Showing papers on "Damages published in 2011"

Economic impacts of non-native forest insects in the continental United States.

Abstract: Reliable estimates of the impacts and costs of biological invasions are critical to developing credible management, trade and regulatory policies. Worldwide, forests and urban trees provide important ecosystem services as well as economic and social benefits, but are threatened by non-native insects. More than 450 non-native forest insects are established in the United States but estimates of broad-scale economic impacts associated with these species are largely unavailable. We developed a novel modeling approach that maximizes the use of available data, accounts for multiple sources of uncertainty, and provides cost estimates for three major feeding guilds of non-native forest insects. For each guild, we calculated the economic damages for five cost categories and we estimated the probability of future introductions of damaging pests. We found that costs are largely borne by homeowners and municipal governments. Wood- and phloemboring insects are anticipated to cause the largest economic impacts by annually inducing nearly $1.7 billion in local government expenditures and approximately $830 million in lost residential property values. Given observations of new species, there is a 32% chance that another highly destructive borer species will invade the U.S. in the next 10 years. Our damage estimates provide a crucial but previously missing component of cost-benefit analyses to evaluate policies and management options intended to reduce species introductions. The modeling approach we developed is highly flexible and could be similarly employed to estimate damages in other countries or natural resource sectors.

Environmental Accounting for Pollution in the United States Economy

Abstract: This study presents a framework to include environmental externali- ties into a system of national accounts. The paper estimates the air pollution damages for each industry in the United States. An inte- grated-assessment model quantifies the marginal damages of air pol- lution emissions for the US which are multiplied times the quantity of emissions by industry to compute gross damages. Solid waste com- bustion, sewage treatment, stone quarrying, marinas, and oil and coal-fired power plants have air pollution damages larger than their value added. The largest industrial contributor to external costs is coal-fired electric generation, whose damages range from 0.8 to 5.6 times value added. (JEL E01, L94, Q53, Q56)

Hidden Costs of Energy: Unpriced Consequences of Energy Production and Use

Abstract: The production and consumption of energy and its derived services have raised the living standards of billions. Energy is traded in markets, and its price in most cases does not reflect the full cost of its use to society. Absent regulation, only the private cost of producing, for example, a kilowatt hour (kWh) of electricity is paid for by consumers through their electricity bills. These private costs, however, fail to account for a variety of external costs from this production activity in the form of, for example, present-day health damages from increased air pollution or potentially lower grain yields due to global warming halfway around the world and almost a century into the future. Economists argue that regulators should make producers “internalize” the external costs, preferably through flexible market mechanisms such as pollution taxes or cap-and-trade systems. Although qualitatively this can be easily explained to an undergraduate student in a 45-minute lecture, the exact magnitude of the full external costs is impossible to determine. The difficulty in determining the damages is caused by the significant degree of uncertainty in our understanding of the source-to-dose relationship combined with an even more limited understanding of the dose–response relationships for the vast variety of pollutants and potentially affected populations and systems. Monetizing the damages (and, in rare cases, benefits) is further complicated by the fact that many affected “receptors” of the pollution are not traded in markets and therefore do not carry a price. The National Academy of Sciences was charged by Congress to “define and evaluate the health, environmental, security, and infrastructural external costs and benefits that are not or may not be fully incorporated into the market price of energy [or] into the federal tax or fee.” The National Research Council committee, convened for this purpose and chaired by Jared Cohon and vice-chaired by Maureen Cropper, produced the report Hidden Costs of Energy, which provides quantitative, qualitative, and in some cases monetized estimates of these external damages from the use of energy for electricity, transportation, heat, and infrastructure and security. The central estimate of damages, which has been widely reported in the press, of US$120 billion for the last year of available data (2005) must be interpreted as a strict lower bound of the true external costs. Fifty-two percent of the estimated damages arises from health-related damages from the combustion of coal for electricity; 47% stems from the combustion of liquid fuels for transport. The remaining US$2 billion in damages are attributable to health effects from natural gas for electricity production and heating. To put this in perspective, the average price per kilowatt hour of electricity in the United States is approximately 10 cents—slightly higher for residential customers and slightly lower for industrial customers. The health damages from coal alone are 3.2 cents/kWh, with some plants having external costs at 12 cents/kWh. The book does not include the damages from climate change in its total costs, yet provides an intriguing calculation. If one assumed marginal damages to be $30/ton of carbon dioxide, the external costs from climate change per kilowatt hour are also in the neighborhood of 3 cents—doubling the estimated external costs. Two other factors that will drive up the true external costs of energy are the impacts on ecosystems and the impacts on national security—either of which are extremely difficult to value. For health damages, the report uses the value of a statistical (human) life of US$6 million, which is based on a large universe of existing willingness-to-pay studies. With the dearth of such studies in the heterogeneous ecosystem context, one cannot credibly and comprehensively determine what the overall monetary damages on ecosystems are. Even though a number of important effects have not been monetized, this report is the essential work in this area and belongs in the library of any serious researcher, policy maker, or writer working in this area. It is the most serious yet accessible assessment and literature review available of the external life-cycle costs of the energy system for the U.S. economy.

The Deepwater Horizon Oil Spill and the Gulf of Mexico Fishing Industry

Abstract: This report summarizes information related to damages caused by the Deepwater oil spill to Gulf fisheries and efforts to mitigate these damages.

Linking Policy to Statistical Uncertainty in Air Pollution Damages

Abstract: This study uses Monte Carlo analysis to characterize the uncertainty associated with per-ton damage estimates for 565 electric generating units (EGUs) in the contiguous United States (U.S.) This analysis focuses on damage estimates produced by an Integrated Assessment Model (IAM) for emissions of five local air pollutants: sulfur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOCs), ammonia (NH3), and fine particulate matter (PM2.5). For each power plant and pollutant, the Monte Carlo procedure yields an empirical distribution for the damage per ton, or marginal damage. The paper links uncertainty in marginal damages to air pollution policy in two ways. First, the paper characterizes uncertainty in the magnitude of the marginal damages which is relevant to policymakers in determining the stringency of pollution controls. Second, the paper explores uncertainty in the relative damages across power plants. Relative damages are important if policymakers elect to design efficient regulations that vary in stringency according to where emissions are released. The empirical section of the paper finds that the marginal damage distributions are positively skewed and they are more variable for sources in urban areas than rural locations. The paper finds that uncertainty in three input parameters has the greatest impact on uncertainty in the magnitude of damages: the adult mortality dose-response parameter, the mortality valuation parameter, and air quality modeling. The analysis also finds that for each pollutant except for NOx only uncertainty in air quality modeling impacts efficient trading ratios calibrated to each firm's marginal damages.

No-fault compensation following adverse events attributed to vaccination: a review of international programmes

Abstract: Programmes that provide no-fault compensation for an adverse event following vaccination have been implemented in 19 countries worldwide, the first in Germany in 1961 and the most recent in Hungary in 2005. We performed a review of these programmes and determined elements that were common to all of them: administration and funding, eligibility, process and decision-making, standard of proof, elements of compensation and litigation rights. Most programmes were administered by state or national governments except in Finland and Sweden where they are coordinated by pharmaceutical manufacturers. Although funding is usually from Treasury, Taiwan (China) and the United States of America impose a tax on vaccine doses distributed. Decisions on compensation are made using established criteria or assessed on a case-by-case basis, while the standard of proof required is usually less than that required for court cases. Benefits provided by programmes include medical costs, disability pensions and benefits for noneconomic loss and death. Most countries allow claimants to seek legal damages through the courts or a compensation scheme payout but not both. We conclude that a variety of programmes, based on ethical principles, have been successful and financially viable in developed countries throughout the world. We believe there is a strong argument for widespread implementation of these programmes in other developed countries.

The FTC’s Proposal for Regulationg IP through SSOs Would Replace Private Coordination with Government Holdups

Abstract: In its recent report entitled “The Evolving IP Marketplace,” the Federal Trade Commission (FTC) advances a far-reaching regulatory approach (Proposal) whose likely effect would be to distort the operation of the intellectual property (IP) marketplace in ways that will hamper the innovation and commercialization of new technologies The gist of the FTC Proposal is to rely on highly non-standard and misguided definitions of economic terms of art such as “ex ante” and “hold-up,” while urging new inefficient rules for calculating damages for patent infringement Stripped of the technicalities, the FTC Proposal would so reduce the costs of infringement by downstream users that the rate of infringement would unduly increase, as potential infringers find it in their interest to abandon the voluntary market in favor of a more attractive system of judicial pricing As the number of nonmarket transactions increases, the courts will play an ever larger role in deciding the terms on which the patents of one party may be used by another party The adverse effects of this new trend will do more than reduce the incentives for innovation; it will upset the current set of well-functioning private coordination activities in the IP marketplace that are needed to accomplish the commercialization of new technologies Such a trend would seriously undermine capital formation, job growth, competition, and the consumer welfare the FTC seeks to promote 1 Qualcomm retained the authors to analyze certain recommendations of the Federal Trade Commission (FTC) March 2011 report entitled “The Evolving IP Marketplace,” and to offer their own views regarding those recommendations to Qualcomm and in this paper This paper is being submitted on August 5, 2011, in response to the FTC’s Request for Comments and Announcement of Workshop on Standard-Setting Issues, Project No P111204, dated May 13, 2011, which states that comments are due by August 5, 2011 The opinions expressed in this paper are those of the authors, who gratefully acknowledge intellectual, editorial, and research contributions provided by Roger G Brooks and James E Daily Epstein is the Laurence A Tisch Professor of Law at New York University School of Law, the Peter and Kirsten Bedford Senior Fellow at Stanford University’s Hoover Institution, and a senior lecturer at the University of Chicago Law School, where he is also the James Parker Hall Distinguished Service Professor of Law emeritus Kieff is a Professor at the George Washington University Law School and the Ray & Louise Knowles Senior Fellow at Stanford University’s Hoover Institution Spulber is the Elinor Hobbs Distinguished Professor of International Business and Professor of Management Strategy at the Northwestern University Kellogg School of Management Corresponding address: skieff@lawgwuedu Epstein, Kieff, & Spulber FTC, IP, SSOs, & Government Hold-Up Page 2 of 55 In this paper, we examine how these consequences play out in the context of standard-setting organizations (SSOs), whose activities are key to bringing standardized technologies to market If the FTC’s proposed definitions of “reasonable royalties” and “incremental damages” become the rules for calculating damages in patent infringement cases, the stage will be set to allow the FTC and private actors to attack, after the fact, all standard pricing methods through some combination of antitrust litigation or direct regulation on the ground that such time-honored royalty arrangements involve the use of monopoly power by patent licensors In consequence, the FTC’s Proposal, if adopted, could well encourage potential licensees to adopt the very holdout strategies the FTC purports to address and that well-organized SSOs routinely counteract today Simply put, the FTC’s proposal for regulating IP by limiting the freedom of SSOs to set their own terms would replace private coordination with government hold-up The FTC should instead abandon its preliminary recommendations and support the current set of licensing tools that have fueled effective innovation and dissemination in the IP marketplace FTC forbearance from its unwise Proposal will improve bargaining incentives, reduce administrative costs, and remove unnecessary elements of legal uncertainty in the IP system, thereby allowing effective marketplace transactions to advance consumer welfare

Managerial Reporting, Overoptimism, and Litigation Risk

Abstract: We examine how the threat of litigation affects an entrepreneur’s reporting behavior when the entrepreneur (i) can misrepresent his privately observed information, (ii) pays legal damages out of his own pocket, and (iii) is optimistic about the firm’s prospects relative to investors. We find higher expected legal penalties imposed on the culpable entrepreneur do not always cause the entrepreneur to be more cautious but instead can increase misreporting. We highlight how this relation depends crucially on the extent of entrepreneurial overoptimism, legal frictions, and the internal control environment.

Economics for Competition Lawyers

Abstract: 1. Introduction 2. Market definition 3. Market power 4. Abuse of dominance 5. Cartels and other horizontal agreements 6. Vertical restraints 7. Mergers 8. State aid 9. Design of remedies 10. Quantification of damages 11. The use of economic evidence in competition cases

Emergency actions and investigations on cultural heritage after the L’Aquila earthquake: the case of the Spanish Fortress

Abstract: The earthquake occurred on the 6th of April 2009 in the Abruzzo Region of Italy, seriously hit the Cultural Heritage (C.H.) patrimony with major destructive effects on L’Aquila, a city of 70,000 inhabitants with the size and the historical and strategic importance of the Region capital. The emergency activities to protect the C.H. have been developed on two parallel levels: (1) survey and assessment of damages, (2) implementation of temporary safety measures. The organization of the emergency actions was managed by a centralized structure, the so called Function 15 “Protection of Cultural Heritage”, that coordinated the surveys of protected buildings and the design and implementation of temporary safety measures. This allowed the cooperation among different involved subjects (Ministry of Cultural Heritage officers, experts on structural engineering, architects and historians from Universities and private offices and fire brigade teams). The first level of the operating process was carried out on site by expert teams filling up dedicated survey forms for churches and palaces, developed by the Civil Protection Group GLABEC (a Working group for Cultural Heritage); the forms were based on the standardization of damage survey allowing for its immediate interpretation. The second level was based on the past experience in the field of temporary safety measures; the idea was to provide a technical and scientific support in order to assist the work of fire brigade, highly experienced professionals in the “emergency” field. After the first emergency phase the damages of the most important buildings were more carefully investigated and the possible damage progression constantly monitored. The paper presents the case of the Spanish Fortress in L’Aquila, severely damaged by the earthquake; the description concerns the definition of the damages and the interpretation of the activated collapse mechanisms. Finally the design of the provisional strengthening interventions and the on site diagnostic investigations are presented.

The FTC, IP, and SSOs: Government Hold-Up Replacing Private Coordination

Abstract: In its recent report entitled “The Evolving IP Marketplace,” the Federal Trade Commission (FTC) advances a far-reaching regulatory approach (Proposal) whose likely effect would be to distort the operation of the intellectual property (IP) marketplace in ways that will hamper the innovation and commercialization of new technologies. The gist of the FTC Proposal is to rely on highly non-standard and misguided definitions of economic terms of art such as “ex ante” and “hold-up,” while urging new inefficient rules for calculating damages for patent infringement. Stripped of the technicalities, the FTC Proposal would so reduce the costs of infringement by downstream users that the rate of infringement would unduly increase, as potential infringers find it in their interest to abandon the voluntary market in favor of a more attractive system of judicial pricing. As the number of nonmarket transactions increases, the courts will play an ever larger role in deciding the terms on which the patents of one party may be used by another party. The adverse effects of this new trend will do more than reduce the incentives for innovation; it will upset the current set of well-functioning private coordination activities in the IP marketplace that are needed to accomplish the commercialization of new technologies. Such a trend would seriously undermine capital formation, job growth, competition, and the consumer welfare the FTC seeks to promote. In this paper, we examine how these consequences play out in the context of standard-setting organizations (SSOs), whose activities are key to bringing standardized technologies to market. If the FTC’s proposed definitions of “reasonable royalties” and “incremental damages” become the rules for calculating damages in patent infringement cases, the stage will be set to allow the FTC and private actors to attack, after the fact, all standard pricing methods through some combination of antitrust litigation or direct regulation on the ground that such time-honored royalty arrangements involve the use of monopoly power by patent licensors. In consequence, the FTC’s Proposal, if adopted, could well encourage potential licensees to adopt the very holdout strategies the FTC purports to address and that well-organized SSOs routinely counteract today. Simply put, the FTC’s proposal for regulating IP by limiting the freedom of SSOs to set their own terms would replace private coordination with government hold-up. The FTC should instead abandon its preliminary recommendations and support the current set of licensing tools that have fueled effective innovation and dissemination in the IP marketplace. FTC forbearance from its unwise Proposal will improve bargaining incentives, reduce administrative costs, and remove unnecessary elements of legal uncertainty in the IP system, thereby allowing effective marketplace transactions to advance consumer welfare.

The restoration of telecom power damages by the Great East Japan Earthquake

Abstract: This digest introduces the unprecedented damages of NTT's telecommunications buildings caused by the Great East Japan Earthquake, and the restoration measures. We also explain NTT's current disaster countermeasures against power system issues by blackouts, earthquakes, water damages such as tsunami and tidal wave, and issues to be solved in the future.

Deterrence and Detection of Cartels: Using all the Tools and Sanctions

Abstract: The United States applies a diverse array of tools and sanctions to deter and detect cartels. Because cartel activity is treated as a serious crime, a formidable array of criminal investigative tools is available, and convicted individuals are imprisoned. Private damages actions also yield substantial recoveries. The many tools and sanctions support each other in various ways, making each significant. But the claim that private damages actions provide the most important deterrent to cartels in the United States ignores the enormous assistance provided by criminal enforcement, misses much that is critical in deterring cartels, and mistakenly assigns credit for detecting cartels.

The social cost of trading: Measuring the increased damages from sulfur dioxide trading in the United States

Abstract: The sulfur dioxide (SO2) cap and trade program established in the 1990 Clean Air Act Amendments is celebrated for reducing abatement costs ($0.7 to $2.1 billion per year) by allowing emissions allowances to be traded. Unfortunately, places with high marginal costs also tend to have high marginal damages. Ton-for-ton trading reduces emissions in low damage areas (rural) while increasing emissions in high damage areas (cities). From 2000 to 2007, conservative estimates of the value of mortality risk suggest that trades increased damages from $0.8 to $1.1 billion annually relative to the initial allowance allocation and from $1.5 to $1.9 billion annually relative to a uniform performance standard. With U.S. Environmental Protection Agency (USEPA) values, trades increased damages from $2.4 to $3.2 billion annually compared to the initial allowance allocation and from $4.4 to $5.4 billion compared to a uniform performance standard. It is not clear that the ton-for-ton SO2 cap and trade program is actually more efficient than comparable command and control programs. The trading program needs to be modified so that tons are weighted by their marginal damage. © 2011 by the Association for Public Policy Analysis and Management.

On the economics of coastal adaptation solutions in an uncertain world

Abstract: The economics of adaptation to climate change relies heavily on comparisons of the benefits and costs of adaptation options that can range from changes in policy to implementing specific projects. Since these benefits are derived from damages avoided by any such adaptation, they are critically dependent on the specification of a baseline. The current exercise paper reinforces this point in an environment that superimposes stochastic coastal storm events on two alternative sea level rise scenarios from two different baselines: one assumes perfect economic efficiency of the sort that could be supported by the availability of actuarially fair insurance and a second in which fundamental market imperfections significantly impair society’s ability to spread risk. We show that the value of adaptation can be expressed in terms of differences in expected outcomes damages only if the effected community has access to efficient risk-spreading mechanisms or reflects risk neutrality in its decision-making structure. Otherwise, the appropriate metric for measuring the benefits of adaptation must be derived from certainty equivalents. In these cases, increases in decision-makers’ aversion to risk increase the economic value of adaptations that reduce expected damages and diminish the variance of their inter-annual variability. For engineering and other adaptations that involve significant up-front expense followed by ongoing operational cost, increases in decision-makers’ aversion increase the value of adaptation and therefore move the date of economically efficient implementation closer to the present.

Recovering from Research: A No-Fault Proposal to Compensate Injured Research Participants

Abstract: National advisory committees have considered the obligations owed to research participants in the event of research-related injuries. These committees have repeatedly concluded that injured research participants are entitled to compensation for their injuries, that the tort system provides inadequate remedies, and that the United States should adopt no-fault compensation. But because the advisory committees have made no concrete proposals and have taken no steps toward implementing no-fault compensation, the United States continues to rely on the tort system to compensate injured research participants. This Article argues that recent legal developments and a transformation in the global research landscape make maintaining the status quo morally indefensible and practically unsustainable. Recent legal developments exacerbate the longstanding difficulties associated with the tort system as a method of compensation; nearly every injured research participant will have difficulty recovering damages, and certain classes of injured research participants — those in federal research and those abroad — are prevented from recovering altogether, resulting in substantial unfairness. In the past ten years, many of the countries substantially involved in research have mandated systematic compensation. By not mandating compensation, the United States has become a moral outlier and risks having its noncompliant research embargoed by foreign ethics committees, thereby delaying important biomedical advances. This Article examines alternative compensation mechanisms and offers a concrete no-fault compensation proposal built on systems already in place. The proposed system can be implemented in the United States and countries around the world to help harmonize various national compensation systems and to more equitably and effectively make those injured by research whole.

The Remedy Gap: Institutional Design, Retaliation, and Trade Law Enforcement

Abstract: One of the major innovations of the World Trade Organization’s (“WTO”) Dispute Settlement Understanding (“DSU”) is the regulation of sanctions in response to violations of trade law. The DSU requires governments to receive multilateral approval before suspending trade concessions and limits the extent of retaliation to prospective damages. In addition, the DSU permits governments to impose only conditional sanctions: sanctions for violations that continue after the dispute resolution process is complete. This enforcement regime creates a remedy gap: governments cannot respond, even to obvious breaches, until the end of the dispute resolution process (and then only to the extent of prospective damages). This gap might not be particularly important if the dispute resolution process were short. In practice, however, the WTO dispute resolution process has proven increasingly time consuming. This Article explores the growth of delays in the WTO dispute resolution process and the increasing significance of the remedy gap. It highlights how the DSU system essentially provides respondent states with an option to violate trade rules for several years without facing trade retaliation. The remedy gap also has counterproductive effects on settlement negotiations: the system gives respondent states few reasons to settle before the end of dispute resolution unless the states are compensated for doing so. Finally, this system may lead frustrated complaining states to subvert the DSU regime by acting outside of the legal framework. This Article discusses several solutions to the remedy gap, most notably creating a procedure where WTO panels can issue preliminary injunctions.

성구매 금지와 인신매매 척결: 스웨덴의 성매매 관련법 (Prohibiting Sex Purchasing and Ending Trafficking: The Swedish Prostitution Law)

Abstract: The English version of this paper can be found at http://ssrn.com/abstract=1966130The Swedish prostitution law from 1999, now followed by Norway and Iceland, criminalized the purchaser and decriminalized the prostituted person. This is analyzed as a cogent state response under international trafficking law, particularly to the obligations set forth in the United Nation’s Trafficking Protocol from 2000. The Protocol states that a person is regarded a trafficking victim when, e.g., someone abuses her “position of vulnerability” in order to exploit her. International jurisprudence and social evidence strongly suggest that prostitution, as practiced in the world, usually satisfies this definition. Further, the Protocol urges states to reduce the demand for prostitution and to protect and assist victims, for instance by adopting laws deterring purchasers of sex, and by supporting those exploited in prostitution. Policy makers, such as the U.S. Department of State, are criticized for taking an inadequate position in face of the growing evidence from the Swedish law's impact.The article shows that Sweden has significantly reduced the occurrence of trafficking in Sweden compared to neighboring countries. It also scrutinizes some misinformation of the law's impact, showing for instance that claims alleging a more dangerous situation for those still in prostitution after 1999 were unfounded. In addition, the article addresses remaining obstacles to the law's effective implementation, arguing that in order to realize the law's full potential to support escape from trafficking, the civil rights of prostituted persons under current law should be strengthened to enable them to claim damages directly from the purchasers for the harm to which they have contributed, and for the violation of the prostituted persons' equality and dignity - a position now recognized by the government to some extent by clarifying amendments made in 2011.

Management of Hazardous Waste and Contaminated Land

Abstract: Regulation of hazardous waste and cleanup of contaminated sites are two major components of modern public policy for environmental protection. We review the literature on these related areas, with emphasis on empirical analyses. Researchers have identified many behavioral responses to regulation of hazardous waste, including changes in the location of economic activity. However, the drivers behind compliance with these costly regulations remain a puzzle, as most research suggests a limited role for conventional enforcement. Increasingly sophisticated research examines the benefits of cleanup of contaminated sites, yet controversy remains about whether the benefits of cleanup in the United States exceed its costs. Finally, research focusing on the imposition of legal liability for damages from hazardous waste finds advantages and disadvantages of the U.S. reliance on legal liability to pay for cleanup, as opposed to the government-financed approaches more common in Europe.

The Interaction of Leniency Programmes and Actions for Damages

Abstract: Although leniency programmes and damages actions, at least to a certain extent, serve the same purpose of increasing compliance with the competition rules, an increasing number of damages actions risk undermining national and EU leniency programmes, because the risk of follow-on damages actions may discourage potential leniency applicants from coming forward. To increase the successful co-existence of leniency programmes and damages actions, the law can interfere at two stages: it can prevent disclosure of leniency applications and it can decrease the risk or the amount of damages to be paid by leniency recipients. This contribution will explain the current rules on these matters and analyse a number of proposals for reform. The analysis will result in a suggestion to introduce at EU level a regime to improve the procedural position of the leniency recipient in proceedings for cartel damages based on the Hungarian model.

Why Power Companies Build Nuclear Reactors on Fault Lines: The Case of Japan

Abstract: On March 11, 2011, a magnitude 9.0 earthquake and 38-meter tsunami destroyed Tokyo Electric's Fukushima nuclear power complex. The disaster was not a high-damage, low-probability event. It was a high-damage, high-probability event. Massive earthquakes and tsunami assault the coast every century. Tokyo Electric built its reactors as it did because it would not pay the full cost of a melt-down anyway. Given the limited liability at the heart of corporate law, it could externalize the cost of running reactors. In most industries, firms rarely risk tort damages so enormous they cannot pay them. In nuclear power, "unpayable" potential liability is routine. Privately owned companies bear the costs of an accident only up to the fire-sale value of their net assets. Beyond that point, they pay nothing -- and the damages from a nuclear disaster easily soar past that point. Government ownership could eliminate this moral hazard - but it would replace it with problems of its own. Unfortunately, the electoral dynamics in wealthy modern democracies combine to replicate nearly perfectly the moral hazard inherent in private ownership. Private firms will build reactors on fault lines. And so will governments.

The Trans-Pacific Partnership Agreement: Challenges for Australian Health and Medicine Policies

Abstract: Four formal rounds of Trans-Pacific Partnership Agreement (TPPA) negotiations took place in 2010 (in Melbourne, San Francisco, Peru and Brunei). They involved over 200 officials from Australia, the United States (US), New Zealand, Chile, Singapore, Brunei Darussalam, Peru and Vietnam. Future negotiations officially are set to include three issues with public health and medicines policy implications for Australia and our region: first, ways to approach regulatory coherence and transparency, second how to benefit multinational and small-medium corporate enterprises (SMEs) and third, multilateral investor-state dispute settlement. This article analyses the likely impact on Australia of these issues by focusing on submissions made about them to the United States Trade Representative (USTR) by influential US health and medicines corporations and lobby groups, as well as reflecting on the opportunities they present to re-shape US and regional health technology safety and cost-effectiveness regulation. Of particular concern is that these submissions advocate investor state dispute settlement procedures that (as well as allowing Australian corporations to sue in other nations) would allow US corporations (such as those involved in pharmaceutical, alcohol, tobacco, fossil fuel or chemical production) as well as those of the other TPPA nations, to obtain damages against Australian governments through arbitral proceedings rather than domestic courts if their investments are impeded by Australian public health and environment protection legislation.

Causes of cataract surgery malpractice claims in England 1995–2008

Abstract: Aims To analyse the causes of malpractice claims related specifically to cataract surgery in the National Health Service in England from 1995 to 2008. Methods All the malpractice claims related to cataract surgery from 1995 to 2008 from the National Health Service Litigation Authority were analysed. Claims were classified according to causative problem. Total numbers of claims, total value of damages, mean level damages and paid:closed ratio (a measure of the likelihood of a claim resulting in payment of damages) were determined for each cause. Results Over the 14-year period, there were 324 cataract surgery claims with total damages of £1.97 million and mean damages for a paid claim of £19 900. Negligent surgery (including posterior capsule tear and dropped nucleus) was the most frequent cause for claims, while reduced vision accounted for the highest total and mean damages. Claims relating to biometry errors/wrong intraocular lens power were the second most frequent cause of claims and result in payment of damages in 62% of closed cases. The claims with the highest paid:closed ratio were inadequate anaesthetic (75%) and complications of anaesthetic injections including globe perforation (67%). Conclusions Claims from cataract surgery in the NHS are extremely infrequent. Consent, though essential, may not prevent a claim arising or resulting in damages. Refractive accuracy has significant medicolegal impact. Endophthalmitis can lead to successful claims if there is delay in diagnosis. Claims relating to inadequate anaesthesia or anaesthetic injection complications are particularly hard to defend.

Forum Non Conveniens and the Enforcement of Foreign Judgments

Abstract: When citizens of Ecuador sued Texaco, Inc. in a U.S. court seeking damages for oil contamination in the Amazon, Texaco successfully moved to dismiss the suit in favor of Ecuador based on the forum non conveniens doctrine, arguing – as that doctrine requires – that Ecuador was an adequate alternative forum and more appropriate than the United States for hearing the suit. The plaintiffs then refiled the suit in Ecuador, and a court there entered a multi-billion dollar judgment against Chevron Corporation, which had merged with Texaco. Chevron now argues that the Ecuadorian legal system suffers from deficiencies that should render the judgment unenforceable. Recently, other defendants have also been experiencing this type of “forum shopper’s remorse.” Having obtained what they wished for – a forum non-conveniens dismissal in favor of a foreign judiciary with a supposedly more pro-defendant legal environment than the United States – they are encountering unexpectedly pro-plaintiff outcomes, including substantial judgments against them. And, like Chevron, they are then arguing that the foreign judiciary suffers from inadequacies that should preclude enforcement of a judgment obtained there by the plaintiff – an argument seemingly at odds with the earlier forum non conveniens argument that the same foreign judiciary was adequate and more appropriate. This Article shows that under current doctrine, these seemingly inconsistent arguments are not necessarily inconsistent at all. The forum non conveniens doctrine’s foreign judicial adequacy standard is lenient, plaintiff-focused and ex ante, whereas the judgment enforcement doctrine’s standard is relatively strict, defendant-focused, and ex post. Therefore, the same foreign judiciary may be adequate for a forum non conveniens dismissal, but inadequate for purposes of enforcing an ensuing foreign judgment. The result can be a transnational access-to-justice gap: A plaintiff may be denied both court access in the United States and a remedy based on a foreign court judgment. This Article argues that this gap should be closed, and it proposes doctrinal changes to accomplish this.

Rationalizing Costs in Investment Treaty Arbitration

Abstract: International investment and related disputes are on the rise. With national courts generally unavailable and difficulties resolving disputes through diplomacy, investment treaties give investors a right to seek redress and arbitrate directly with states. The costs of these investment treaty arbitrations - including the costs of lawyers for both sides, as well as administrative and tribunal expenses - are arguably substantial. This Article offers empirical research indicating that even partial costs could represent more than 10% of an average award. The data suggested a lack of certainty about total costs, which parties had ultimate liability for costs, and the justification for those cost decisions. Although there were signs of balance and a preference for parties to be responsible for their own costs, there was neither a universal approach to cost allocation nor a reliable relationship between cost shifts and losing. Awards typically lacked citation to legal authority and provided minimal rationale, and the justifications for cost decisions exhibited broad variation. Small pockets of coherence existed. Tribunals typically decided costs only in the final award; and as the amount investors claimed increased, tribunal costs also increased. Such a combination of variability and convergence can disrupt the value of arbitration for investors and states. In light of the data, but recognizing the need for additional research to replicate and expand upon the initial findings, this Article recommends states consider implementing measures that encourage arbitrators to consider specific factors when making cost decisions, obligate investors to particularize their claimed damages at an early stage, and facilitate the use of other Alternative Dispute Resolution (ADR) strategies. Establishing such procedural safeguards can aid the legitimacy of a dispute resolution mechanism with critical implications for the international political economy.

To dollars from sense: qualitative to quantitative translation in jury damage awards

Abstract: This article offers a new multistage account of jury damage award decision making. Drawing on psychological and economic research on judgment, decision making, and numeracy, the model posits that jurors first make a categorical gist judgment that money damages are warranted, and then make an ordinal gist judgment ranking the damages deserved as low, medium, or high. They then construct numbers that fit the gist of the appropriate magnitude. The article employs data from jury decision-making research to explore the plausibility of the model.

Private Enforcement of EC Competition Law

Abstract: The European Commission's recent green paper on damages actions for breach of EC antitrust rules stirred a debate across Europe on the need for legal reform that would encourage private plaintiffs to claim compensation for losses suffered as a result of anticompetitive conduct. Prominent in the wake of that initiative was the international conference convened by the Max Planck Institute for Comparative and International Private Law in Hamburg in April 2006, the papers and proceedings of which are presented in this important book. Among the topics and issues raised and discussed here are the following: the 2001 Courage judgment of the European Court of Justice, in which the court decided that everyone who suffers losses from a violation of arts. 81 or 82 EC is entitled to compensation; relevance of the case law that contributes to general principles of European tort law; comparative analysis from the more comprehensive experience of national laws in the United States, Germany, France, and Italy; calculation of damages; passing-on of losses sustained in an upstream market to customers in a downstream market; procedural devices which may help to overcome the lack of implementation; duties of disclosure and the burden of proof; collective actions that may help to overcome the rational abstention of individuals; pitfalls of leniency programmes implemented by national competition authorities; and, issues of jurisdiction and choice of law. The lively debates that followed the presentations at the conference are also recorded here. Although more discussion will be needed before a viable legal framework in this area begins to emerge, these ground-breaking contributions by lawyers of various disciplines, jurists, economists, academics, and European policymakers take a giant step forward. For lawyers, academics, and officials engaged with this important area of international law, this book clearly improves our understanding of the economic need and legal particularities which could generate an effective European system of private antitrust litigation.