Non-pecuniary damages, financial incentive or symbol? Comparing an economic and a sociological account of tort law

Schwitters focuses on the differences between economic and a sociological perspectives on non-pecuniary damages. By exposing the alternative perspectives on this issue, he illuminates some methodological differences between both disciplines. Although law and economics has had a positive influence on empirical research, he questions the merits of this perspective when analysing non-pecuniary damages. Law and economics regards non-pecuniary damages exclusively as a financial incentive to realise optimal deterrence and maximisation of welfare. Alternatively, in sociology of law there is also attention for the symbolic dimension of law in which rules are seen as normative standards of behaviour. Compensation is a way to bring the wrongdoer to recognise that he has done wrong and has to compensate the victim, and to show the victim that his rights are taken seriously. Through a sociological lens, the adoption of an exclusively economic model of human behaviour has to be questioned. To what extent human behaviour is really influenced by either financial incentives or by normative standards of behaviour is an open empirical question. Finally, he argues that the decision to base our institutions (such as law) on economic underpinnings is a decision which itself cannot be based on an economic procedure of aggregating individual preferences and maximising welfare.