Citation

Viscusi WK. J. Forensic Econ. 1990; 3(3): 1-15.

Copyright

(Copyright © 1990, National Association of Forensic Economics)

DOI

unavailable

PMID

unavailable

Abstract

A frequent target of liability reform efforts has been to attempt to constrain the awards in some manner because of a belief that award levels are excessive. Although there have been few criticisms of the approach to calculating economic losses, which has changedv ery little, the determination of non-economic losses has come under considerable fire. This criticism has arisen not necessarily because of any demonstrable faults with pain and suffering awards, but rather from the fact that there are no clear criteria for determining the level of pain and suffering compensation. As a result, there is no formal justification for the award levels that are provided. Moreover, there is considerable uncertainty as to what the actual outcome will be with respect to pain and suffering and other non-pecuniary components.

Although the rise in award levels has led to considerable pressure for constraints on the awards levels, the developments in tort liability may be in the opposite direction. In recent years there has been considerable discussion of a "hedonic" damages concept in which individuals would be compensated for the loss in their enjoyment of life. If adoption of this damages concept becomes prevalent, the level of damages could easily increase by a factor of 10 -- an effect that would dwarf the recent increases in damages levels. In this paper I will explore the rationale for this approach, the economic literature with respect to its pertinence, and the size of the awards levels likely to result under this damages regime.