Private Versus Socially Optimal Provision of Ex Ante Legal Advice

19 Pages Posted: 10 Jul 2007 Last revised: 29 Jul 2022

See all articles by Louis Kaplow

Louis Kaplow

Harvard Law School; National Bureau of Economic Research (NBER)

Steven Shavell

Harvard Law School; National Bureau of Economic Research (NBER)

Date Written: October 1991

Abstract

This article considers whether the demand for legal advice about potential liability for future acts is socially excessive. using the standard model of accidents, we find that the answer depends on the type of advice and the form of liability. When advice provides information about properly determined liability, the demand for advice is socially optimal under strict liability but is socially excessive under the negligence rule. When advice identifies errors the legal system is expected to make, the demand for advice is socially excessive under both liability rules.

Suggested Citation

Kaplow, Louis and Shavell, Steven, Private Versus Socially Optimal Provision of Ex Ante Legal Advice (October 1991). NBER Working Paper No. w3868, Available at SSRN: https://ssrn.com/abstract=473991

Louis Kaplow (Contact Author)

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National Bureau of Economic Research (NBER)

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Steven Shavell

Harvard Law School ( email )

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National Bureau of Economic Research (NBER)

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United States

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