• Monzer Kahf 10232 Bellehurst Avenue, Westminster, CA 92683, USA. *The writer was formerly a research economist at the Islamic Research and Training Institute (IRTI) of the Islamic Development Bank (IDB).



This paper navigates through the civil liability legal theory in studying its economic effects. It aims at giving an insight of the Islamic system of liability. To do so, it begins with a brief introduction of what a liability system is through a glance at the experience of the United States in this regard. The American system of liability gives the courts a wide range of authority to assess the injury, which includes material, emotional, and loss of future income opportunity, and compensation that aims at not only granting the injured a recuperating sum, but also at deterring the injurer from such a behavior. The most serious economic outcome of the A system are: the grandiose uncertainty and unpredictability, and the huge amount of grants that represents high cost, and sometimes prohibitive, of liability. This led to long and cumbersome litigation, consumer profiteering, forsake of innovative ideas, and shortage of certain products and services. The Islamic system of liability centers on the materiality of the injury, both in its causality and in its outcome, and it provides a list of compensations. Accordingly, recognizable emotional harm is only the one that can actually be materially checked, and recognizable loss of income covers only that actually forgone income during the off work period caused by the injury. As life and parts of the human body are sacred and priceless, the I system leaves it only to revelation to define the amount of compensation for loss of life and bodily parts. The main economic outcome of the I system is its predictability and conservative amounts of compensation. The system also assigns a role for the society both in payment of the grant and in benefiting from the compensation.

JEL classification: G22, K13, P59

Keywords: Civil liability, Tort, Islamic tort and Islamic liability


How to Cite

Kahf, M. (2013). ECONOMICS OF LIABILITY: AN ISLAMIC VIEW. International Journal of Economics, Management and Accounting, 8(2).