Towards an Expanding Enterprise Liability in Europe?
| Author | Ton Hartlief,Michael Faure |
| DOI | 10.1177/1023263X9600300303 |
| Published date | 01 September 1996 |
| Date | 01 September 1996 |
| Subject Matter | Article |
Michael Faure *
Ton Hartlief
**
Towards an Expanding Enterprise Liability in Europe?
How
to
Analyze
the
Scope
of Liability of Industrial Operators and their
Insurers
§
1.
Introduction
•••
Since the 1970's the scope
of
liability
of
industrial operators in the United States has
expanded considerably. 1 This expansion relates both
to
the likelihood
of
being found
liable in case
of
an accident
and
to the amount
of
damages awarded. A tendency
towards an increased liability for industrial operators seems to have started in Europe
to some extent
as
well. The need
to
protect innocent victims against major industrial
hazards has led both legislation and case law to expand the scope
of
liability. Some
argue that in many cases the classic negligence standard has de facto been replaced by
a strict liability rule.
In this article we will try to indicate what elements may influence the scope
of
liability
of
industrial operators. This question obviously not only relates to the situation
of
industrial operators, but also to their insurers. Indeed, whether
or
not an industrial
operator will be found liable after
an
accident has occurred,
and
will
be
bound to pay
compensation, may not only depend upon substantive tort law, but also upon the existing
social security system. This
may
in
some countries be
so
elaborate that it eliminates the
* Professor
of
Law at Maastricht University (NL).
** Professor
of
Law at the University of Leiden (NL).
*** We are grateful
to
Ad
Geers, Jaap Spier, Walter van Gerven and Gerrit van Maanen for useful com-
ments on an earlier draft
of
this paper.
1. See on this development Kiely,
T.,
Modern Tort Liability: Recovery
in
the '90s, (Wiley, 1990); Priest,
G.,
'The
Invention
of
Enterprise Liability: A Critical History
of
the Intellectual Foundations
of
Modern
Tort
Law',
Journal
of
Legal Studies (1985), 461; Tunc,
A.,
'Ou va
Ia
responsabilite civile aux Etats
Unis?', Revue internationale
de
droit compare (1989), 7; Weir, T., 'International tendencies in the law
of
liability', Aktuel/e Juristische Praxis (1996), 444; and the dissertation
of
Schirmeister, F
.C.,
Amerikaanse toe stand
en
in he/ schadevergoedingsrecht? De vergoeding van /etselschade in
de
Verenigde Staten, (Vermande, 1996), 437-531.
MJ 3 (1996) 235
I Towards An Expanding Enterprise Liability in Europe?
need for a victim to file a tort claim. In addition the attitude
of
the legal community
may play a role
as
well. Therefore, in many cases where potential liability exists,
damage suits are nevertheless not brought.
Obviously the scope
of
liability will be dependent upon the specific tendencies in legisla-
tion and case law in different legal systems. Therefore we will not try to generalize
tendencies on the scope
of
liability within Europe. Instead, we will provide a model that
indicates some
of
the elements that determine the scope
of
liability. In some cases the
situation in the Netherlands will serve
as
an example.
The goal
of
this article
is
merely to indicate how one could analyze a shift in the scope
of
liability. A next step would be to analyze the consequences
of
a shift in the scope
of
liability for the insurability
of
certain risks. It is, however, not possible to deal with this
second step within the scope
of
this article.
In order to be able to analyze whether one can detect a shift in the scope
of
liability we
will address the following elements. After this introduction
we
will first concentrate on
shifts in substantive tort
law(§
2). Then
we
will
tum
to possible shifts in social security
law that may increase the need for victims
of
torts to bring private damage actions. In
this part we will also address the possibility
of
social insurers using the tort system to
recover the amounts that have been paid to victims from tortfeasors via a right
of
redress
(§
3). Next
we
will look at other elements that may influence the willingness
of
victims to bring a
claim(§
4). Finally, we will discuss changes in the amount
of
damages awarded
(§
5).
To a large extent we will deal with tendencies that can be noted in various European
legal systems, but that are still uncertain. Therefore we should, once more, stress that
it is not the ambition
of
our paper to analyze whether there
is
indeed an expanding
liability
of
industrial operators in Europe
at
the current stage. We are merely attempting
to indicate the elements that need
to
be taken into account
if
one wishes to execute such
an analysis either for the scope
of
enterprise liability today
or
in the future.
A few final remarks will be formulated
(§
6).
§ 2. Changes in Tort Law with Respect to the Scope of Liability
A.
INTRODUCTION
In this part
of
the article we would like to address the question whether there have been
substantial changes in European tort law recently and whether it can be predicted that
other changes may occur in the near future. In many countries in Europe one can find
authors that can be quoted to support the thesis that the scope
of
liability has indeed
236 MJ 3 (1996)
Michael Faure I
Ton
Hartlief
expanded in recent years. 2 This expansion of liability relates in general
to
enterprise
liability, but also to liability
of
professionals, such
as
physicians, accountants and
lawyers. 3 In this section
we
shall try
to
sketch some of the developments that in gen-
eral might have influenced this expansion. Since
we
have indicated that we are inter-
ested in addressing the consequences
of
these expansions, both for industrial operators
and
for their insurers, we shall also briefly address the consequences
of
changes in tort
law
for the insurability
of
certain risks.
As
far
as
the insurability
is
concerned one
should keep in mind that the magnitude
of
the risk
is
determined by the probability (p)
that an accident with damage (D) will occur. 4 Changes in material tort law that affect
the conditions for liability usually relate to (p).
But
as
we
have indicated in the introduc-
tion, (p) is also influenced
by
other factors, such
as
the scope
of
the social security
system (which we will discuss in §
3)
and the willingness to file claims
by
the legal
community and their clients (which will be discussed
in
§ 4). Changes in tort law can
obviously also affect the amount
of
damages awarded; this will be discussed below (in
§
5)
as
well.
In many cases it will not be possible to indicate precisely what the financial conse-
quences
of
a certain change in tort law will be.
It
will be hardly possible e.g. to indicate
whether a certain shift in case law will lead
to
a
10
%,
25
% or greater increase in the
chances
of
an industrial operator being found liable. However, one can at least try to
indicate whether an expansion in liability
is
due
to
changes in legislation or case law
with respect to material tort law
or
to changes
in
the social security system. We shall
now discuss some developments in material tort law that might affect the probability
of
an
industrial operator being found liable, distinguishing between developments
at
the
international level
(B)
and
at
the national level (C).
2.
For
the Netherlands see e.g. J. Spier, De maalstroom van het aansprakelijkheidsrecht, Houthoff-
lecture,
24
March 1992 (Houthoff, 1992) and for Germany Schmidt-Salzer,
J.,
'Untemehmens- und
Mitarbeiterhaftung
im
deutschen und europiiischen Produkt-
und
Umwelthaftungsrecht' in Ahrens, M.
and Simon, J. (eds.), Umwelthaftung, Risikosteuerung und Versicherung, (Erich Schmidt Verlag,
1996), 59 and Kiitz, H., Deliktsrecht, (Alfred Metzner, 1991), 5th ed., 15-17, as well
as
generally
Rogers, W. V.H., Spier,
J.
and Viney, G., 'Preliminary observations' in Spier, J. (ed.),
The
Limits
of
Liability, Keeping the Floodgates Shut, (Kiuwer, 1996), 1-2; Spier, J., 'How
to
keep liability within
reasonable limits? A brief outline of Dutch law'
in
Spier, J. (ed.),
The
Limits
of
Liability, 98-99 and
Bolt, A.T. and Spier, J ., De uitdijende reikwijdte van de aansprakelijkheid uit onrechtmatige daad,
advisory-report Nederlandse Juristenvereniging, (Tjeenk Willink, 1996).
3. See with respect
to
evolutions in professional liability
the
special issues
of
The Geneva Papers on Risk
and Insurance, October 1989 and January 1990
and
specifically Whelan, C. and McBamet,
D.,
'The
"Crisis" in Professional Liability Insurance', The Geneva Papers
on
Risk
and
Insurance (1989), 296.
4. See
on
insurability generally Faure, M., 'The Limits
to
Insurability from a Law and Economics
Perspective', The Geneva Papers on Risk
and
Insurance (1995), 454.
MJ 3 (1996) 237
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