Law And Risk Research Paper

Usually the law is considered to be an instrument of risk regulation. Any damage done to another person can be judged in terms of the legal questions of guilt, liability, or compensation, for example. Criminal law, civil law, and public law provide individuals, companies and administrative bodies with a number of instruments designed first and foremost to prevent damage but also to recover compensation for its consequences. The principle of causality and the instrument of absolute liability can be seen as legal reactions to the typical forms of risk encountered in modern society. However, under the conditions posed by the ‘risk society,’ this simple notion of regulation begins to appear doubtful. Legal instruments fail to work when confronted with cognitive uncertainty. Scientific experts are no longer expected to produce valid knowledge for every single case; more often they demonstrate deep-rooted dissent over the issues of risk and inherent danger. In many cases, the economic as well as the technological capacity to manage risk is restricted. Therefore, in theory and practice, the question arises whether the law is really an adequate instrument for regulating risk (Jasanoff 1995).

1. Information And Decision—Two Concepts Of Risk

The term ‘risk’ has two dimensions: information and decision. Both are legally relevant. Historically, the information-based understanding of risk dates back to the maritime trading companies of the early modern age. In order to minimize economic loss on long journeys overseas, merchants were forced to calculate possible damage. Therefore, the idea of risk was understood to be based upon sufficient information about the circumstances of an individual case. Risk was defined as the probability of the occurrence of some event causing damage, multiplied by the amount of the damage anticipated. The risk problem, therefore, was to forecast both quantities: the probability of the event and the projected financial loss. This concept of risk is fundamental to every insurance business; it is also the basis for legal risk management. The connection between the law, legal regulation, and risk is knowledge generation and certainty as the bases for such regulation. Where the law is used to prevent damage or to recover compensation for its consequences, we need risk assessment, that is, an estimate of probable risk upon which a legal judgment or decision will be based. This calculation provides the necessary certainty underlying legal attribution of events and their consequences. Let us illustrate the case with some examples. For instance, standards fixing maximum daily intake or exposure to potentially toxic substances, or determining the duration of exposure to x-rays, or setting maximum values for the hazardous emissions, give the law the certainty to adjudicate—to affix blame, guilt, liability, or degree of compensation. Combined with scientific expertise, the law creates predictability, that is, we know what to expect and we know what should or should not be done. One could say, then, that the law absorbs the risk inherent in everyday activities, as well as in economic ventures or administrative decision making.

Decision-based understanding of risk shows, on the other hand, that decisions are inevitably afflicted with the problem of uncertainty and insufficient knowledge, and that there is never enough information to rid us of all risk altogether. Risk, then, is understood to be the tension resulting from the necessity to make a decision and the impossibility of attaining perfect justification for that decision. This means that, given a social situation where adjudication is necessary—where a decision is expected—any possible variation or deviation in behavior under these circumstances will be understood to be a result of that decision. In this case, even doing nothing constitutes deliberate behavior, and any possible consequence that could turn up subsequently will be attributed to the decision made. Here, the risk is the tension between not knowing completely and perfectly what events will result from the causal chain that begins with the decision and, simultaneously, being compelled to decide. In other words, risk is a characteristic dilemma between the temporal dimension and the social dimension of behavior. In particular, the decision aspect shows that risk is closely connected to the distribution of responsibility and the attribution of consequences to a specific decision. It is precisely at this point that regulation of risk becomes the focal point, because the law is not necessarily a perfect means to manage risk. The law says what ought to be done to somebody who has damaged somebody else but it does not lend much support to forecasting, to deciding which of two alternatives would lead to negative outcomes. In other words, under the condition of uncertainty and imperfect knowledge, it is doubtful whether the law can really contribute much to the prevention of risk. Under this supposition, the question is whether risk regulation is indeed part of the function and performance of the law in modern society (and, if it is, what form should it take).

2. Stabilizing Expectations S. Regulating Risk— The Function And Performance Of The Law

The function and performance of the law are distinct: function refers to the type of tasks the law must fulfill with respect to society as a whole; performance is used to describe the relationship between the law and other social subsystems, such as the political and policy arena, the economy, or the educational system.

The social function of the law is designed to stabilize social expectations. In general, we can distinguish between two modes of expectation, the cognitive and the normative. Cognitive expectations are open for correction; they are the basis for learning processes. For example, one may expect the Dow Jones to fall during the next 24 hours, but if that expectation proves false, one does not hold stubbornly and steadfastly to the same hypothesis: rather, one adapts one’s estimate accordingly and corrects one’s behavior. Cognitive expectations are not stable; they are open for modification or amendment (learning). The contrary is true for normative expectations. Normative expectations are upheld even in the case of deviant behavior. For example, one expects others to respect one’s property. If others behave deviantly, in a manner disrespectful of one’s property, one does not abandon this expectation: rather, the principle of ‘respect for property’ will be reiterated all the more emphatically. Normative expectations remain unchanged even contra factum, and it is counterfactual stabilization of expectations that reveals their normative character. With respect to society as a whole, the law is a means to stabilize such expectations. The law is usually guaranteed by a state authority with the power to enforce legal norms through sanctions. This function of the law, stabilization, makes its very structure relatively resistant to flexibility or to the modification of expectations that would seem appropriate for the decision aspect of risk. A negative outcome that results from a decision, disappointed or unfulfilled expectations inherent in the decision itself, can best be coped with through learning, not by clinging to false expectations. Some theorists argue that this demonstrates the impossibility of regulating risk with legal instruments (see Sects. 4 and 5).

The performance of the law in relation to other societal subsystems (that is, what the law does for them) is fivefold:

(a) Conflict resolution: competing social expectations can generate internal conflicts in societal subsystems, such as in science, the economy, or in the educational system. The law provides these subsystems with the ability to identify conflicts and to export them to the legal context. If a risky decision has harmful consequences, then science, research, and development can learn—theories can be modified or technical equipment revamped. The law takes over the task of conflict resolution and thus frees science to operate without normative interference.

(b) Regulation of conduct: the law provides the political system with a means to regulate individual behavior.

(c) Legitimation of the social order: the law defines the framework or sets the parameters for political action. Under the rule of law, this framework is commonly laid out in the form of constitution.

(d) The law permits planning and prevention of risk.

(e) The law can act as a means of surveillance. Under each of these five aspects of performance, the law absorbs risks by providing rules for decision making for the other societal subsystems, or relieves others of the burden of justifying a decision. The question is how and to what extent the law is really able to provide this service to the other subsystems under the condition of risk. As pointed out above, under the condition of risk, the function of the law qua stabilizer of expectations over time tends to run contrary to its intended performance for the other subsystems.

3. Different Perspectives On Regulation— Theories Of Risk In The Social Sciences And Consequences For The Law

The degree to which risk regulation may be deemed successful or not will depend upon the theoretical perspective one takes. Three main approaches can be distinguished: psychological risk theory, cultural theory, and systems theory.

3.1 Psychological Risk Theory

The psychological, cognition-oriented approach is based upon the difficulties arising from the dilemma of decision. If it is true that the information basis for a valid risk assessment is generally inadequate, then the question of how individuals come to make certain decisions about risk becomes increasingly significant (Jungermann and Slovic 1993). Psychological risk analysis seeks to determine how individuals judge the level of risk and decide upon some behavior in a given situation, and psychological risk research has generated some interesting findings. Voluntary risk is more readily accepted than involuntary risk. Acceptance of risk depends upon the amount of control one believes one has. The risks associated with new technologies are estimated to be much higher than those from older technologies. Risks are also judged to be more acceptable, the further away one perceives the consequences of a decision to be. After all, acceptance of risk depends upon a believable estimate of how easy or difficult it will be to repair damage. In terms of psychological risk theory, whether or not regulation of risk is possible will depend upon the impact of the law on individual behavior. Insofar as the law generates commitment, it may be able to influence or even to regulate individual behavior. Under this supposition, therefore, the law can be a suitable means to regulate risk within the scope of known risks. In such cases, the law can be used to program conduct with reference to science-based information. A basic problem nevertheless remains: how to reconcile the complex relationship between attitude, legal incentives, and sanctions on the one hand, and behavior on the other.

3.2 Cultural Theory

The decision problem shows that risk assessment cannot be solely understood as deliberate behavior. On this premise, cultural theory introduces social actors and conceptualizes risk as a collective construction. The concrete form of a risk concept depends on certain qualities of the social field in which this concept is shaped. Cultural theory devises a matrix of social fields based upon two dimensions (Douglas and Wildavsky 1982); ‘Group’ describes the external boundaries between a social collective and the outside world, while ‘Grid’ means all the other social distinctions determining how individuals behave towards one another. We can distinguish four types of social interest groups with distinct perceptions of risk and, correspondingly, four regulatory models:

(a) A hierarchical culture is characterized by high grid group scores. This means that it will handle risks through routine procedures and that it will probably use legal instruments to establish such procedures.

(b) An individualistic market culture is characterized by low grid and low group scores. It will incorporate risk into the domain of individual concern; calculated risk is accepted and the law is used to provide a framework for individual, competitive, and risky activities.

(c) An egalitarian (sectarian) culture is characterized by low grid and high group scores. Normally it has high resistance to risk and it is the culture most sensitive to possible hazards. The law is seen as an impediment to the right way to live, because it allows risky behavior in many cases.

(d) A fatalist culture is characterized by high grid and low group scores. Risks are perceived as imposed from the outside by others and they provoke passive resentment. On this view, legal regulation can hardly make any difference whatsoever.

3.3 Systems Theory

The most radical version of the decision dilemma can be found in systems theory, especially in the work of Niklas Luhmann (1993). Risk is understood as the tension between the temporal dimension and the social dimension of decision making. In modern society, the introduction of the concept of risk means that our relationship to the environment, to the future, and to social disparity have been redefined. First, risk communication indicates that damage previously perceived as a consequence of some natural phenomenon is increasingly attributed to social conduct (decisions). The question of accountability becomes a core issue together with the law as a means to distribute that accountability. Second, following on from that, the future becomes increasingly relevant for justifying social activities. It is no longer sufficient or appropriate to disregard the future; it must be treated as a calculable element. The issue of risk assessment and risk forecasting begins to infiltrate every part of the social system. The law does not seem able to deal with this kind of cognitive orientation towards the future. Third, risk communication indicates a social disparity based upon a division between those who decide and those who are affected by the consequences of the decision. This kind of disparity means that the concept of risk is most suitable for generating social movements where individuals place themselves on the side of the affected parties. They challenge policy makers and confront the law with their interests. On this view, the law can be seen either as a means for political action or as a political obstacle.

In sum, according to all the theories, the problems of legal risk regulation will occur in the areas of information and behavior, the cultural determinants of behavior, and the temporal structure of legal communication. According to psychological and cultural theory, in certain situations and with respect to certain social fields, the law will be able to resolve conflicts, regulate conduct, practice surveillance, and, through all of these, underscore the legitimation of a given social order. Finally, according to systems theory, it is doubtful whether the law is adapted to and adequate for planning and prevention insofar as these require cognitive orientation.

4. Options, Limits, And Risks Of Legal Risk Regulation

In all legal fields a dense network of risk regulation and control can be found (Bora 1999). Civil law provides us with instruments mainly to prevent or to compensate for damage. Contract law, liability law (including rules of evidence), and business law are continuously adapted upon the basis of new information and possible risks. The same is true for public law, especially administrative law, which is traditionally concerned with issues of technological risk. Administrative law has developed to become the standard instrument for dealing with environmental problems and policies. Technology assessment and environmental impact assessment have been instituted in numerous organizations, industry, and governmental or administrative agencies. In the field of biotechnology, for instance, a whole set of institutions concern themselves with regulatory risk and safety issues, including environmental protection agencies, food and drug administrations, and animal and plant health inspection services. In the USA, for instance, consider the Environmental Protection Agency (EPA), Food and Drug Administration (FDA), United States Department of Agriculture (USDA), and the Animal and Plant Health Inspection Service (APHIS), among others. In Germany, comparable organizations are the Umweltbundesamt (the German Federal Office of Environment), the Biologische Bundesanstalt (the national agency for biological affairs), the Robert Koch Institute, the Bundessortenamt (the national regulatory agency for plant and seed types), and the various Pflanzenschutzamter (plant protection agencies). Many forms of regulation can be observed, from the traditional—legal intervention, proscription and sanction—to voluntary agreements.

This highly developed system of legal risk regulation also has its limits. First, there is no absolute benchmark for risk regulation; the law always depends upon a comparison of risks, typically the comparison between a traditional, conventional technology and a new one. Second, legal regulation needs the criterion of causality, the rule of law stands in opposition to regulation based upon mere suspicion. Third, the task of regulating unknown risks confronts the law with the problem of reversal of the burden of proof. This, in turn, generates empirical and logical problems, because it is impossible to demonstrate empirically the nonexistence of a fact. Fourth, the law always requires concrete damage as a material fact. The politically motivated aim to guarantee environmental quality is insufficient. Fifth, there is typically no check-andbalance system for social needs within the scope of the law; legal norms are in fact the result of political disputes over social needs. Sixth, the law will therefore not be a suitable political instrument to curtail innovation, nor can it function as an instrument of innovation control in general.

Whenever we speak of limits, we must also address the special risk of the law itself. To an increasing extent the other societal subsystems (politics, the economy, etc.) dump their risks onto the law. Unless the law can somehow redistribute the risks, it runs the risk itself of being overloaded with risky decisions. This is the case, in particular when programming of the law via political decision fails—a frequently observed phenomenon. The citizenry expects even the most hypothetical dangers to be regulated or managed by the state, a fact that undermines the usual means of programming the law through new information, established knowledge, or causal attribution. Thus, the law will always be condemned to promise more prevention than it will be able to deliver. We can say, then, that as the regulation of risk becomes increasingly necessary, it becomes increasingly risky itself at the same time.

5. Is Global Regulation Possible? Future Developments In Theory And Research

The empirical and theoretical challenge for the future relationship between law and risk is globalization. Globalization is characterized by the worldwide perceptibility of communication, the worldwide relevance of events, and the plurality of world views. Under these circumstances, risk takes on new dimensions. Global warming, deforestation, and biological safety are problems that reach far beyond the range of regulatory instruments available to the classic nationstate. The law tends in some respect to become global law without a state. Is the law in the global age a reliable means to regulate worldwide risk, or will it, as some theories predict, be replaced increasingly by nonlegal instruments which focus more on cognitive expectation and the mechanisms of learning? The future of the law in the global risk society seems to be open.

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