Liability of Persons of Unsound Mind : Incentives for Choosing Activity Level. An Economic Analysis of the Law

The aim of this paper is to demonstrate that liability on the part of a person of unsound mind in respect of an act committed by that person does not alter incentives to act by reason of the fact that when this person commits the unlawful act, he is not in possession of all their faculties. Regulations providing for liability on the part of the person of unsound mind in the choice of the activity level when he is in possession of all the faculties would have the effect of acting as a disincentive to conduct which is inefficiently harmful, as the person, when choosing his level of activity, would take into account the risk of liability in cases where he commits an unlawful act. Liability linked to the choice of level of activity would act as a disincentive to excessive risks of harmful events.The proposal made by some academic researchers whereby indemnification must take into account the age and the severity of the incapacitation would induce people who are not, in a certain moment, of unsound mind to choose their level of activity, taking into account liabilities they may face. A law which links the indemnification that injurer must pay when he is of unsound mind to age and severity of incapacitation acts as a disincentive to the choice of excessively high levels of activity and therefore excessive risks, and favours efficiency