'Causation-consistent' liability, economic efficiency and the law of torts

Some legal scholars have argued that the standard modeling of liability rules is inconsistent with the causation requirement of the law of torts. It has been claimed that under the doctrinal notion of causation liability, an injurer is liable only if he was negligent. Moreover, he is liable for only that loss which can be attributed to his negligence and not the entire loss, as is the case with the standard modeling of liability rules. Our analysis shows that the 'causation-consistent' liability provides interesting insights on several issues concerning efficiency as well as compensation. Paper shows that when care is bilateral, causation-consistent liability provides a basis for efficiency characterization of the entire class of liability rules. Moreover, it remains a basis for the efficiency classification of liability rules even for bilateral-risk accidents.