Tort Law in the Era of Climate Change, Katrina and 9/11: Exploring Liability for Extraordinary Risks (original) (raw)
Related papers
Catastrophic Harm in United States Law: Liability and Insurance
58 American Journal of Comparative Law 69-96 (2010), 2010
Catastrophes or disasters may be defined as natural or man-made events of significant magnitude causing disruption such that survivors feel deprived of normal social help. In American law, catastrophic harm includes the mass of individual losses suffered by individuals, businesses, and entities of all kinds, also including environmental harm. The Federal Emergency Management Agency (FEMA), created in 1979, coordinates the response to disasters occurring in the United States while it administers prevention and organizes relief efforts. However, the system does not work top-down, since local and state governments bear the initial responsibility as first respondents. Local or state failure can cause the system not to be reactive enough, explaining the slow response after Hurricane Katrina. Non-desirable risks tend to concentrate in earthquake, flood, or hurricane prone areas, making such risks uninsurable. Significant efforts are made at state and federal level to make catastrophic risk insurable, pooling risks and sometimes creating compensation funds, especially in the case of nuclear and terrorist risks. Rather than disrupting the market, state or federal intervention tend to create proper conditions for a market to exist where none could otherwise prosper, whilst in best cases encouraging disaster mitigation. Given the weakness of the American welfare system by comparison to other developed countries, victims are more prone than elsewhere to look for a tortfeasor and sue. The jury system, the practice of contingent fee and the availability of class actions make American tort law a powerful pro-plaintiff system and tort law has a large impact wherever defendants can be identified. Insured victims tempted to sue are rarely overcompensated. Sophisticated solutions have been devised for the assessment of environmental damage when caused by oil pollution. Sovereign immunity may bar mass tort litigation against the federal government, for instance, for the failed flood control levees in New Orleans, but history proves that the Corps of Engineers made good proposals but had to comply with wrong political decisions.
goldberg, Richard S., Perspectives on Causation …, 2010
forthcoming in Richard S. Goldberg, ed., PERSPECTIVES ON CAUSATION (Hart Publishing, 2010) This Article considers the possibility of imposing liability in torts for a wrongfully created risk of future harm. We examine the American and English court decisions pertaining to this issue and consider whether a probability-based compensation for the victim's expected-albeit not yet materialized-harm is just and efficient. We demonstrate how the virtues of a legal regime that allows a tort victim to recover compensation for her expected harm overshadow its vices. We conclude that a person's risk of sustaining harm in the future should be actionable whenever the risk is substantial. We further conclude that it should be left to the victim to decide whether to recover for his or her expected harm, or else wait and see if the risk materializes and recover only if it does. We observe that allowing victims to make this choice might create a collective action problem. Because expedited compensation for a victim's expected harm erodes the wrongdoer's ability to compensate future claimants, victims would opt for an early recovery for expected harm even when their substantive remedial preferences are different. We demonstrate, however, that this problem can be resolved.
Risk, Everyday Intuitions, and the Institutional Value of Tort Law
Stanford Law Review, 2010
This Note offers a normative critique of cost-benefit analysis, one informed by deontological moral theory, in the context of the debate over whether tort litigation or a non-tort approach is the appropriate response to mass harm. The first Part argues that the difference between lay and expert intuitions about risk and harm often reflects a difference in normative judgments about the existing facts, rather than a difference in belief about what facts exist, which makes the lay intuitions more defensible. The second Part considers how tort has dealt with this divergence between lay and expert perspectives. It also evaluates how tort's approach has differed from that of public law approaches to accident law, such as legislative compensation and risk regulation by administrative agencies. Ultimately, tort's ability to recognize the value of lay intuitions supports retaining the tort perspective as part of our societal arsenal of responses to risk and harm. This ability can also support a pro-tort perspective in two practical debates in the arena of tort law: that over preemption of tort law by administrative agency judgments, and that over access to tort recovery as part of a no-fault system.
Liability is both a legal notion and an ethical concept. This article contributes to the debate around the future roles of the precautionary principle by investigating how legal and ethical considerations intertwine. It also considers how financial markets are adjusting to the emerging economic and social realities of climate change. These two features are explored from the perspective of investors (with regard to “fiduciary duty”) and managers (with regard to the alignment between mitigation targets and company strategy). It has long been argued that mitigating climate change action suffers from a prisoner’s dilemma paradox, both geographically (each country preferring to free-ride) and temporally (every current generation lacking a direct incentive to prevent distant harm). The precautionary principle, understood in a financial context, however, allows us to go some way toward meeting these challenges. The reason is twofold: First, some actors in the financial sector—such as investment funds and companies—may outlive any one generation and thus accrue exposure to risk, which needs to be mitigated through a precautionary approach. The lawsuits that bankrupted asbestos manufacturers set a precedent, and there is an ongoing debate on whether other companies—insurers, fossil fuel companies, banks—face similar challenges. Second, as markets are driven by information, the financial risks of climate change can precede the physical time- and space-spread costs of floods and storms. Precautionary investor action can bring the future forward. The biggest private U.S. coal producer went bankrupt last year. Can we expect to see something similar for other fossil fuel companies as the world economy reduces its carbon intensity and investors shun oil and gas? What is the appropriate precautionary response? These are the questions addressed in this article, structured around two main themes: fiduciary duty and corporate governance.