 180-degree turnaround, the Court reversed the precedent of Monroe v. Pape (1961),3 which had mandated governmental immunity from suits for money damages under 42 U.S.C. ?1983, and went on to impose strict liability on local governmental units for constitutional rights violations which fairly could be characterized as the result of policy decisions. The result was openly admitted to be a public policy choice that it is better for the taxpayers to become the insurers of the actions of the governmental entity from which they derive benefits than it is for the victim of the constitutional rights violation to go uncompensated when the official actors themselves are immune from liability because they acted in good faith.4 Maine v. Thiboutot (1980) greatly expanded the potential liability under ?1983 by opening the federal courthouse door to suits based on alleged violations of federal statutory rights, and Martinez v. California (1980) sanctioned the use of the state courts as an alternative forum in which a plaintiff could file a ? 1983 claim.5 All of these decisions were premised on statutory interpretation, although they re-

The Collateral Source Rule and Contract Damages

Abstract: The collateral source problem, that prickly game of three-cornered catch that occurs when an injured person has received compensation from a source independent of the injurer, remains one of the most troublesome in the modem law of damages. The focus of concern has been mainly the effect of the collateral source benefit on tort recovery, so much so that the collateral source problem is widely thought of as exclusively a tort problem. Indeed, in other areas it has led little more than a shadow existence. One of these other areas is contract claims, the subject of the present study. Largely neglected in the scholarly literature', the problem of the effect of collateral source payments on contract damages has evoked few responses that might give direction to a principled approach. This Article begins with a brief explanation of the collateral source rule and its justifications, and argues that the difference in the policies underlying contract and tort does not by itself justify a different application of the collateral source rule in the two areas. In an attempt to develop some guiding principles for contract, the Article proceeds to analyze the existing case law, asking whether the outcome did turn or should have turned on (1) the type of breach, whether willful, negligent or innocent; (2) the type of damage, whether personal injury, property damage, or economic loss; and (3) the type of benefit and availability of subrogation. What emerges from this investigation of the cases is that most often the choice before the court is not between conferring a windfall on either plaintiff or defendant but of determining which of two obli-

Surface owner vs. mineral owner - or ''They can't do that, can they. ''

Abstract: Surface mining laws in South Dakota can put the rights of the surface owner in conflict with those of the mineral developer if the surface is owned by a private party. The author discusses the origin of severed estates, minerals owned privately or by government entities, theories of recovery for damages, and types and measures of damages. The trend of the law in these areas suggests that the historical concept of the dominance of the mineral estate is still alive and well, although the courts have restricted and qualified those rights through the doctrine of reasonable necessary use, the due regard or accommodation doctrine, the least destructive alternative approach, and the balancing of the respective interests of the surface and mineral owners. The courts use these qualifying doctrines to soften the dominant mineral estate concept by applying equitable principles on an individual care basis.

On the Efficacy of a Conditional Contract

Abstract: In connection with section 27 of the Contracts (General Part) Law of 1973, Prof. D. Friedmann has dealt with the nature of the conditional contract. In his view a conditional contract is complete, valid and effective, and only differs from an absolute binding contract in its contents.One reason for that he finds in the fact that section 27 does not appear in Chapter One of the Law, which treats of the making of a contract, or in Chapter Two, that deals with avoidance of a contract because of a defect in its making, but in Chapter Three, that is concerned with the form and contents of a contract.To make a contract subject to a condition is certainly not a defect in its making. But the location of section 27 does not of itself yield any of Prof. Friedmann's conclusions. Chapter Three covers contracts which are illegal and therefore invalid (section 30, a propos illegal or immoral contracts, or contracts contrary to public policy) or are at all events void (contracts lacking form ad substantiam, falling within section 23) or contracts that are not enforceable by specific performance or actionable in damages (gaming, betting and lottery contracts, under section 32) or are unjusticiable (contracts for giving marks and the like, regulated by section 33).

Governmental responsibility for victims of atomic testing: a chronicle of the politics of compensation.

Abstract: Since 1945 the U.S. government has conducted extensive atomic testing for purposes of protecting the national security and developing industrial uses of nuclear power. Newly available information indicates that many citizens were unwittingly harmed by exposure to radioactive fallout from this testing. The victims are pressuring the government to accept liability for its actions and offer compensation for the damages. To date, however, their efforts have been largely unsuccessful. This article analyzes the politics of the atomic compensation movement, from its beginnings through the 97th Congress. It concludes that, barring the enactment of specific legislation, atomic victims stand little chance of gaining financial compensation or moral satisfaction.