On the Judicial Interest Rate: Towards a Law and Economic Theory[*]
-
Hugo A Acciarri
und
Nuno Garoupa
Abstract
While all legal systems implement a form of pre-judgment or post-judgment interest, there is a dearth of literature on substantive law and economics analysing the impact, functioning, and assessment of the judicial interest rate. Current legal scholarship typically views the interest rate as having a neutral effect on private and social costs. This paper demonstrates that the issue is theoretically far more complex and largely influential in legal policy. Due to the asymmetric opportunity costs for each party in a case, judicial interest rates may lead to improper delay of proceedings or the decoupling of damages from recovery. These potential results influence the number of settlements and suits. On this ground, we compare different institutional settings from an economic perspective and conclude that the appropriate mechanism depends on the alternative policy instruments available, namely, the rules of procedure, court fees, or mechanisms for appropriately setting damages. Further, we argue that abolishing the statute which sets pre-judgment interest may be a proposal worth considering.
About the authors
© 2013 Walter de Gruyter GmbH, Berlin/Boston
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Artikel in diesem Heft
- Masthead
- The Product Liability Directive: Time to get Soft?
- On the Judicial Interest Rate: Towards a Law and Economic Theory
- Tony Weir and the Law of Tort
- French Tort Law Facing Reform
- Lotte Meurkens/Emily Nordin (eds),The Power of Punitive Damages. Is Europe Missing Out? (Intersentia, 2012, Ius Commune Europaeum, vol 101). xxvi + 533 pp. ISBN 978-1-78068-047-7. € 95.00 (paperback).
- Jacques De Mol,Le dommage psychique – Du traumatisme à l’expertise (Larcier, Bruxelles 2012). xviii + 314 pp. ISBN-10: 2804451968; ISNB-13: 9782804451967. € 90.00 (paperback).
- Pekka Aalto,Public Liability in EU Law: Brasserie, Bergaderm and Beyond (Hart Publishing Ltd, Oxford 2011). xxxvii +240 pp. ISBN 9781849461337. £67.00 (hardback).
- Marten Breuer,Staatshaftung für judikatives Unrecht. Eine Untersuchung zum deutschen Recht, zum Europa- und Völkerrecht (Jus Publicum. Beiträge zum Öffentlichen Recht, vol 211, Mohr Siebeck, 2011). xxviii + 726 pp. ISBN 978-3-16-150535-5. € 124.00 (hardback).
- M Infantino,La causalità nel diritto della responsabilità extracontrattuale. Studio di diritto comparato (Stämpfli-Edizioni Scientifiche Italiane, Berne-Naples 2012). xxxiv + 386pp. ISBN 978-3-7272-2652-6. € 68.00 (paperback).
- B Winiger/H Koziol/B Koch/R Zimmermann (eds),Digest of European Tort Law, Vol 2: Essential Cases on Damage (De Gruyter, Berlin 2011). XXXVII + 1130 pp. ISBN 978-3-11-024848-7. € 349.00 (hardback).
