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66 WE FIRST CONSIDER the possibilities for altering the private remedies available in this area by the creation of a new statutory tort. A number of factors are considered:
• fault-based or strict liability;
• the burden of proof;
• who will be liable;
• defences; and
• limitations periods.
67 The general rule is that a plaintiff who has suffered loss needs to prove that the defendant was responsible for the damage caused. To succeed in negligence, the plaintiff must prove that the defendant failed to exercise the care and skill expected of a reasonable practitioner in that field.[62] The loss suffered by the plaintiff must also be foreseeable. In nuisance and the rule in Rylands v Fletcher proof of negligence is not needed but the defendant will still only be liable if the harm was foreseeable.
68 Given the unpredictable nature of the possible harm that could by caused by GMOs, the need to prove negligence or foreseeability of harm may prevent some injured parties from receiving compensation. One way to address this problem would be to create a new statutory tort specifying, for example, that “[a]nyone who sells or uses any genetically modified organism is subject to liability for physical harm, damage or economic loss to property caused by that organism”.[63] This would remove the requirement to prove foreseeability from nuisance and the rule in Rylands v Fletcher. In cases of negligence, it would remove the requirement to prove fault, replacing it with a “no fault” regime.
69 A fundamental policy issue arises: should those in the genetic modification industry be held liable only if they are at fault (a fault-based regime), or should they be held liable for any loss caused (a strict liability regime)?
Fault-based
70 In general, if a GMO developer complies with all the statutory requirements, is not negligent, and takes all measures to prevent any harm that was reasonably foreseeable, then the GMO developer is not legally “at fault” and is unlikely to be held liable for any damage that may be caused. This may mean that some of the losses caused would not be able to be compensated – the risks would be “socialised”. The question that arises is whether there is good reason to hold GMO developers to a higher standard of care than others working with potentially dangerous substances.
Strict liability
71 On the other hand, there is an argument that a person who is carrying out an inherently hazardous activity should bear the risk if damage is caused by them, rather than the victim or society at large.[64] Genetic modification is a new technology with unknown risks. Companies or individuals enter the genetic modification industry knowing of this and they should therefore be responsible for all damage, even if it was not specifically foreseeable or preventable. This line of reasoning leads toward a strict liability regime.
72 Such a regime seeks to ensure that the costs of the genetic modification industry are borne by the industry itself – the “polluter pays” principle.[65] Arguments for such a regime include that:[66]
• the industry will be provided with incentives to take effective preventive measures to avoid causing damage;
• the industry costs will be “internalised” (that is, the industry would be responsible for all damages from the product, and could spread the costs of the possible harm through higher product prices); and
• plaintiffs’ claims will not fail merely because the harm was not foreseeable, or because the defendant was not at fault.
73 It is moot whether a strict liability regime will necessarily achieve the first two aims. While a liability regime should, ideally, encourage investment in precautions,[67] the problem with GMOs in this regard is that the nature of possible harm and the level of risk may be unknown. If the likely harm is not foreseeable, it is difficult to see how strict liability would have any advantage over fault-based liability in encouraging preventive measures.[68]
74 Some commentators suggest that strict liability may actually provide perverse incentives, leading to reduced expenditure on preventive measures. This is because strict liability takes no account of investment in precautions, therefore, an efficient response may be to minimise such investment so as to maximise short-term profits.[69]
75 Similarly, because the potential for, or likely costs of, damage caused by GMOs is difficult to predict, the genetic modification industry has no means to internalise these costs through higher product prices.
76 Creating a new statutory tort would not relieve the plaintiff of any difficulties in proving causation. However, it would make the plaintiff’s case easier by removing the need to prove fault or foreseeability.
Conclusion
77 Whether to create a new statutory tort or not is ultimately a policy decision. Staying with the existing tort regime is more likely to encourage the development of genetic modification in New Zealand. Alternatively, the adoption of a new statutory tort that imposes strict liability may dissuade developers, but is likely to cover a broader range of potential damage.[70]
78 Potential plaintiffs could face difficulty and expense in establishing causation and proving the extent of any damage caused by GMOs.[71] This is due to both the time that may elapse before damage is discovered and the scientific evidence that may be required to prove causation. For example, if damage is caused by the combined effects of a number of GMOs in a particular environment over a period of time it may be difficult, or impossible, to establish that any individual or group of GMOs caused the damage.[72]
79 Plaintiffs who have suffered damage will be left without a remedy if they are unable to prove causation. Similarly, plaintiffs may be dissuaded from commencing a suit if they perceive that the evidential problems will be overwhelming, or the costs of taking the action prohibitive.
80 One way to redress the difficulty of establishing causation would be to shift the burden of proof onto the defendant. For example, there could be a presumption of causation (that the defendant’s activity caused the harm) where there is solid prima facie evidence of its probability – such as known causal connections or apparent absence of alternative causes.[73] Once the plaintiff has established a prima facie case for liability it would be up to the defendant to prove on the balance of probabilities that they were not responsible.[74] Another possibility is that, in a case with multiple defendants, if the plaintiff proves that some of the defendants have indeed caused harm, but cannot reasonably prove which are actually responsible, then the burden of proof could be shifted so that the individual defendants must prove that they were not responsible.[75]
81 The advantage of placing the burden of proof on the defendant is that the defendant may be more familiar with the possible effects of the GMO than the plaintiff. On the other hand, it is always difficult to prove something negative, for example, that the GMO did not cause the damage.[76]
82 One example where the burden has been altered is the German Act on Genetic Engineering. Under that Act, in order to relax the burden of proof for the plaintiff, there is a rebuttable presumption that any damage a GMO causes is the result of its biotechnology-induced characteristics, and not the organism’s “natural” traits.[77]
83 Two general observations are appropriate. Causation difficulties with GMOs may not be any greater than those faced by other claimants in other areas. Secondly, whatever regime is adopted the injured party will still have to establish a right to the remedy sought. As stated in the Royal Commission report, “[d]evising a new form of liability will not, however, resolve the difficulty [of causation]; it is inherent in whatever kind of liability regime is adopted”.[78]
84 The choice of whether or not to alter the burden of proof involves yet another policy decision. The disincentive to GMO developers from introducing a novel legal responsibility has to be weighed against the possible advantage of lessening the difficulties of proving causation for a plaintiff who has suffered loss.
85 There are a number of different groups that could be held liable for damage caused by GMOs, including producers, suppliers and users (such as farmers who grow genetically modified crops).
86 Under tort law there is unlikely to be any basis to distinguish between the producers, suppliers or users. All would be liable if they have breached their relevant duty.
87 However, in other fields, legislation has been passed to ensure only some parts of a dangerous industry can be sued. For example, in the United States’ nuclear industry there is a channelling of liability to the installation operator.[79] Another possibility is that a person’s liability could differ depending on their role. Some environmental liability regimes impose more onerous duties on those who produce or dispose of hazardous substances than those who merely carry them. This could be mirrored in the genetic modification area by, for instance, placing a higher standard of care on those who develop GMOs, and a lesser standard on the farmers that grow them.[80]
88 Thus, if liability is not channelled to one party, or if there are a number of parties responsible for damage, then the regime needs to have a means of apportioning liability.[81] Two possibilities could be considered:
• proportionate liability – where each defendant is only responsible for the damage that the plaintiff can prove was caused by that defendant; or
• joint and several liability – where, in the event that other defendants cannot be identified or are not worth suing, each defendant is liable for the full amount of the damage caused.
89 In Europe, the most common rule for apportioning liability for environmental damage (not limited to genetic modification damage) is joint and several liability, qualified by encouragement of division on equitable grounds in relation to the amount of damage caused by each individual.[82] However, there is an argument that liability should be proportionate because this is more consistent with the “polluter pays” principle.[83]
90 An additional question to be considered is whether any new liability regime should be made retrospective. Given the novelty of the release of GMOs in New Zealand it seems unnecessary to make any new regime retrospective in its effect because it is unlikely that anyone has suffered damage at this stage.
Conclusion
91 It is a policy decision as to who will be held liable under any new liability regime.
92 Any proposal for a new liability regime would need to include what defences would be available. For example, the proposal from the European Commission for a Directive on Environmental Liability recognises defences in:
• an act of war;
• an act of God;
• deliberate acts of third parties;
• an event authorised by law; and
• activities that were not considered harmful according to the state of scientific and technical knowledge at the time when the activity took place.[84]
Other possibilities include a “state of the art” defence in which a defendant would not be liable for unforeseeable risks if the defendant had taken state of the art precautions, and contributory negligence.[85]
93 The defences that are made available need to be considered carefully so as not to undercut the purpose of any new regime. For example, if one of the reasons a new liability regime is created is to remove the need for a plaintiff to prove foreseeability it would be pointless to create a defence that the defendant’s activity was not considered harmful at the time. Similarly, to allow a defence if the activity was authorised by law would make any new regime very similar to our current one where there are no statutory penalties if the statutory requirements are complied with.
Conclusion
94 It is a policy decision as to what defences will be available if a new liability regime is preferred.
95 Some kinds of harm caused by GMOs may only emerge after an extended period of time. Therefore, any claims may be barred by the expiry of the relevant limitation period (usually six years for civil claims, and two years for personal injury with the possibility of an extension). The Royal Commission suggested that, in most cases, time would run from discovery of the harm, rather than from the date the harm was caused.[86] The Law Commission has previously recommended introducing a discoverability principle, with a 10-year cut off from the date the cause of action accrued, defined as the date when all facts necessary to establish the claim are in existence, whether or not their existence is known to the claimant. Claims after that date would become barred irrespective of knowledge.[87]
Conclusion
96 It is a policy decision as to the appropriate limitation period for actions based on GMO damage under any new liability regime.
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URL: http://www.nzlii.org/nz/other/nzlc/report/SP14/SP14-6_.html