Environment, Damages, and Compensation

Abstract

This article, the first part of a larger study devoted to the compensation of damages caused by pollution, reviews the existing sources of compensation in the United States: the common law of torts, federal and state statutes, and various forms of commercial insurance coverages. It shows how the rules of nuisance law have remained flexible in response to changing customs and public policies, how for a long time prevailing attitudes favored industrial development and economic growth over physical comfort, and how increasing concerns about the long-term health effects of environmental pollution have created a trend in the opposite direction. The author also points out that the existing system of liability and compensation, which relies on individual actions and case-by-case adjudication, is not ideally suited for dealing with the effects of large-scale pollution or for the —primarily political—task of evaluating and balancing all of the interests and values, present and future, economic and noneconomic, that need to be considered before decisions can be made that are bound to affect the health and economic well-being of a large part of the population beyond the immediate parties to a lawsuit. This indicates a need for a comprehensive approach that would not only coordinate the rules concerning liability and those concerning insurance and other sources of compensation but would also make the compensation of pollution damages an integral part of a thoroughly rational and consistent environmental policy. The various possibilities of constructing such a comprehensive compensation system will be discussed in the second part of the study, to be published in a forthcoming issue of the American Bar Foundation Research Journal.