Indian courts have applied those rules that have been shown to be efficient in the economic analysis of liability rules. But, as a matter of practice, these rules as applied by Indian courts lead to various kinds of uncertainties regarding the compensation awards. Such uncertainties not only defeat the stated objective of the law of torts, but also cause economic inefficiency. Uncertainties, among other things, result in avoidable wastage of resources, since they induce more litigation by reducing the chances of out-of-court settlement. Many of these uncertainties can be reduced significantly, if courts make use of the relevant tools and techniques developed in the field of economics and statistics.
