Broken Elevators in the Cathedral: The Burden of Determining Property Rules & Liability Rules

Broken Elevators in the Cathedral: The Burden of Determining Property Rules & Liability Rules Richard R. W. Brooks ∗ Northwestern University Law School r-brooks@law.northwestern.edu February 28, 2002 Abstract Scholars have long argued for and against property rules and liabil- ity rules based on justice or efficiency. Recent arguments have fo- cused on judges’ ability to assess the information needed to administer these rules. Some observers argue that courts should find imposing property rules informationally less burdensome than liability rules be- cause property rules require only a relative comparison of valuations, whereas liability rules compel a specific estimate of a party’s valuation. Other commentators argue that liability rules demand less informa- tion because only one value must be estimated, while property rules require two. In this Article, Professor Brooks reconciles these oppos- ing views, uncovering implicit assumptions about the court’s ability to manage uncertainty under the two remedial regimes. Using a heuris- tic model, he highlights the salient factors that lead judges to be in a better position to determine one class of remedies or the other. The theory is then applied to numerous cases taken from contract, prop- erty, and tort law. Through this application Professor Brooks explains existing remedial regularities and suggests some new considerations. I am grateful to Ian Ayres, Richard Epstein, J.B. Heaton and Cass Sunstein for their thoughtful and kind contributions to this work. Helpful comments were also received from Scott Altman, Bob Bennett, David Dana, Dan Kahan, Ed McCraffery, Tom Merrill, Joseph Miller, Elizabeth Olson, Eric Talley, Marshall Shapo, Henry Smith, Dick Speidel, Jim Speta, Matt Spitzer, and Sandy Zabell.