Berkeley Program in Law and Economics

Mainstream economic analysis of Tort Law takes for granted that efficiency cannot be reached by allocating liability according to causal apportioning. In this paper we will present some ways to escape from the full scope of this claim. We start by reviewing the standard conception of causality in the economic analysis of Tort Law, to show how some underlying assumptions influence the currently held view on the relation between causal apportioning and efficiency. Then, we revisit those assumptions to see how plausible they actually are. In the light of this discussion we introduce an alternative framework of causal reasoning in Tort Law. We will show how our model yields a way of allocating liability in terms of a causal apportioning rule. The outcomes obtained through this procedure are closer to efficiency than those prescribed by the mainstream.