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 10: Group litigation in the enforcement of tort law

Geoffrey Miller

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


Legal systems in the United States and elsewhere provide mechanisms for consolidating similar claims in a single proceeding. These forms of group litigation—the American class action being the best known—tend to be used in cases where the plaintiffs have common claims and each individual plaintiff’s stakes are small relative to the litigation costs of the suit. We may evaluate any litigation procedure with respect to three criteria for optimal tort liability. First, in the case of negligence liability, the applicable legal rules should ensure that negligent injurers internalize the expected cost to victims of the injurers’ failure to take due care and that non-negligent injurers are not held liable. Second, rules and processes should, all else equal, promote risk spreading and compensation by enabling victims with good cases to recover while precluding recovery for those who do not have good cases. Third, litigation rules should, all else equal, minimize victims’ recovery costs. A challenge for legal design is to maximize the net benefits of this type of litigation by taking each of these three concerns into account.

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