A precaution is owed when the probability of harm times its magnitude exceeds the burden of taking it.
Hand's 1947 formulation in United States v. Carroll Towing: B < PL. It is an early explicit cost-benefit rule for institutional risk, and it makes negligence a question of arithmetic rather than character.
In practice
- A supermarket that could fit non-slip matting for £8,000 and faces £200,000 of foreseeable injury claims is negligent for not fitting it.
- A landlord who could install a £40 carbon monoxide alarm against a small chance of a death is doing the same arithmetic, and the answer is not close.
- Standing
- An early explicit cost-benefit rule for institutional risk.
- Subject
- Risk & Reliability
- Essay
- How much caution, and the jokes about its limits