Changes in Damages when Liability Rules Change: an Empirical Study on Compensation for the Time Spent in Pretrial Detention

In some legal systems, non-convicted pretrial detainees are to be compensated by the Government for the losses derived from their stay on remand. Several theoretical and empirical studies have analyzed some of the consequences of such compensation. This paper finds a result that said studies did not predict: a legal change that relaxed the requirements for compensation is correlated with a reduction in the amount of compensation awarded. We empirically analyze which factors are correlated with the amount of compensation awarded in these cases by Spanish courts from 1990 until today. Our econometrical analysis finds that (i) this amount has drastically decreased after the Supreme Court, by establishing that every non-convicted pretrial detainee is to be compensated, significantly expanded the set of cases where such compensation is due. Moreover: (ii) the longer the time spent on remand, the lower the daily compensation awarded; (iii) those who work receive higher damages than those who do not work, but there are notable (and apparently unjustifiable) differences by type of work; e.g., police officials get much higher awards than other claimants; (iv) we find no gender nor foreign bias.