Document Type

Article

Publication Title

University of Chicago Law Review

Abstract

The substantial role of these frictions in real-world disputes is evident enough to judges, lawyers, and clients alike. Indeed, it is the thesis of this article that within the class of rules that appear plausible on incentive and corrective justice grounds, administrative and error costs routinely should play a dominant role in the shaping of legal rules, not only of evidence and procedure, but also of substantive tort law. The telescope does not show us all the proper answers; for those we must look to the microscope. The enterprise of figuring out how these costs influence the substantive shape of the law is of potentially enormous scope, covering virtually the entire body of tort law. To give only one example, reluctance to compensate victims for mental distress or for pure economic harms attributable to negligence stems in large part from the judicial fear that a system with such extensive protection is clearly unworkable. In addition, much of the law of nuisance, such as the doctrine of "live and let live," can be explained in part by the simple idea that the costs of suit are too great for everyday low-level reciprocal nuisances. Similarly, the decline of the law of nuisance and the rise of public intervention in environmental matters have followed largely from a conviction that private suits are simply too expensive to control the manifest types of external harm, when the number of possible defendants is great, the costs of their identification are high, and apportionment of loss among them is uncertain. This article, however, does not range so widely. Instead, it addresses the question of how transaction costs can and should shape legal rules within the routine, mainline business of common law courts: the ordinary actions for property damages and physical injuries. To focus the inquiry even further, I shall concentrate on one pervasive element of all legal disputes that bears heavily on the costs of running a legal system: time.

First Page

1175

DOI

https://doi.org/10.2307/1599747

Volume

53

Publication Date

1986

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