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

Pierre Bentata () and Karim Barkat ()
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Pierre Bentata: CERGAM-CAE, Aix-Marseille Université
Karim Barkat: CERGAM-CAE, Aix-Marseille Université

No 97, CAE Working Papers from Aix-Marseille Université, CERGAM

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 the regulation/liability mix increases efficiency, the regulation providing a new way to address causal uncertainty at the liability stage. We show that such increase in efficiency is mainly due to a transfer of information from regulators to judges and to the adoption by judges of a probabilistic approach to causation.

Keywords: Regulation; Liability; Environmental Risk; Causation; Institutional Design; Empirical studies; Courts decision (search for similar items in EconPapers)
JEL-codes: K13 K32 K41 L51 (search for similar items in EconPapers)
Date: 2012-03
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Persistent link: http://EconPapers.repec.org/RePEc:cgm:wpaper:97

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