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In most jurisdictions, the burden of producing evidence on a contested issue traditionally falls on plaintiffs. In a tort claim, this de facto creates a presumption of non-negligence in favor of injurers. Some legal systems in Europe placed renewed attention on “presumed liability” rules, which instead create a presumption of negligence against injurers. In this paper, we analyze the effects of alternative legal presumptions on parties’ care incentives in the presence of discovery errors. Differently from what was suggested in prior research, we show that legal presumptions do affect primary behavior: presuming that the injurer was (not) negligent strengthens (weakens) his care incentives in situations where the plaintiff faces probatory difficulties. We analyze how these effects should inform the choice of evidence regimes to improve the robustness of liability rules, and to minimize the dilutive effect of imperfect discovery on individuals’ care incentives.

We use a lab experiment to examine whether and how leaders influence workers’ (un)ethical behavior through financial reporting choices. We randomly assign the role of leaders or workers to subjects, who can choose to report an outcome via automatic or self-reporting. Self-reporting allows for profitable and undetectable earnings manipulation. We vary the leaders’ ability to choose the reporting method and to punish workers. We show that workers are more likely to choose automatic reporting when their leader voluntarily does so and can assign punishment. Even workers who choose self-reporting tend to cheat less when their leader chooses automatic reporting. Nonetheless, most leaders do not opt for automatic reporting in the first place: they often choose self-reporting and punish workers who rather choose automatic reporting. Collectively, our results reveal a dual effect of leadership on ethical behaviors in organizations: workers behave more ethically if their leader makes ethical choices, but often leaders do not make ethical choices in the first place. Hence, leading by example can backfire.

Much of the conventional wisdom of evidence law rests on the premise that the amount of evidence available in any given case is exogenously determined. With the advent of evidence technology (e.g. dashcams, black-box technology, digital data storage, surveillance cameras), the availability of evidence is substantially controlled by individuals. In this article, we show that evidence rules play an important role in determining individuals’ decisions to invest in private evidence. We compare the evidence rules adopted in the USA and Europe and analyze their relative impact on the voluntary adoption of evidence technology. We find that by making private evidence not discoverable, more rather than less evidence would be made available to courts.

This Article analyzes the interaction between the burden of proof and evidentiary discovery rules. Both sets of rules can affect incentives for prospective injurers to invest in evidence technology (i.e., ex ante investments that increase the quantity and quality of evidence in case an accident occurs). This interaction becomes acutely important in the private international law setting, where jurisdictions are split on the question whether the burden of proof should be treated as a substantive or procedural matter. When a tort occurs in Europe, but the case is litigated in American courts, treating the burden of proof as a procedural matter preserves the complementarity of incentives created by the burden of proof and evidentiary rules. Conversely, treating the burden of proof as a substantive matter creates a mismatch in incentives created by the burden of proof and evidentiary rules.

The standard 1-period, unilateral care accident model assumes identical injurers and perfect information of an individual’s risk type. However, these assumptions are unlikely to hold in real-world accident scenarios. This paper considers a 2-period, unilateral care accident model in which injurers differ by probabilities of accident (their risk types) and have incomplete information about their risk types. We find that courts should optimally examine an individual’s accident history to accurately infer the risk type and adjust the due level of care accordingly. We show that tailoring due levels of care in the second period affects the definition of the due level of care in the first period. When judges have access to accident records but the risk type is hidden, they should relax the due level of care for first-time offenders to generate more information about an individual’s risk type, which helps to establish more efficient differentiated standards in the subsequent period.