Environmental Regulation and Civil Liability Under Causal Uncertainty: An Empirical Study of the French Legal System
AbstractThe key question in this paper is to determine whether regulation and regulators information can help solving causal uncertainty problems in liability. A widely held view among Law & Economics scholars is that civil liability alone is not well-suited to cope with environmental accidents, especially where causation is uncertain or costly to establish. Instead of a simple civil liability rule, it is therefore advocated that a regulatory system be implemented combined with a public insurance scheme, or, alternatively, to go for a mix of regulation and civil liability. Such a mix of regulation and civil liability prevails in French law and this article presents an original analysis of French courts decisions concerning cases of environmental accidents for which causation was uncertain and regulators were not able to control for levels of organizational and human care. The dataset covers more than fifty years of trials outcomes from the highest civil and criminal court in France – Cour de Cassation. We found evidence that the regulation/liability mix increases efficiency, the regulation providing a new way to address causal uncertainty at the liability stage. We show that such increase in efficiency is mainly due to a transfer of information from regulators to judges and to the adoption by judges of a probabilistic approach to causation.
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Bibliographic InfoPaper provided by Aix-Marseille Université, CERGAM in its series CAE Working Papers with number 97.
Length: 19 pages
Date of creation: Mar 2012
Date of revision:
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Regulation; Liability; Environmental Risk; Causation; Institutional Design; Empirical studies; Courts decision;
Find related papers by JEL classification:
- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability
- K32 - Law and Economics - - Other Substantive Areas of Law - - - Environmental, Health, and Safety Law
- K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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