Economic analysis of the bodily damages supply Fund in the light of "Efficiency" and "Cost-Benefit" principles

دانشنامه حقوق اقتصادی

Volume 30, Issue 23, August 2023, Pages 67-79   

Document Type: Scientific research

DOI: 10.22067/economlaw.2023.78149.1207

Authors

Hamid Afkar^{* 1}; Mohammad Abedi²

¹Ph.D Graduate, Department of Private Law, Faculty of Law and Political Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

²Associate Professor, Department of Private Law, Faculty of Law and Political Sciences, Ferdowsi University of Mashhad, Mashhad, Iran

Abstract

Objective: The bodily damages supply Fund has been established to protect the victims of vehicle accidents in order to be responsible for compensating the bodily injuries of the victims together with the insurance institution. Although several legal and jurisprudential principles justify the need to establish this fund, but maintaining the fund's position in society based on jurisprudential and legal criteria is not enough and examining the economic efficiency and desirability of the establishment strengthens its social foundation; Therefore, in this study, an attempt is made to assess the efficiency of the bodily damages supply Fund from the perspective of economic analysis of law and its economic justification.
Research Method: The present research method is analytical and descriptive.
Findings: Adopting new financing methods of compensation requires the establishment of legal institutions based on economic analysis studies. The economic analysis of a legal entity means the use of economic tools and ideas in the process of legal analysis to inject economic data into the body of the legal system to maintain the dynamism and desirability of the institution. Planning the operation of the bodily damages supply Fund in the form of the cost-benefit principle and various efficiency criteria justifies the need for the survival of the institution and increase social welfare and the evaluation of the function of the bodily damages supply Fund in the light of economic theories leads to the strengthening of the foundation of the fund based on the economic analysis of rights.

Conclusion: The benefit of having social security and removing the feeling of dissatisfaction resulting from the violation of the security duty of the government covers the cost of establishing the fund based on the cost-benefit principle. Although it is difficult to match the efficiency of the fund with the Pareto efficiency criterion, the difficulty of justifying most of the social and legal institutions with the said criterion makes the lack of economic efficiency of the fund negligible, based on the said criterion. Identifying the economic optimality of a legal entity based on the Caldor-Hicks criterion requires a comparison of efficiency in the assumption of the existence or absence of that entity and the superiority of its benefits. Placing the bodily damages supply Fund in the format of utilitarianism theory instills a feeling of pleasure more than pain and suffering to the society, and despite the apparent conflict of the efficiency of this institution with the Posner criterion, the possibility of quick recovery of economic power and achieving a sense of social security is a great help to maximize social wealth. Doing public duty arising from the thinking of distributive justice in compensating damages and providing the basis for social growth and excellence resulting from the good governance of the welfare state also justifies not only the role and position of the bodily injury fund in compensating for traffic accidents, but also strengthens the idea of expanding compensation funds in non-traffic accidents.

Keywords

Bodily damages supply Fund; Economic Analysis; Economic Efficiency Bodily Injury Fund; Social Welfare Theory; Wealth Maximization

References

 

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