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The Netherlands out of the EU: What does it cost us?

Posted by on Feb 14, 2017 in General Posts | 0 comments

In the light of the upcoming general elections in the Netherlands, a lot of citizens are questioning the membership of the country in the European Union. What are the consequences of a possible NEXIT and what are the pros and cons thereof?

In this KNAW symposium in Maastricht four KNAW-members, including M-EPLI’s Jan Smits, will cover what will happen after the Netherlands leave the EU. A special focus will be laid on the areas of criminal law, private law, and economics. This event will be held in Dutch.

Time: 9th March 2017, 7pm till 9.15pm

Location: Maastricht University Hoofdgebouw, Aula, Minderbroedersberg 4-6, 6211 LK Maastricht

Participants:

  • Arnoud Boot, full professor of economics at Amsterdam University
  • André Klip, full professor of criminal law at Maastricht University
  • Corien Prins, full professor of law and computerisation at Tilburg University and soon chairwoman of WRR
  • Jan Smits, full professor of private law at Maastricht University

This symposium and the debate will be moderated by Corien Prins.

Free registration is required. Please click here.

Innovating Private Law: On Law and Technology (Pavia, 8 February)

Posted by on Feb 13, 2017 in Catalina Goanta, Consumer Law, Contract Law, European Integration, European Private Law, Legal Education, MEPLI, Online Shopping | 0 comments

On 8 February I had the pleasure to accompany Jan Smits for a visit to Pavia, where we gave a presentation titled ‘Innovating Private Law: On Law and Technology’, on the third day of the Innovating Legal Studies and Practice Winter School 2017.

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Claims Against Overcrowded Trains and the Litigious Society

Posted by on Jan 27, 2017 in General Posts, Gijs van Dijck | 0 comments

Stichting ConsumentenClaim has announced to start legal proceedings against Dutch Railways on behalf of a passenger. The question that the court will essentially need to answer is whether overcrowdedness in trains resulting in passengers frequently not having seating constitutes a breach of contract.

To determine whether such a claim will be successful, several legal questions need to be answered: does Dutch Railways have an obligation to perform?, does it merely have a best efforts obligation, and if so, what should be understood under ‘best efforts’?, when can a passenger reasonably expect a place to sit on the train?, how do passengers prove they have suffered a loss?, and what losses does a passenger exactly suffer? Some argue that passengers’ claims do not stand a chance. Others see such claims as society becoming more litigious and may condemn passengers of overcrowded trains who file a claim. One may even see them as despicable money-grabbing plaintiffs.

Qualifications like these are likely unjustified. Empirical research has demonstrated what victims need in case they suffered a harm or loss. They do not primarily or not only seek monetary compensation, but (also) tend to seek recognition, an apology, disclosure (what happened, and why), closure, and prevention. A train passenger is not likely to seek money, but a place to sit.

It is also known that once frustration builds, there will be individuals who seek legal enforcement to have their needs met. This could explain why train passengers are now willing to join StichtingConsumentenclaim in a battle against Dutch Railways. They may hope or expect that a claim will provide incentives to Dutch Railways to solve the issue of overcrowded trains, or at least reduce the issue.

The problem, however, is that the solution that contract law and tort law provide, the law of damages in particular, is rather one-dimensional. Even though most jurisdictions allow for different types of relief, monetary compensation is by far the most popular tool in the legal toolbox. This explains why train passengers resort to monetary compensation: the legal system forces them to. The emphasis (or: fixation) on monetary compensation is so strong that it becomes difficult to consider alternatives. This not only, partly or predominantly, explains why train passengers file claims against Dutch Railways, but also why they claim against physicians who have erred or against Malaysian Airlines after the downing of the MH17 plane.

As a result, claims such as the one against Dutch Railways expose the inability of contract law and tort law, the law of damages in particular, to properly address victims’ needs. They reveal the limitations of the monetary perspective that dominates the law. The real challenge for the legal community is therefore not to formulate an answer to questions such as ‘Did the train passenger suffer a loss?’, but to find an alternative to the dominant monetary perspective.

Can families of ISIS-victims sue twitter?

Posted by on Jan 21, 2017 in General Posts | 0 comments

By Professor Michael G. Faure

Recently it was brought in the news that families of Americans killed by ISIS in Belgium and France sued twitter for allegedly failing to keep members of the terrorist organisation of its platform. It was a typical case whereby American victims were killed in Europe but lawsuits are brought in the United States, probably on the basis of the nationality of the victims and their relatives, but maybe also on the link between twitter and the US. This lawsuit raises a number of interesting and legal questions. From a legal perspective the first question which obviously arises in such a tort suit is whether one can hold that the defendant, in this particular case twitter, has acted wrongfully. Were such a case not brought in the US but in any of the EU Member States, the question would arise whether the behaviour of twitter would have violated a standard of care or could be considered a fault. According to the newsflashes the plaintiffs argue in court that twitter violated the Anti-terrorism Act. If that were the case in most European legal systems such a violation of an explicit statutory obligation would almost automatically be considered wrongfulness. But the question would of course arise whether that violation of a statutory duty is as clear as the plaintiffs argue. In addition to wrongfulness plaintiffs would have to show damage, which unfortunately, would in this particular case not be the most difficult aspect of the suit. But probably the most complicated requirement from the plaintiffs’ perspective is that they would also have to show a causal link between any wrongfulness by twitter (assuming that there is) and the damage they have suffered. Most legal systems would at least require that plaintiffs show that but for the wrongfulness of twitter the damage would not have occurred. In other words, it would have to be clear (and proven by the plaintiffs) that without the wrongfulness by twitter (in presumably not preventing ISIS to use its platform) the damage would not have emerged or not in the same way. In legal terms: the wrongfulness by twitter would have to be the conditio sine qua non (CSQN) for the damage. But even if plaintiffs would be able to prove that most legal systems would hold that in addition to this physical CSQN connection (often considered as causality) plaintiffs should also show legal causation in order to make twitter liable. Depending upon the formulation in the legal system it usually means that even when the wrongfulness is considered CSQN plaintiffs would still have to show that the contribution was sufficiently important, in other words adequate to cause the damage. The defendant twitter in this particular case would undoubtedly hold that other factors about which twitter has no control whatsoever were much more important in the emergence of the damage.

In addition to those legal issues one could equally ask the question which social goals these types of lawsuits serve. From a victim’s perspective the goal is obviously compensation. In order to seek compensation victims often sue others than primary tortfeasors, especially when the primary tortfeasors (like terrorists) are insolvent and therefore “judgment proof”. That has brought about a tendency in tort law to bring lawsuits against a variety of gatekeepers, varying from banks lending money, auditors or related corporations. Twitter is yet another (gatekeeper) in the long list of “indirect tortfeasors” where victims who cannot claim against direct tortfeasor seem redress. As a compensation tool tort law always has its limits. The factual and legal barriers to obtain compensation via tort law are often high. That is why in many legal systems (both in the US and in Europe) alternative compensation mechanisms have been worked out to compensate victims of terrorism, for example via first party (victim) insurance, supported through a reinsurance by the state (via the Terrorism-risk Insurance Act – TRIA in the US). However, tort suits do not only have a compensatory function (although that may be the primary interest for the victim). Tort law equally provides incentives to prevention to both direct and indirect tortfeasors and thereby tort law also has an important social function. Even when the plaintiffs in New York may not be successful in obtaining compensation, the lawsuit provides an important signal to twitter (and obviously also to similar providers of internet services to terrorist networks), being that they need to be increasingly alert to whom they provide those services and for which they are specifically used. An exposure to tort liability may hence exercise an important preventive function. If that succeeds and providers of internet services more critically screen the use and users of their services, this could in the end reduce terrorism risk. If that were the case tort law would have exercised its preventive function.

Read more: Faure, M.G., “Attribution of Liability: An Economic Analysis of Various Cases”, Chicago-Kent Law Review, 2016, Vol. 91(2), 603-635.

Technology, law and the promise of interdisciplinarity: Technolawgy

Posted by on Jan 18, 2017 in Catalina Goanta, Legal Education | 0 comments

Smart devices already communicate with each other, why shouldn’t we? When law meets technology: a creative workshop bringing together the fields of law and artificial intelligence through student engagement (see event website here).

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Holding the security industry liable for terrorism-related risk difficult

Posted by on Jan 6, 2017 in General Posts | 0 comments

By Professor Michael G. Faure

As the attack on the Twin Towers on 9/11 has shown, terrorism can lead to large-scale damage, massive property damage, thousands of cases of personal injury, pain and suffering and enormous consequential damage, including billions in lost profits. After 9/11 many law suits were filed seeking compensation of damages totalling over 1 billion US$. Among the parties sued in these law suits were not only public authorities, but also security firms and an aircraft manufacturer. The magnitude of this litigation caused concerns in the US over unlimited liability of security firms which was believed to create disincentives for firms to develop and introduce new security technology. In response to these issues the US introduced its US Safety Act, a regime intended to offer security companies protection against liability exposure.

In a book called Civil liability in Europe for terrorism-related risk, Cambridge, Cambridge University Press, 2015, (http://www.cambridge.org/nl/academic/subjects/law/tort-law/civil-liability-europe-terrorism-related-risk?format=HB&isbn=9781107100442) Lucas Bergkamp, Michael Faure, Monica Hinteregger and Niels Philipsen examine the exposure of operators of facilities such as airports, train stations, nuclear power plants and the security industry to liability. After the terrorist attacks in Paris, Madrid, London and Brussels, also in Europe concerns have arisen about a potential liability exposure for terrorism-related damage which has been called “enterprise-threatening”. The book analyses civil lability for terrorism-related risk under international and European Union law and the law of several representative Member States. The book also compares the liability environment in Europe to the situation in the US which, as noted, thought it necessary to provide for liability protection for industry through specific legislation.

The international liability treaties do not specifically deal with liability for damage caused by terrorists and neither does European Union legislation. As a result liability for damage caused by terrorists is chiefly a function of national law. The facility operator may be liable towards victims under fault-based liability rules or under strict liability if the activity is deemed “hazardous”. In theory also a security firm could be liable, but the burden of proof lies with the victim. Despite suggestions to the contrary the authors found no evidence of an impending liability crisis in the security industry. Assertions of potentially “enterprise-threatening” liability exposure are not consistent with the liability standards under the law of the examined legal systems. Thus far facility operators and security firms have not been held liable for damage caused by terrorist attacks in Europe. It is therefore concluded that no urgent EU measures are necessary.

However, although the case for a liability limitation for the security industry is therefore weak, civil liability for terrorism-related risk is an issue that does require the attention of policy-makers. Policy-makers should take time to analyse the liability exposure of operators and security firms. It is particularly important to verify any malfunctioning of the markets for terrorism-related insurance and public procurement of security services. To prevent specific problems of liability rules to the case of terrorism the EU could consider drafting a recommendation or communication concerning the promotion of the insurability of terrorism-related risk. In developing policy on this issue, the government should keep in mind that its primary responsibility is to prevent terrorist attacks from occurring and liability for damage caused by such attacks can contribute to accomplishing this objective.

Nuclear operators should pay for nuclear accidents!

Posted by on Dec 30, 2016 in General Posts | 0 comments

By Professor Michael G. Faure

Following the great east earthquake in Japan in March 2011, five years ago now, the subsequent accident at the Fukushima nuclear power plant shocked the world and triggered fierced debates on the future of nuclear energy in many countries. Not so long ago yet another earthquake took place close to the same area, reminding the potentially devastating effects of tsunamis, but especially of nuclear accidents. One of the questions that always arises in the context of a nuclear accident of the Fukushima type is why nuclear operators are largely protected as a result of outdated international conventions that seriously limit their exposure to liability. Those conventions, but also many national legislations, in fact provide a hidden subsidy to the nuclear industry as a result of which they only pay for a small amount for the losses they cause.

In the 1960s international conventions were created of which the main goal was to protect the (American) owners of the nuclear material that was delivered to European nuclear operators. Since liability was exclusively channelled towards operators in Europe only operators and no longer other parties could be held liable for potential damage. The international conventions imposed very low caps on the liability of the operator. After the Chernobyl accident (which happened on 26 April 1986) new conventions came into being that were supposed to increase the amount of compensation. Although Chernobyl already is more than 30 years ago, most of those new conventions have not entered into force yet. Moreover, when they will enter into force the amount available will only be 1,5 million Euro. Recent estimates of the damage caused by the Fukushima incident hold that the total amount of the damage could be as high as 170 billion Euro. This clearly shows that operators today are not liable for the consequences of the accident. Moreover, an important part of the damage is compensated through public funding, which means that the general public (the tax payers) pay the compensation.

This financial limit on the liability of nuclear power plant operators has several negative effects. One problem is that obviously insufficient compensation will be available for victims if a nuclear accident happens. A second problem is that since operators are not fully exposed to the total costs of the accidents they may cause, they also will not demand insurance cover for those amounts and hence they de facto pay too low premium. A third related consequence of this subsidization of nuclear power is that the relative price of nuclear power is too low, as nuclear operators are not forced to incorporate the full social costs of their activity into their prices. This may constitute a distortion of competition towards other energy forms that do not enjoy similar subsidies. Given the high subsidies the price of nuclear power also does not reflect the social costs as a result of which the demand for nuclear power will be too high. Finally and perhaps most importantly, the fact that nuclear operators are not fully liable for the consequences of a nuclear accident may lead to too low investments in prevention. In a provocative article Harvard Professor Mark Ramseyer argued that the Tokyo Electric Power Company (TEPCO), the operator of the Fukushima plant on purpose built the nuclear facility in an earthquake area, knowing that they are protected through the limited liability and can hence throw the consequences of their activity on society.

In many countries the life time of the first generation nuclear power plants has been extended. That can undoubtedly also increase the risks. Policy-makers should realise that times have changed: whereas in the 1960s an argument could be made that the newly established nuclear industry needed a support from the regulator in the form of a limitation of liability the same argument cannot be made any longer 60 years later, especially after the experiences with Chernobyl and Fukushima. The lesson from Fukushima should therefore be clear: the limitations on the liability of nuclear power plant operators whether they appear in national legislation or in international conventions should be abrogated and power plant operators should be fully exposed to unlimited liability in case of a nuclear accident, of course supported with financial guarantees.

The government should promote insurability of natural disasters, not play Santa Claus!

Posted by on Dec 23, 2016 in General Posts | 0 comments

By Professor Michael G. Faure 

To an increasing extent many EU Member States are victim of a variety of natural disasters, including heavy rainfall, flooding, earthquakes, volcano eruptions and tsunamis. During the period 1970-2007 there has been a substantial increase in the losses due to natural catastrophes. Even recently Italy was hit again by an earthquake causing substantial losses. A major problem is that after every new natural disaster politicians often have the tendency to play Santa Claus and provide substantial amounts of compensation to victims. Those ex post payments are problematic from various perspectives: 1. Since victims will be counting on ex post compensation by the government those payments will reduce the incentives of victims to invest in ex ante prevention, for example by not-building in flood prown areas or by avoiding to put valuables in the basement. 2. Ex post government compensation will also negatively affect the incentives to purchase insurance: solidarity kills market insurance. As a result of generous ex post compensation potential victims will not be willing to buy insurance cover for natural disasters. Why should victims pay premiums for insurance cover if they can freeride on the state? (more…)

The Future of Empirical Legal Research in the Netherlands

Posted by on Dec 15, 2016 in Author, General Posts, Gijs van Dijck | 0 comments

Last Tuesday was the Empirical Legal Studies (ELS) conference organized at the Dutch Supreme Court (‘Hoge Raad’) in the Hague by the Nederlands Studiecentrum Criminaliteit en Rechtshandhaving (NSCR). All of a sudden, ELS is everywhere in the Netherlands. Last July, there was the first European Conference on Empirical Legal Studies in Amsterdam. Recently the Empirical Legal Studies initiative (ELSi), hosted by the Ius Commune Research School, came on the block. Now the NIELS conference. And upcoming January, a conference will be held by the VSR.

What particularly seems to be becoming more popular, is to talk about ELS – there is no evidence for an increase of the number of empirical legal studies that are conducted in the Netherlands. Some evidence by one of the presenters at Tuesday’s conference even suggested that the number of journal articles that present original empirical research (i.e. through data collection by the researcher / author himself or herself) has remained constant over the years. This observation is surprising, as multidisciplinary research may attract more funding, Ministries are calling for more empirical research, scholars seems to welcome more empirical legal research, and all of the Judiciary Council’s research is empirical. Moreover, empirical legal research that is conducted in the Netherlands is primarily done by researchers who have a social scientific background, with or without a law degree (Elbers 2016; for English summary click here).

Why is ELS seemingly on the rise but not resulting in more empirical research? One explanation is that there are other forces in play. While ELS is becoming more popular, the Dutch bar association has imposed stricter requirements as to the courses and topics Dutch law schools should teach. As a result, the vast majority of the course credits are and should be assigned to courses in private law, criminal law, and administrative and constitutional law.

It is a widespread belief that the bar requires Dutch law schools to only teach doctrinal scholarship to students. I doubt whether this belief is correct. Teachers may have more flexibility than they think regarding exposing students to different perspectives and approaches than merely a doctrinal approach, as long as they focus on the topics the bar wants them to focus on (e.g. tort law, criminal law). The issue, therefore, may not be so much the bar and its requirements, but the perception of legal academia of what the bar requires law schools to do.

Consequently, there are two conditions for empirical legal scholarship to flourish in the Netherlands. First, it will only evolve if teachers no longer believe that courses have to be taught doctrinally. Second, law schools need to stop believing that they need to hire doctrinally oriented teachers (at every level, from lecturer to professor) to teach their courses. This means that the success formula for empirical legal research in the Netherlands may ultimately be rather simple: just do it.

A (Uniquely Unqualified American) Reflection of the EU&ME Summit

Posted by on Dec 11, 2016 in European Integration, Mark Kawakami | 0 comments

fullsizerenderThe EU&ME Summit (part of the Europe Calling! initiative) held on 9 December 2016 to celebrate the 25th Anniversary of the Maastricht Treaty was the event of the season. As an American that somehow wandered into this event, I was quite amused by Maastricht’s Mayor, Annemarie Penn-te Strake, and her welcoming speech that – among other delights – quoted former US President George Bush, who stated that the birth of the EU was something that was great for the entire world. As a happy migrant living in the Netherlands and working in the EU, I wholeheartedly concur with our former President and I feel extremely privileged – not just for having attended the summit, but more generally – to be living and working in Maastricht, the birthplace of the EU.

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