This is in the news today:
The attorneys general of Alabama, Louisiana, Florida and Mississippi settled “in principle” with the fallen oil giant British Petroleum on Thursday, agreeing to accept $18.7 billion in damages after the company was deemed “grossly negligent” in the costliest offshore environmental accident in U.S. history
I’m sure this will make a lot of people feel good. But read the article edited by the car accident lawyers at JD Injury Law, APC and look around the web for a bit – while you will see a lot of information about how reckless BP was and how clearly this was a huge disaster, what you will have trouble finding is how much actual damage was known that have come from the spill. Note that I am not saying that BP ought not pay huge fines, after all, there are obviously legal reasons to pay penalties beyond just for damages done, but you’d think that with so much ink spilled (pardon the pun) on this sort of disaster at least some enterprising journalist would take the time to find out how much real damage actually occurred.
Without getting into the weeds on the particulars, this episode brings to mind two things for me, related:
(1) This paper that I stumbled upon last year is highly relevant. Here is part of the abstract:
… I examine the introduction of an insurance mandate that reduced firms’ ability to avoid liability through bankruptcy. …Finally, environmental outcomes, including those related to groundwater contamination, also improved sharply. These results suggest that incomplete internalization of environmental and safety costs due to bankruptcy protection is an important determinant of industry structure and safety effort in hazardous industries, with significant welfare consequences.
Now there are important reasons to have bankruptcy protection in place, but I’ve long since believed that modern bankruptcy law exists as much to provide work for lawyers as it does economic protection.
(2) This result should provide some guidance on financial regulation, no? For all that has been done since the onset of the crisis, has ANYONE proposed ensuring that financial firms have more skin in the game? And when I say more skin in the game, I don’t just mean capital requirements, I mean changes to ownership liability structures? Maybe going back to the days of full-blown partnerships and double liability can never happen, but surely there were some advantages of that system.
946791 190879Wow, superb blog layout! How long have you been blogging for? you make blogging appear easy. The overall look of your site is magnificent, as well as the content material! xrumer 820330
992980 29004I got what you intend, saved to bookmarks , extremely decent internet internet site . 946600
327816 966261quite good post, i undoubtedly really like this fabulous internet site, persist with it 253086
202795 579115Greetings! Quick question thats completely off topic. Do you know how to make your website mobile friendly? My weblog looks weird when viewing from my iphone. Im trying to locate a template or plugin that might be able to fix this difficulty. If you have any recommendations, please share. Appreciate it! 663373
113432 645209Hiya! Amazing blog! I happen to be a day-to-day visitor to your site (somewhat more like addict ) of this internet site. Just wanted to say I appreciate your blogs and am looking forward for much more! 204143
663945 37699Yay google is my world beater aided me to find this outstanding website! . 389178
304047 144921Yay google is my king aided me to discover this excellent web site ! . 451916