The Disaggregated Hand Formula

Commercial activities, like selling a car or serving hot coffee, can generate a risk of loss to which multiple individuals are exposed. When burdens and losses are distributed across multiple stakeholders, when should negligence law tolerate or condemn the risky choice? A famous answer at the center of the first-year curriculum invokes the Hand formula: The failure to avoid a risk is negligent when the sum of the burdens of risk-avoidance is less than the sum of the expected losses. This Article argues that the Hand formula should be applied to multiparty cases by, first, disaggregating burdens and losses and comparing them on a pairwise basis, starting with the individual who bears the highest burden and the one who bears the highest expected loss.