Law Commons^™

On The Judicial Interest Rate: A Comparative Law And Economics Perspective, Hugo A. Acciarri, Nuno Garoupa

Hugo Alejandro Acciarri

Although all legal systems use some form of pre-judgment or post-judgment interest, there is no substantive law & economics literature providing for a comprehensive theory on the impact, functioning and assessment of the judicial interest rate. Mainstream legal scholarship has usually dealt with it as having neutral effects on private and social costs. In this paper we show that the issue is theoretically-wise far more complex and it has a definite influence on legal policy. Due to asymmetric opportunity costs for plaintiff and defendant, judicial interest rates may bring about improper delay of proceedings and/or decouple damages from recovery. Both …