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We have assumed for this analysis what Kornhauser and Revesz call a negligence regime of "full liability" rules. These authors point out that accidents can occur in the absence of negligence. Thus, it can be argued that "partial liability" rules would provide adequate deterrence. Under partial liability the victims' damages would be discounted by the probability of harm occurring through acts of non-negligent actors. For example, if there is a 20% probability that a creditor will be unable to collect a $1000 debt in the absence of negligence, but in feet there is negligence, then his recovery under a partial liability rule would be limited to $800. Kornhauser & Revesz, Sharing Damages, supra note 158, at 837-40. These authors note that commentators are split as to whether common law courts follow full or partial liability rules. Id. at 839-40. We think it unlikely that courts will seek reduction of damage awards commensurate with the "background" probability of losses occurring to creditors, guarantors, and investors in the absence of negligence.

(n276) See William M. Landes & Richard A. Posner, Joint and Multiple Tortieasors: An Economic Analysis, 9 J. LEGAL STUDIES 517, 518 (1980) [hereinafter Joint and Multiple Tortfeasors]. In the alternative care ease "optimal accident avoidance requires that only one potential injurer take care." An example given is "where a product defect that causes an injury would have been prevented if either the manufacturer of the defective component had been more careful or the manufacturer of the final product had inspected its components more carefully." Id. The auditor's case would appear to offer a close fit; harm to third parties would be avoided if either the client reports the truth or the auditor discovers a misrepresentation and sets it right. In contrast, the "joint care" case requires both parties to take care. Id.

We believe the Landes-Posner model would find that the auditor's case is "simultaneous rather than successive" because in the latter instance "one tortfeasor aggravates an injury inflicted by the other." Id. But when an auditor fails to detect a client's misrepresentation, the two parties' acts produce a single unaggravated injury to the third party creditor, guarantor, or investor.

(n277) Id. at 526.

(n278) ECONOMIC STRUCTURE, supra note 272, at 200.

(n279) Id.

(n280) Id.

(n281) Although H. Rosenblum does not explicitly deal with the issue of back-up liability as such, it is generally the case that an auditor is sued only when its client defaults, or is likely to default, on its obligations.

(n282) ECONOMIC STRUCTURE, supra note 272, at 201-12. A rule of comparative fault when there are multiple tortfeasors is, in effect, a rule of comparative contribution. Id. at 197.

(n283) Id. at 201-03. Landes and Posner point out that even pro rata contribution is expensive because additional lawsuits may be required to identify all the potential tortfeasors. They dismiss the idea of allowing defendants to seek contribution from nonparties because "this is a costly


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