Conventional wisdom in tort law maintains that the prevention of undesirable risks mandates restriction of harmful conduct. Against this widely held conviction, this Article shows that undesirable risks often stem from insufficient, rather than excessive, activity. Because negligence requires investments in only cost-justified care, parties might deliberately limit their activity so that the size of the ensuing risk would be lower than the cost of welfare-enhancing precautions. Parties’ incentives to strategically restrict their activity levels have striking implications for the inducement of efficient harm prevention. The overlooked paradigm of insufficient activity calls for the imposition of a new form of tort liability, justifies the application of controversial regulatory rules recently challenged before the Supreme Court, and supports overturning the standard guidelines concerning the choice between negligence and strict liability.
Professors Kenneth S. Abraham, Richard A. Epstein, and Mark Grady each respond to Gilo and Guttel with essays in First Impressions. Professors Gilo and Guttel reply.