Probabilistic Liability and Judicial Insurance for Environmental Risks

This study analyzes the responsibility framework for environmental risks from legal, economic, and philosophical perspectives, focusing on both individual and state-level accountability. Recognizing the need for proactive (ex-ante) risk management, we challenge the current frameworks that only respond after damage occurs. Tort liability, which operates on the damage-compensation axis, has disadvantages in terms of environmental protection. Besides, pre-determined norms can lead to standards that are either excessively strict or too lenient than necessary before damage occurs. Moreover, the stochastic nature of environmental risks renders them unsuitable for purely normative consideration. We argue that pure normative approaches fail to consider the case-specific and dynamic nature of environmental risks. Instead, our study proposes probabilistic liability. The legal foundation of probabilistic liability lies in the recognition that the customary no-harm obligation encompasses the risk of harm as well. The research question of our study is: What is the legal consequence of causing a risk of harm? Drawing on insights from the theoretical arguments of the reality of risk, probabilistic causation, and risk attribution, we propose an innovative solution: courts mandating “judicial insurance” for those posing environmental risks. Courts may identify the coverage gap resulting from activities altering risk values and impacting sustainability in the incident under consideration. To address this gap, courts may enforce insurance obligations on operators under market conditions. This introduces a probabilistic liability model applicable to both states and individuals. This novel approach offers a more effective and adaptable mechanism for managing environmental risks while ensuring accountability and sustainability.