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Journal of Law, Economics, and Organization Advance Access originally published online on December 12, 2007
Journal of Law, Economics, and Organization 2008 24(2):434-457; doi:10.1093/jleo/ewm061
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© The Author 2007. Published by Oxford University Press on behalf of Yale University. All rights reserved. For permissions, please email: journals.permissions@oxfordjournals.org

Environmental Liability in Transboundary Harms: Law and Forum Choice

Andrew Eckert*

University of Alberta

R. Todd Smith**

University of Alberta

Henry van Egteren***

University of Alberta

* Department of Economics, University of Alberta. Email: aeckert{at}ualberta.ca.

** Department of Economics, University of Alberta. Email: todd.smith{at}ualberta.ca.

*** Department of Economics, University of Alberta. Email: henry.van.egteren{at}ualberta.ca.

We examine the economic consequences of choice of law and the choice of forum for the adjudication of transboundary harms. We examine strict liability and negligence and show that the socially optimal levels of care can be implemented in negligence only if the actions of the firm that caused the harm are adjudicated using the standards of the jurisdiction in which the harm occurs. This lends theoretical support to the extraterritorial application of domestic environmental laws in the case of transboundary pollution disputes. (JEL K32, Q5)


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