Lewinsohn-Zamir on Monetary Versus In-Kind Remedies

Daphna Lewinsohn-Zamir (Hebrew University) has posted Can't Buy Me Love: Monetary Versus In-Kind Remedies (Illinois Law Review) on SSRN.  Here's the abstract:

The choice of appropriate remedies is a major concern in all legal spheres, yet little has been done to determine which remedies people actually prefer. Scholarly debates on this issue are typically based on theoretical arguments and intuitions rather than experimental or empirical data. It is often assumed that people are indifferent between in-kind and monetary remedies of equal pecuniary value. Consequently, some scholars have argued, for instance, that people ordinarily view a contractual obligation as an option to either perform in-kind or pay expectation damages.

This Article challenges the conventional wisdom that monetary remedies are usually a satisfactory substitute for in-kind redress. It presents new experiments that examine the choices laypersons and experienced businesspeople make between remedies and entitlements. The findings establish that members of both groups strongly prefer in-kind entitlements and remedies over monetary ones. For example, they would rather be given the very thing to which they were entitled than receive a monetary substitute, however accurately calculated. It is therefore possible that damages routinely fail to provide adequate compensation, even when they pertain to fungible, easily quantifiable assets.

Since promoting individuals’ welfare is a major concern for legal policy-making, ignoring the preference for in-kind redress may lead to both inefficiency and unfairness. The Article offers various normative implications of the experimental findings, through the discussion of such in-kind remedies as specific performance of contractual obligations, injunctions for wrongful interference with property, compensation in development rights for takings of land, and apologies in defamation cases.

Steve Clowney