Torts - Cases, Principles, and Institutions Fifth Edition, 2016a

Witt & Tani, TCPI 4. Negligence Standard
Critiques from Administrability
Even setting aside objections to the moral structure of utilitarianism, methodological
difficulties abound for cost-benefit analysis. Professors Frank Ackerman and Lisa Heinzerling
argue that the valuations commonly used by analysts are typically “inaccurate and implausible,”
and that analysts “trivialize . . . future harms and the irreversibility of some environmental
problems” by valuing present economic gains over future economic losses (through a process
economists call discounting). They also suggest that adding up all of society’s gains and losses
muddles opportunities for a full conversation about distributional and moral consequences,
making a supposedly transparent and objective process anything but. Frank Ackerman & Lisa
Heinzerling, Pricing the Priceless: Cost-Benefit Analysis of Environmental Protection, 150 U. PA.
L. REV. 1553, 1563 (2002).
Other critics observe that the informational demands of Posner’s approach to cost-benefit
analysis are superhuman. In decentralized markets, well-informed market participants compound
vast quantities of information. The market’s capacity to crowd-source cost-benefit calculations is,
as Nobel laureate Amartya Sen puts it, “[t]he spectacular merit of the informational economy of
the market system for private goods.” But judicial cost-benefit analysis can claim no such market
advantage. “When all the requirements of ubiquitous market-centered evaluation have been
incorporated into the procedures of cost-benefit analysis,” Sen has remarked, “it is not so much a
discipline as a daydream.” Amartya Sen, The Discipline of Cost-Benefit Analysis, 29 J. LEGAL
STUD. 931, 951 (2000). See also David M. Driesen, Is Cost-Benefit Analysis Neutral?, 77 U.
COLO. L. REV. 335 (2006); Ulrich Hampicke & Konrad Ott (eds.), Reflections on Discounting, 6
INT. J. OF SUSTAINABLE DEVELOPMENT 7 (2003).
A Precautionary Alternative?
Critics further argue that there are better alternatives to cost-benefit analysis. Some
advocate a “precautionary principle” for making policy decisions about risk. For example, the
Declaration of the 1992 United Nations Conference on Environment and Development (also
known as the “Rio Declaration”) states that “where there are threats of serious and irreversible
damage, lack of full scientific certainty shall not be used as a reason for postponing cost-effective
measures to prevent environmental degradation.” How might a precautionary principle approach
be adopted in tort law? Should we all have a duty to take special precautions to avoid irreversible
damage to life and limb, even when not cost-justified? Or are injuries to life and limb themselves
costs to be brought into the balance?
Can the precautionary principle handle decisions about risk that feature risks to human
health and life on both sides of the equation? It is an important question, since most decisions
about risk can be said to include risks to life on both sides of the equation. Consider safety
regulations that increase the cost of some consumer good. Safer cars will save lives. But more
expensive cars will cost lives, too, since they may reduce the number of cars sold, reduce wealth,
and cost some people their jobs. Such “life-life” or “risk-risk” situations, contend the defenders
of cost-benefit reasoning, preclude resort to any “precautionary” approach, since there are risks on
all sides. Even setting aside the risk-risk problem, opponents of the precautionary principle
contend that its advocates are simply trying to put an illicit thumb on the scale for difficult policy
balancing decisions. See Cass Sunstein, Beyond the Precautionary Principle, 151 U. PA. L. REV.
1003 (2003).
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