8 - Summary of implications: A. Assume one dimension (care)...

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Summary of implications: A. Assume one dimension (care) is observable by the court, another (activity level) is unobservable. o 1. Note that "care" and "activity level" are merely convenient examples. o 2. The real categories are "activities with regard to which the court can tell whether or not the actor was negligent" and "activities with regard to which the court cannot . .. ." B. A sketch of the implications of the alternative rules. Notice the symmetry; the first two columns are the same, with the roles of the actors reversed, and similarly for the second two. Is There An Optimal Level of? No Liability Strict Liability Negligence Strict with Contributory Negligence Care by Tank No Yes Yes Yes Tank Act Level No Yes No Yes Care by Car Yes No Yes Yes Car Act Level Yes No Yes No C. Why are there accidents? In general, because our assumption that both courts and individuals have perfect information is not true. o 1. The court might be wrong about either what precautions the tortfeasor took or what precautions he should have taken, and so find him negligent when he was not. o 2. The tortfeasor might be wrong about what precautions he should have taken, and so really be negligent. Or . .. o 3. The tortfeasor might gamble on the court thinking he wasn't negligent when he really was--and lose. D. The "reasonable man" standard. o 1. One form that imperfect information by the courts takes is the rule that negligence is judged according to what precautions would be cost effective for an imaginary "reasonable man" rather than for the actual tortfeasor, since the court doesn't know whether the tortfeasor has better or worse reactions, higher or lower alcohol tolerance, etc. than the average. o 2. Suppose you have much better reflexes than the average: a. One half of the argument for keeping down to what the court considers a safe speed is that if you don't, you will be liable for damages if you run into someone. That argument still applies to you.
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b. The other half is that if you are liable, it is then in your interest to take all cost-justified precautions. But keeping down to what the court considers a safe speed is not cost-justified for you. c. So you either keep down to the court's speed, in order to make sure that if there is an accident you won't have to pay for it, or d. Drive at the efficient speed, which is faster than the court things, knowing that you will be liable if there is an accident. o 3. Prediction: Courts should (if Posner is right about the efficiency of the law) tend to use strict liability where actors vary a lot, such that the "reasonable man" standard works badly for many of them. o 4. More generally, strict liability not just where activity level is important (Posner's argument), but more generally where unobserved variables are important. E. Effects of court error depend on the form of the error:
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8 - Summary of implications: A. Assume one dimension (care)...

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