Law and Economics Paper #4
There are an estimated 89,468,677 persons living in the Philippines as of July 2006. A person living in the city interacts with more than a hundred people. Each person comes from a different background, has different values, morals and pattern of thinking. Let us assume that each person is rational. When spheres of existence collide, the game starts, or at least the Game Theory’s application begins. Let’s take a common form of interaction--- one which results in injury. Prevention of injury is one of the aims of tort law, another aim is sufficient recompense for such injury caused. But then, who is liable to pay? Can this liability be shared? What is considered as sufficient recompense?
In the Philippines, contract law is more popular than tort law, where causes of action sometimes fall short of mentioning claims based on tort. Aside from actual or compensatory damages, court awards to the injured are primarily based on standards set by jurisprudence. What then would be the effect of these standards on the behavior of the potential tortfeasor and potential victim?
It is difficult to predict how an individual would react to injury and how he translates his suffering in monetary terms. The task, if left to the court does not become any easier. Hospital bills, receipts for medicine and proof of monthly income help quantify the damage done. It’s interesting to note, however, that wrongful conduct resulting in injury proves to have more expensive consequences than wrongful conduct resulting in death. Taking the above factors in consideration, a tortfeasor may end up paying millions for the monthly medical expenses of the injured whereas the going rate for the loss of life is pegged at around P 60,000 only.
In the situation above, clearly, on the part of the tortfeasor/injurer, it would be more efficient to make sure that the injured dies for such a result would be less expensive. What incentive does the potential tortfeasor have to exercise due care and more importantly to refrain from throwing all moral conduct to the wind? On the other side of the coin, would the possibility of being compensated for injury serve as an incentive for the potential injured to be cautious and try avoiding injury?
Again, the parties are assumed to be rational. Rationality dictates that an ideal situation or strategy would involve no injury and no expense. Hence, Bus Operators would make sure that brakes aren’t defective and that the drivers are briefed regarding road safety. Pedestrians, on their part, would use the overpass or the pedestrian lane. In a situation where both parties fail to observe the due amount of care to avoid liability, again, quantifying the same in terms of damages or resulting decrease in liability, cannot be culled from some sort of formula. The judge, it is clear, should not only use standards previously set, but also consider economic principles advanced by Cooter and Ulen.
There are an estimated 89,468,677 persons living in the Philippines as of July 2006. A person living in the city interacts with more than a hundred people. Each person comes from a different background, has different values, morals and pattern of thinking. Let us assume that each person is rational. When spheres of existence collide, the game starts, or at least the Game Theory’s application begins. Let’s take a common form of interaction--- one which results in injury. Prevention of injury is one of the aims of tort law, another aim is sufficient recompense for such injury caused. But then, who is liable to pay? Can this liability be shared? What is considered as sufficient recompense?
In the Philippines, contract law is more popular than tort law, where causes of action sometimes fall short of mentioning claims based on tort. Aside from actual or compensatory damages, court awards to the injured are primarily based on standards set by jurisprudence. What then would be the effect of these standards on the behavior of the potential tortfeasor and potential victim?
It is difficult to predict how an individual would react to injury and how he translates his suffering in monetary terms. The task, if left to the court does not become any easier. Hospital bills, receipts for medicine and proof of monthly income help quantify the damage done. It’s interesting to note, however, that wrongful conduct resulting in injury proves to have more expensive consequences than wrongful conduct resulting in death. Taking the above factors in consideration, a tortfeasor may end up paying millions for the monthly medical expenses of the injured whereas the going rate for the loss of life is pegged at around P 60,000 only.
In the situation above, clearly, on the part of the tortfeasor/injurer, it would be more efficient to make sure that the injured dies for such a result would be less expensive. What incentive does the potential tortfeasor have to exercise due care and more importantly to refrain from throwing all moral conduct to the wind? On the other side of the coin, would the possibility of being compensated for injury serve as an incentive for the potential injured to be cautious and try avoiding injury?
Again, the parties are assumed to be rational. Rationality dictates that an ideal situation or strategy would involve no injury and no expense. Hence, Bus Operators would make sure that brakes aren’t defective and that the drivers are briefed regarding road safety. Pedestrians, on their part, would use the overpass or the pedestrian lane. In a situation where both parties fail to observe the due amount of care to avoid liability, again, quantifying the same in terms of damages or resulting decrease in liability, cannot be culled from some sort of formula. The judge, it is clear, should not only use standards previously set, but also consider economic principles advanced by Cooter and Ulen.
"Who's been painting my roses red? WHO'S BEEN PAINTING MY ROSES RED? Who dares to taint With vulgar paint The royal flower bed? For painting my roses red Someone will lose his head."
- The Queen in Lewis Carroll’s Alice in Wonderland
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