A Law-economics Approach to Priority to Gain Compensation Owned by the Subrogation Man

The judicial explanation of the Supreme People's Court enlarges the effect of the subrogation right regulated by contract law,which has been arousing questions of civil law circle.The article will use the analytical methods of costbeneficial results in laweconomics to demonstrate that the system in which loaners can exercise the subrogation right and have priority to gain compensation is more efficient and more propitious to realize the equilibrium of equity and efficiency than the one in which loaners cannot exercise the subrogation right or they can exercise the right but have no priority to gain compensation,and that such is the optimal choice in system.So,the judicial design is feasible in practice,and to make the judicial explanation be the legal articles is the need to perfect the system on subrogation right and perform its functions.