President Obama announced today that the $20 billion BP compensation fund will be administered by Kenneth Feinberg - the administrator of the September 11 Victims Compensation Fund fors which he did an admirable job as I observed in my article Will the post 9/11 World be a Post-Tort World (qualified NO). Of course more recently he has been the "pay czar" - a term he spurns - for companies which received TARP `bailout' funds. And he is designated the "allocation neutral" for those in the 9/11 clean-up mass tort settlement.
Today Richard Epstein, who my late friend Lousie Halper called "the greatest legal thinker of the 19th century" presented in the Wall Street Journal a robust defense of un-capped strict tort liability for dangerous activities - like drilling 5,000 feet below the surface of the sea. Epstein says:
The legal system should never allow self-interested parties to keep for themselves all the gains from dangerous activities that unilaterally impose losses on others—which is why the most devout defender of laissez-faire must insist, not just concede, that tough medicine is needed in these cases. The fundamental question here is one of technique: What mix of before and after sanctions will do the job at the lowest cost?He is right, of course, about tort. It is a straight forward system of assessing liability based both on fault and on unilaterally (but without fault) imposing losses on others from which they have a right to be free. The line-drawing problems are great but the general principles are plain enough.
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