Liability as regulatory tool

Establishing a legal basis for liability claims or modifying an existing one can deter economic operators or other natural or legal persons from unwished behaviours. To use this instrument, it is necessary to analyse the tort law regime of the respective jurisdiction and to complement or correct it so as to ensure that the unwished behaviour is covered. The following check-list of relevant issues might help regulators in this task. The check-list reflects various tort law traditions. This means, on the other hand, that some of the issues listed below are not relevant in all jurisdictions.

Before we start with the checklist, we need to get familiar with the two basic principles applied: fault-based liability or strict liability. The issues to be regulated for strict liability are the same as for fault-based liability, but less or nothing needs to be stipulated for the first two and the fifth. It goes without saying that strict liability has a stronger deterring and thus regulating effect. It raises less practical problems for the victims. Accordingly, we can observe a trend towards strict liability across all jurisdictions.


1. Duty of care in common law jurisdictions or written law legal obligation not to behave in a certain way. Most jurisdictions contain either an explicit written law legal obligation or they have established a tradition of oral law according to which tortfeasors can be hold liable for behaving in a certain (damaging) way. In both cases, it is crucial to check whether the legal tradition covers behaviours which are not wished by the regulator. If the legal tradition is not sufficient to that end, it is necessary either to create a completely new legal basis for liability claims or to create a link between the unwished behaviour and the legal tradition, e.g. by stating that “common law tort principles apply to infringements of Articles … of this regulation” or “Article … of the Civil Code applies to infringements of Articles … or this regulation”.

2. Breach of that duty or obligation by the behaviour of the tortfeasor or a person for whom he is responsible.

a) For which persons under his control is the tortfeasor responsible (e.g. employees)?

b) In some jurisdictions, the breach is only “objectively” stated regardless of the consciousness of the tortfeasor. In others, the tortfeasor must have been subjectively conscious of breaching a duty or obligation. In the latter jurisdictions, regulators might consider creating an exemption from the requirement of subjective consciousness in order to reach full compensation of victims.

c) Do state authorisations exclude the possibility of a breach of duty or obligation?

3. Existence of a damage.

a) The first point to regulate here is which goods are protected:

– life and the integrity of the body,

– health and life expectancy,

– pain,

– shock and other psychic suffering,

– intellectual property rights,

– market positions / prospects / profit expectations,

– property or similar rights with regard to of goods, real estate, ships etc.,

– rights with regard to these derived from (rental and similar) contracts,

– other contractual rights,

– rights for periodic state or private allowances (e.g. shall kids be compensated for the loss of their allowances from their father if the father was killed?),

– other legally protected interests,

– costs triggered by measures taken in the past to reduce or to repair the damage,

– costs about to be triggered by measures to be taken in the future to reduce or to repair the damage.

b) Which types or means of proof are available to prove the damage? Must the damage be proven or at least assessed by an expert for certain types of damage (see list above)?

c) How strong is the burden of proof – which certainty must be proven? E.g. “beyond all doubts” or “prevailing likelihood”?

d) Is there a reversal of the burden of proof when there is some first evidence for a damage?

4. Causality between breach of duty or obligation and damage.

a) Must causality be direct or can a long causality chain also trigger liability?

b) Shall the relationship or the proximity of the parties play a role?

c) Shall atypical causalities be excluded?

d) Must the causality be foreseeable? In some jurisdictions, this question fits better under “negligence”.

e) Which types or means of proof are available to prove the causality? Must the causality be proven or at least assessed by an expert?

f) How strong is the burden of proof – which certainty must be proven? E.g. “beyond all doubts” or “prevailing likelihood”?

g) Is there a reversal of the burden of proof when there is some first evidence for the causality?

h) Is there a presumption of proof when there is some first evidence for a damage?

5. Negligence.

a) What is the minimum level of negligence for establishing liability?

b) Is it defined in abstract terms (perspective and knowledge of a “reasonable man”) or shall the subjective knowledge of the tortfeasor be taken into account? Is the same criterion to be applied to an academic than to an unskilled worker?

6. Considerations of fairness excluding liability.

a) If the victim omitted to limit or to prevent the damage though s/he might have done so easily, s/he might not be regarded as meriting (full) compensation.

b) Likewise if the victim intentionnally provoked the damaging behaviour.

7. What can be asked for.

a) Repair or also purchasing a new replacement object?

b) Other forms of re-instatement?

c) Compensation for indirect losses, e.g. due to the non-availability of the object in the meantime? d) Costs for the expert’s analysis or legal proceedings?

e) Punitive damages (like in the U.S. tradition)?

8. Multitude of tortfeasors.

a) Shall each of the tortfeasor be liable for the entire damage to the vicitm(s), but entitled to get compensation from the others? Or shall each of the tortfeasor only be liable proportionately for his/her contribution?

b) If the first: how shall the tortfeasor compensating the victim obtain a contribution from the other tortfeasors?

c) If the second: what if some of the tortfeasors cannot be reached or are insolvent?

d) If the second: shall the procedings be combined?

9. Multitude of victims.

a) Shall several victims be entitled to sue together or even obliged to sue together?

b) Shall class actions be possible in general or only when common legal questions prevail?

c) If so, shall there be an opt-out?

d) Shall there be mandatory joint legal representation?

10. Associations.

a) Shall associations be authorised to sue on behalf of victims or shall their claim even substitute the claims of the victims?

b) Shall they be mandated to sue to protect nature or other common goods?

11. Transfer of rights and obligations.

a) What in case of death of the tortfeasor or in case of merger or acquisitions of a tortfeasing company?

b) Shall the acquirer of a company be liable for a tort committed by the acquired company?

12. Insurances.

a) Shall (future) victims be protected by requiring (future) tortfeasors to be insured when exerting certain activities? Please note that in this case the insurances might issue safety prescriptions which can have a further regulating effect.

b) Shall (future) victims even have a right against the insurer directly? There is a trend to give victims a direct right in Scandinavian jurisdictions.

13. Dispute resolution.

a) Shall there be (mandatory or facultative) dispute resolution?

b) Shall dispute resolution be offered online?

14. Collision rules.

a) How shall the relationship between the new legal basis for compensation claims and other legal bases, e.g. of the general civil law, be?

b) How shall the relationship be with regard to legal claims in other jurisdictions?

Further helpful literature:

Link 1

Link 2

Link 3

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