The Hand Formula on the Big Screen

While Fight Club is on my mind, it seems like a good time to introduce you to Judge Learned Hand.  Hand was a second circuit judge, and he's a pretty famous guy in legal circles. If you've been to law school, the name rings out.  One of the things he's famous for is the Hand Theorem, a way of calculating costs and benefits when it comes to negligence.  

The idea, developed in U.S. v. Carroll Towing Company (159 F.2d 169), is that when calculating whether or not a duty has been breached, you should consider three variables: B, P, and L.

• B = the burden of taking the precautions necessary to avoid an accident
• P = the probability of that accident occurring
• L = the amount of harm or damages that would result from that accident

IF B is less than P x L, there is incentive to take precautions and prevent against lawsuits.  After all, you'll pay less to do that than you would pay for the litigation that could arise.

IF B is greater than P x L, then the party involved has some incentive not to meet the standard of care. It will cost less to deal with any litigation that arises from potential accidents than it will to take the precautions that would prevent such accidents.

When I first heard of the Hand Theorem, I had a "I've heard that before" moment.  Googled the Fight Club screenplay, and found that my hunch was correct.  I had heard something very similar, indeed.  Listen and learn.