Assignment Of Liability Research Articles

The Inner Logic of the Coase Theorem and a Coasian Planning Research Agenda

This paper is an original attempt to explore the inner logic of and apply the Coase Theorem—specifically the corollary of the invariant version of the Coase Theorem (CIT) and the extension of the corollary of the optimality version of the Coase Theorem (COTE)—to empirical planning research. This attempt hinges critically upon seven theoretical propositions developed on the basis of seven law and policy relevant determining variables that are manifestations of ways of ‘assignment of rights and liabilities’ for the application of CIT (COTE). This is preceded by an examination of the meaning of seven allocative outcomes or determined variables pertaining to the theorem component ‘resource allocation would (under CIT not) be identical’. A 7 × 7 matrix (with forty-nine cells, each defining a specific research arena) is constructed, and relevant literature is surveyed to map the landscape of Coasian planning research as a step to building a transaction-cost-based research agenda. An example of empirically refutable planning hypotheses is given to demonstrate the usefulness of the propositions and to obtain a glimpse of the applicability of the agenda.

Strict Liability Versus Negligence in Indiana Harbor

Judge Richard Posner's opinion in Indiana Harbor Belt Railroad Co. v. American Cyanamid Co. offers an economic interpretation of Restatement (Second) of Torts Section 520, which imposes strict liability on actors who conduct abnormally dangerous activities. This paper, which was prepared for a University of Chicago Law Review Symposium in honor of Judge Posner, provides a critique of the opinion and argues that Judge Posner's analysis is at many points unpersuasive. The problem lies in substantial part with the questionable logic of the Restatement criteria for the assignment of strict liability.

Comparative Causation and Economic Efficiency: When Activity Levels are Constant

In some recent works, negligence-based liability has been severely criticized. It has been argued that negligence-based liability does not form a convincing basis for liability assignment. Causation-based liability has been proposed as an alternative basis of liability determination. Parisi and Fon (2004) have studied the efficiency properties of the causal apportionment of liability. The authors have shown that when care levels as well as activity levels of the parties affect the causation of an accident, causation based liability does not provide efficient incentives for the parties. In this paper, we assume the activity levels to be constant. Under this assumption, we have demonstrated the existence of liability rules that are efficient and at the same time `consistent' with the requirement of causation liability. In addition, it is shown that under these rules the equilibrium outcome is unique. The analysis has been undertaken in a very general framework.

Deploying Carbon Capture and Storage in Europe and the United States: A Comparative Analysis

AbstractCarbon capture and storage could play an important role as a near-term bridging technology, enabling deep reductions from greenhouse gas emissions while still allowing use of inexpensive fossil fuels. However, filling this technological promise requires resolution of key regulatory and legal uncertainties surrounding both human and ecological health, integration within a larger climate policy, and clear assignment of responsibility and liability for long-term care. Deployment of CCS projects in the European Union (E.U.) and the United States (U.S.) may be technologically similar, but will be contextually different. In this paper, we explore the existing energy, policy, regulatory and legal climates that will necessitate different approaches for deployment. The high U.S. dependence on coal makes CCS very important if the U.S. is to achieve deep emissions reductions, while in the E.U. an established climate policy, the importance of off shore projects, and a supportive political climate are favorable to CCS deployment. Additionally, in Europe, regulators must clarify the classification of CO2 within E.U. and international regulations governing on and offshore projects, whereas in the U.S. subsurface property rights, abandoned wells, and state-level jurisdictional difference will play important roles.

The Concept of a Joint Criminal Enterprise and Domestic Modes of Liability for Parties to a Crime: A Comparison of German and English Law

The concept of a Joint Criminal Enterprise (JCE) has become a useful tool in international criminal law. It allows courts to hold individuals criminally liable for group activities to which they have contributed in a criminally relevant way. The concept allows for an attribution of criminal responsibility of unforeseen consequences of such group activities, and it seems to enable the prosecution and the courts to extend criminal liability to high-level perpetrators that use subordinated persons for their criminal aims. The advantages of such a tool are obvious since the crimes under international criminal law are mostly of a systematic, large-scale and collective character, while domestic criminal law mainly deals with less complex crimes that are normally committed by individuals who can easily be linked to the crime. Due to this empirical or criminological fact, it seems logical that the normal modes of liability for parties to a crime used in domestic criminal law need to be adapted, and that a rather extensive assignment of criminal liability for secondary parties is justified in international criminal law. This article seeks to question this assumption by undertaking a comparative analysis of domestic modes of liability. The author aims to show, on the one hand, to what extent the concept of JCE is in line with the general concept of parties to a crime in domestic criminal law. On the other hand, the author argues that abandoning the idea of JCE as an independent mode of liability may lead to better compliance with the principles of legality and individual criminal responsibility and thereby increase the legitimacy of international criminal law.

Overcoming Past Obstacles to Insurance in the New EU Countries

The newest EU member countries in Central and Eastern Europe went through a rapid transition from state to market direction of economic and financial affairs as well as of enterprises and social arrangements, including insurance. As incentive structures, property rights, rules of competition, and the assignment of liabilities changed, so did the risks associated with private operations and investments. This essay looks at some of the unexpected risk exposures and the means of coping with rapid change in incomplete financial markets largely through the eyes of a leading participant in the process.

A Complete Characterization of Efficient Liability Rules: Comment

In a recent article, Jain and Singh (2002) prove that a condition they call negligence liability is necessary and sufficient for any liability rule to be efficient. In this note I criticize their result on two accounts: First, their result crucially depends on implicit restrictions they impose on the liability assignment function. If we drop the assumption that the liability apportionment between two non-negligent parties is constant for all combinations of non-negligent care levels, the equivalence between the condition of negligence liability and the efficiency of liability rules breaks down. Second, their attempt to drop the assumption of uniqueness for the social optimum improves the generality of the model at a substantial cost, since it must be accompanied by a new assumption that is possibly even more unrealistic. The importance of the uniqueness assumption is shown in a simple discrete care model, in which comparative negligence may lead to an inefficient outcome when the existence of two social optima leads us to interpret due care as a varying standard based on the other party’s actual choice.

Errors in technological systems

AbstractMassive data and experience exist on the rates and causes of errors and accidents in modern industrial and technological society. We have examined the available human record, and have shown the existence of learning curves, and that there is an attainable and discernible minimum or asymptotic lower bound for error rates. The major common contributor is human error, including in the operation, design, manufacturing, procedures, training, maintenance, management, and safety methodologies adopted for technological systems.To analyze error and accident rates in many diverse industries and activities, we used a combined empirical and theoretical approach. We examine the national and international reported error, incident and fatal accident rates for multiple modern technologies, including shipping losses, industrial injuries, automobile fatalities, aircraft events and fatal crashes, chemical industry accidents, train derailments and accidents, medical errors, nuclear events, and mining accidents. We selected national and worldwide data sets for time spans of up to ∼200 years, covering many millions of errors in diverse technologies. We developed and adopted a new approach using the accumulated experience; thus, we show that all the data follow universal learning curves.The vast amounts of data collected and analyzed exhibit trends consistent with the existence of a minimum error rate, and follow failure rate theory. There are potential and key practical impacts for the management of technological systems, the regulatory practices for complex technological processes, the assignment of liability and blame, the assessment of risk, and for the reporting and prediction of errors and accident rates. The results are of fundamental importance to society as we adopt, manage, and use modern technology. © 2003 Wiley Periodicals, Inc. Hum Factors Man 13: 279–291, 2003.

Electricity: taxes on emission liabilities. An examination of the economic effectiveness of Polluter Pays Principles

In spite of the resolutions of Conference of Parties on Climate Change (COP7), policy practitioners in many countries are currently obligated to react to perceived domestic environmental damages. Like few other sectors, utilities, especially, coal-based electricity generation is often identified as a major source of emission. Since the generating companies and end-users have joint interests in profit maximization but may dichotomize in their activities, the policy practitioners are struggling in designing a unique domestic emission policy. Both law and economic theory suggest that companies should be made to pay the costs of the pollution through assignment and enforcement of full liability— Polluter Pays Principles—and then pass these incurred costs on to end-users by charging higher rates per kWh of electricity usage. Questioning this full liability in designing emission policy with implicit weighting of welfare gains and losses to society as a whole, a three-group (consumers, producers and victims of the emission) supply–demand model is developed, and the net welfare effects are analyzed. With plausible parameter values, our analysis shows that the intermediate liabilities over a full or zero liability are preferable on both economic efficiency and equity grounds. However, the model is quite sensitive to the parameter values.

Sticks and stones and words that harm: Liability vs. responsibility, section 230 anddefamatory speech in cyberspace

This article explores recent developments in the regulation of Internet speech, in particular, injurious or defamatory speech and the impact the attempts at regulation are having on the `body' in the sense of the individual person who speaks through the medium of the Internet and upon those harmed by that speech. The article proceeds in three sections. First, a brief history of the legal attempts to regulate defamatory Internet speech in the United States is presenteds a short comparative discussion of defamation law in the UK and Australia is included. As discussed below, this regulation has altered the traditional legal paradigm of responsibility and, as a result, creates potential problems for the future of unrestricted and even anonymous speech on the Internet. Second, an ethical assessment is made of the defamatory speech environment in order to determine which actors have moral responsibility for the harm caused by defamatory speech. This moral assessment is compared to the developing and anticipated legal paradigm to identify possible conformity of moral and legal tenants or to recognize the conflict between morality and law in assigning responsibility to defamatory actors. This assessment then concludes with possible suggestions for changes in the legal climate governing the regulation of defamatory speech on the Internet, as well as prediction of the result should the legal climate continue to develop on its present course. This is not to suggest that all law, or even the law of defamation, be structured to reflect the subjectivity of a moral construct, but since it is the authors position that the legal assignment of liability in online settings is misaligned, this reflection can serve as beginning reassessment of that assignment.

Market system to curtail emission magnitudes evolved from electricity generation

The recent resolution of the seventh Conference of the Parties to the Climate Convention (COP7) indicates that if a country is required to comply with the pollution limit, part of the required reduction in levels of emission will have to be achieved domestically. With this status quo, policy practitioners may opt to design emission level standards along with the provision of allowing access to the international permit market that may facilitate carbon offset crediting to the country. In policy formulation cognate to electricity generation through coal combustion, it is suggested that end-users will pay emission compliance costs in terms of the price of electricity usage and the companies will offer a rebate on reduction to those who curtail the level of usage of electricity. Under the scheme proposed, the generating company(s) will face the consequences if it fails to comply to domestic emission standards. In practice, the proposed method can ensure ‘Pareto efficiency’ and exhibit ‘Pareto improvement’ in two-party cases where both parties have joint interest in profit maximization, but they may have dichotomy in their activities. In dealing with domestic greenhouse gas issues, the proposal becomes appealing to parties for reducing the level of emissions. Moreover, it may produce a greater degree of abatement of CO2 emissions over the levels of abatement resulting from policies of consumer or producer liability assignments.

The Coase Theorem and Opportunity Cost

The Coase Theorem maintains that, absent transaction costs, the assignment of legal liability for external damage caused by a given product will not affect the levels of production of the damaging good (or of the damaged good). Over the past decade a sporadic debate has emerged in the law and economics literature concerning the validity of the Coase Theorem in a world without transaction costs. Daniel Posin has proposed circumstances in which the Coase Theorem is purported to fail. This paper reviews the arguments proposed by Posin, and explains why they are apparently erroneous. The reasoning applied does not rely on the existence of wealth effects or explicit changes in factor prices in response to rate of return differentials. Furthermore, while my model does not rely on one-owner analysis, the results derived are identical to those under the one-owner model.

Toward a Trademark-Based Liability System

No general rule of law renders trademark owners liable for products sold or business conducted under the trademark. This essay proposes the adoption of such a rule. The rationale for the change is that businesses are known by their trademarks, not their entity names, in the marketplace. The vast majority of customers - both businesses and consumers - select the persons with whom they will deal, and contract with those persons, on the basis of trademarks. The entity structures of businesses (corporate groups, franchises, joint ventures, etc.) are generally invisible to customers. Yet under current law the businesses' liabilities to customers are calculated from those entity structures. The result is a failure in the market for liability: Customers lack the information they need to contract for the level of supplier financial responsibility they prefer. The proposed rule would create no new liability, it would merely extend existing liability to trademark owners. The rule would extend liability to trademark owners for (1) defective products sold under the mark and (2) the wrongful acts of licensees that conduct businesses identified to customers by the mark. The initial assignment of liability to the trademark owner will prevent businesses from externalizing their liabilities. Trademark owners will remain free, however, to pass the liability on to their licensees by contracts requiring indemnification or insurance.

Should Liability Follow the Logo? An Essay on the Appropriate Role of Trademark in the Liability System

No general rule of law renders trademark owners liable for products sold or business conducted under the trademark. This essay proposes the adoption of such a rule. The rationale for the change is that businesses are known by their trademarks, not their entity names, in the marketplace. The vast majority of customers - both businesses and consumers - select the persons with whom they will deal, and contract with those persons, on the basis of trademarks. The entity structures of businesses (corporate groups, franchises, joint ventures, etc.) are generally invisible to customers. Yet under current law the businesses' liabilities to customers are calculated from those entity structures. The result is a failure in the market for liability: Customers lack the information they need to contract for the level of supplier financial responsibility they prefer. The proposed rule would create no new liability, it would merely extend existing liability to trademark owners. The rule would extend liability to trademark owners for (1) defective products sold under the mark and (2) the wrongful acts of licensees that conduct businesses identified to customers by the mark. The initial assignment of liability to the trademark owner will prevent businesses from externalizing their liabilities. Trademark owners will remain free, however, to pass the liability on to their licensees by contracts requiring indemnification or insurance.

Unintended Consequences of Tort Reform: Rent Seeking in New York State's Structured Settlements Statutes

Abstract No abstract available.

Contractual responsibility in non-profit associations

The contractual liability exposure of members of unincorporated non-profit undertakings has not been deeply investigated by the courts. The basic principle is clear enough - contractual liability depends on whether or not a member participates in managing the affairs of the association. This is framed by the judges as a question of agency. What has remained unstated is the rationale for this approach. The author examines the English, Canadian, and American authorities in an effort to clarify the operation of the agency analysis and to justify the liability assignments it produces.

Effects of necessary, sufficient, and indirect causation on judgments of criminal liability.

When has one essentially committed a crime? When are one's actions necessary for its occurrence or sufficient to bring it about under normal circumstances? Participants assigned punishments to 17 scenarios that varied as to the necessity and sufficiency of a perpetrator's actions in bringing about a murder; in some instances abnormal circumstances prevented the crime from coming about. The perpetrator's perceived contribution to the outcome was the strongest predictor of assigned liability, but perceived necessity and sufficiency were also predictors. All three measures mediated assignments of liability when relevant to a given case. In contrast to the stance taken in the Model Penal Code, liability assignments for sufficient cause scenarios were higher than those assigned to attempt scenarios, revealing that people regard actions that are ordinarily sufficient to bring about murder as requiring more punishment than less complete attempts.

Legal Liability as an Environmental Policy Tool: Some Implications for Land Markets

This article considers the use of legal liability as a tool for internalizing environmental externalities, considering specifically the implications for land markets. The discussion focuses on liability under CERCLA. A simple model of land markets is used to evaluate alternative assignments of liability in terms of their impacts on decisions to buy and sell property and to invest in pollution abatement. The results suggest that the existence of a land market can alter the effect of the liability rule. In some cases the land market can eliminate an inefficiency that would otherwise exist, while in other cases it can create one.

The liability problem in modern environmental statutes

This article mainly focuses on modern statutes and drafts concerning civil liability for environmental harm. A first part is dedicated to an historical summary of the circumstances which gave birth to the problems concerning the various criteria for assignment of liability; in a second part the laws and the projects that are most representative and pertinent for this inquiry are examined. The article is at the same time an effort to combine the historical-comparative approach with that elaborated by the economic analysis of law.

What is the Coase Theorem?

The Coase Theorem is interpreted as asserting that the equilibrium level of an externally (e.g., pollution) is independent of institutional factors (in particular, assignment of liability for damage), except in the presence of transaction costs. It is shown here that absence of income effects (due to parallel preferences or quasi-linear utility functions) is not only sufficient (which is well known) but also necessary for this to be true. Equilibrium may be perfectly competitive or other Pareto optimal and individually rational, in particular an element of the core. Both convex and non-convex (Starrett type) economies are considered.