Table of Contents

Research Handbook on the Economics of Torts

Research Handbook on the Economics of Torts

Research Handbooks in Law and Economics series

Edited by Jennifer H. Arlen

This pioneering Handbook contains specially-commissioned chapters on tort law from leading experts in the field. This volume evaluates issues of vital importance to those seeking to understand and reform the tort law and the litigation process, taking a multi-disciplinary approach, including theoretical economic analysis, empirical analysis, socio-economic analysis, and behavioral analysis. Topics discussed include products liability, medical malpractice, causation, proximate cause, joint and several liability, class actions, mass torts, vicarious liability, settlement, damage rules, juries, tort reform, and potential alternatives to the tort system. Scholars, students, legal practitioners, regulators, and judges with an interest in tort law, litigation, damages, and reform will find this seminal Handbook an invaluable addition to their libraries.

Chapter 5: Causation and foreseeability

Mark F. Grady

Subjects: economics and finance, law and economics, law - academic, law and economics, law of obligations


U.S. courts have held that a defendant will be immune from liability for an accident otherwise caused by negligence if it was not “reasonably foreseeable.” This is the doctrine of proximate cause and the subject of this chapter. The classic case is Palsgraf v. Long Island R.R. The plaintiff was standing on a platform of the defendant’s railroad station after buying a ticket to go to Rockaway Beach. A train stopped, bound for another place. Two men ran forward to catch the train after it had started moving. One reached the platform of the car without mishap. The other, carrying a small package, jumped aboard the car, but seemed unsteady as if about to fall. A guard on the car reached forward to help him in, and another guard on the station platform pushed him from behind, dislodging the package, which fell upon the rails. The package, covered by newspaper, turned out to contain fireworks, which exploded when the package fell. The explosion knocked down some scales at the other end of the platform, many feet away. The scales struck the plaintiff, causing the injuries for which she sued. The Court of Appeals of New York, in a famous majority decision by Justice Benjamin Cardozo, held that the plaintiff could not recover because the accident was not “reasonably foreseeable” to the defendant.

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