Damages as Insurance Damages only insure against a small subset of losses You have to prove causation,negligence,etc,which is costly And reputational incentives for the payer are backwards An insurance company wants the reputation Of being willing to compensate you with as little hassle as possible So that people will buy its insurance A tortfeasor wants the reputation Of fighting as hard as possible not to pay damages ·So people won't sue it So design tort law to deter tortfeasors and motivate victims Damages as Insurance • Damages only insure against a small subset of losses • You have to prove causation, negligence, etc, which is costly • And reputational incentives for the payer are backwards • An insurance company wants the reputation • Of being willing to compensate you with as little hassle as possible • So that people will buy its insurance • A tortfeasor wants the reputation • Of fighting as hard as possible not to pay damages • So people won’t sue it • So design tort law to deter tortfeasors and motivate victims