Roger Van den Bergh

Liability for nuclear accidents in Belgium from an interest group perspective

Liability for nuclear accidents in Belgium is governed by a strict liability rule and subjected to compulsory liability insurance. In addition the compensation due to the victim is limited. The regulation of the nuclear risk has traditionally been explained, both by the legislator and by legal doctrine, on victim protection grounds. Many lawyers favour the evolution towards an expanding strict liability and compulsory insurance, arguing that these devices suit the need of effective victim protection. Taking a closer look at the regulation, it, however, becomes clear that its contents cannot entirely be explained on victim protection grounds. The legal mechanisms used are not effective means of victim protection. Indeed, as will be explained below, compared with the previous law, strict liability combined with a limit to compensation does not improve the situation of the victim substantially. Moreover, the advantages of strict liability and compulsory insurance have to be weighed against the disadvantages of the regulation for the victim (such as the channeling of liability and the short periods of limitation) before definitive conclusions with respect to the victim’s position can be drawn. A better insight in statutory arrangements can often be achieved by analyzing them from an interest group perspective. This is true both for market and non-market regulations, such as liability rules. The purpose of this paper is to use the Belgian regulatory framework for nuclear accidents to show that the interest group theory of regulation can also help to provide a better understanding of regulations concerning liability rules and insurance. Hitherto this theory has mostly been applied to explain the passage of legislation in fields of production and distribution. In this paper we use interest group theories of regulation to find an explanation for some odd legal rules which do not serve the goal of victim protection, pronounced by the legislator. We start from the assumption of rational behaviour by utility-maximizing politicians. Useful insights will be obtained by examining the regulation as a form of rent-

Cooling-Off Periods in the Consumer Laws of the EC Member States. A Comparative Law and Economics Approach

Lawyers tend to see cooling-off periods in consumer laws as a remedy for the problems caused by unequal bargaining power between sellers of goods and consumers. This article takes a different approach and argues that cooling-off periods can be seen as efficiency-enhancing devices. From an economic point of view, cooling-off periods provide a remedy for irrational behaviour on the part of consumers and may cure market failures, in particular problems caused by situational monopolies and asymmetric information. In spite of these important benefits, the economic approach also warns against possible disadvantages. The latter range from a moral hazard problem on the side of the consumer to the adverse counter-productive effects of cooling-off periods. A legislator who is informed by economic analysis may design cooling-off periods in ways that maximise their ability to cure inefficiencies and at the same time minimise their potential detrimental effects. Unfortunately, the relevant EC Directives and the current consumer laws of the Member States are not in perfect harmony with an efficiency enhancing-approach.

Subsidiarity as an Economic Demarcation Principle and the Emergence of European Private Law

In 1989 and 1994 the European Parliament adopted Resolutions expressing the desire for a harmonization of European private law .1 Many prominent European lawyers favour the idea of a new ius commune, a newly codified European private law. MiillerGraff sees the creation of European private law as a necessity, since an internal market has been established under the auspices of the European Community.2 In his view market integration seems to be synonymous with the highest possible degree of legal uniformity. Lando, who chairs the European Contract Law Commission, infers the need for a European private law from the interests of trade: legal diversity means costs and risks.3 Consequently the Lando Commission justifies harmonization of contract law, since this facilitates cross-border trade within Europe by providing a set of rules which apply uniformly throughout the territories of the various states and which are detached from any particular system.4

Self-regulation of the professions in Belgium

In the context of the 1992 program, the European Economic Community aims at a free flow of professional services. Many barriers to this freedom have already been overcome. The right of establishment is protected by the directfy effective prohibition of discrimination and furthered by directives for the mutual recognition of diplomas and qua&fications.’ As far as the freedom to provide services is concerned, significant progress has been realized by the acceptance in case law of the principie that restrictions must be justified on grounds of “public interest .“? Free access to the host member state does not, however, provide for real freedom as long as professional ethics continue to restrict competition. In the EEC member states professional ethics are issued by self-regulating public professional bodies. This self-regulation restricts entry into the profession and limits competition through strict rules regarding professional conduct. Impediments to real market integration resulting from these restrictions are further worsened by differences between the professional ethics that apply in the separate member states. Various important judgements of the European Court of Justice have made it clear that the freedom of establishment and the freedom to provide services also

The Subsidiarity Principle in European Community Law: Some Insights from Law and Economics

The framers of the European Union Treaty considered subsidiarity as an absolutely central concept to the construction of the Union and as a guideline for future action. The subsidiarity principle has thus become crucial for the diffusion of powers between different levels of government in the European Community. 1 Nevertheless, the important factor about subsidiarity is not the emphasis laid upon the concept by politicians, but the manner in which it is defined.

Post-Chicago Developments in Antitrust Law

This book offers a timely and critical evaluation of the Chicago School approach to antitrust law. Recent judgements by the United States Supreme Court (in cases such as Kodak) and the debate surrounding the Microsoft monopoly have led to the view that antitrust has entered the post-Chicago era, in which previous immoderations are tempered, and more refined and accurate analyses take precedence. This claim is made at a time when European competition policy is gradually embracing an economics-based approach. The authors discuss the economic foundations of competition policy and the different ways in which both American and European competition law does – or does not – take account of economic insights. Although the book makes no claim to provide a definitive answer to the host of questions arising from the complexities of antitrust, it does offer an important contribution to a better understanding of the many ‘interfaces’ between economic thinking and sound legal policy.

Towards Better Regulation of the Legal Professions in the European Union

This article starts by discussing a number of public interest explanations for regulating the markets of legal services: information asymmetries, negative externalities and public goods. Since professional associations of lawyers meet the requirements for acting as effective lobbyists, the article subsequently investigates private interest explanations. Empirical work to test alternative theories of professional regulation so far remains limited and the results are ambiguous. Even if empirical studies are able to show that there exists a correlation between levels of professional regulation and profits earned, firm policy conclusions cannot be drawn as long as quality is not adequately assessed. After an overview of the theoretical and empirical literature, the article suggests a number of best practices for policy making. The two most important guidelines seem to be the following. Regulation should not be profession-focused but targeted at market failures in particular segments of the legal services markets. Changes of the regulatory infrastructure that create scope for competitive self-regulation may be the best way for coping with market failures and at the same time reducing the scope for rent-seeking.

Private Enforcement of European Competition Law and the Persisting Collective Action Problem

Several economic criteria may help policy-makers in choosing between public and private enforcement of competition law. The welfare losses caused by infringements of the cartel prohibition may be better internalized by imposing fines rather than by bringing damages actions. Public agencies may possess information advantages and they may also be able to remedy the difference between the private and social motive to sue. Private enforcement may complement public enforcement by increasing deterrence and guaranteeing compensation. Both direct and indirect buyers should be given standing to bring damages actions. Given the reluctance to introduce US-style class actions, European policy-makers favour collective opt-in actions and representative actions brought by consumer associations. However, the participation rate of opt-in collective actions may remain too low and actions by consumer associations are also vulnerable to principal-agent problems. Moreover, private enforcement of competition law by consumer associations will remain suboptimal if the funding problem is not solved. This paper argues in favour of an optimal mix of public and private enforcement of competition law and suggests some remedies to overcome the above mentioned problems.Several economic criteria may help policy-makers in choosing between public and private enforcement of competition law. The welfare losses caused by infringements of the cartel prohibition may be better internalized by imposing fines rather than by bringing damages actions. Public agencies may possess information advantages and they may also be able to remedy the difference between the private and social motive to sue. Private enforcement may complement public enforcement by increasing deterrence and guaranteeing compensation. Both direct and indirect buyers should be given standing to bring damages actions. Given the reluctance to introduce US-style class actions, European policy-makers favour collective opt-in actions and representative actions brought by consumer associations. However, the participation rate of opt-in collective actions may remain too low and actions by consumer associations are also vulnerable to principal-agent problems. Moreover, private enforcement of competition law by consumer as...

Mutual Recognition Revisited: Misunderstandings, Inconsistencies, and a Suggested Reinterpretation

The principle of mutual recognition is almost universally acclaimed for removing barriers to trade, for enabling regulatory competition, and for preserving scope for regulatory autonomy instead of embarking on a path to harmonisation and centralisation. By using economic theories of legal federalism and regulatory competition, this paper shows that mutual recognition leads to a number of inconsistencies, which question its suitability as a conflict of law rule that guarantees a stable allocation of regulatory powers within a two-level system of regulations. Mutual recognition should be understood more as a dynamic principle, which triggers a reallocation of regulatory powers between different jurisdictional levels. It leads either back to the country of destination principle, to a free market for regulations, or to harmonisation. The European experience suggests that a regime of mutual recognition is primarily another path to convergence and harmonisation, instead of being an instrument that preserves decentralised regulatory powers or even regulatory competition. The welfare gains from achieving market integration should be balanced against the welfare losses of an inefficient allocation of regulatory powers.

Regulation and Economics

This comprehensive volume provides a state-of-the-art overview of regulatory economics and reviews the main theories, tools, and domains of regulation