The Unexpected Effects of Caps on Non-Economic Damages

We study the economic and legal implications of the enactment of caps on noneconomic damages on parties in conflict who know that state supreme courts may strike down the caps as unconstitutional within a few years of enactment. We develop a simple screening model where parties have symmetric expectations regarding the probability of a strike down and asymmetric information regarding plaintiff’s non-economic harm. Our model makes several surprising predictions: First, caps may increase the length of resolution of disputes if the caps are low enough or the probability of a strike down is large enough. Second, although caps always increase the percentage of disputes that are settled out of courts, they do not necessarily save litigation expenses. Third, while caps always reduce the recoveries of plaintiffs with large claims, caps may increase recoveries of plaintiffs with low claims compared to their recoveries in states with no caps. We conclude that to increase welfare legislators have to tailor caps to the economic and constitutional circumstances in their state in ways which we characterize in the paper.Tort reform, caps on recoveries, length of dispute resolution

Pain-and-Suffering Damages in Tort Law: Revisiting the Theoretical Framework and the Empirical Evidence

Should there be pain-and-suffering damages in tort law? Most legal economists who wrote on the subject that there should not be pain-and-suffering damages in tort law. A minority of scholars thought the decision of whether tort law should provide pain-and-suffering damages is an empirical, or an experimental, question that cannot be armchair-theorized. Yet, all scholars who have done empirical or experimental work to explore the desirability of pain-and-suffering damages reached the conclusion that it is undesirable. In this paper I argue that the majority view cannot serve as a policy-making aid. I side with the minority of scholars who argue it is an empirical or experimental question. I then show why the empirical and experimental evidence provided by scholars who recognized the need for empirical or experimental studies cannot serve as a policy making aid for denying pain-and-suffering coverage in tort law. I then provide preliminary evidence that it may in fact be desirable to have pain-and-suffering damages in tort law. Specifically, I present three experimental studies I researched in order to study the demand for pain-and-suffering coverage. Most importantly, I was interested to know whether participants perceive any difference between monetary and non-monetary coverage. In my studies, participants faced four insurance decisions involving the purchase of four different types of products: padding for roller skates ($40), a portable saw ($100), computer monitor ($250), and tires for a car ($800). For each product, participants had to state the price they were willing to pay, above the price of the product, for monetary and for pain-and-suffering insurance. Before answering the questions, participants were told that they had no other rights whatsoever to a remedy for any loss as result of an accident besides the insurance coverage that they were about to buy. I then compared the demand for monetary coverage with the demand for pain-and-suffering coverage. My results in all studies show that the vast majority of the participants treated the two types of insurance the same, either buying them both or buying neither. Moreover, on average, in all studies the majority of participants (in the state of full information) treated both types of insurance exactly the same, namely, they paid exactly the same amount of money for both types of insurance. Of those who did not treat it the same, the vast majority preferred monetary to pain-and-suffering insurance

Pain-and-Suffering Damages in Tort Law: Revisiting the Theoretical Framework and the Empirical Evidence

Should there be pain-and-suffering damages in tort law? Most legal economists who wrote on the subject that there should not be pain-and-suffering damages in tort law. A minority of scholars thought the decision of whether tort law should provide pain-and-suffering damages is an empirical, or an experimental, question that cannot be armchair-theorized. Yet, all scholars who have done empirical or experimental work to explore the desirability of pain-and-suffering damages reached the conclusion that it is undesirable. In this paper I argue that the majority view cannot serve as a policy-making aid. I side with the minority of scholars who argue it is an empirical or experimental question. I then show why the empirical and experimental evidence provided by scholars who recognized the need for empirical or experimental studies cannot serve as a policy making aid for denying pain-and-suffering coverage in tort law. I then provide preliminary evidence that it may in fact be desirable to have pain-and-suffering damages in tort law. Specifically, I present three experimental studies I researched in order to study the demand for pain-and-suffering coverage. Most importantly, I was interested to know whether participants perceive any difference between monetary and non-monetary coverage. In my studies, participants faced four insurance decisions involving the purchase of four different types of products: padding for roller skates ($40), a portable saw ($100), computer monitor ($250), and tires for a car ($800). For each product, participants had to state the price they were willing to pay, above the price of the product, for monetary and for pain-and-suffering insurance. Before answering the questions, participants were told that they had no other rights whatsoever to a remedy for any loss as result of an accident besides the insurance coverage that they were about to buy. I then compared the demand for monetary coverage with the demand for pain-and-suffering coverage. My results in all studies show that the vast majority of the participants treated the two types of insurance the same, either buying them both or buying neither. Moreover, on average, in all studies the majority of participants (in the state of full information) treated both types of insurance exactly the same, namely, they paid exactly the same amount of money for both types of insurance. Of those who did not treat it the same, the vast majority preferred monetary to pain-and-suffering insurance

Overlooked and Underused: Clinical Practice Guidelines and Malpractice Liability for Independent Physicians

This paper discusses how the use of Clinical Practice Guidelines (CPGs) can improve the quality and delivery of healthcare in America. The author states that with the passage of the Patient Protection and Affordable Care Act of 2010 the American healthcare system is in need of re-alignment, specifically challenging the established norms for promulgating CPGs. The article explores the legal evolution of CPGs and new legal avenues for their promulgation by examining their history and purpose. The author concludes by identifying three accountability models and arguing in favor of a private competitive regime for CPGs

New AMS (14)C dates from the early Upper Paleolithic sequence of Raqefet Cave, Mount Carmel, Israel

Raqefet Cave (35°04'21"N, 32°39'17"W) is situated in the southeastern side of Mount Carmel in Israel (Figure 1) on the left bank of wadi Raqefet (230 m asl), ~50 m above the wadi bed. It is 50 m long with an area of ~500 m2 (Figure 2). Eric Higgs of Cambridge University and Tamar Noy of the Israel Museum conducted excavations at the site between 1970 and 1972 (Higgs et al. 1975). New excavations at the cave began in 2004 (Lengyel et al. 2005)

Remedies for Anticipatory Breach of Contract with Two-Sided Asymmetric Information: A Comparison of Legal Regimes

The Law and economics movement has paid a lot of attention to carefully analyzing various doctrines of contract law. Yet, with few exceptions, the doctrine of anticipatory breach seems to have escaped law and economics scholars\u27 scrutiny. Specifically, the question of optimal choice of remedies has escaped scholars\u27 eyes. While traditionally in England the party who files a law suit can get only damages, in the US the party can not only ask for assurances for performance, but also, in appropriate cases, get specific performance. Which regime is better? Can parties opt in and out of those regimes? Is there a legal regime which is superior to both the English and American regimes? In this paper we attempt to start filling in this gap by studying the relationship between various regimes of remedies. Specifically, we start by studying the conditions in which the American legal regime (which grants the non-breaching party an option to choose, in appropriate cases, between specific performance and actual damages) is superior to the English regime (which allows the non-breaching party to seek only actual damages). We then explore a third regime, which as far as we know does not exist, and show that it is unconditionally Pareto Superior to both the English and American legal regimes. Our analysis in this paper informs transactional lawyers of the relevant economic factors they should consider when deciding between remedies in a given anticipatory breach context. We focus on the ex-ante design of the contract in light of new and asymmetric information that the parties anticipate they will gain after they draft the contract. We assume fist, for simplicity, that no renegotiation or investments are involved. We demonstrate the optimal way to design contract clauses which takes advantage of the information that the seller and the buyer receive between the time they enter into the contract and the time of the breach. We present two models. One is for non-market goods and the other is for market-goods. The law is different with respect to the way damages are calculated for these two classes of goods. We thus model both types of transactions. Section two describes the legal background against which we have designed our models. Section three surveys the literature that evaluates contract remedies in the context of anticipatory breach context from an economic perspective. Section four presents two simple models with incomplete two-sided asymmetric information. In section four, we compare the performance of the American legal regime with that of the English one. Section five discusses some interesting extensions meant to approach the first-best allocative efficiency. The appendix provides a more rigorous mathematical demonstration of the model