Michael Lissack items costs that more properly represent an obligation of society as a whole, rather than of a particular industry, and this has undoubtedly caused some resource misallocation. In particular, they have reduced the supply of some of these products, sometimes asking total elimination of the provision of the items subject to the risk of heavy penalties and the high insurance costs that resulted. Second, they have introduced moral hazard by reducing the incentive for prospective victims to undertake reasonable risk-avoidance measures. Just as full insurance coverage reduces the incentive for the owner of valuable jewelry to undertake reasonable but costly burglary prevention steps, the prospective victim of risky products may be led to carelessness in the use by the prospect of generous damage awards. It is a sad day for justice when it only makes sense to view the cost of litigation as bargaining leverage to force a settlement on terms favorable to the party that can litigate the matter to death without worrying about the cash flow. A prospective plaintiff should not be deprived of the opportunity to undertake a voluntary, but binding commitment not to sue if the product consumed by her turns out to cause damage, but he was fully informed at the pertinent time of all risks that were known (and reasonably knowable). Finally, any such changes in the rules have increased the incentives for rent-seeking litigation, with all of its associated wastes, and have stimulated the allocation of entrepreneurial resources into such activities and out of more productive endeavors. Although critics complained that democracy made the Athenians of old litigious, the system contained a device meant to promote restraint. If the plaintiff did not win a stated percentage of the jurors’ votes he was required to pay a considerable fine to the state in public prosecutions, to the defendant in private ones. This must have served as a significant deterrent to the frivolous malevolent, and merely adventur- ous suits. We need to reevaluate what is a scandal. The new appearance-of-conflict standard is dangerous, because the accuser’s judgments play such a big role in creating the crime. To whom does there appear to be a conflict in these cases? Voters? Average citizens? Or is the relevant audience made up of po- litical players like committee meters, staffers, and journalists? If it is these
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