An Economic Rationale for the Legal Treatment of Omissions in Tort Law: The Principle of Salience

Abstract

This paper provides an economic justification for the exemption from liability for omissions in torts and for the exceptions to this exemption. It interprets the differential treatment of acts and omissions under tort law as a proxy for a more fundamental distinction between harms caused by multiple injurers, where each one can single-handedly prevent the harm (either by acting or failing to act), and harms caused by a single injurer (either by acting or failing to act).

Since the overall cost to which a group of injurers is exposed is constant, attributing liability to many injurers reduces the part each has to pay and, consequently, reduces each one’s incentives to take precautions. Broad exemption from liability for omissions is a way of carving a simple, practical rule to distinguish between the typical cases in which an agent can be easily selected and provided with sufficient incentives (typically, cases of acts) and cases in which there is a serious problem of dilution of liability (typically, cases of omissions). The exceptions to the rule exempting from liability for omissions are explained in terms of efficiency. The imposition of liability for omissions depends on the ability to identify a salient agent, i.e., to single out one or few liable agents and differentiate their role(s) from that of others. Tort law designs three types of "salience rules." It either creates salience directly (by attributing liability to a single agent), or it can exploit salience created "naturally," or it can induce injurers to create salience voluntarily.