The "hand rule" as a standard of care in swiss tort law?

Balz Hammer

Sandra Duss

pp. 177-205

in: Klaus Mathis (ed), Law and economics in Europe, Berlin, Springer, 2014

Abstract

The "Hand rule " – named after US Federal Judge Learned Hand, its originator – is familiar in the literature of Economic Analysis of Law as the first attempt to define the standard of care when determining negligence , and hence ultimately liability, by means of a cost-benefit analysis . According to the rule, a person acts negligently if the expected value of some harm caused by that person is greater than the cost of avoiding it. Proponents of the Hand rule see it as the basis for the most efficient possible regulation of tort law , since in bilateral incidents of harm or accidents it sets the right incentives for both the injurer and the victim to take precautions as long as the costs are proportionate, and thus promotes the maximization of social welfare. The objection to this imposition from a traditional juristic viewpoint is that tort law 's main function is to bring about corrective justice between the affected parties rather than to achieve welfare-maximizing outcomes of any kind. The present essay attempts to mediate between these conflicting viewpoints by setting out the possibilities and limitations of any application of the Hand rule in Swiss tort law .