Environmental Regulation and Civil Liability under Causal Uncertainty: An Empirical Study of the French Legal System

Abstract

The 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 French judges apparently use the informational advantage of regulation (in showing that a particular activity may be of higher risk) to adopt a probabilistic approach to causation, thus increasing the effectiveness of the liability system. Claims that would (probably) be rejected in a liability regime (without regulation), given causal uncertainty are now accepted successfully in courts because the breach of regulation guides the judge (and hence cures his informational deficiency) in the difficulties in proving causation that normally arise in environmental liability cases.