Liability for Harm Versus Regulation of Safety

This chapter discusses four general determinants of the relative desirability of liability and regulation. Examination of the four determinants has thus shown that two generally favor liability—administrative costs and differential knowledge—and the other two favor regulation—incapacity to pay for harm done and escaping suit. The chapter argues in light of the determinants that the actual, observed use of the two methods of reducing risks may be viewed as socially desirable, or roughly so. The theoretical determinants examined would be of relevance to a comprehensive analysis of the social control of risk, and specifically to one allowing for the use of public fines measured by harm done, and of the private right to enjoin others from engaging in harmful activities. The chapter concludes with several qualifying remarks and with comments on how the analysis could be extended to incorporate additional means of social control including the fine and the injunction.