Tuesday, September 27, 2005

The Hand Formula

"[...] if the probability [of an injury] be called P; the injury [and level of liability], L; and the burden [on industry taking precautions], B; liability depends upon whether B is less than L multiplied by P."
--- Judge Learned Hand, United States v. Carroll Towing Co., 1947

Little did I know when I was accepted to law school that I would be going back to 9th grade algebra, but here I am. The above equation has become known as "The Hand Formula," and it originated with a case coming out of World War II, in which a negligent tugboat owner tried to pull a negligently managed barge out of New York Harbor, and in the process sank the barge, which happened to contain some much needed supplies for the Greatest Generation fighting in Europe.

Since its relatively obscure beginnings, the Hand Formula has been used in many tort litigation cases involving small people butting up against large companies. Hand breaks it down like this: Multiply the probability that an accident will occur by the magnitude of the injury at bar; if that figure (or idea or image) comes out less than the cost of the burden to the corporate entity to take precautions to prevent such an injury, there is no liability on the part of the corporation.

Now take this into consideration: Hand does not expect you to actually plug in any numerical figures. In fact, that would be basically impossible. Say the accident took someone's life. Well, then the liability was very, very high. Are you going to assign a number to that? Probably not.

Essentially, the Hand Formula is supposed to prevent companies from being held liable for freak accidents and just plain stupidity. And, in that regard, it does its job and it does it well.

My only problem with this formula, however, is that both sides - the injured private citizen and the potentially liable corporation - are seen on equal footing. It doesn't take into account the fact that the injured private citizen may only have limited resources with which to bring a legal challenge, while the corporation may have nearly unlimited resources to fight a legal challenge. Therefore, should a legitimate negligence claim be raised as a matter of serious public safety, whose to say the corporation can't just run out the clock on the private citizen, making them jump through all kinds of hoops until they just don't have the resources to continue.

Someone call Erin Brokovich.

1 comment:

BeingHuman said...

Learned Hand was unquestionably intelligent however his formula - famous in legal academia - seems too abstract to ever find any practical application. As you note there is no real ability to assign definite values for any of the variables he has created (except maybe probability of harm).

Learned Hand's formula, ultimately, becomes merely an idealistic attempt to create certainty in a complex and inhernetly uncertain world.