REMEDIES FOR DAMAGE TO PROPERTY: MONEY DAMAGES OR RESTITUTION IN NATURA?

Abstract

In spite of the great volume of law and economics research carried out in the field of tort law, there exists a gap in the literature concerning the effects of different tort remedies, namely money damages and restitution in natura. Although there is a parallel between the above mentioned remedies and the remedies for breach of contract, i.e. money damages and specific performance, the analysis of the latter does not apply in torts; the high transaction costs involved in such involuntary transactions bring about fundamental changes in it. The aim of this paper is to perform a comparative analysis of money damages and restitution in natura from an efficiency perspective. The basis of the comparison is the relation of each of the remedies to the 'ideal' compensation, which, at least in principle, corresponds to the subjective accident loss for the victim. According to the conclusion reached, no rule is generally preferable to the other. Thus, it is crucial to sort the different types of cases and apply the remedy which is better suited to each one of them. The normative proposition derived is that judges should be granted the discretion to decide on the adequate remedy on a case-to-case basis. On this premise, I proceed to a comparative analysis of the relevant legal rules in Germany, England, Greece, and France, since each legal system tackles this issue differently.