Post by Sapphire Capital on Jul 26, 2008 20:54:06 GMT 4
Compensation is Not Just About Money and Neither Should its Economic Assessment Be
José Mulder
Tilburg University - Faculty of Law; Tilburg Law and Economics Center (TILEC)
March 2008
TILEC Discussion Paper No. 2008-012
Abstract:
Financial compensation awarded in tort cases is meant to make a victim whole again. It, however, is rather complicated to assess the amount of compensation that actually accomplishes this goal. According to renowned economists, one should determine court compensation by identifying how much first-party insurance people would have bought voluntarily in order to compensate similar losses. This 'theory of insurance' is the subject of this paper. In the first part I shall expound the theory itself and in the second part I shall demonstrate how it falls short because of its focus on outcomes. I do so by showing how a court process affects an individual's well-being just like a court outcome does. Finally, I will show how 'procedural utility' interacts with the amount of compensation needed to make a victim whole again, and how it, therefore, seems no longer accurate to disregard this type of utility when it comes to determining court compensation.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1105093_code524065.pdf?abstractid=1099865&mirid=3
José Mulder
Tilburg University - Faculty of Law; Tilburg Law and Economics Center (TILEC)
March 2008
TILEC Discussion Paper No. 2008-012
Abstract:
Financial compensation awarded in tort cases is meant to make a victim whole again. It, however, is rather complicated to assess the amount of compensation that actually accomplishes this goal. According to renowned economists, one should determine court compensation by identifying how much first-party insurance people would have bought voluntarily in order to compensate similar losses. This 'theory of insurance' is the subject of this paper. In the first part I shall expound the theory itself and in the second part I shall demonstrate how it falls short because of its focus on outcomes. I do so by showing how a court process affects an individual's well-being just like a court outcome does. Finally, I will show how 'procedural utility' interacts with the amount of compensation needed to make a victim whole again, and how it, therefore, seems no longer accurate to disregard this type of utility when it comes to determining court compensation.
papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1105093_code524065.pdf?abstractid=1099865&mirid=3