Strict Liability Regime Research Articles

Product liability in Nigeria: a paradigm shift from fault-based to strict liability regime

Until recently, civil liability for product defect in Nigeria was essentially fault-based under the law of contract and the tort of negligence. This made it extremely difficult for consumers to recover damages against manufactures and sellers of defective products and constituted a serious deterrence to consumers from seeking redress when they suffer loss or damage as a result of defective products. This article analyses the relevant provisions of the new Federal Competition and Consumer Protection Act 2018 and argues that they constitute a departure from the fault-based contract and negligence principles in favour of a strict product liability regime.

Strict liability Regime in Poland

The article focuses on administrative violations, which are considered to be based on strict (or objective) liability model. Due to the lack of in-depth scholarly analysis of administrative liability, its principles had to be developed in the case-law of the Constitutional Tribunal, which influences the decisions of administrative courts. The recently introduced provisions of the Code of Administrative Procedure concerning administrative monetary penalties are also analysed. The conformity of this model with the guarantees provided by the European Convention on Human Rights is examined, as well. The analysis leads to the conclusion that three exculpatory circumstances are recognized in this regime: force majeure, necessity and ensuring the standard of diligence established by the Constitutional Tribunal.

An Unreasonable Solution: Rethinking the FTC's Current Approach to Data Security

For over two decades, the FTC creatively employed its capacious statute to police against shoddy data practices. Although the FTC’s actions arguably were needed at the time to fill a gap in enforcement, there are reasons to believe that its current approach has outlived its usefulness and is in serious need of updating. In particular, our analysis shows that the FTC’s current approach to data security is unlikely to instill anything close to optimal incentives for data holders. These shortcomings cannot be fixed through changes to the FTC enforcement approach, as they are largely generated by a mismatch between the tools that Congress gave it over a century ago and what it needs to foster firms’ incentives to mimic socially optimal levels of care for the data they hold. Not only does the current framework likely suffer from informational deficiencies attendant to its focus on “reasonable” security that render liability standards uncertain, it also lacks the ability obtain the type of relief that will force firms to internalize the costs of their data security decisions. We examine the problem of data security enforcement through the lens of the economics of optimal precautions and identify several reasons why a strict liability regime administered by the FTC, under which firms pay for the expected harm from breaches they cause, is likely to be superior to the current framework that revolves around the concept of reasonableness. The benefits from strict liability flow from the likelihood that firms do not fully internalize the costs and benefits of their data security decisions and the relatively large informational burdens associated with measuring actual and optimal care under a negligence regime. We also show why in this informational environment strict liability is better than negligence for developing a vibrant market for cyber insurance, which will allow data security regulation to be de facto outsourced to insurers who will contract with firms for optimal levels of care. Because these private contracts will harness private information on costs and benefits from precautions, they are likely to incentivize more efficient behavior.

Reducing Legal Uncertainty and Regulatory Arbitrage for Robo-Advice

Robo-advisers are online financial adviser services that use algorithms to create investment recommendations without human input. They deliver advice at low costs and they are growing in popularity. However, the nature of the interaction between client and machine raises many legal questions under the applicable EU regulation. This article argues that robo-advisers provide investment advice within the meaning of the Second Markets in Financial Instruments Directive (MiFiD2). They are subject to authorisation by the national regulator and ongoing conduct requirements. It might be tempting to introduce regulatory sandboxes to address the persisting legal uncertainties in practice, but such a regulatory change does not seem likely in the near future. Instead, regulatory arbitrage should be reduced by a uniform application of the MiFiD2 framework throughout the EU. Regulators and courts should also be aware that software replacing human advisers diverges from the basic idea of human interaction that forms the basis of contract law. Investment firms are able to use new technology in the services they provide. However, as this means introducing new risks for investors, the investment firm should be subject to a strict liability regime for failures of the respective technology (for example, the unavailability of the service).

Railway Sparks: Technological Development and the Common Law

Abstract The railways have been described as Britain's ‘gift to the world’. The sheer scale, ambition and audaciousness of the engineering still inspires awe and reshaped the landscape forever. They brought towns and cities closer together and instigated irreversible economic, political and social changes. However, as is often the case with a new technology, the railways also brought negative side effects, one of the most destructive of which was fire damage caused by sparks and lighted coals from steam locomotives. The railway sparks issue has long served as a case study for the economic analysis of tort and the issue of where the loss should fall. Nevertheless, much of the analysis has lacked an appreciation of how the courts actually resolved these disputes. This has attracted some comment from tort scholars and legal historians but has never been the subject of a sustained piece of doctrinal or historical research. This article constitutes the first truly comprehensive and in-depth analysis of the cases (both reported and unreported). The study has yielded new insights into the main arguments (and in particular the need to fit spark arrestors to locomotives), the attitude of the railway industry to the problem and the role played by such cases in key doctrinal developments such as strict liability. Moreover, it examines how railway interests in Parliament were able to stymy attempts to replace the common law with a much more onerous strict liability regime under statute. As such it affords important new insights into how law responded to some of the new challenges of the Industrial Age.

Reducing Legal Uncertainty and Regulatory Arbitrage for Robo-Advice

Robo-advisers are online financial adviser services that use algorithms to create investment recommendations without human input. They deliver advice at low costs and they are growing in popularity. However, the nature of the interaction between client and machine raises many legal questions under the applicable EU regulation. This article argues that robo-advisers provide investment advice within the meaning of the Second Markets in Financial Instruments Directive (MiFiD2). They are subject to authorisation by the national regulator and ongoing conduct requirements. It might be tempting to introduce regulatory sandboxes to address the persisting legal uncertainties in practice, but such a regulatory change does not seem likely in the near future. Instead, regulatory arbitrage should be reduced by a uniform application of the MiFiD2 framework throughout the EU. Regulators and courts should also be aware that software replacing human advisers diverges from the basic idea of human interaction that forms the basis of contract law. Investment firms are able to use new technology in the services they provide. However, as this means introducing new risks for investors, the investment firm should be subject to a strict liability regime for failures of the respective technology (for example, the unavailability of the service).

Environmental Liability for Deep Seabed Mining in the Area: an Urgent Case for a Robust Strict Liability Regime

Environmental Liability for Deep Seabed Mining in the Area: an Urgent Case for a Robust Strict Liability Regime

Pharmaceutical product liability in Spain

This paper aims at describing the different liability regimes applicable to damages caused by pharmaceutical products. Special attention is paid to the strict liability regime foreseen in the European Directive 85/374/CEE, on the liability of the manufacturer for defective products. It also deals w ith some of the main characteristics of the Spanish procedural system, when referred to tort liability procedures aimed at compensating damages caused by defective products.

Tort Law and Mass Transportation Accidents: A French-German View on Legal Challenges in Times of Market Deregulation

Abstract The liberalisation of the coach, air and rail transport market sheds new light on a relatively unexplored field of comparative tort law: the rules governing the liability of transportation companies for accidents involving third parties. Through an assessment of recent developments under French and German Law, this article reflects on the emerging trends of those tort rules, induced or highlighted by the market opening process. The existing strict liability regimes for railway and coach carriers, already subject to a significant tightening process, raise new questions as to the exact circle of persons liable for injuries, since the market liberalisation goes hand in hand with the unbundling of infrastructure and operations.

Retrospecto da responsabilidade da pessoa jurídica no ordenamento jurídico brasileiro: do Código Civil de 1916 até a compreensão da responsabilidade objetiva da Lei Anticorrupção (Lei nº 12.846/2013)

O artigo busca apresenta um retrospecto sobre mudança do pensamento jurídico brasileiro a respeito do panorama de responsabilização da pessoa jurídica. Desde a edição do Código Civil, em 1916, até a edição da Lei Anticorrupção, em 2013, observa-se uma paulatina e crescente atenuação do regi­me de responsabilidade limitada e subjetiva da pessoa jurídica (restrita à sociedade, e não atingível ao patrimônio dos seus sócios), havendo o que se denomina de “verdadeiro fim da responsabilidade li­mi­tada no Brasil”. A hipótese apresentada no presente artigo é a de que o ordenamento jurídico evoluiu de uma responsabilidade subjetiva da pessoa para um regime de responsabilidade objetiva da pessoa jurídica, devido às necessidades da sociedade brasileira. O objetivo principal do artigo é promover um retrospecto histórico do regime de responsabilização da pessoa jurídica, de modo a melhor compre­ender o regime de responsabilidade objetiva da Lei Anticorrupção, que impõe pesadas sanções às pessoas jurídicas que venham a causar prejuízos à Administração Pública. Além disso, o estudo busca aprofundar os limites da responsabilidade objetiva da pessoa jurídica no âmbito da Lei Anticorrupção, de modo a examinar as diferenças existentes no regime de responsabilização, por meio da utilização de sanções administrativas, no âmbito do Direito Consumidor, Ambiental, Tributário e Concorrencial, que se utilizam constantemente de sanções administrativas para responsabilizar pessoas jurídicas.

The Kiev Civil Liability Protocol and the Interaction between Civil and Administrative Liability Regimes

Abstract Τhe Kiev Civil Liability Protocol creates a strict liability regime which channels liability towards the operator, providing also that such liability shall be covered by compulsory insurance. The Protocol implements the “polluter-pays” principle and, unlike other similar regimes, it is neither exclusive nor self-contained, allowing in some instances for the application of other international instruments or of relevant rules of domestic law. It is argued that the Kiev Protocol can coexist with eu Directive 2004/35 on environmental liability, given that the latter opts for an administrative approach, and could even provide a mechanism for the recovery of costs incurred by the competent public authority in case of transboundary damage, thus facilitating the implementation of the Directive. It covers both economic and, to an extent, environmental damage and, if in force, will be an important tool in the hands of the victims of transboundary pollution.

The Signal-Tuning Function of Liability Regimes

Fault-based liability regimes require an inquiry into the nature of the defendant’s conduct, whereas this type of inquiry is absent in strict liability regimes. Therefore, verdicts reached through fault-based liability regimes can convey superior information compared to verdicts reached through strict liability regimes. Further reflection reveals that this advantage is enjoyed by fault-based liability regimes only if the evidence related to the nature of defendants’ actions is such ciently informative. Otherwise, admitting such evidence can add noise to the information conveyed through verdicts. Therefore, liability regimes have a function of tuning signals conveyed on to third parties, which, in turn, causes deterrence effects by affecting the informal sanctions imposed on defendants who are found liable. We construct a model wherein this function is formalized, and we identify the optimal liability regime and burden of proof as a function of various factors (e.g. the commonality of the harmful act, and the informativeness of the evidence).

From horizontal to vertical: an intermediary liability earthquake in Europe

As part of its Digital Single Market Strategy, the European Commission would like to introduce vertical regulations, replacing — or better conflicting with — the well-established eCommerce Directive horizontal intermediary liability regime. An upcoming revision of the Audio-visual Media Services Directive would ask platforms to put in place measures to protect minors from harmful content and to protect everyone from incitement to hatred. Meanwhile — under the assumption of closing a ‘value gap’ between rightholders and online platforms allegedly exploiting protected content — the Draft Directive on Copyright in the Digital Single Market would implement filtering obligations for intermediaries. Finally, the EU Digital Single Market Strategy has also endorsed voluntary measures as a privileged tool to curb illicit and infringing activities online. Each of these actions will erode the eCommerce intermediary liability arrangement by bringing in — in a way or another — proactive monitoring obligations and causing a systemic shift from a negligence-based to a strict liability regime for hosting providers. This systemic shift would apparently occur against public consensus and absent any justification based on empirical evidence. Nonetheless, it will bring about dire consequences by pushing privatization of enforcement online through algorithmic intelligence, based on murky, privately-enforced standards, rather than transparent legal obligations. This reform might cause a policy earthquake that will shake and crack EU law’s systemic consistency, due process and fundamental rights online.

From Horizontal to Vertical: An Intermediary Liability Earthquake in Europe

As part of its Digital Single Market Strategy, the European Commission would like to introduce vertical regulations, replacing — or better conflicting with — the well-established eCommerce Directive horizontal intermediary liability regime. An upcoming revision of the Audio-visual Media Services Directive would ask platforms to put in place measures to protect minors from harmful content and to protect everyone from incitement to hatred. Meanwhile — under the assumption of closing a ‘value gap’ between rightholders and online platforms allegedly exploiting protected content — the Draft Directive on Copyright in the Digital Single Market would implement filtering obligations for intermediaries. Finally, the EU Digital Single Market Strategy has also endorsed voluntary measures as a privileged tool to curb illicit and infringing activities online. Each of these actions will erode the eCommerce intermediary liability arrangement by bringing in — in a way or another — proactive monitoring obligations and causing a systemic shift from a negligence-based to a strict liability regime for hosting providers. This systemic shift would apparently occur against public consensus and absent any justification based on empirical evidence. Nonetheless, it will bring about dire consequences by pushing privatization of enforcement online through algorithmic intelligence, based on murky, privately-enforced standards, rather than transparent legal obligations. This reform might cause a policy earthquake that will shake and crack EU law’s systemic consistency, due process and fundamental rights online.

The Signal-Tuning Function of Liability Regimes

Fault-based liability regimes require an inquiry into the nature of the defendant’s conduct, whereas this type of inquiry is absent in strict liability regimes. Therefore, verdicts reached through fault-based liability regimes can convey superior information compared to verdicts reached through strict liability regimes. Further reflection reveals that this advantage is enjoyed by fault-based liability regimes only if the evidence related to the nature of defendants’ actions is such ciently informative. Otherwise, admitting such evidence can add noise to the information conveyed through verdicts. Therefore, liability regimes have a function of tuning signals conveyed on to third parties, which, in turn, causes deterrence effects by a¤ecting the informal sanctions imposed on defendants who are found liable. We construct a model wherein this function is formalized, and we identify the optimal liability regime and burden of proof as a function of various factors (e.g. the commonality of the harmful act, and the informativeness of the evidence).

Liability for Environmental Damages from the Offshore Petroleum Industry: Strict Liability Justifications and the Judgment-Proof Problem

After the Deepwater Horizon oil spill of 2010, one of the worst environmental man-made disasters and the largest ever oil spill in the United States, scholars and government investigators analyzed the offshore regulatory regime and its implementation in search of failures that led to the accident and possible solutions. Relatively few critiques of the regulatory regime discussed strict liability for environmental damages from oil spills. Enacted in the Oil Pollution Act of 1990, this regime is a part of the solution, but is not a complete answer. One issue not addressed by this liability regime is the judgment-proof problem — some injurers are unable to pay the full amount for which they have been found legally liable because they simply do not have the economic assets. The judgment-proof problem significantly reduces deterrence and undercuts the protection that the strict liability regime seeks to implement. British Petroleum’s wealth and ability to repay tens of billions of dollars after the Deepwater Horizon spill obscured this issue. But the judgment-proof problem may arise in future oil spills if the operating company’s total assets are worth less than the actual amount of damages. The likelihood of this occurring increases in times of decreasing oil prices, when the value of some drilling companies is dramatically diminished. A number of policy tools used in combination could mitigate the judgment-proof problem: compulsory liability insurance, vicarious liability,minimum asset requirements, special tax, and criminal liability. Currently, a requirement for both financial responsibility and criminal liability has been incorporated into both U.S. and European legal regimes. To minimize the risk of judgment-proof parties, however, the United States should utilize a clearer requirement of minimum assets combined with liability insurance and additional vicarious liability for parties who have some control over the injurer’s behaviour (i.e. lenders). As practical difficulties may prevent the implementation of all these tools, additional policies should be explored to address the problem during this time of diminishing oil company values, such as a requiring that operating companies pay part of their dividends into a compensation fund and encouraging small companies to merge and create an entity with higher total assets.

Unknown Risks and Civil Liability in Spain: A Study of Spanish Law with Some French/Italian Comparative Remarks

Taking advantage of the French and Italian literature, this paper explores how the Spanish legal system deals with the problem of unknown risks. Questions relating to fault and strict liability, adequate causation and the defence of development risks are discussed. Amongst these questions, and to some extent to the author’s surprise, the attention of legal writers in these three legal systems is focused on the question of the role of the development risks defence within the general rules of non-contractual liability. The context for this discussion is the problem of how to understand the option between the European based regime of defective products and the said general rules of non-contractual liability. Underscoring that some traditional legal writers and case law have understood strict liability as liability based on a presumption of fault, this paper focuses on the particular approach of the Spanish legal system. The Spanish situation is special because (a) there is no provision in the Civil Code that could be seen as a general clause of strict liability for things or for risky activities and (b) because the commonly held understanding that every kind of strict liability regime is based on a presumption of fault may wrongly lead to the idea of applying the development risks defence to every kind of liability.

Towards Efficiency in Attributing Criminal Liability to Corporations: Canadian and Brazilian Regimes Compared

This article compares Canadian treatment of corporate criminal liability with that in Brazil, examining whether there are ways in which one system can learn from the other. It is argued that the Canadian model could provide a starting point for revision of Brazilian legal principles in this area that, would encourage the public to recognize that crimes committed by corporations should be taken seriously. However, because criminal liability requires a high burden of proof and is therefore difficult to secure, the Brazilian regime of strict liability may ultimately be useful in encouraging compliance by corporations, assuming sanctions are severe enough and detection of violations by law enforcers is enhanced. The solution may therefore consist in the use of both these regimes, as is currently the case with anticorruption law in the UK.

Enhancing moral relationships through strict liability

The article considers the apparent tension between contract’s strict liability doctrine with respect to performance and the general moral precepts that liability should track fault and that one should internalize the costs of one’s own choices, but not the costs of arbitrary misfortune. By making contractors strictly liable for their failure to perform, the law attributes greater responsibility to agents than these moral principles seem to countenance – namely by according them legal responsibility for events or outcomes for which they bear no fault. Those precepts, however, are couched at a highly abstract level that is more appropriate for blame and punishment than for the sort of responsibility that contract law assigns. In the article, I defend the strict liability doctrine as a philosophically interesting default rule that supports trusting relationships between the parties and lays the groundwork for a healthier moral cooperative relationship between contracting parties than a fault-based system would. Strict liability norms relieve the promisee of pressures to supervise and intrude upon the promisor during performance and so eliminate some of the impetus to cultivate and display attitudes and behaviours of distrust. In turn, strict liability encourages the promisors to assume full responsibility for a project and by relieving promisees of pressures to intrude on the promisor gives the promisor a greater arena of autonomy in which to operate. While fault-based liability rules may encourage displays of distrust and sow the seeds of conflict, strict liability rules assign responsibility in ways that encourage trust and other components of healthy moral relationships. However, conceiving strict liability in this way brings out an internal tension between the justification of strict liability in contract and broad construals of the duty to mitigate, a doctrine that places the burden of self-help on disappointed promisees. As I will argue, broad construals of the duty to mitigate work at cross-purposes with the moral functions of a strict liability regime, offering further reasons to interpret the duty to mitigate narrowly.

Liability Issues Concerning Self-Driving Vehicles

This article deals with the civil liability issues that arise when self-driving vehicles are admitted to our streets. Firstly, it is explained why strict liability regimes for the vehicle holder, which are in place in several jurisdictions across Europe, are a workable foundation for ensuring compensation of the victim. However, accidents caused by highly automated vehicles will raise the question of the manufacturer's liability for a defective product. Accordingly, this article examines the effects of the circumstance that accidents occurring with self driving cars will no longer be caused by misconduct of the human driver, but often rather by a system malfunction. Thirdly, it is argued that preferably the manufacturer should be the risk bearer and that this shift in liability towards the manufacturer will result in an adequate allocation of liability.