Showing papers on "Damages published in 1998"

Normalized Hurricane Damages in the United States: 1925-95

Abstract: Hurricanes are the costliest natural disasters in the United States. Understanding how both hurricane frequencies and intensities vary from year to year as well as how this is manifested in changes in damages that occur is a topic of great interest to meteorologists, public and private decision makers, and the general public alike. Previous research into long-term trends in hurricane-caused damage along the U.S. coast has suggested that damage has been quickly increasing within the last two decades, even after considering inflation. However, to best capture the year-to-year variability in tropical cyclone damage, consideration must also be given toward two additional factors: coastal population changes and changes in wealth. Both population and wealth have increased dramatically over the last several decades and act to enhance the recent hurricane damages preferentially over those occurring previously. More appropriate trends in the United States hurricane damages can be calculated when a normalization of the damages are done to take into account inflation and changes in coastal population and wealth. With this normalization, the trend of increasing damage amounts in recent decades disappears. Instead, substantial multidecadal variations in normalized damages are observed: the 1970s and 1980s actually incurred less damages than in the preceding few decades. Only during the early 1990s does damage approach the high level of impact seen back in the 1940s through the 1960s, showing that what has been observed recently is not unprecedented. Over the long term, the average annual impact of damages in the continental United States is about $4.8 billion (1995 $), substantially more than previous estimates. Of these damages, over 83% are accounted for by the intense hurricanes (Saffir‐Simpson categories 3, 4, and 5), yet these make up only 21% of the U.S.landfalling tropical cyclones.

Assessing Punitive Damages (with Notes on Cognition and Valuation in Law)

Abstract: Although legal scholars have disagreed about whether juries should be allowed to award punitive damages and about how judges should instruct them, the debate has included little discussion of jurors' cognitive capabilities In this Article, Professors Sunstein, Kahneman, and Schkade respond to this gap by offering an experimental study The study seeks to separate the tasks that a jury is suited to perform from those that a jury can accomplish only with great inconsistency In personal injury cases, the study shows, jurors' normative judgments about outrageousness and appropriate punishment are relatively uniform, at least when measured on a bounded numerical scale (0 to 6) Indeed, these normative judgments are uniform across race, age, education, wealth, and gender When subjects map their judgments onto an unbounded dollar scale, however outcomes become erratic and unpredictable Drawing on these results, the authors question the current legal approaches to the regulation of punitive damages They then analyze various reform proposals designed to overcome erratic awards, including damage caps, compensatory judgement "multipliers," and conversion formulas that translate either jury judgments on bounded numerical scabs or jury arrangement of comparison cases into punitive damage awards Finally the authors discuss the implications of the study for many other issues of law: including contingent valuation and compensatory damages in such areas as pain and suffering, libel, sexual harassment, and intentional infliction of emotional distress Language: en

Impossibility and Related Doctrines in Contract Law: An Economic Analysis

Abstract: O RDINARILY the failure of one party to a contract to fulfill the performance required of him constitutes a breach of contract for which he is liable in damages to the other party. But sometimes the failure to perform is excused and the contract is said to be discharged rather than breached. This study uses economic theory to investigate three closely related doctrines in the law of contracts that operate to discharge a contract: "impossibility," "impracticability," and "frustration." These are not the only excuses for nonperformance of a contract. Among other excuses, not discussed in this study, is the closely related doctrine of mutual mistake (sometimes called "antecedent impossibility"). Also related, and only incidentally discussed herein, is the doctrine of Hadley v. Baxendale1 limiting the liability of the breaching party to the foreseeable damages of the breach. There is an extensive legal literature on the set of doctrines that, for want of a more inclusive term, we shall sometimes lump together under the name "impossibility." The main conclusions of this literature are summarized in Part IA, next, while Part IB analyzes the subject from the standpoint of economics.2 Part II applies the economic analysis to the leading cases and

When does the rule of liability matter

Abstract: The active interface between law and economics has been limited largely to antitrust and regulation, but recent work, primarily in economics, has revealed a much wider area of common interest. The law, reasoning that crops stand in the way of a neighbor's cattle, can leave the farmer to bear the cost of crop damage; alternatively, reasoning that cattle stray errantly across farm fields, the law can assign liability for crop damages to ranchers. The question of long-run considerations has been raised because it would seem that different liability rules would alter the profitability of remaining inside or outside each industry. Once significant transacting or negotiating cost is admitted into the analysis, the choice of liability rule will have effects on resource allocation, and it no longer follows that wealth distribution is the main or even an important consideration in choosing the liability rule.

Monitoring of Pollution Regulation: Do Local Conditions Matter?

Abstract: Economists have greatly criticized regulations that impose uniform environmental standards. Such a critic ignores that the implementation of the standards may vary significantly across plants, thus giving rise in fact to non-uniform standards. The purpose of this paper is to analyze the determinants of the regulator's monitoring activities. We show that greater inspection effort, ceteris paribus, is allocated towards those plants whose emissions are likely to generate a higher level of damages. On the other hand, we show that the behavior of the regulator is also a function of variables that may not be directly related to abatement cost and damages. In particular, we show that variables pertaining to local labor market conditions have an impact on the monitoring strategy adopted by the regulator.

Remedies and the Psychology of Ownership

Abstract: I. INTRODUCTION It is surprising that there are cases like Boomer u. Atlantic Cement Co.1 The plaintiffs in Boomer were eight homeowners seeking injunctive relief against the dust and noise produced by a neighboring cement plant, the Atlantic Cement Company. The trial court declared Atlantic Cement a nuisance, but refused to enjoin the plant's operations.2 Instead, the court awarded monetary damages to the plaintiffs for the loss in value to their property attributable to the defendant's activities. The dissatisfied plaintiffs appealed, but ultimately New York's highest court declared that they were not entitled to injunctive relief.3 That the plaintiffs sued the plant is not surprising; Atlantic Cement's operations produced a tremendous amount of noise and dust.4 The striking aspect of the case is that the plaintiffs spent the time and money to appeal the type of remedy, even though they had won the right to substantial damages. Clearly an injunction had special value for the Boomer plaintiffs-but why? This Article presents evidence that people do not regard rights protected by damages remedies as being owned in the same way as rights protected by injunctive relief. The former can be taken by another without the right holder's permission, whereas the latter cannot be taken without the right holder's permission. The power to refuse to sell a right is a critical psychological component of ownership, and damages remedies do not include this power. When the trial court refused to grant the Boomer plaintiffs an injunction, it took away their power to refuse to sell their rights to Atlantic Cement, thereby undermining their status as owners. Law and economics has an alternative account of the Boomer plaintiffs' motives. Application of the Coase Theorem suggests that the plaintiffs were hoping to use an injunction to extract a large settlement from the defendant.5 According to Coase, parties regularly trade their legal rights, and so the homeowners might have been hoping to improve their bargaining position before ultimately selling their rights to Atlantic Cement. The right to shut down Atlantic Cement's plant would have been a valuable right, indeed, as the plant had cost $45 million to build and supported a payroll of 300 employees.6 The eight homeowners could conceivably have demanded a sizeable portion of Atlantic Cement's future revenue stream in exchange for allowing the company to continue operating. Furthermore, the homeowners had reason to be dissatisfied with the size of the damages remedy that the lower court provided. The Boomer plaintiffs, like most homeowners, probably valued their property at an amount greater than the market-price damages that the courts used as a measure of compensation. The present owner of a right is likely to be the party who most values it (or else they would likely have sold it). This suggests that the market-price damages would have undercompensated the plaintiffs. In this view, the plaintiffs were using the leverage that an injunction would provide either to extort Atlantic Cement or to recover the subjective value they had for their homes. Understanding the Boomer plaintiffs' motives is not a mere academic inquiry. Boomer is a paradigmatic nuisance dispute. As such, it plays a prominent role in debate concerning the appropriate allocation of and protection for property rights.7 Courts and legislatures must constantly decide how to allocate and protect rights, and Boomer squarely presents both of these issues. The court in the Boomer case could have given a right to pollute to Atlantic Cement or given the right to clean air to the plaintiffs. If the court had given rights to the plaintiffs, it could have protected them with monetary damages (a liability rule) or injunctive relief (a property rule).8 The Boomer plaintiffs' motives should matter a great deal to courts and legislatures as they make these choices. Their motives reveal what it is that property owners value, try to protect, and expect the law to protect. …

International environmental law and policy

Abstract: This dynamic casebook offers a coherent presentation of a complicated area: - offers an introduction to international law and institutions as a foundation for the study of global norms applicable to environmental problems - presents International Environmental Law in the 21st century, covering traditional issues such as transfrontier pollution and shared resource allocation and examining newer and emerging issues such as climate change, biological diversity and human rights implications - takes an interdisciplinary approach in an analytical framework - leads students from fundamental issues to sophisticated applications in four main parts: The Nature of International Environmental Issues, Pollution Control, Natural Resource Management, and Trade and Finance - thorough Teacher's Manual The authors use a skillful blend of material to capture and hold student interest: - detailed case studies - convenient appendices on Researching International Environmental law, International Organizations, and General Steps in Formulating Multilateral Agreements - detailed discussions of the relationship between international and domestic implementation of law - in-depth coverage of the liability, accountability, and valuation of natural resource damages Changes to the Second Edition include: - new developments in international environmental law, including compliance with agreements, international health problems, biotechnology, developments in WTO and NAFTA, sustainable economic development, and accountability of international institutions - the book is redesigned and condensed to make the materials readily accessible to a broad variety of students, bothin the United States and abroad - the rewritten introductory chapter now begins with a short history of international environmental law, the nature of international environmental problems, and political and economic contexts - several new case studies demonstrate the major problems involved in international environmental law and highlight the many interests surrounding treaty negotiations

The Tobacco Deal

Abstract: [Forthcoming in Brookings Papers on Economic Activity] We analyse the major economic issues raised by the 1997 Tobacco Resolution and the ensuing proposed legislation that were intended to settle tobacco litigation in the United States. By settling litigation largely in return for tax increases, the Resolution was a superb example of a "win- win" deal. The taxes would cost the companies about $1 billion per year, but yield the government about $13 billion per year, and allow the lawyers to claim fees based on hundreds of billions in “damages”. Only consumers, in whose name many of the lawsuits were filed, lost out. Though the strategy seems brilliant for the parties involved, the execution was less intelligent. We show that alternative taxes would be considerably superior to those proposed, and explain problems with the damage payments required from the firms, and the legal protections offered to them. We argue that the legislation was not particularly focused on youth smoking, despite the rhetoric. However, contrary to conventional wisdom, youth smokers are not especially valuable to the companies, so marketing restrictions are a sensible part of any deal. The individual state settlements set very dangerous examples which could open up unprecedented opportunities for collusion throughout the economy, and the multistate settlement of November 1998 is equally flawed. The fees proposed for the lawyers (around $15 billion) and the equally remarkable proposed payoff for Liggett (perhaps $400 million annually, for a company with a prior market value of about $100 million) also set terrible examples. We conclude with some views about how public policy might do better.

The Addition of Contingent Valuation and Conjoint Analysis to the Required Body of Knowledge for the Estimation of Environmental Damages to Real Property

Abstract: Executive Summary: A problem often exists when using traditional approaches to valuation in assessing damages to contaminated real property. Cost, income, and sales comparison approaches may understate the impact on value when historical and recent sales are limited or nonexistent, or when potential buyers are unaware of or not fully knowledgeable regarding the nature and extent of the contamination. When one or more of these conditions is present, reliance on traditional methods is limited in developing an opinion of damages for litigation. Three complementary survey-based techniques are presented as supplementary tools in estimating damages in impaired property situations: contingent valuation, conjoint analysis and perceived diminution. Due to the fact these approaches may be employed when conditions limit the use of other methods, the approaches presented are an important addition to the required body of knowledge for any analyst addressing impaired property value. This study briefly explores the theo...

The Effect of Legal Rules on the Value of Economic and Non-Economic Damages and the Decision to File

Abstract: This study focuses on the economic consequences of tort reform. In particular, we address two issues. First, we test the relationship between tort reforms and claim severity for an automobile liability incident while controlling for a variety of cost drivers including the presence of no-fault rules, and the impact of a plaintiff's attorney. In addition to examining the effect of tort reforms on total claim severity, we also test their effect on economic and non-economic damages separately. Second, we test the proposition that tort reforms, by reducing the damages available at trial, have reduced the likelihood that an injured party will seek legal remedy. Both aspects of this study are examined with individual data from a large sample of insurance claims from 61 insurers. Our results suggest that many of the reforms have had a statistically significantly effect on total damages, non-economic damages and economic damages. Caps on non-economic damages, collateral source rule reforms, and minor reforms impacting prejudgment interest, frivolous suits, and provisions for periodic payments are negatively related to the value of non-economic claims, while joint and several reform is positively related to the value of non-economic claims. We find collateral source rule reforms and minor reforms are negatively related to the value of economic claims. We find that caps on non-economic damages and minor reforms are associated with a decreased probability to file. We do not find any evidence that joint and several or collateral source rule reform is associated with the decision to file.

The Tobacco Deal

Abstract: We analyse the major economic issues raised by the 1997 Tobacco Resolution and the ensuing proposed legislation that were intended to settle tobacco litigation in the United States. By settling litigation largely in return for tax increases, the Resolution was a superb example of a "win-win" deal. The taxes would cost the companies about $1 billion per year, but yield the government about $13 billion per year, and allow the lawyers to claim fees based on hundreds of billions in "damages". Only consumers, in whose name many of the lawsuits were filed, lost out. Though the strategy seems brilliant for the parties involved, the execution was less intelligent. We show that alternative taxes would be considerably superior to those proposed, and explain problems with the damage payments required from the firms, and the legal protections offered to them. We argue that the legislation was not particularly focused on youth smoking, despite the rhetoric. However, contrary to conventional wisdom, youth smokers are not especially valuable to the companies, so marketing restrictions are a sensible part of any deal. The individual state settlements set very dangerous examples which could open up unprecedented opportunities for collusion throughout the economy, and the multistate settlement of November 1998 is equally flawed. The fees proposed for the lawyers (around $15 billion) and the equally remarkable proposed payoff for Liggett (perhaps $400 million annually, for a company with a prior market value of about $100 million) also set terrible examples. We conclude with some views about how public policy might do better.

Market Processes, Standardisation, and Tort Law

Abstract: Private standards play a decisive role in tort law and in administrative law. Although they seem to be a perfect tool to achieve the goal of European integration, they tend to substitute democratic legitimacy with uncontrolled private governance. The loss of democratic control is accentuated by the failure of markets to provide sufficient incentives for standardising organisations to behave in a non‐opportunistic manner. The dangers of cartelisation and oligopolistic behaviour are obvious. The approach to overcome these deficits is complex: on the one hand, an institutional governance of private organisations is necessary to incorporate third party interests in the process of enacting private standards; on the other hand, the legal effects of private standards have to be restricted to mere assumptions dependent on the democratic quality of their enacting process. The problem of democratic legitimacy is aggravated by the parallel substitution of state authorities' control by means of private certification organisations which control only the management procedures of firms. As these management systems are difficult to be evaluate, the opportunities for opportunistic behaviour amongst firms and certifiers increases. Moreover, markets themselves fail to discipline certifiers by virtue of a lack of observable factors which might indicate the quality of certification. Tort law, too, cannot fulfil that gap by providing liability for damages caused by undue certifications because tort law suffers from a variety of shortcomings such as missing protection of public goods and difficult assessments of causation linkages. In sum, the author argues for a mixture of market incentives, tort law and administrative law. Each sector must fill in the gaps left by the others.

Timing Problems in Contract Breach Decisions

Abstract: In contracts susceptible to efficient breach, each party has an American option to breach and pay damages rather than perform. She will repudiate early if the expected decrease in damages liability resulting from her partner's mitigation exceeds the expected value of the terminated contract, including the option to breach in the future. We show that each party has the incentive to repudiate earlier than socially optimal because expectation damages compensate the nonrepudiating party only for the loss of the completed exchange and not the value of its lost breach option. This inefficiency is particularly acute in long‐term, fixed‐price contracts in which the cost of performance to the promisor and the value to the promisee are volatile and uncorrelated. We explore various responses to this problem, including vertical integration, changes in contract remedies (including specific performance), flexible price provisions, and the capital structure of each party.

Bendectin on Trial: A Study of Mass Tort Litigation

Abstract: Beginning in the mid-1970s, the manufacturer of Bendectin was sued repeatedly over allegations that the drug - prescribed for pregnant women to overcome the effects of morning sickness - had caused birth defects. Yet in twenty years no one has collected any damages. Joseph Sanders offers a comprehensive study of the litigation surrounding this drug and its manufacturer. Sanders looks at the cases from the different perspectives of the parties involved: attorneys, scientists, and juries. He discusses the role of lawyers in the development of claims and in the litigation, how scientific evidence was used in these trials, and the part judges played in managing and resolving these cases. Bendectin on Trial will appeal to scholars of the American judiciary and those interested in the role of courts in product liability matters.

The social costs of climate change: A critical examination

Abstract: There is a growing body of literature on economic aspects of global warming Whereas the research in greenhouse gas (GHG) abatement costs has provided many studies, the question of greenhouse damage valuation has gained little attention yet Ongoing the first section of this paper provides a brief overview of the main results relating to the costs of reducing CO2 emission. Afterwards the main interest is focused to the benefits of emission abatement, defined as the benefits from avoided damages. A synthesis of both costs and benefits is to find an economical\y efficient war for the optimum amongst emission abatement and not avoided damages otherwise. Guided by the mainly applied Cost-Benefit-Analysis (CBA), there are several examinations to evaluate the social costs of greenhouse gas emissions. Finally same criticism related to the here presented and often applied Cost-Benefit-Approach as well as an outlook will follow.

Liability for oil spill damages: Issues, methods, and examples

Abstract: Liability is an important incentive‐based instrument for preventing oil spills and provides a sustainable approach for restoring coastal resources injured by spills. However, the use of liability for environmental damages raises many challenges, including quantification of money measures of damages. In this article, case studies are used to illustrate the issues, methods, and challenges associated with assessing a range of damages, from those that can be measured relatively easily using market information to more “esoteric,”; and much more difficult, cases involving non‐market‐valued losses. Also discussed are issues raised by the new national and international regulatory focus on restoration and by the simplified, compensatory formula used by some states.

Turning Servile Opportunities to Gold: A Strategic Analysis of the Corporate Opportunities Doctrine

Abstract: The corporate opportunities doctrine ("COD") regulates when and whether a corporate officer or director may appropriate new business prospects for her own account without first offering them to the firm. The doctrine -- a subspecies of the fiduciary duty of loyalty -- has been a mainstay of corporations law in most states for well over a century. At the same time, however, the COD has always been murky in application and is currently in a state of considerable disarray. In this Article, Professor Eric Talley attempts to chart a course out of this doctrinal quagmire by offering a contractarian account of the COD as a default mechanism for allocating intrafirm property rights between shareholders and fiduciaries. Within such a framework, Professor Talley develops a model of fiduciaries' incentive structures under various legal regimes. He then demonstrates that both the reach and the consequences of an "optimal" legal rule depend crucially on the information structure that governs the underlying agency relationship. When relevant information available to shareholders and fiduciaries is complete and symmetric, the optimal rule allocates each new project to whoever is the lowest cost producer. When corporate fiduciaries possess private, unverifiable knowledge about new projects, however, the optimal COD has a strict-liability flavor, imposing damages that need not correspond to either the corporation's losses or the fiduciary's gains. Consequently, such a doctrine will frequently overdeter fiduciaries from appropriating certain projects and may underdeter appropriation of others. This observation suggests (among other things) that coherence in the COD would be greatly improved if courts paid more attention to information structure than is currently the norm.

Empirical Studies of the Effect of Flood Risk on Housing Prices

Abstract: : The Principles and Guidlines for Water and Related Land Resources Implementation Studies (P&G) provide that the reduction of flood damages should not be claimed as a benefit of evacuation or relocation because they are already accounted for in the fair market value of floodplain properties. Corps guidance for implementing the P&G explains further that "it would be double-counting to also consider the costs of the physical damages." Yet the assumption that the value of floodplain properties is discounted for flood damages has never been empirically established. This study reviewed existing academic studies and conducted two case studies of hedonic price models. Hedonic price models measure the effect of property attributes upon the overall property value. While the findings are insufficient to show that properties are or are not discounted for flood damages, they show that many attributes affect floodplain property values (e.g., flood insurance, location within the floodplain and income) and that these attributes likely will vary from community to community. These findings bring into question the assumption that all properties are discounted for flood damages.

An Economic Analysis of Damages Rules in Intellectual Property Law

Abstract: I. INTRODUCTION In 1987, an architect named Lebbeus Woods created a graphite pencil drawing entitled "Neomechanical Tower (Upper) Chamber," which depicts an ominous-looking chamber containing a chair mounted high upon one wall by means of a vertical rail, and a sphere suspended in front of the chair at face level.(1) Eight years later, Universal City Studios, Inc. ("Universal") released the film 12 Monkeys, a dystopian adventure involving a future world in which human beings have taken to living underground following an outbreak of a mysterious virus that kills five billion people beginning in the year 1996.(2) Near the beginning of the film, the rulers of this world bring the lead character, played by Bruce Willis, into a room where he is told to sit in a chair which is attached to a vertical rail on a wall. The chair slides up the rail to a horizontal ledge on the wall so that the chair is several yards above the ground. A sphere supported by a metal-frame armature descending from above is suspended directly in front of (Willis]. On three occasions, [Willis] returns to this chair.(3) A few weeks after the film was released, Woods filed suit in the United States District Court for the Southern District of New York, alleging that Universal and the film's director and production designer had infringed his copyright in the drawing by reproducing the work in the scene described above (albeit in another medium, film), and by distributing and exhibiting the reproduction to the public without permission.(4) Concluding that the defendants had access to Woods's work and that the scene was strikingly similar to that work, the court granted Woods's motion for a preliminary injunction.(5) Shortly thereafter, the parties agreed to a settlement pursuant to which Woods agreed to allow the continued exhibition of the film in return for an undisclosed sum of money.(6) Had the case proceeded all the way to trial and resulted in a judgment in Woods's favor, Woods presumably would have been entitled to a permanent injunction against the exhibition of the film,(7) and also to monetary damages for the defendants' unauthorized use of the drawing.(8) But what would those damages be? In answering this question, a policymaker with the authority to award whatever damages she believes to be appropriate would face several different, and difficult, choices; and although this example involves the law of copyright, one can easily imagine similar examples involving other types of intellectual property such as patents, trade secrets, and trademarks. One option would be to award Woods his lost profits from the sale of authorized copies of his drawing;(9) on the facts described above, however, this amount probably would be zero, because it is unlikely that the film would be a close enough substitute for, say, a book of authorized Woods reproductions so as to displace sales of the latter.(10) A second option would be to award Woods a royalty for the unauthorized use of his drawing, but this option raises the question of how to determine the amount of the royalty. Should the policymaker simply award the amount she believes to be "just"? Should she refer the decision to some expert tribunal? Or should she try to reconstruct the amount the parties themselves would have agreed upon ex ante (and if so, how)?(11) A third option would be to forgo compensation altogether and to order the defendants instead to disgorge their profit from the exhibition of the film--though surely not their entire profit, but only that portion that is attributable to the use of Woods's drawing (and how, exactly, would you go about measuring that)? Perhaps one could sympathize with a policymaker who, upon consideration of the above choices, simply throws up her hands and awards some arbitrary amount--as, arguably, the concept of presumed damages allows the trier of fact to do in some types of defamation cases. …

Die Rückkehr des genius malignus : Entwurf zu einer Philosophie der Vorbeugung

Abstract: The article analyses material from the French legal history to demonstrate a twofold paradigm shift in the modern allocation of responsibility for damages caused by human activities. It is argued that the individualistic paradigm of early modernity was substituted by a paradigm of solidarity at the end of the nineteenth century centering on the legal idea of strict liability, and that this second paradigm is shifting again at the end of the twentieth century because incalculable risks have begun to dominate and new forms of responsibility have to be established

New directions in European public law

Abstract: Member state liability in damages for breach of community law - an assessment of the case law, Takis Tridimas taking Article 215(2) EC seriously, Walter van Gerven state liability in damages following "factortame III" - a remedy seen in context, Peter Oliver liability of member states in damages and the community system of remedies, Piet Eeckhout the domestic liability of public authorities in damages - lessons from the European Community?, Paul Craig rebirth of the innominate tort?, Mark Hoskins give and take - cross-fertilisation of concepts in constitutional law, Eivind Smith the constitution and the justification of judicial power, Ivan Hare developments in Italian administrative law through cross-fertilisation, Luisa Torchia mechanisms for cross-fertilisation of administrative law in Europe, John Bell transplantation and cross-fertilisation in European public law, John W.F. Allison epilogue - recent developments in the law relating to state liability in damages, Takis Tridimas.

The Manager and the Auditor in a Double Moral Hazard Setting: Efficiency through Contingent Fees and Insurance Contracts

Abstract: Our article integrates the manager’s care in the literature on auditor’s liability. With unobservable efforts, we face a double moral hazard setting. It is well-known that efficient liability rules without punitive damages do not exist under these circumstances. However, we show that the problem can be solved through strict liability, contingent auditing fees, and fair insurance contracts. Neither punitive damages nor deductibles above the damages are required.

Corporate Judgment Proofing: A Response to Lynn LoPucki's The Death of Liability

Abstract: In The Death of Liability' Professor Lynn M. LoPucki argues that American businesses are rendering themselves judgment proof.Using the metaphor of a poker game, Professor LoPucki claims American businesses are increasingly able to participate in the poker game without putting \"'chips in the pot.\"' 3 He argues that it has become easier for American companies to play the game without having chips in the pot because of the ease with which a modern debtor can grant secured credit,4 because of the growth of the peculiar form of sale known as asset securitization, because foreign havens for secreting assets are now available,6 and because firms can use traditional ways of

Commitment Through Specific Investment in Contractual Relationships

Abstract: The effectiveness of stipulated damages in inefficiently excluding competitors can be undermined by the penalty doctrine and by the possibility of renegotiation. Recent works show that investment by the breached-against party can restore the effectiveness of stipulated damages. The authors investigate a model in which the breaching party makes a specific investment and show that (1) the breaching party's overinvestment can be an effective commitment device without need to use stipulated damages, (2) the commitment through overinvestment does not suffer from the penalty doctrine nor from the possibility of renegotiation, and (3) the availability of stipulated damages creates no additional effect.

The liberalisation of public procurement and its effects on the common market

Abstract: Introduction: the European integration process as the forum for the regulation of public procurement some fundamental conceptual elements in the regulation of public markets the case of public procurement in the European Community. The intellectual and the policy approaches to the regulation of public procurement: the new approach towards the integration of public markets the regulatory background of public procurement inherent dangers in the process of integration of the European public markets the structure of public procurement of member states. The evolution of European public procurement law: the public supplies regime the public works regime the public utilities regime the public services regime the compliance directives the GATT agreement on government procurement the new WTO government procurement agreement. The mechanism of integration of the European public markets: the principle mandatory advertisement and publication of public contracts the monetary applicability of the public procurement directives selection and qualification criteria legal requirements for the qualification of contractors the list of recognized contractors the award of public contracts tendering procedures the award criteria framework agreements in-house contracts and contracts to affiliated undertakings design contests concession contracts additional award criteria sub-contracting and public procurement local labour employment and public procurement the award of public housing schemes. Enforcement of and compliance with public procurement law - a critique of the system: judicial contol at centralized level proceedings before the European Court of Justice the consequences of a judgement by the Court of Justice interim measures judicial contol at domestic level the award of damages under Community law the judicial structure of Member states with reference to public procurement litigation a critique of the national judicial structures in relation to public procurement cases the compliance directives the award of damages under the compliance directives the role of the European Commission under the compliance directives compliance with and enforcement of the rules under the WTO Government Procurement Agreement. An impact assessment of the European public procurement law and policy: inherent shortcomings in the public procurment rules the dimensionality of public procurement the effects of the principle of transparency the abuse of award procedures which may restrict competition in the public markets public monopolies standarization and specification reluctance in initiating litigation - a taxonomy of case law on public procurement. (Part contents)

The value of human life in global warming impacts

Abstract: A recent article in Mitigation and Adaptation Strategies for Global Change by Fankhauser and Tol makes monetary estimates of potential global warming damages that assign higher value to each life lost in wealthy countries as opposed to poor ones. Regardless of how much sense such a procedure may make to GDP-oriented economists, it is morally unacceptable to most of the world and needlessly damages efforts to build support for any global warming mitigation and adaptation strategies that may be proposed. A better solution would be to use a money value of zero for human life losses and report separately the monetary and human life costs of warming (and benefits of mitigation).

Environmental Management and Institutions in OECD Countries: Lessons from Experience

Abstract: The lessons from the country members of the Organization for Economic Cooperation and Development (OECD) summarized in this report should help developing and transitional country governments find effective ways and mechanisms to protect their populations and natural resources from the effects of environmental pollution and degradation. The report points out that the first and most important underpinning of effective environmental management is the commitment of policy makers to address environmental problems, and an effective mechanism of consensus building to set realistic and achievable targets. It also warns, however, that institutional development is a gradual process that should rely on national characteristics, traditions, and culture, rather than emulating complex foreign models. Environmental management practices and the underlying regulatory and institutional frameworks in OECD countries have gradually evolved from an ad hoc, sectoral approach that reacted to emerging problems by mitigating the consequences of environmental damages after the damages occurred towards a proactive and integrated approach that recognizes the need to introduce environmental considerations into economic decisions while analyzing potential environmental impacts across all media. The decades-long experience of OECD countries has also resulted in increasing recognition of the need to influence the actions of microlevel enterprise managers and consumers through incentive polices rather than mandatory and uniform technological measures.

Why There is No Defense of Punitive Damages

Abstract: This paper is a response to the comments by David Luban and Theodore Eisenberg on my article on punitive damages to be published in the Georgetown Law Journal (1998) and entitled "The Social Costs of Punitive Damages against Corporations in Environmental and Safety Tort." Neither of these authors presents any evidence indicating that there is a determent effect of punitive damages. They suggest, however, that there could be retribution objectives or other rationales for punitive damages. In addition, they claim that punitive damages are predictable and that cognitive biases may not tilt juries against corporations. This paper reviews these diverse arguments on behalf of punitive damages and concludes that they are without foundation. Indeed, the evidence on the predictability of punitive damages suggests that there is no evidence in the literature that would enable firms to distinguish the different expected punitive damages costs associated with alternative safety choices. This paper also includes sensitivity tests to ascertain whether classifying Louisiana as a no-punitive damages state alters the assessment of the deterrent effects. It does not.

Estimation of environmental damages from mining pollution : the Marinduque Island mining accident

Abstract: Pollution, in general, can cause damages on natural resource systems which provide valuable though unpriced services to society. Oftentimes, the harmful effects of pollution are not considered by the polluter in decision-making, thus creating excessive environmental externalities. To estimate the externalities generated by pollution, it is necessary to develop economic measures of values of the environmental and resource services provided by the affected resource systems. The estimation process is undertaken primarily to provide inputs to the information base supporting public resource and environmental management decisions (Freeman 1993). One of these decisions that is of primary relevance to this study has to do with determining the natural resource damage liability of responsible parties in pollution cases, which can be used as basis for damage compensation to affected parties. Mining pollution has historically been a major source of degradation of natural resource systems such as river, coastal, and air (USEPA 1995). For this reason, mining, as an economic activity, is subject to major environmental regulations worldwide, including the Philippines.1 Unfortunately, the current information on mining externalities is insufficient to be useful for policy setting. This study was undertaken partly to partly fill this information gap, particularly in the development of policy instruments which require information on social costs of mining, and partly to assist in the formulation of guidelines on damage assessment and compensation for the mining sector. A case study of an accident-induced mining pollution was implemented.