Law and Data Science Module 2 Part 3

Liability

the legal responsibility for harm and damage

Functions of Liability

Preventive and Risk Allocation

Preventive

incentive to take appropriate precautions

Risk allocation

law may decide that the person or organization that creates, controls, or benefits from a risk should also bear the consequences when that risk materializes

3 Main Sources of Liability

Contractual, Fault-based, Strict

Contractual Liability

breach of agreement

Consequences of contractual liability

other party has right to:

• Termination (end the contract); and

• Damages (direct loss, consequential damages); or

• Specific performance (court order to perform)

Fault-based liability

wrongful act (tort)

Consequences of Liability for Unlawful Act

anyone who commits an unlawful act that can be attributed to them is obliged to compensate the damage suffered by another as a result of this unlawful act

Strict liability

risk-based responsibility

Damage

Either material (pecuniary) or immaterial (non-pecuniary)

Material Damage

Financial loss, lost profits, sometimes future losses ⟶ material

Immaterial damage

Pain, reputational damage, psychological injury (‘shock damage’)

3 Categories of Unlawful Acts

• infringes on a subjective right (e.g. personality rights); or

• violates a statutory duty; or

• breaches the unwritten standard of due care in society (contextual, policy-sensitive assessment of conduct)

Causal Link

claimant bears the burden of proving that the damage would not have occurred without the defendant’s conduct

2 Levels of Causal Link

Factual causation (Would the harm have occurred anyway?)

Legal causation = Foreseeability (Was the harm too remote?)

Attributability

Act is due to the defendant’s fault (schuld)

Difference between Risk and Fault

Fault determines if defendant acted carelessly, risk is to what extent it was voluntarily taken

Strict liability

based on the creation of risk: those who create or control a risk must bear the cost when it materializes