Laudatio: Ariel Porat

In 2020, I was asked to introduce Ariel Porat in celebration of his Lifetime Achievement Award and Honorary Membership to the European Association of Law and Economics (EALE).^[1] It was a great pleasure and honor to deliver Ariel Porat’s Laudatio.^[2] There are many things that can go into delivering oral remarks for an award of this kind, but the limited space allowed for this written version of the Laudatio necessitates conciseness and the selection of just a few highlights of Professor Porat’s significant contributions to the discipline of law and economics. Conciseness will prove especially difficult in this occasion, given the vast range of Porat’s accomplishments, and the personal admiration that I have for him as a scholar and as a friend. Three years ago, I accepted the EALE Lifetime Achievement Award with an apology to the previous recipients. My American and Italian predecessors (Guido Calabresi in 2004, Pietro Trimarchi in 2005, and Robert Cooter in 2011) were all giants in the field, and pioneers of law and economics in Europe. Their shoes were too big for me to fill. I apologized for having diluted the value of the EALE award. With Ariel Porat, the prestige of the EALE Award is returning to its historic highs: a true giant is being recognized by the European Association for his lifetime contribution to law and economics, in Europe and in the international community.

I have known Professor Porat for many years and have had the honor to co-author a paper with him^[3] (during our recent dinner together, we agreed that there will be additional joint work soon), and in this Laudatio I shall take the occasional liberty to refer to him as Ariel. Ariel represents one of the most important encounters in my academic career. He is one of the most influential scholars in our discipline; his sharp-mindedness, creativity, and his dedication to his students and junior colleagues have greatly inspired me in recent years. After the announcement of Ariel’s award, I was approached by many attendees who told me how their careers had been influenced by the privileged interactions they had with Ariel Porat, as students, colleagues, or co-authors. An attendee who shall remain unnamed (but hardly anonymous in our small community) offered some beautiful personal remarks about Ariel’s qualities which I shall quote here verbatim: “Ariel is a very generous gentleman, who always knows how to give support and compliments. … Ariel is also a terrific teacher. … His academic achievements are extraordinary. … but Ariel’s [biggest achievement is] he was the dean who recruited me to Tel-Aviv University when I was a doctoral student in Chicago.” Ariel has been a prolific collaborator and all his co-authors confirmed my experience that Ariel is not only a bright intellect, but he is also a joy to work alongside.

We need not look beyond Professor Porat’s lengthy list of publications and appointments to understand why he is beyond deserving of this high honor. Professor Porat’s career has been anchored at Tel Aviv University, where he has been on the Faculty of Law since 1990. His academic positions, however, have included visiting professorships around the world, including the United States, Germany, and India. His most extensive post, besides Tel Aviv University, has been at the University of Chicago, where Professor Porat was the Fischel-Neil Distinguished Visiting Professor from 2003 until 2019. I know that his presence at Chicago was felt well beyond that of a visiting professor, and his contributions to the faculty – in terms of ideas for research, fresh scholarly vision in law and economics, and joint scholarship with his Chicago colleagues – remain tangible to this day. I am confident that his colleagues at Chicago consider Porat an important pillar of the University of Chicago legal tradition.

I know from personal experience that splitting academic time across different continents is not an easy task. Professor Porat fully succeeded in this challenge: Ariel has taught at some of the most noteworthy schools in the United States and around the world, but his focus and academic attention have remained tied to the Israeli academic community. Ariel Porat is now the President of Tel-Aviv University and the Alain Poher Chair in Private Law, at Tel Aviv University, Faculty of Law. He has served as Dean of Tel Aviv University, Faculty of Law, from 1999 to 2003, and as the President of the Israeli Law and Economics Association, since 1990. Professor Porat has played a key role at Tel-Aviv University and is unanimously recognized as the father of the Israeli school of law and economics. Many of the students that worked with him are now leading scholars at top institutions. If somebody could draw a map of all the places where Professor Porat’s students have ended up, there would not be much ground left to cover. This is a testimony to Ariel’s talent, not only as a scholar and academic leader, but also as a coach of younger generations of scholars. The mark of his intellectual leadership as Dean of the Faculty of Law in Tel Aviv is strongly felt in the Israeli academic community. In the almost three decades of academic teaching and mentorship, hundreds of scholars have found their way to Professor Porat and benefitted greatly from his mentorship and kindness. His contributions not only to scholarly discourse, but to true and honorable academic and professional mentoring will serve this discipline for quite some time. Israeli scholars have been playing a key role in the European academic community and in our Association, and I am sure, in one way or another, each of them owes a debt of gratitude to Ariel and would recognize his intellectual influence in their life. The Israeli academic community is equally enthusiastic about Ariel’s current role as University President, confident that his vision will shape the bright trajectory of Tel Aviv University for many years to come. Ariel’s family has also played an important role as an anchor to Israel. Both his father, Haim Porat, and his mother, Adina Porat, were judges in Israel—a background which unsurprisingly fostered Ariel’s extraordinary social awareness for justice. One of his colleagues and close friends pointed out to me that behind the curtains of academia, Ariel is first and foremost a family man. His wife Timna is also a lawyer and they have three wonderful children: their daughter, Hagar, and their two sons Haggai and Omri. Now, members of his expanding family are rising stars in our discipline: his son Haggai holds an S.J.D. in law and in economics from Harvard and is pursuing a Ph.D. in Economics at Tel Aviv University, and Tom Zur (Haggai’s soon-to-be spouse), is an S.J.D candidate and Olin Fellow in Law and Economics at Harvard Law School.^[4] Ariel became a grandfather a few years ago; his daughter Hagar has a son, Yoav (Yoavi), to whom he is very close.

In many respects, the EALE Award comes as a small addition to Ariel’s list of academic recognitions. Since 2005, Ariel has served as a Member of the American Law Institute; in 2014, Ariel won the EMET Prize, Israel’s highest prize for scientists; and during the same year, he was elected Member of the Israeli Academy of Sciences; from 1997 to 2002, he served as Founding Editor-in-Chief of the highly influential Theoretical Inquiries in Law; and in 2012, he was the recipient of the Zeltner Prize for Academic Excellence. Professor Ariel Porat’s Lifetime Achievement Award and Honorary Membership to the EALE was not awarded to him solely for this remarkable record as a teacher, academic leader, and exemplary human being. According to the EALE nomination committee, “his creative, theoretical and yet pragmatic approach to the study of law and economics” was one of the key reasons for his award. Ariel Porat’s academic contributions have had an enormous impact in legal academia and lawmaking. At the time of his nomination to the EALE Award, Porat had 584 Hein database citations (11.45 per article), and his research has influenced and has become part of both Israeli and U.S. law. Two examples include the self-risk doctrine and evidential damages doctrine (Cooter and Porat 2000; Porat and Stein 2001).

Ariel’s scholarly work has served as a source of inspiration and as a benchmark of excellence in law and economics. His paper ideas are captivating, and his presentations enchant the audience with a sequence of counter-intuitive ideas, the logic of which is slowly unveiled, like the mystery of a psychological thriller. We generally say that great scholars are those that come up with counterintuitive ideas. Ideas that after they are presented, make perfect sense, and they become intuitive. Well, Ariel Porat is not such a scholar. He surely comes up with counter-intuitive ideas. But even after he presents them, they still do not make sense. Those who have had the privilege, or misfortune, to present a paper at a conference with Ariel Porat know that after his presentations, the participants are hypnotized by his intellectual puzzles. Conference program organizers refer to this as “Porat’s effect.” Those who present after Porat at a conference have a hard time bringing the audience’s attention back to them—the audience continues to think about Porat’s counterintuitive puzzles and the implications of his results. If somebody asks a question at the end of the session, it is likely an overtime question about Porat’s paper. This year, the EALE Program organizers tried to contain Porat’s effect and the avalanche of questions that would have followed his presentation by scheduling his lecture as a pre-Dinner presentation, which ended with a wonderful Portuguese dinner in sight, waiting to be served.

Professor Porat’s academic career spans over three decades. In that time, as the world has changed in seemingly inexplicable and unfathomable ways, Professor Porat’s work continues to provide solid pillars for legal analysis, revealing the resilience of rigorous theoretical analysis in the face of changing environments. In preparing these brief remarks it soon became clear that the papers he published were way too many to survey, and the choice of the most noteworthy was less than obvious to me, so I asked Ariel to come to the rescue, naming a handful of papers that he was most proud of. Below is the list of papers he selected and the informative summaries he wanted me to highlight for the readers.

1. Omri Ben Shahar & Ariel Porat, Personalized Law: Different Rules for Different People (Oxford University Press, 2021). According to Ben Shahar and Porat, “personalized law” – rules that vary person by person – may be the most profound revolution in Big Data’s future. From speed limits to punishments for crimes, from legal protection to legal procedures, people’s rights and duties are presently uniform. But information technology can change that. A legal norm aimed for the “reasonable person” could be replaced by a multitude of personalized commands—each actor with her own “reasonable you” standard. Better drivers could be freed to drive faster, weaker consumers would receive stronger protections; and each investor would be entitled to a personalized disclosure, tailored to her mental capacity. Like personalized medicine or education, personalized law could bring enormous social benefits. But unlike other sectors, it raises fundamental questions about equality, rule of law, manipulation, coordination, and the power of data in the hands of public authorities. Given this prospective horizon, one of the most important policy questions of our time is how the law ought to govern the world of Big Data. This book reverses the inquiry: by identifying the benefits and perils of personalized law, this book asks: how Big Data ought to govern the law.^[5]

2. Robert Cooter & Ariel Porat, “Does Risk to Oneself Increase the Care Owed to Others? Law and Economics in Conflict,” 29 Journal of Legal Studies 19 (2000). In this article, Cooter and Porat explain that when courts set the standard of care, they consider the risks the injurer created toward others, but not the risks he created for himself. The negligent injurer ideally bears all risks, but courts consider only some risks, such as risks to others, when setting the standard of care. To illustrate, imagine a driver who creates risk of 7 for himself and 8 for others, which the driver can eliminate by taking precautions that cost 10. The costs of precautions exceed the risk to others (10 > 8), so the court imposes no liability. This is a mistake by the court. Since precaution costs less than the total risk to himself and to others (10 < 7 + 8), if precautions are not taken the driver should be held negligent and bear liability. When possible, all risks should be considered when courts set the standard of care. The U.S. Restatement (Third) of Torts §3 (Negligence) adopted the principle advocated by Cooter and Porat that injurer’s self-risk should be included when setting legal standards.^[6]

3. Ariel Porat, “Offsetting Risks” 106 Michigan Law Review 243 (2007). In this paper, Porat observes that under prevailing tort law, if an injurer must choose between Course of Action A, which creates an expected harm of 500 (e.g., a probability of 0.1 that a loss of 5000 will result), and Course of Action B, which creates an expected harm of 400 (e.g., a probability of 0.1 that a loss of 4000 will result), and he negligently opts for the former, he will be held liable for the entire accident loss of 5000 that materializes. This full liability forces the injurer to pay damages that are five times higher than would be necessary to internalize the increase in expected harm of 100 that his negligent choice creates. Porat argues that tort law should recognize the “offsetting risks principle,” under which courts would consider not only the risk created by the wrongdoer’s action, but also the risks that were avoided by the wrongdoer’s activity as a mitigating liability factor. In Porat’s example, in the event of an accident, the injurer should only be liable for 1000, which is 20% of the loss that materialized.^[7] The failure of tort law to discount the reduction in risks created by the wrongdoer’s negligence, as illustrated by the example above, emanates from the law’s disregard of background risk, and for the possible positive externalities generated by wrongdoings. In our example, the injurer’s negligent choice creates two opposite effects: one negative (increasing expected harm by 500) and one positive (decreasing expected harm by 400). Because the law imposes liability for the negative effects when harm materializes, but ignores the positive effects, the result is that the injurer bears liability for risks that by far exceed the actual risks he negligently created.^[8] Porat’s analysis focuses on the potential application of the offsetting risks principle in medical malpractice cases. Adopting the offsetting risks principle (i.e., computing the preexisting background risk faced by the victim) in such cases and reducing liability in accordance with offsetting risks would result in a huge—and desirable—decrease in the damages awarded in medical malpractice suits. Doctors would then pay for no more than the social harm generated by their negligence, practice less defensive medicine, and refrain from overinvesting in distortive precaution efforts. Patients would be the main beneficiaries of this legal change, paying less for medical services and receiving improved care in return.^[9]

4. Robert Cooter & Ariel Porat, “Anti Insurance,” 31 Journal of Legal Studies 203 (2002). In standard models of contracts, efficient incentives require the promisor to pay damages for non-performance and the promisee to receive no damages. To give efficient incentives to both parties, Cooter and Porat propose a novel contract requiring the promisor to pay damages for nonperformance to a third party, not to the promisee. In exchange for the right to damages, the third party pays the promisor and promisee in advance before performance or nonperformance occurs. The authors call this novel contract “anti-insurance” because it strengthens incentives by magnifying risk, whereas insurance erodes incentives by spreading risk. Anti-insurance is based on the general principle that when several parties jointly create risk, efficient incentives typically require each party to bear the full risk. Without a third party, the most that can be achieved is to divide the risk among the parties. By improving incentives, anti-insurance contracts can create value and benefit everyone as required for a voluntary exchange.^[10]

5. Ariel Porat, “Misalignments in Tort Law” 121 Yale Law Journal 82 (2011). In negligence law, the risks that courts consider when setting the standard of care are the same risks considered when imposing liability and awarding damages. Porat calls this the “alignment principle.” In this article, Porat exposes the exceptions to the alignment principle, which he calls “misalignments.” In cases of misalignment, the risks that courts consider for setting the standard of care are different from the risks for which liability is imposed and damages are awarded. Porat suggests modifications to the law when the identified misalignments cannot be justified. The important contribution of this article is to offer a theory as to how to evaluate and contend with misalignments. Porat discusses five cases of misalignment. In all five cases, the goals of tort law would be better served if courts successfully removed the misalignments, and all risks would be equally considered when setting the standard of care and awarding damages.

6. Ariel Porat & Eric Posner, “Aggregation and Law” 122 Yale Law Journal 2 (2012). If a plaintiff brings two claims, each with a 0.4 probability of being valid, the plaintiff will usually lose both, even if the claims are based on independent events, and thus the probability of at least one of the claims being valid is 0.64. Similarly, if a plaintiff brings a claim alleging two misconducts, neither of which is sufficient to justify a remedy, the plaintiff will usually lose, even if the claim alleges sufficient overall misconduct to justify a remedy. Generally, courts refuse to engage in what Porat and Posner call factual aggregation (the first case) and normative aggregation (the second case), as well as other forms of aggregation that the authors identify. The authors identify numerous exceptions to this rule in private and public law, criticizing courts’ inconsistent approaches to aggregation and proposing conditions under which courts should, and should not, aggregate.

7. Ariel Porat, “Private Production of Public Goods: Liability for Unrequested Benefits” 108 Michigan Law Review 189 (2009). In this article, Porat explores why the law treats negative externalities (harms) and positive externalities (benefits) differently. Ideally, from an economic perspective, both negative and positive externalities should be internalized by those who produce them, because with full internalization, injurers and benefactors alike would behave efficiently. However, in practice the law requires that injurers bear the harms they wrongfully create, but it does not symmetrically allow benefactors to recover for the benefits they voluntarily confer on recipients without the latter’s consent (“unrequested benefits”). Porat explores the different legal treatment of negative and positive externalities and exposes the reasons for this puzzling divergence. The explanation for this phenomenon is found in the different types of obstacles possibly hindering agreement between injurers and victims, on the one side, and benefactors and recipients of benefits, on the other. Porat also proposes a change to the law, with the adoption of an Expanded Duty of Restitution (“EDR”), under which, when certain conditions are met, recipients would compensate benefactors for unrequested benefits.^[11]

8. Omri Ben-Shahar & Ariel Porat, “The Restoration Remedy in Private Law” 119 Columbia Law Review 1901 (2018). One of the most perplexing problems in private law is when and how to compensate victims for emotional harm. In this article, Ben Shahar and Porat propose a novel way to accomplish this remedial goal—a restoration measure of damages. It solves the two fundamental problems of compensation for emotional harm—measurement and verification. Instead of measuring the emotional harm and awarding the aggrieved party money damages, the authors propose that defendants pay damages directly to restore the underlying interest, the impairment of which led to the emotional harm. And to solve the problem of verification—compensating only those who truly suffered the emotional harm—the authors develop a sorting mechanism that separates sincere claimants from fakers, awarding the restoration measure of damages to account only for the harm suffered by the former. The authors further demonstrate how the proposed restoration remedy would apply in important cases and discuss its relevance to additional remedial challenges in private law.

This brief exploration of Professor Porat’s scholarship provides a glimpse of the passion and intellectual energy that he puts into his work, thinking about how humans would react to alternative rules or remedies, and how rules could be best redesigned to achieve desirable outcomes. He questions the basic legal wisdom with creative freshness, opening doors to unexplored alternative ways to address legal problems. His approach is theoretical, yet his goals are pragmatic and concrete, and his results are very influential—identifying and implementing rules that can improve the wellbeing of society. He believes in the incentive effects of laws, but he is also aware that humans have varied needs, including an innate sense of fairness and justice that motivates them. His passion and work have made us all think much harder and more consciously about the fundamental parts of law, economics, philosophy, and the ways in which those disciplines interact and inform one another. His positions and interests show a scholar and a person keenly aware of the ways in which these academic disciplines can be dehumanizing and cold. Professor Porat resists the temptation to create lifeless subjects out of people. Instead, he looks to make the people at the core of his work able to move about the world and asks the more foundational questions regarding how those movements can be affected. Even more importantly, he seems to ask whether or not they should. Resisting the urge to overregulate what cannot be changed is a throughline I think we can all appreciate.

As disclosed to Ariel during the award ceremony, we should end this Laudatio with a cautionary note: unlike the financial component of the Nobel Prize for Economics, the EALE Award is not paid all at once, but on a yearly basis. It comes under the form of a voucher—free entrance to the Conference (and maybe a free meal at the Annual Dinner: EALE’s Treasurers are still working on this budget item). The value of these lifetime benefits obviously increases with life expectancy and hinges upon the recipient’s attendance to the EALE Conferences (the voucher is not transferable). So, as I recently wrote, the secret to make the best out of the EALE Award is to learn how to “Grow Younger” (Parisi 2020) and always to attend the EALE Annual Conferences. Besides these small practical differences between the Nobel and EALE awards—and setting jokes apart—the tribute that the European Association of Law and Economics wanted to give to Professor Ariel Porat is as deeply felt as a Nobel Prize would be, for economists at large.