Centro de Documentacion de Fundación MAPFRE - Public authority liability and the cost of disasters

MAP20190028585

Public authority liability and the cost of disasters / Jef De Mot, Michael Faure

Sumario: We examine the influence of introducing public authority liability in the context of disasters. In an ideal setting a rule of comparative negligence would incentivise the government to take an optimal amount of care. The citizen, being the residual bearer of the loss, would consequently also take optimal care. However, in the specific context of disasters, public authority liability may backfire and lead to more losses than without such liability. We argue that under some circumstances perverse incentives of citizens may increase with liability. We focus inter alia on (1) the difficulties that may exist to incentivise public authorities through liability rules, (2) the specific characteristics of comparative negligence that may make public authorities liable for the lion's share of the damages, (3) the problem of negative expected value suits and (4) the fact that public authorities may be much more inclined to intervene ex post when damages exceed a threshold.

En: Geneva papers on risk and insurance : issues and practice. - Geneva : The Geneva Association, 1976- = ISSN 1018-5895. - 01/10/2019 Volumen 44 Número 4 - octubre 2019 , p. 760-783

1. Catástrofes naturales . 2. Responsabilidad de la Administración . 3. Negligencia . 4. Costes económicos . I. Faure, Michael . II. Título.