The Filtering Effect of Sharing Rules

Sharing rules have a filtering effect on violations: they prevent the most harmful
violations and let the least harmful ones occur. We show under what conditions the
filtering effect improves social welfare and argue that this may explain why, in most
areas of the law, sharing rules are, in general, preferred to rules that entirely burden
one party. Our analysis applies to comparative negligence, communal liability, the
allocation of police investigation efforts, contract remedies for non-verifiable
breaches such as those that may occur in marriage and employment contracts, and
to the distribution of shares in partnerships.