Showing papers on "Damages published in 1993"

IPO underpricing and insurance against legal liability

Abstract: Initial public offerings (IPOs) of equity are typically underpriced on the day of the offering. A frequently mentioned explanation for this puzzling phenomenon relies on issuers' desire to avoid legal liabilities under federal securities laws for misstatements in the offering prospectus or registration statement. According to this "lawsuit avoidance hypothesis," large positive returns from offer price to early after market trading reduce (i) the probability of a lawsuit, (ii) the conditional probability of an adverse judgment if a lawsuit is filed, and (iii) the amount of damages in the event of an adverse judgment.

Comparing greenhouse gases for policy purposes

Abstract: In order to derive optimal policies for greenhouse gas emissions control, the discounted marginal damages of emissions from different gases must be compared. The greenhouse warming potential (GWP) index, which is most often used to compare greenhouse gases, is not based on such a damage comparison. This essay presents assumptions under which ratios of gas-specific discounted marginal damages reduce to ratios of discounted marginal contributions to radiative forcing, where the discount rate is the difference between the discount rate relevant to climate-related damages and the rate of growth of marginal climate-related damages over time. If there are important gas-specific costs or benefits not tied to radiative forcing, however, such as direct effects of carbon dioxide on plant growth, there is in general no shortcut around explicit comparison of discounted net marginal damages.

Valuing Natural Assets: The Economics of Natural Resource Damage Assessment

Abstract: 1. Introduction Raymond J. Kopp and V. Kerry Smith 2. Understanding Damages to Natural Assets Raymond J. Kopp and V. Kerry Smith Part 1: Statutes, Rulemaking, and Practice 3. Natural Resource Damages, Superfund, and the Courts Frederick R. Anderson 4. Uncertain Legal Issues: Comments on Chapter 3 Howard Kenison 5. Economics of Natural Resource Damage Assessment: A Critique Gardner M. Brown, Jr. 6. Economics of Natural Resource Damage Assessment: Comments on Chapter 5 Willie R. Taylor 7. Implementing Natural Resource Damage Assessments Raymond J. Kopp and V. Kerry Smith Part 2: Measuring Natural Resource Damages 8. Indirect Methods for Assessing Natural Resource Damages Under CERCLA Kenneth E. McConnell 9. Assessing Natural Resource Damages with Indirect Methods: Comments on Chapter 8 Robert Mendelsohn 10. Use of Direct Methods for Valuing Natural Resource Damages William D. Schulze 11. Contingent Valuation and the Legal Arena Richard T. Carson and Robert Cameron Mitchell Part 3: Two Key Conceptual Dimensions of Damage Assessment 12. Marking Time with CERCLA: Assessing the Effect of Time on Damages from Hazardous Waste Ralph C. d'Arge 13. Nonuse Values in Natural Resource Damage Assessment A. Myrick Freeman III Part 4: Research Implications of Damage Assessment 14. Natural Resource Damage Assessment: The Road Ahead Raymond J. Kopp and V. Kerry Smith

No win, no fee: Some economics of contingent legal fees

Abstract: mark up in different types of case, is to be issued after consultation with professional bodies. American style share contracts, whereby the lawyer is paid a proportion of the award if the case is won and nothing if it is lost, will continue to be unenforceable at law and prohibited by the professional bodies. The introduction of contingency fees in England and Wales has been discussed in a number of official and semi-official reports without any consensus emerging.3 We use a formal model of the litigation process to analyse the implications of contingent fees under both English and United States cost shifting rules. In the model potential defendants can take care to avoid accidents which impose losses on potential plaintiffs. If an accident occurs the defendant is sued by the plaintiff and makes a settlement offer. If the plaintiff rejects the offer the case proceeds to trial. Plaintiffs who win at trial are awarded damages and, under English rules, costs against the defendant. Lawyer-client contracts can be evaluated by the extent to which they (a) compensate plaintiffs after an accident by making it easy to sue and obtain redress, (b) induce settlements rather than costly trials and (c) provide

Are Antitrust "Treble" Damages Really Single Damages?

Abstract: This Article will show that antitrust violations do not actually give rise to "treble" damages. When viewed correctly, antitrust damages awards are approximately equal to, or are in fact less than, the actual damages caused by antitrust violations.The article demonstrates this by analyzing the relatively quantifiable harms from antitrust violations, modeling the issues under both deterrence and compensation frameworks. It calculates rough estimates of those factors that affect the magnitude of the antitrust damages multiplier actually awarded. These adjustments to the "treble" damages multiplier arise from: (1) the lack of prejudgment interest; (2) the effects of the statute of limitations; (3) plaintiffs' attorneys' fees and costs; (4) other costs to plaintiffs pursuing cases; (5) costs to the judicial system in handling antitrust cases; (6) "umbrella" effects of market power; (7) allocative inefficiency effects of market power; and (8) tax effects.The article then combines these adjustments using both deterrence and compensation frameworks. It compares the sum of the damages caused by antitrust violations to the typical amounts awarded to successful plaintiffs to determine, on average, the true effective ratio of recovery to damages. This analysis show that when all the appropriate adjustments are considered together, awarded damages are, at most, probably at the single level. From either a deterrence or compensation perspective, the Article concludes by discussing some implications of this finding in light of the consensus that antitrust damages should be substantially higher than singlefold to account for detection problems, proof problems, and risk aversion. For these reasons the Article urges that antitrust damages levels be raised by, for example, awarding prejudgment interest.

The External Costs of Nuclear Power: Ex Ante Damages and Lay Risks

Abstract: Interest has been growing in embedding the external costs of fuel cycles resulting in electricity generation into prices. In any attempt to internalize these costs for the nuclear cycle, the remost but real possibilities of accidents and the wide gap between lay perceptions and expert assessments of such risks must be taken into account. This paper discusses this including the following topics: An expected utility model of power plant operations/accident risks; simulation; comparison of experts versus lay risks; comparison of experts versus lay risk literature; simulation of expert versus lay risks. Current practice in estimating the damages from accidents at nuclear power plants appear to ignore significant features of the problem from the perspective of economic analysis. Individual aversion to risk, the exante perspective in decision making under uncertainty, and lay risk perception are all conceptually important elements of a damage estimate that accords with observation of behavior and the theory that underlies it but that are ignored by common practice. 18 refs., 1 tab.

Contingent Valuation: The Wrong Tool to Measure Passive-Use Losses

Abstract: William Desvousges is senior director and Richard W. Dunford is assistant director of ResearchTriangle Institute's Natural Resource and Environmental Valuation Program. Sara P. Hudson works at RTf on damage assessment projects relating to oil spills and hazardous substance releases, and Alicia R. Gable is completing her undergraduate degree in economics and international studies at the University of North Carolina. The measurement of passive-use values, values that do not depend on human use of natural resources, is one of the most controversial topics facing environmental economists today. Most economists, including ourselves, feel that people mayvalue the existence of unique beaches, lakes, and other natural resources, even though they may not actually use them. However, while use values can be readily estimated by observing people's actual behavior, passive-use values have no associated behavior to use in estimation. The main empirical challenges are to determine which resources have passive-use values and whether these values can be reliably estimated. Recently, passive-use values have played a critical role in policy decisions concerning compensation for damages to natural resources. In 1986, the u.s. Department of the Interior promulgated natural resource damage assessment (NRDA) regulations, allowing trustees of natural resources (i.e., government agencies) to be compensated for damages resulting from a chemical or hazardous substance release. Under these regulations, trustees could recover foregone passive-use values only if no foregone use values could be estimated. In 1989, the U.S. Court of Appeals significantly expanded the potential role of passive-use values in natural resource damages by ordering potentially responsible parties to pay for foregone passive-use values, if those values are "reliably" measured. The Oil Pollution Act of 1990 further increased the potential importance of passive-use damages in NRDAs, supporting the Court of Appeals' decision. As a result of these developments and an increasing number of state legislative actions, trustees have filed numerous suits against potentially responsible parties (PRPs) to recover foregone passive-use values. Since potentially large monetary settlements are at stake, determining whether passive-use values can be reliably measured is very important.

Comparative Antitrust Damages in Bid-Rigging Cases: Some Findings from a Used Vehicle Auction

Abstract: In order to recover antitrust damages, the plaintiff in a bid-rigging case must be able to prove the amount of the price change suffered as a result of a conspiracy. However, despite a large theoretical literature on auctions and competitive bidding, there are only a few published studies of the possible effects of bid-rigging on auction prices.' One result of this lack of empirical evidence is

Forgoing Life-Sustaining Treatment: Limits to the Consensus

Abstract: This is the second of a two-part series. In the December 1992 issue, Alan Meisel discussed the legal consensus about forgoing life-sustaining treatment. abstract. While substantial progress has been made in reaching a moral and policy consensus regarding forgoing life-sustaining treatment, several holes exist in that consensus where more public discussion and moral analysis is needed. First, among patients who have not been found to be legally incompetent there is controversy over whether certain treatments can be refused. Controversies also remain over damages for treatment without consent, limits based on third-party interests and the ethical integrity of the medical profession, and cases where it cannot be agreed whether the patient is competent. Even greater dispute exists over care of incompetent patients. Perhaps the greatest gap in the consensus arises over limits to the use of the best interests standard. This article proposes replacing it with a "reasonableness standard" that takes into account disputes about what is literally the best for the patient and conflicts of interest between the patient and others.

Management of limited water resources in Hong Kong

Abstract: The topography of Hong Kong is very complex and there are no major rivers or natural lakes in the territory. The rapid increase in population—mainly caused by the influx of immigrants from across the border—and the territory's rapid economic strides have led to an ever increasing demand for water. As such, water rationing is a recurrent problem which causes many economic as well as sanitary risks. This paper summarises the basic hydrological features of the territory and highlights the various approaches adopted to minimize the damages due to the limitation of water resources in Hong Kong.

The history of flood damages in ontario

Abstract: This paper documents the history of flood damages in Ontario. Following a review of the literature, the strengths and weaknesses of utilizing newspaper articles as a data source are described. By comparing stream flow records to reported floods, newspapers are found to be a reasonably reliable source for documenting flood events, but some problems in using newspaper accounts are identified. These issues include the accuracy of damage estimates and coverage. Flood damages in Ontario are reported. Since the 1950’s, annual flood damages have decreased. Hurricane Hazel which occurred in 1954 was responsible for the clear majority of flood damages in Ontario between 1680 and 1989. Riverine flood damages are estimated to have been between $378 million and $1.32 billion (1989 dollars). Between 1859 and 1987, shoreline damages are estimated to have been $188 million (1989 dollars).

Accuracy in the Assessment of Damages

Abstract: Assessment of damages is a principle issue in litigation and, in light of this, we consider the social justification for, and the private benefits of, accurate measurement of harm. Greater accuracy induces parties to exercise levels of precaution that better reflect the magnitude of the harm they are likely to generate, and related, it stimulates uninformed parties to learn about risks before acting. However, accuracy in the assessment of harm cannot influence the behavior of parties -- and is therefore of no social value -- to the degree that parties lack knowledge of the harm they might cause when deciding on their precautions. In addition, regardless of the social value of accuracy, litigants generally gain by devoting resources toward proof of damages, leading often to socially excessive private incentives to establish damages.

Dobbs law of remedies : damages, equity, restitution

Abstract: More than a rulebook, this text discusses the remedies that are available in a particular fact setting. Illustrates possible applications of difficult rules, explains proof requirements, assesses arguments and offers options in uncertain situations. Coverage includes the particulars of damages, restitution and equitable relief, and remedial schemes for harms to tangible property. Also covers economic interests, intangible personal property, and compensatory and non-compensatory damages. Discusses remedies for economic torts, personal injury, breach of contract, and more.

Medical Malpractice: Law, Tactics, and Ethics

Abstract: Preface Acknowledgments Part I: Legal, Medical, and Ethical Standards 1. Threshold Considerations: When Doctors and Patients Collide 2. The Lawyer's Duty of Care 3. The Common Law of Medical Malpractice 4. Discovering and Proving the Standard of Care in a World of Specialization 5. Economics, Ethics, and the Standard of Care: Emerging Issues 6. Tort Reform: Legislation, Courts, and State Constitutions Part II: Assessing and Proving Damages 7. Assessing and Proving Compensatory Damages 8. Punitive Damages: Goals and Standards Part III: Gathering Evidence and Developing Strategies 9. Obtaining and Reviewing Medical Records 10. Choosing and Using an Effective Expert Witness 11. Special Problems Related to Therapeutic Drug-Induced Injuries 12. Multiple Parties: Issues, Concerns, and Strategies 13. Preparing for Trial: Integrating Law and Medicine Appendix Notes Suggested Readings in Case Law General Index Index of Cases

Losses in Commercial Litigation

Abstract: For purposes of this paper, "commercial itigation" will refer to civil suits filed by a plaintiff who has been economically damaged by the allegedly wrongful acts of another party. We distinguish a commercial economic loss from a personal economic loss in the following way. A commercial loss is a business loss of profits or loss of asset value resulting from the actions of another party. These actions may involve a temporary or permanent interruption of business, breach of contract, or losses due to fraud. In contrast, personal injury cases involve a temporary or permanent disruption to the personal income or benefits of an individual, or the ability to earn income. The focus of this article is on the role of the forensic economist in measuring the economic damages suffered by the plaintiff in a commercial loss case. From the point of view of an attorney, commercial litigation cases usually fall into one of five categories: breach of contract, tort, fraud, condemnation or antitrust. Since the literature on both the law and the economics of antitrust is vast, antitrust issues will not be addressed in this paper. A valid contract typically involves enforceable promises by one party, in consideration for which another party makes a payment or a reciprocal promise. When one party does not perform its promise, a breach may have occurred and a lawsuit may follow. An example would be a heating contractor who pays for an advertisement to appear in a "Yellow Pages" type of directory, but the publisher fails to include the ad in the next issue. American common law recognizes several methods for defining the resulting economic damages. The most commonly applied method is the "expectations remedy,’’ whereby the breaching party would pay an amount that makes the plaintiff firm as well off as it expected to be if the contract had been properly fulfilled. Under an alternative theory, known as the "reliance remedy," the payment would make the plaintiffs as well off as if they had never entered into the contract which was breached. 1 A tort is a private or civil wrong or injury other than a breach of contract. An example of a tort giving rise to commercial litigation would be a business whose premises were flooded when a paving contractor breaks a nearby water main. In this instance, a court might apply the equivalent of the expectations remedy to measure damages: the magnitude of the damages must be sufficient to make the plaintiff/owners as well off as they could have expected to be if the flood had never occurred. 2

The Bondsman's Burden: An Economic Analysis of the Jurisprudence of Slaves and Common Carriers

Abstract: Antebellum judges played crucial roles in resolving conflicts between slaveowners and common-carrier owners. Because courts could easily quantify the value of a slave's life, they were quicker to compensate slaveowners for slaves injured or killed by a common carrier than to award damages to an injured free person or his estate. Yet judges also had to craft rules governing the behavior of the slave property itself. By the 1860s, Southern courts had established law that encouraged parties with legal standing to act efficiently. Strikingly, tort doctrines developed in slave cases foreshadowed the evolution of law for free accident victims. W ithin the antebellum institutions of law and business, were slaves property, persons, or both? This question has engaged the attention of modern legal and economic scholars as it did that of antebellum citizens. Pre-Civil War legal proceedings offer particularly fruitful discussions of the slave's dual nature. From the beginnings of statehood until 1875, state and federal appellate-court reporters for the 15 slave states and the District of Columbia record about 11,000 opinions involving controversies over American slaves. ' Although plantation law governed at home, it could not solve many conflicts over slaves in the outside world. Nor were statutes adequate to the task. Instead, Southerners often turned to the courts to resolve their disputes over human property.2

Toward Economic Evaluation of Climate Change Impacts: A Review and Evaluation of Studies of the Impact of Climate Change

Abstract: Efforts to assess climate change have generally been unsuccessful in describing the economic damages (or benefits) associated with climate change or the functional relationship of damage (or benefits) to climate. Existing integrated economic studies have developed an aggregate damage estimate for the United States associated with equilibrium doubled trace gas climate that is unlikely to occur for 100 years or more. These estimates are used to extrapolate damages to other regions and over time. There is little or no basis for such extrapolation. It is possible to introduce climate explicitly into standard economic models but such models have generally not been estimated. Potentially affected sectors include 1) forestry and ecosystems 2) agriculture 3) coast 4) fisheries 5) water resources and 6) communities and households. An impact classification system is developed that considers short and long run flexibility to adapt to climate change, the existing knowledge or capacity to adapt. and the degree to which climate matters after adaptation (i.e the degree to which damages can be avoided).

Putting the World's Oppressors on Trial: The Torture Victim Protection Act

Abstract: On 12 March 1992, the United States became the first country in the world to inaugurate legislation offering torture victims the legal right to sue their oppressors for civil damages. Under the Torture Victim Protection Act ("TVPA"),' victims of torture now have a federal cause of action in US courts against their torturers who acted under color of law.2 The TVPA is welcome legislation for supporters of human rights. Nearly every nation today agrees that official torture and extrajudicial killing violates international law.3 In 1980, the Second Circuit Court of Appeals held in the landmark decision, Filartiga v. Pefia-lrala,4 that "official torture is now prohibited by the law of nations."5 Despite this universal consensus, in practice governments throughout the world continue to participate in summary executions and torture.6 Amnesty International reports that in 1991 alone, more than 100 governments engaged in acts of torture.7