1. Safety in Critical Domains
How to Allocate Liabilities for Failures
Marta Simoncini | European University Institute

2. Safety in the risk society
Risk and uncertainty are relevant issues in the management
of scant resources
 Technological risks are the «secondary consequences» of
industrial development
Risk management aims at preserving and possibly enhancing
the expected living standards
Trade off between risk and safety

4. Legal instruments for risk management
Forward-looking
Precautionary management of risk
Safety Standards
 aimed at mitigating risks to the extent to which these can become acceptable
in the risk society
Backward-looking
Risk is trasferred to the party who is in the best position to bear it
Liability
 reparation and incentive to the correct functioning of the precautionary system
Insurance
 transfer of the risk in exchange of payment

5. Safety standards
 Thresholds beyond which the relevant community does not
want to take a specific risk
 Rational management of risks aimed at making the trade off
between risk and safety tenable

6. … but the possibility of failure cannot be
excluded completely…

7. Liability and software
In case of failure of safety standards,
who can be charged with liability?
•the producer?
•the user?
•the standard setters?

8. Is the «regulatory compliance
defence»
comparable to
the «state of the art defence»?

9. Negligence and risk
 Negligence refers to failure to respect a due care standard
 Due care is related to the foreseeability of the risk with regard to a specific role
and its tasks
EFFECT OF COMPLIANCE WITH STANDARDS
Who sets the standard?
 Private regulation
 proof of prudent behaviour (for the defendant), but the insufficiency of the
standard can be challenged (by the plaintiff): the standard-setter can be found
negligent. E.g., USA case-law on swimming pools and screening practices in
blood transfusions
 Public regulation
 if «regulatory compliance defence» is comparable to the «state of the art
defence», the liability of the producer can be ruled out
USA: FDA preemption
 the public regulator (the State) can be liable for 'faulty' supervision or
regulation with reference to the state of the art
Italy: Cass. Civ., III, 11609/2005

10. Strict liability and risk
 Related to the effects of a risk, not to misbehaviour
EFFECT OF COMPLIANCE WITH STANDARDS
Who is liable?
 The market (market share liability) in mass production
 pro rata liability of producers limited to the extent of the
respective share of the market
USA: DES cases (Sindell v. Abbott Laboratories, 26 Cal. 3d 588 1980)
 The State
 state compensation of damages stemming from the
unforeseeable materialisation of risk with the aim to restore an
equal distribution of public burdens
e.g., France, Germany, Italy

11. Insurance and software
Further means to transfer risks
Why is it difficult to insure software?

12. Insurance and risk
 The possibility of insuring against risks depends on the
nature of the risk at stake
 foreseeable
 measurable: the amount paid by insured party must cover both
risk and expected costs of providing coverage

13. Difficulties in assessing risks related to
software
Uncertainty of risk makes difficult to
identify the advantage of risk bearing
Potential catastrophic impact
(e.g. automated ATM)

14. Discussion is very open…..
Thank you very much!