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Corporate Liability for Extraterritorial Torts Under the Alien Tort Statute and Beyond: An Economic Analysis

Citation

Publication Date: 
December 31, 2012
Format: 
Working Paper
Bibliography: Alan Sykes, Corporate Liability for Extraterritorial Torts Under the Alien Tort Statute and Beyond: An Economic Analysis, Georgetown Law Journal, (forthcoming 2012). (Also in the Law & Economics Research Paper Series Working Paper no. 420 on SSRN)

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Litigation against corporate defendants under the Alien Tort Statute is largely an effort to enlist multinational business interests in a laudable effort to reign in the human rights abuses of repressive regimes. The hard question is whether the costs of this now extensive litigation (and related litigation under state tort law) are worth the benefits. This essay offers number of reasons for skepticism in that regard, although I stipulate that the ultimate answer to this question turns on empirical judgments. Courts considering the difficult issues that arise in these cases should at least be mindful of the possibility that corporate liability may impose great costs on firms subject to suit in the United States while accomplishing little or nothing to improve human rights. And if the door to corporate liability is to remain open, careful attention to the standards for aiding and abetting liability, to the requirements for vicarious liability, and to the measure of damages can both cabin and calibrate corporate liability in ways that enhance its potential to afford constructive incentives.