The Uneasy Case of Multiple Injurers’ Liability

Guttel, Ehud; Leshem, Shmuel

doi:10.1515/til-2014-0202

Cited by 1 publication

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“…Subsequent literature examined how to best design apportionment rules in terms of both equity and efficiency (Rizzo andArnold, 1980, 1986;Kaye and Aickin, 1984;Feess and Hege, 1998, Kornhauser and Revesz, 1989, 1995Ferey and Dehez, 2016). 10 More recently, Guttel and Leshem (2014) and Leshem (2017) suggested that shared liability can induce excessive care if injurers are strictly liable. In line with prior literature, they too investigated the desirable features of an apportionment rule that could restore optimal incentives.…”

Section: Related Literaturementioning

confidence: 99%

OUP accepted manuscript

Guttel

Procaccia

Winter

2020

Jnl of Law, Economics, and Organization

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Extensive literature has shown that assignment of liability for a single harm to multiple injurers undermines incentives for optimal care. As each potential injurer anticipates bearing only a fraction of the harm, incentives to take precautions are often diluted. The dilution-of-liability concern has led theorists to propose sophisticated apportionment rules to restore optimal incentives. This article demonstrates, however, that shared liability also gives rise to the converse risk, namely, it induces injurers—whether subject to negligence or strict liability—to invest excessively in care. Furthermore, unlike its extensively analyzed counterpart, the risk of excessive care arises under any apportionment regime. While apportionment rules cannot eliminate the problem of excessive care, we suggest other means by which the problem can be addressed (JEL D62, D86, K13).

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