∑ Loans are transactions over time, with risk fi Need for insurance fi MH problems Risk: Borrower needs insurance (limited liability), as even loans for good projects cannot be repaid in bad years. But lender cannot provide insurance as he cannot monitor genuine failures from false claims ∫ Problem of enforcement. (Moral Hazard (MH) in repayment). Limited liability induces risk taking behavior ...

strict liability is the result of philosophical ideas of lawyers in front of developments in human knowledge and complexity of social relationships. strict liability the main aim is facilitation of victim's compensation, so the proof of fault is not necessary and causation is sufficient. this type of liability is justified by various foundations of economics, society and morality. in the b...

Although the most visible manifestations of medical malpractice involve patient safety and the legal process, the availability and affordability of liability insurance largely determine the direction of medical malpractice policy. Scientific and industrial developments since the first modern malpractice crisis in the 1970s reveal major problems with the structure and regulation of liability ins...

This paper investigates the incentive effects of automobile insurance, compulsory insurance laws, and no-fault liability laws on driver behavior and traffic fatalities. We analyze a panel of 50 U.S. states and the District of Columbia for 1970–98, a period in which many states adopted compulsory insurance regulations and/or nofault laws. Using an instrumental variables approach, we find evidenc...

Consumers have legal redress for any harm brought on by a faulty product under liability law. According to estimates, items detrimental impact millions of individuals throughout the world, and sellers or producers wind up shelling out sizable sum products-liability insurance as well damages. A must satisfy consumer's reasonable expectations, thus it is duty buyers guarantee product's safety qua...

Michael Klausner is the Nancy and Charles Munger Professor of Business and Professor of Law at Stanford Law School. He can be reached at klausner@ stanford.edu. Jason Hegland is a Fellow and a Director of Securities Litigation Analytics at Stanford Law School. He can be reached at jhegland@ law.stanford.edu. Matthew Goforth is a Research Fellow at Stanford Law School. He can be reached at mgofo...

Legal liability for accidents determines the circumstances under which injurers must compensate victims for harm. The effects of liability on incentives to reduce risk, on risk-bearing and insurance (both direct coverage for victims and liability coverage for injurers), and on administrative expenses are considered. Liability is also compared with other methods of controlling harmful activities...