1. A LAW AND ECONOMICS PERSPECTIVE ON INJUNCTIVE RELIEF Anthony Ogus Louis Visscher

2. TRADITIONAL LEGAL JUSTIFICATIONS Inadequacy of damages –economic = consumer surplus Public policy –economic = externalities

3. EFFICIENT WRONGDOING Imperfect legal formulation Argument against injunction (though see later)

4. CALABRESI & MELAMED: PROPERTY RULES & LIABILITY RULES Role of state in relation to private rights –police power to protect physically (injunction) + power of owner to alienate (Coasian bargaining) = property rule –no such police power thus defendant free to violate on payment of damages = liability rule Normative approach –economic: minimisation of transaction/administrative costs

5. TRANSACTION & ADMINISTRATIVE COST CONSIDERATIONS Case for injunction if continuing tort - enhanced if significant subjective value to right Case against injunction: high bargaining costs: multi-party – ephemeral relationships – strategic behaviour

6. EX ANTE CONSIDERATIONS Incentives to invest in activity: injunctions and damages have different effects on the ex ante incentives from all involved actors to invest in their activity Incentives to take care ex ante: also here different effects Compare art. 6:168 Dutch Civil Code

7. TIMING OF SANCTIONS Preclusion; Act-based sanctions; Harm- based sanctions Relevant factors: –Limits to magnitude of sanctions? –Costs of preclusion –Available information –Enforcement Costs Applied to the choice between damages and injunction

8. CONCLUSIONS Relevant issues: Subjective dimension; Social value of the activity; Ex ante investment and care; Factors determining optimal timing.