This Note aims to develop and describe a new class of penalty, the reflective remedy, to address the problem of optimal deterrence when the law is uncertain. It describes a novel remedial option for traditional legal disputes, in which the activity level chosen by the defendant is ‘reflected’ over the socially optimal level, and shows how this penalty theoretically improves on traditional options because of its scale-blind impact on incentives. As a result, this penalty will, in certain cases, better induce socially-optimal levels of behavior by regulated actors. The Note also develops a method by which an ordinary trier of fact can implement this proposal in when faced with more complex legal standards and proposes concrete examples where this proposed penalty could improve on the current status quo by realigning the incentives of the parties to more closely comply with the law.
Johnston, Mitchell, Reflective Remedies (May 27, 2019). Yale Law Journal, forthcoming.