The Role of Environmental Civil Liability: An Economic Analysis of the French Legal System

Abstract

This study analyses the long standing question whether environmental risks and accidents can be sufficiently controlled under a civil liability regime. The literature generally holds that regulation should be the primary instrument to promote environmental care, but that environmental liability can have a supplementary effect. However, little is known empirically on how environmental liability actually supplements regulation and whether this combination can in fact be considered efficient. This paper uses a dataset from France with all environmental cases that reach the French Supreme Court (Cour de Cassation) in the past 50 years, analysing how courts play such a supplementary role in addition to regulation. It is argued that regulators do provide judges with relevant information to help solve causal uncertainty problems, but that on the other hand liability rules are especially applied when regulation is weak. The data we provide hence lend some support to the hypothesis that environmental liability plays an important supplemtary function in deterring environmental harm in combination with regulation.