New model reveals optimal liability rules for toxic tort cases
The article presents a new model that considers both risk and ambiguity in legal liability. Ambiguity occurs when it's unclear if someone's actions caused harm, like in toxic tort cases. If being more careful reduces uncertainty, strict liability is better than negligence. This means that if the person causing harm is less afraid of risk and uncertainty than the victim, and can estimate harm more clearly, strict liability is preferred. The opposite is true only in specific situations.