A considerable amount of recent tort reform is tributary to the body of economic analysis of tort law performed in the second half of the last century. Analysts and tort reform proponents have made Society become more demanding on the joint performance of liability systems and relating insurance markets. Times when compensation was the only relevant dimension in liability performance analysis are gone by. Today, precaution incentives and side effects must also be taken into account prior to any reform. At the same time, those two goals can also be pursued by means of alternative schemes namely no-fault plans-. So for a liability regime to be considered socially valuable today it must not just do a good job compensating victims and deterring injurers effectively, cheaply and timely, but it also has to do it better than alternative compensation and risk-control measures.
Scheduling personal injury awards are by all means the most innovative and crucial of those passed in Spain in many years. This paper aims to analyze this reform focusing one particular and central dimension: How do schedules for bodily injure awards affect tort litigation? This is approached by means of the well developed litigation models in Law & Economics1, in an attempt to objectively identify the incentives, costs and final effects to be expected from this legal institution.
Some of the conclusions reached in this preliminary study threaten primary intuition, as well as what proponents and the legislator itself- claimed to be one of its utmost beneficial effects: an immediate reduction in litigation rates.