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The structure of strict liability

Trimarchi suggests that the risk liability concept plays its role only if applied to economic activities, and not biological ones. Biological activities are char­acterized by the element of necessity, not by economic rationality, thus calculating costs and benefits in relation to them makes little sense.

There­fore, Trimarchi concludes that liability must be based on an activity that ‘is the result of an economic decision, that has a minimum of continuity and organization, and presents a considerable risk’ if the concept of risk liability is to fulfil its function. Most biological activities (that is, the non-economic activities that are not organized or risky) are subject to the ‘no liability without fault’ principle.2

According to Trimarchi, the structural study of strict liability also requires an analysis of the differences between the strict liability system and the so- called strict liability for ‘avoidable risk’. The latter category encompasses situations where the law’s formula subjects a tortfeasor to liability unless ‘he proves that he adopted all measures and took all proper steps to avoid the injury (both physical and economic)’.3 According to Trimarchi, the function of strict liability for avoidable risk is limited compared to strict liability that encompasses all kinds of typical risks. Strict liability for avoidable risk requires only the adoption of security measures for the system of production currently adopted by the entrepreneur, while general strict liability may also induce a radical change of production system or the partial or total termina­tion of the enterprise. Thus, the former operates only within the competition among firms that produce the same type of goods utilizing similar technol­ogies. The latter, meanwhile, also operates on competing firms that produce the same products with a different technology, or that produce different but competing goods or products. More specifically, strict liability creates an incentive to discover new technologies that will reduce accident losses, while a negligence rule, or a rule of strict liability for avoidable risk, merely apply a pressure to take precautions that are reasonable, or possible, given the exist­ing technology, with a benchmark that does not induce evolution and technological improvement.

Considering the subjective approach (that is, the determination of the person who is objectively liable), unless specifically explained by the rules of the civil code (such as articles 2053 and 2054), strict liability is only imposed on the entrepreneur, because he controls the general conditions of the risk, can calculate its cost, and include the costs in the firm’s balance sheet through insurance. Trimarchi notes that ‘there must be a constant (not occasional) relationship with the risk’ to create the practical incentive to seek insurance.

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Source: Backhaus Jürgen G. (ed.). The Elgar Companion to Law And Economics. Second Edition. Edward Elgar,2005. – 777 p.2. 2005
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