Risk and uncertainties in the law of tort and insurance

By prof. Herman COUSYKU Leuven University(Belgium)

“The message is that there are known knowns. There are things we know that we know.

There are known unknowns. That is to say there are things that we now know we don’t know.

But there are also unknown unknowns. These are things we do not know we don’t know. And each year we discover a few more of those unknown unknowns.”

D. Rumsfeld

RISK SOCIETY

• Uwe BECK

“Risikogesellschaft”

• Denis KESSLER

“L’ère de la vulnérabilité”

• Luc FERRY

“De la peur comme passion démocratique: vers la société de risque”

• Orio GIARINI

“Industrial revolution: scarcity

Post-industrial era: uncertainty”

RIKS AND UNCERTAINTIES

• Massive impact• Serial impact• Catastophic risks• Virtual risks• Potential/uncertain risks

Frank KNIGHTRisk, Uncertainty and Profit, Boston 1921

POUVOIR versus SAVOIR

Wissenschaft und Technik

Wissenschaft versus Technik

PRECAUTION AS A METHOD OF SCIENTIFIC THOUGHT

Discrepancy between « pouvoir » and « savoir » (F. EWALD)

Aristoteles: Sophia v. phronesis

Descartes: natura rerum

G. Vico: prudentia

Enlightment: savoir = pouvoir

Postmodern: nova prudentia

« precaution »

PRECAUTIONARY PRINCIPLELEGAL GROUNDS

« Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective measures to prevent environmental degradation»

Principle 15 of the Declaration of the Rio Conference on the Environment and Development (1992)

PRECAUTIONARY PRINCIPLELEGAL GROUNDS

« Community policy on the environment shall aim at a high level of protection taking into account the diversity of situations in the various regions of the Community. It shall be based on the precautionary principle and the principles that preventive action should be taken, that environmental protection should as a priority be rectified at source and the polluter should pay. »

Presently Art. 191, par. 2, TFEU

SUMMARY

1. Elementso threat of serious or irreversible damageo lack of full scientific certaintyo no reason for postponing measureso that are cost effective

2. Evolution o Umweltschutz Gesundheitsschutz Arbeitsschutzo Environment Health (human, animal, plant) Food

chain

RADICAL CRITICISMS

Jean DUPUIS

Pour un catastrophisme éclairé.

Quand l’impossible est certain.

Ed. Seuil Points, 2004

B. DELANOY

“Le cas vraiment incertain, c’est évidemment lorsqu’on ne sait pas qu’on ne sait pas”

(Futuribles, 2003, 54)

THE PRECAUTIONARY PRINCIPLE

SUBSTANTIVE NOVELTY

PRECAUTIONARY PRINCIPLE

PRECAUTIONARY PRINCIPLE

PRECAUTIONARY PRINCIPLE

PRECAUTION AS ILLUSTRATION OF THE “POSTMODERN” LAW

FORMAL NOVELTY

1. Addressee: decision makers

2. General principle

3. Open principle (Kantian maxim)

4. Janus face (happy or grumpy)

PRECAUTION AND SUSTAINABLE DEVELOPMENT

• “Handle so dass die wirkungen deiner Handlingen vertraglich sind mit der Permanenz echten menschlichen Lebens auf Erde”

Hans Jonas, Das Prinzip Verantwortung, 1979

PRECAUTION AS A CODE OF CONDUCT

KOURILSKY, Ph. & VINEY, G., Le principe de précaution- “Dans le doute, mets toute en œuvre pour

agir au mieux”- The “ten commandments” of precaution

PRECAUTION AS A POLITICAL MAXIM

• « Risk governance », aspect of good governance in the « risk society »

• Encouraging precaution v. encouraging innovation

• Information, transparency and participation

• « Les dix commandements de la précaution »

(G. VINEY & Ph. KOURILSKY, Le principe de précaution)

PRECAUTION AND TORT LAW

A. No relevance

B. Full relevance

C. Recuperation

Ph. KOURILSKY & G. VINEY, Le principe de précaution, Ed. Odile Jacob, 2000

D. Influence of the idea of precaution

A. GUÉGAN, “L’apport du principe de précaution au droit de la responsabilité civile”, R.J.E. 2/2000, p. 147.

UNCERTAINTY AND INSURANCE 1. Exogeneous and endogeneous risks

« L’assurance porte sur des risques exogènes, quand la démarche de précaution concerne les risques endogènes (…). Ainsi pourrait-on définir la précaution comme l’assurance des risques endogènes. »

(F. EWALD)

2. The coverage of development risks in liability insurance

3. Long tail risks and long term risksThe « escape » of the insurer through the « claims made » clause

4. Artificial uncertainty. Limited or no access to genetic information

5. Need for innovative approaches

PRECAUTION AND THE INSURANCE CONTRACT

1. Must the costs of precautionary measures, like of prevention, rest on the insured, or, like measures of mitigation (« mesures de sauvetage, de sauvegarde ou de préservation ») be borne by the insurer?

(Cfr. Cass., 21 nov. 2000, GIE Transmanche construction c/ Axa global risks et CUA, et le commentaire de L. MAYAUX, RGDA, 2003, n°2)

2. Under what conditions is the damage resulting from failure to take precautionary measures, born by the liability insurer? Does faulty failure to take precautionary measures give rise to damages or to loss of right or exclusion?

PRECAUTION IS THE PRUDENCE OF

THE PROMETHEAN MAN