Some comments on de facto limits on liability

Kenneth A. Solomon, David Okrent

Expert InsightsPublished 1977

An overview of large technological systems in society to ascertain the prevalence of situations that can lead to catastrophic effects where the resultant liabilities far exceed the insurance or assets subject to suit in court, thereby imposing de facto limits on liability. Several potential situations are examined, including dam rupture, aircraft crash into a sports stadium, chemical plant accident, shipping disaster, and a toxic drug disaster. These events are estimated to have annual probabilities similar to or larger than a major nuclear accident. All are found to involve potential liability far exceeding the available resources, whether they be insurance, corporation assets, or government revenues. If limits on liability represent an important problem for society, the problem is general and should be dealt with from that perspective.

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Solomon, Kenneth A. and David Okrent, Some comments on de facto limits on liability. Santa Monica, CA: RAND Corporation, 1977. https://www.rand.org/pubs/papers/P5885.html.
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