Battlepanda: Equations in Law = Bad Idea


Always trying to figure things out with the minimum of bullshit and the maximum of belligerence.

Tuesday, January 03, 2006

Equations in Law = Bad Idea

Two of the friends I got together with to celebrate the New Year in Chicago (including my lovely hostess) are currently law students. From their conversations, I picked up this disturbing nugget of information about tort law in this country. My friends are united in their contempt of law and economics, which is not about laws governing economics, as I first assumed, but the school of thought which seeks to apply economic reasoning to legal matters. Sounds like bad news? Yep.

Consider Judge Learned Hand's (yes, that really is his name) formula for establishing negligence -- an act is considered in breach if B is less than PL where B equals the burden of taking a precaution to prevent the accident, P equals the possiblity of the accident occuring and L is the size of the injury. "B is less than PL" works perfectly for individual risktaking -- we have to decide every day whether, say, the burden of locking the car doors is worth the small possibility of thievery multiplied by the loss of your belongings. But this formula makes no sense when two different parties are involved. Call me a crazed individualist, but I find it shocking that, in the eyes of the law, it is acceptable for businesses to put my health, safety and property at risk without my permission as long as they make a big enough profit, even if I do not benefit from that profit. That's like saying stealing my stereo is OK as long as the thief really enjoys music and gets a lot of use out of it.

This is not some wacky theoretical law -- first-year law students are learning this. "I had a hard time with this stuff for most of the semester because it just didn't make sense" said one friend, "but realizing how illegitimate the core idea was and how violently I disagreed with it made studying a lot easier." (I paraphrase).

Oh, and why am I not surprised that Judge Posner is a chief proponent of this theory?