Firm Risk Management in the Face of Product Liability Rules*

This paper addresses the issue of corporate risk management strategies in dealing with products liability law. It views risk management as the dependent variable. How do attributes of the firm and of the law of products liability influence the risk management practices of the corporation? Drawing on the work of Oliver Williamson and others, the paper views the firm as a boundedly rational organization that must devote significant resources in monitoring and controlling its agents. This is especially costly in an environment where the measure of adequate performance (i.e. the design, manufacturing and marketing of a non-defective product) is uncertain and where the criteria used by legal actors (judges and juries) to judge product defectiveness, may vary substantially from the criteria used by the firm's engineers and scientists. Both the costs of control and the level of legal uncertainty are variables. Together they combine to shape a firm's risk management strategy.     

Economics of Polluter Pays Principles for Mitigating Social Costs of Electricity: A Search for an Optimal Liability Share

To deal with externalities associated with electricity generation, under the Polluter Pays Principles (PPP), companies can be made to pay the compliance costs and then pass these costs incurred on to the end-users by charging a higher price per kWh of electricity used. However, there is a need for an optimal liability scheme, in terms of economic efficiency, equity and ethics in a world of favor seeking politics. With implicit weighting of welfare gains and losses to society, we developed supply-demand models. By incorporating plausible parameter values into the models, the optimal liability shares fell to less 100 percent (full) liability. However, the model is very sensitive to changes in the parameter values.     

The Responsibility of Accomplices in the Case-Law of the Ad Hoc Tribunals

This article discusses complicity as a form of liability in international criminal law, in particular as interpreted and applied by the ad hoc Tribunals in their case-law. After a short introduction on the distinguishing features of complicity, in particular with respect to joint criminal enterprise, reference is made to the complicity doctrines which, it is argued, mostly exerted an influence on the international judges – namely those developed in the English and French criminal orders. Subsequently, a critical and thorough assessment of the international case-law is provided. Looking forward, some remarks are also made to the complicity model delineated in the ICC Statute. The author concludes with some general observations on the contribution made by the ad hoc judges in giving actual content to the notion of complicity.     

美国产品责任中的纯粹经济损失规则探析——兼论我国相关法律制度的构建

在美国的侵权法上,因产品自身存在的缺陷而发生的产品本身价值的减损、修理更换发生的费用,以及因产品不能使用而发生的利润损失等被视为是一种纯粹经济损失。针对该类损失,美国的法院创造了责任排除规则,并且各州在对这一规则在运用时采用的是一种灵活且有弹性的实践方式。这样灵活的纯粹经济损失规则对于我国相关法律制度的构建非常有借鉴意义。     

Economic models of compensation for damage caused by nuclear accidents: Some lessons for the revision of the Paris and Vienna Conventions

In this paper the economic analysis of accident law is used to examine the liability for nuclear accidents. It is argued that the classic system of individual liability of a nuclear power plant operator with a financial cap on compensation and individual insurance by national pools is not effective. The current system leads to a too low compensation for victims and lacks an adequate internalization of the nuclear risk. Hence, it is argued that the economic analysis of law can provide useful insights for the revision of the Paris and Vienna Conventions on the liability for nuclear accidents. It is also argued that higher amounts of compensation can be generated only if the idea is accepted that all plants share the costs of an accident wherever it occurs. This could be realized through a mutual pooling system. Such a system could also be fitted into the revision of the Paris and Vienna Conventions.     

美国产品责任法归责原则的演进

作为侵权责任法重要组成部分的产品责任法,其担当着平衡社会主体之间,尤其是消费者集团与生产者集团之间利益关系的重要角色。美国产品责任法经历了从合同责任到侵权责任,进而由一般侵权责任到特殊侵权责任的发展过程。从历史发展的角度,展现美国商品经济各个时期侵权责任法归责原则的不同表现,分析它们产生的时代背景、理论基础及法律渊源等因素,从而获得了美国产品责任法归责原则纵向发展的概貌、制度特色,从中可以发现对我国产品责任立法的借鉴意义。     

经济法律责任独立性探讨

对法律责任划分标准的正确理解,是认识经济法律责任独立存在的前提条件。经济法律责任是以法律责任的部 门法性质为标准对法律责任进行分类的结果,且经济法律责任具有其独特性。独立的经济法律责任体制有利于 责权利效相统一原则的实现;更能体现经济法的"社会本位"性;充分发挥经济法作为独立部门法的作用;促进经 济法主体守法和执法。构建时,必须遵循经济法自身体系要求,体现经济法律责任自身特色,形式上可以与其他 部门法形式相交叉,可通过经济法中的民事责任、经济法中的行政责任、经济法中的刑事责任、经济法中的经济责 任的方式来实现。     

Deepwater Horizon: The Legal Fallout—The Framework for Liability,Fines, and Penalties for Oil Pollution

On April 20, 2010, an explosion occurred on the Deepwater Horizon offshore drilling unit resulting in the death of eleven workers, and subsequently a continuous and uncontrolled release of crude oil and natural gas from the wellhead for a total of eighty-six days. The Oil Pollution Act of 1990 (OPA) provides a comprehensive liability and compensation scheme by creating strict liability for the responsible party of a vessel or facility from which the oil was released subject to statutory limitations, and very limited applicable defenses. The owner of the Deepwater Horizon and the operator of the Macondo well were designated responsible parties under OPA subjecting them to liability for removal costs and damages. In addition, the Clean Water Act imposes civil and administrative fines on a per-day-per-barrel basis without limitation. Other federal statutes which are used to impose criminal liability are the Migratory Bird Treaty Act, the Endangered Species Act, and the River and Harbors Act of 1899.     

A Study of Juror and Jury Judgments in Civil Cases: Deciding Liability for Punitive Damages

A study was conducted to investigate civil juries' decisions concerning defendants' liability for punitive damages in tort cases. A total of 121 six-member mock juries composed of jury-service-eligible citizens were presented summaries of previously decided cases and given a comprehensive instruction on the defendant's liability for punitive damages. Most of the mock juries decided that the consideration of punitive damages was warranted, although appellate and trial judges had concluded that they were not warranted. The tendency to find the defendant liable was partly due to jurors' failure systematically to consider the full set of legally necessary conditions for the verdicts they rendered. Individual differences in the jurors' backgrounds were not strongly related to their verdicts; income and ethnicity were weakly related to judgments. The social processes in deliberation on civil juries were similar to the dynamics of deliberation that have been observed in criminal juries.     

The expert witness. Neither Frye nor Daubert solved the problem: what can be done?

Flawed expert scientific testimony has compromised truth finding in American litigation, including in medical malpractice and in product liability cases. The Federal Rules of Evidence and the Supreme Court in Daubert and other cases have established standards for testimony that include reliability and relevance, and established judges as gatekeepers. However, because of lack of understanding of scientific issues, judges have problems with this role, and juries have difficulties with scientific evidence. Professionals and the judiciary have made some advances, but a better system involving the court's use of neutral experts and a mechanism to hold experts accountable for improprieties is needed.     

The Expert Witness. Neither Frey nor Daubert Solved the Problem. What Can Be Done?

Expert testimony flawed by intent or ignorance, has compromised truth finding in American litigation, including in medical malpractice and in product liability cases, where scientific evidence is at issue. The Federal Rules of Evidence and the Supreme Court in Daubert and its progeny have established standards for testimony that include reliability and relevance, and established judges as gatekeepers. However, because of lack of understanding of scientific issues, judges have problems with this role, and juries have even more problems in sorting out scientific evidence. Professionals and the judiciary have made some advances in solving some of these problems, but a better system involving the court's use of neutral experts and a mechanism to hold experts accountable for improprieties is needed.     

The law and economics of AI liability

The employment of AI systems presents challenges for liability rules. This paper identifies these challenges and evaluates how liability rules should be adapted in response. The paper discusses the gaps in liability that arise when AI systems are unpredictable or act (semi)-autonomously. It considers the problems in proving fault and causality when errors in AI systems are difficult to foresee for producers, and monitoring duties of users are difficult to define. From an economic perspective, the paper considers what liability rules would minimise costs of harm related to AI. Based on the analysis of risks and optimal liability rules, the paper evaluates the recently published EU proposals for a Product Liability Directive and for an AI Liability Directive.     

The ambiguous Heritage of Mitteleuropa: the Resurfacing of Mitteleuropa as a Counter-image to the EU in Austrian Populism

The analysis in this article addresses the resurfacing of Mitteleuropain the populist discourse or, more precisely, the use of Mitteleuropa-ideas in the political strategies of the Austrian FPÖ (Austria's right-wing `Freedom Party'). The plans of the future European assessment spread by the European right-wing populism have an ambiguous character, which partly reproduces the ambiguity of the traditional definitions ofMitteleuropa in the debate at the beginning of the twentieth century. The article shows that the FPÖ's use of the concept ofMitteleuropa must be analysed with regard to the problem of the Austrian identity, because the ambiguous status of an ‘Austrian identity between Mitteleuropa and German re-union’ is the most important condition underpinning the emergence of the FPÖ. Secondly, the choice of a particular idea ofMitteleuropa - the Mitteleuropadefined by principles of exclusion, by a strong German culture and identity (Kulturnation), and strict reference to a Volksgemeinschaft with a territory and a culture that are juxtaposed to a cosmopolitan and liberal idea of Mitteleuropa- reveals the FPÖ's historical legacy and its opposition towards democracy and the representative institutions. Finally, the question is raised as to whether Haider should be considered not only an Austrian phenomenon, but an Austrian reaction to political and economic transformations, which evoke other protest movements in Europe. On the one hand, Haider is an Austrian phenomenon. On the other hand, he represents an Austrian reaction to political and economic transformations. In this sense, Haider's populism can be compared to France's Le Pen or Belgium's Vlaams Blokif we look at the form of popular legitimacy that they invoke, the request for a re-territorialisation of politics and for the defence of a national / European identity, and the opposition to constitutional patriotism and to all forms of ``thin'' European identities.     

Concurrent Duties

This paper offers an account of concurrent liability, and in particular the existence of, and interaction between, concurrent contractual and non‐contractual duties. It argues for five essential propositions: (1) a defendant can owe simultaneous private law duties towards a claimant, the content of which overlaps in whole or in part; (2) cases of concurrent liability in contract and negligence involve independent duties, which are concurrent but not coextensive; (3) the doctrine of concurrent liability is conceptually distinct from the rule that the claimant must elect between inconsistent remedies; (4) if the defendant commits a wrong in breach of more than one duty, the claimant has a prima facie choice to sue for any of those breaches; and (5) the content of one any duty might affect the content of the other. The last of these principles, it is argued, provide an explanation for the recent decisions in Wellesley Partners v Withers and AIB v Mark Redler.     

U.S. Supreme Court Affirms Potentially Responsible Parties' Right of Action for Cost Recovery

In the wake of the Supreme Court's decision in Aviall—that potentially responsible parties (PRPs) are not permitted to seek contribution from other PRPs under CERCLA unless they have been sued or otherwise settled their CERCLA liability—PRPs and the courts have struggled to identify a remedy for those that voluntarily undertake cleanup of contaminated sites. The Atlantic Research decision resolves a conflict among the circuits and clarifies that PRPs voluntarily incurring cleanup costs pursuant to CERCLA, can maintain an action for cost recovery against other PRPs. The authors discuss the current legal landscape regarding actions for cost recovery as presented in Atlantic Research.     

The civil liability of European nuclear operators: which coverage for the new 2004 Protocols? Evidence from France

In Western Europe, the nuclear liability is governed by two international conventions, drafted by the Nuclear Energy Agency of the OECD: the Paris (1960) and Brussels (1963) Conventions. These conventions traditionally limited the liability of the nuclear power plant operators to relatively low amounts. In France, the liability of the (state owned) operator of €91 million is covered by insurance (for €31 million) and reserves (for €60 million). A recent modification to the conventions occurred in 2004 and increased the liability limit to €700 million. In this paper we aim to evaluate the costs for covering the increased liability for the nuclear risk after the introduction of the 2004 amendments. In order to do so, we calculate the actuarial insurance premium for the nuclear risk and find that the current premium charge is very large. The paper tries to explain the high price of nuclear liability insurance. Also the costs of the own reserves for the coverage of potential nuclear accidents are examined. We then aim to evaluate the different options (mostly insurance and reserves) and indicate the optimal combination of both instruments to cover the future operators’ liability limit, introduced by the latest 2004 amending Protocols.

论有限责任公司债权人权利的回归

The contingent governance theory based on state-contingent ownership has exerted an important impact on economic academia, and its application in the field of company law is also of significant value. The lack of internal restraint mechanism and public supervision of limited liability companies makes it feasible to implement contingent governance. Under the mechanism of contingent governance, creditors of a limited liability company may intervene in its governance. The right of intervention is mainly reflected in three aspects, i.e., (1) mandatory debt-for-equity swap, (2) obligation of the actual controller to creditors when the limited liability company is on the edge of insolvency, and (3) creditor’s right of objection with respect to the decision of corporate substantial business. Ding Guangyu, Ph.D in civil and commercial law, works in the Chinese Institute of Applied Jurisprudence of the Supreme Court of China. His publications include Introduction of Chinese Labor Law: Cases and Materials (China Legal Publishing House, 2008), Tracing the right of creditors in LLC: From the perspective of contingent governance theory (Studies in Law and Business, 2008.2), Judicial Discretion and the Rule (Legal Daily, 2007-4-20), Uniform of Legal Application (Legal Daily, 2006-12-9).     

Judges as satisficers: a law and economics perspective on judicial liability

If judges are guardians of the law, who is to protect the individual member of society from the occasional corrupt, malicious, or reckless judge? The aim of this paper is to provide an answer to the last part of this question, focusing more heavily on cases of negligently inflicted harm. Departing from Simon’s bounded rationality and influenced by other constructs in behavioral law and economics, we view judges as satisficers who make decisions within real-world constraints, such as imperfect information and uncertainty, cognitive limitations and erroneous information. Judges are limited by the commonly observed barriers to the decision making process. Because their goal is not to optimize but to render opinions that are merely satisfactory, they often act as poor agents of their principals’ interests. In this light, it becomes clearer why judges tend to engage in behavior that is “improper”, especially under the circumstances of the currently overloaded judicial caseloads. We first address the differences in judges’ roles in Anglo-American and Continental legal systems. We then present our simple model for judicial misbehavior based on an understanding of judges as “satisficers”. Next we discuss the particularities of judicial errors and introduce a realistic and viable construct of “inexcusable judicial error”. On this basis we evaluate the impact of various incentive schemes on judicial behavior, focusing on the civil liability of judges. We conclude that civil liability for grave judicial errors is the most adequate remedy.     

An attempt to incorporate fairness into an economic model of tort law

This paper incorporates fairness into a simple economic model of tort law and discusses the difficulties of doing so. People are assumed to adhere to either the negligence or the strict norm and to incur a cost if liability is not imposed in accordance with their norm. The optimal standard of negligence is determined in a trade-off between fairness and efficiency. Conditions are derived under which preferences for fairness do not affect the optimal negligence standard. The modeling difficulties concern the ad hoc nature of the fairness norms. They are argued to be inherent to the subject.     

完善我国产品责任法之思考

产品责任法应成为我国社会主义市场经济法律体系的重要组成部分。尽管新《产品质量法》颁布时间不长 ,但我国现行产品责任法律制度无论在形式上还是内容上仍有必要依据保护消费者利益与促进生产发展并重的基本原则、严格责任与过错责任并用的归责原则及全部赔偿、限定赔偿和惩罚性赔偿并行的赔偿原则做进一步的完善