One of the persistent problems surrounding the discipline of law and economics is the role of economic arguments in legal reasoning. The problem has been extensively discussed in the legal literature but has not been ultimately solved. This paper is a contribution to this discussion. The argument goes as follows. First, I argue that insights from law and economics, to the extent that they claim to be directly relevant for legal reasoning, should carry a jurisprudential preface that states that this very relevance is limited and conditional. Second, I introduce the concept of consequencebased reasoning and show that the typical normative claims of law and economics based on economic efficiency can be interpreted as consequence-based arguments of a special kind. Third, in the analytical core of the paper, the conceivability, feasibility and desirability of the judicial appreciation of general social consequences of legal decisions is considered. Referring to the philosophical, jurisprudential and institutional dimensions of the issue I argue that in a modern constitutional democracy the scope of consequence-based judicial reasoning is limited mainly by the expertise of courts. A more general implication of this analysis is that the impact of law and economics scholarship on law can only be understood through a close look at legal reasoning in general and consequence-based arguments in particular.