Introducing quantitative rigor into the legal process has been
proposed to reduce error and uncertainty in litigation. One area of law that
would seem to be a candidate for such formalism would be proving
causation. Yet most legal scholars balk at the idea that the legal principles
of causation are based on anything as precise as, say, scientific causation.
We believe that counterfactual analysis, a relatively recent trend in the
philosophy of causation that is being applied in the social sciences, has a
role in understanding causation in at least one important area of the lawshareholder class-action lawsuits. The increasingly strict standards imposed
by the Supreme Court of the United States over the past twenty years,
culminating in the Dura Pharmaceuticals, Inc. v. Broudo decision, can be
understood in the context of counterfactual analysis establishing loss
causation. This approach then has important implications for estimating
damages in shareholder class-action lawsuits.
Description
The Continuing Evolution of Securities Class Actions Symposium
