The legal literature generally assumes that an aggregate-risk-utility
test is employed to determine whether conduct was reasonable or
negligent. However this test is infrequently mentioned by the courts
and almost never explains their decisions. Instead, they apply, explicitly
or implicitly, various justice-based standards that take into account
the rights and relationships among the parties.
This is true even for the two judges most closely identified with the
aggregate-risk-utility test: Learned Hand and Richard Posner. During
the five decades (1909-1961) that Hand served as a federal judge,
he mentioned the test in only eleven opinions, between 1938 and
1949, and in none of those opinions did he actually apply the test to
resolve the negligence issue. In his last reference to the test, in 1949,
he essentially abandoned it. None of his fellow circuit judges ever
mentioned the test.
Posner claims that the Hand formula expresses an economic
efficiency interpretation of negligence that has long been implicit
in judicial opinions. However, Posner's arguments are based on
speculative and implausible assumptions, overbroad generalizations,
selective quotations, and superficial descriptions of cases that misstate
or ignore facts, language, rationales, and holdings that are inconsistent
with his argument. The same flaws are apparent in Posner's attempts
to apply the Hand formula in his own judicial opinions. Neither he
nor his like-minded colleague, Frank Easterbrook, has been able to
employ the Hand formula to resolve the negligence issue in any case,
and none of their fellow circuit judges has attempted to do so.
INTRODUCTION
There is a puzzling disjunction, at least in common law jurisdictions,
between the law of negligence that is expounded in academic legal texts
and both the expectations of ordinary people and the actual practice of
the courts. Subject to varying reservations and qualifications,' common-law
academic texts generally assume that whether a person's conduct is negligent,
and hence subject to legal liability for harms caused by such coniduct, depends
on whether the aggregate risks (expected losses or costs) created by the
conduct are greater than the aggregate utility (expected gains or benefits)
of the conduct.2 Although some scholars once asserted that this aggregaterisk-utility
definition of negligence is consistent with the principles of justice,
almost all of them now acknowledge that it is a transparent implementation
of the basic principles of utilitarianism and its modem offshoot, economic
efficiency theory, and as such is in direct conflict with the principles ofjustice.3
Yet it is usually thought that the fundamental purpose of the law should be