Examination and Analysis of Personal Injury Jury Verdicts and Economic Theory PDF Download

Author: Ernest Acevedo
Publisher:
ISBN:
Category : Compensation (Law)
Languages : en
Pages : 72

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Book Description
There is surprisingly little research on the determination of verdicts in personal injury cases. This thesis examines current national jury award data and finds them to be consistent with data compiled locally. Two economic theories, Coase's theorem and hedonic damage theory, are used to help explain variations in awards. Coase's theorem, using assumptions that do not exist in reality, provides a model that shows how efficient compensation for damages will be allocated. This is done in a way that promotes economic efficiency without considering emotional issues. The hedonic damage theory is more normative. It presents a method for valuing damages that includes putting a dollar value on potential lost pleasures. While some argue that this discourages economic efficiency by allowing emotions to affect jury decisions, hedonic theory does consider emotional factors that do in fact influence jurors. We conclude that both theories play a part in the determination of personal injury verdicts. High awards in cases involving emotional distress would indicate the presence of hedonic damages, suggesting that juries do look beyond earning potential when making awards. The Coase Theorem provides a method of damage determination for large cases. Taking a case to court involves high transaction costs, defying a key assumption of the Coase Theorem. With small cases this cost is too high to allow the theory to work effectively. In larger cases, however, transaction costs become less significant relative to the total value of the case, enabling the case to be settled in a manner consistent with Coase's theorem.