V. Torts
B. Harm (cont'd.)
2. a tort => a net social loss
Recall the school owner who
filed suit to block a rival: "One schoolmaster sets up a new school to
the damage of an [existing] school, and thereby the scholars are allured from the old
school to come to his new." (Eng. 18th c. judge citing 1410 case)
Entry harms existing producers, but the harm is a pure transfer
Society as a whole gains from the competition
=> Competition is not a tort
In Winn Dixie, the loss suffered by Benton is not offset by a matching gain to Winn Dixie stores
3. a tort => high ex ante
transaction costs
recall: using my car by
taking it. Transaction costs are not high, so I am protected by a property rule. You must
bargain with me in advance (ex ante).
crashing into it. Transaction costs are high, so I am protected by a
liability rule. You must pay damages after the fact (ex post).
V. Torts
C. Causation
the goal of examining
causation is to try to zero in on the lowest-cost avoider of damages in order to provide
that party with efficient incentives
"The efficiency goal
of negligence is to deter uneconomical accidents by allocating the loss to the 'cheapest
cost avoider.'" (LEA 27)
1. Causation criteria
3 key ingredients to
causation:
(1) the "but for" test
(2) proximate cause
(3) foreseeability
these establish practical considerations to limit the information costs that we expect injurers to incur
Criterion 1: the "but for" test
Without action A, does B still
occur?
If not, then A is a cause
Davies v. Mann, 10 M. & w. 547, 152 Eng. Rep. 588 (1842)
illustrates the doctrine of "last clear chance"
components of
"last clear chance":
"(1) That plaintiff has been
negligent and, as a result thereof, is in a position of danger from which he cannot escape
by the exercise of ordinary care; and this includes not only where it is physically
impossible for him to escape, but also in cases where he is totally unaware of his danger
and for that reason unable to escape; (2) that defendant has knowledge that the plaintiff
is in such a situation, and knows, or in the exercise of ordinary care should know, that
plaintiff cannot escape from such situation; and (3) has the last clear chance to avoid
the accident by exercising ordinary care, and fails to exercise the same, and the accident
results thereby, and plaintiff is injured as the proximate result of such failure.'" (Perin v. Nelson & Sloan (1953))
(1) plaintiff
endangered by own negligence
(2) a reasonable defendant would recognize the danger
(3) the defendant fails to exercise ordinary care in a last clear
chance to avoid the accident
=> an incentive to always
exercise ordinary care
the negligence of others does not excuse us from that obligation
British Columbia Electric Rail Co., Ltd. (d) v. Loach (p), 1916 1 A.C. 7193 (1916)
We still should take all relevant incentives into account. We get better incentives here by holding the defendant liable: "Were it otherwise the defendant company would be in a better position, when they had supplied a bad brake but a good motorman, than when the motorman was careless but the brake efficient."
The case suggests that you should assign liability to the party who should have had the last clear chance at the time of the injury
Criterion 2 proximate cause
The "but for" test sets a very low bar: "I wish I had never been born"--makes your parents the cause of all your harms
For want of a nail, the shoe
was lost;
For want of a shoe, the horse was lost;
For want of a horse, the rider was lost;
For want of a rider, the battle was lost;
For want of the battle, the kingdom was lost;
And all for the want of a horseshoe nail.
Criterion 2 keeps the search for cause manageable by drawing practical limits on how far back up the line of events it will go.
proximate cause does not => just the immediate cause
a "substantial factor" with "a direct connection" and "without too many intervening causes." (Palsgraf v. Long Island Railroad Company (1928))
Central of Georgia Ry. Co. (d) v. Price (p), 106 Ga. 176 , 32 S.E. 77 (1898)
"The injuries to the plaintiff were not the natural and proximate consequences of carrying her beyond her station, but were unusual and could not have been foreseen or provided against by the highest practicable care."
illustrates a case of alternative causation
A question to
help pinpoint causation:
If defendant isn't responsible, then who is?
Palsgraf v. Long Island Railroad Company, 248 N.Y. 339 (1928)
Cardozo, for the 4-3 majority:
"[plaintiff] must show that the act as to him had possibilities of danger so many and
apparent as to entitle him to be protected against the doing of it"
Andrews, for the dissent: "Everyone owes to the world at large the
duty of refraining from those acts that may unreasonably threaten the safety of others....
[W]hen injuries do result from our unlawful act we are liable for the consequences. It
does not matter that they are unusual, unexpected, unforeseen and unforeseeable. But
[t]he
damages must be so connected with the negligence that the latter may be said to be the
proximate cause of the former."