8/27/2020 E-Library - Information At Your Fingertips: Printer Friendly designated physician to contest then as it had not been timely disclosed to him. Not only did respondents not refute that the findings were belatedly disclosed to petitioner, there is also nothing on record showing that they submitted the findings within the prescribed period. Hence, when the period had lapsed, there was a presumption that petitioner's disability is total and permanent. It was also not contested that petitioner is still incapacitated to perform his usual duties and that his health has not regained normalcy. He has not been able to engage in any meaningful activity since 2012. He could not perform any manual labor, and had to continue undergoing physical therapy. Thus, petitioner's failure to refer the assessment to a third doctor is not fatal to his disability claim. The mandatory rule on third doctor referral does not apply here. Consequently, the company-designated physician's findings cannot be given credence due to the presumption that petitioner's disability is total and permanent. Hence, petitioner is entitled to total and permanent disability benefits amounting to US$90,000.00 under the Collective Bargaining Agreement. Law and economics can provide the policy justification of our existing jurisprudence. The contract between the manning agency and the seafarer is strictly regulated by the Philippine Overseas Employment Administration due to the unaccounted consequences that these contracts produce, mostly in the form of work-related risks and injuries. In economics, these are referred to as "externalities," which are unintended effects or consequences of an activity that affects the parties but are not reflected and imposed as a cost.[87] In employing seafarers, the manning agency and the shipping company, which have control over the ship, bear the burden of complying with safety regulations. When externalities such as occupational hazards are not accounted for, they escape the burden of shouldering the cost of keeping the vessel safe for their seafarers.[88] Imposing a liability induces the employers and the injured seafarers to be burdened with the cost of the harm when they fail to take precautions. This process of "internalization" means the consequences and costs are accounted for and are attributed to the party who causes the harm.[89] Thus, the occupational hazards are internalized through a claim of damages paid by the employer. Seafarers are compensated for the injuries they suffered. Here, the law intervenes to achieve allocative efficiency between the parties. Allocative efficiency means that both parties reach a mutually beneficial agreement. In a strict economic sense, allocative efficiency concerns the satisfaction of individual preferences where an optimal market is producing goods that consumers are willing to pay.[90] A choice or policy increases allocative efficiency only if it makes an individual better off and no one worse off.[91] Hence, allocative efficiency compels the law to help the parties achieve their goals as fully as possible.[92] Allocative efficiency for both employers and seafarers is reached by internalizing the occupational hazards through a seafarer's employment contract and Philippine https://elibrary.judiciary.gov.ph/thebookshelf/showdocsfriendly/1/65396 12/20