Farber on Torts and Catastrophe

Daniel Farber (Berkeley Law) has just posted an article on SSRN entitled “Tort Law in the Era of Climate Change, Katrina and 9/11: Exploring Liability for Extraordinary Risks.”  The abstract follows:

Tort cases generally deal with routine risks – the kind of risk that aperson encounters as a result of driving a car or buying a product.These risks are also staples of the insurance industry. Today, however,society faces risks that threaten massive harms to large segments ofthe public. Such risks materialized with 9/11 and Hurricane Katrina,and may confront us with climate change.

The first part of this article is comprised of case studies of howthe tort system has responded to catastrophic risks such as large-scaleflooding, terrorist acts, and climate change. Liability approaches varydepending on the problem and jurisdiction, but there is at least noconsistent pattern of immunity for those who have created catastrophicrisks or failed to take reasonable precautions against them.

Part II examines how compensation for catastrophic risks couldcontribute to societal goals such as deterring undesirable risks andsocial risk-spreading. The risk-spreading goal is particularlyimportant because of the reluctance of private insurers to cover suchrisks. Compensation, whether administrative or judicial, might alsocontribute to stronger risk prevention or mitigation, and under somecircumstances would advance corrective justice.

ADL