Analysis and reflections

In Brazil, civil liability is advancing, but not as much as is necessary. We persist in the misconception of the purely compensatory paradigm, under which the only factor assessed when a tort is committed is the pecuniary and moral damages suffered by the victim. This is the lesson of Article 944 of the Civil Code: “Compensation is measured by the extent of the damage.” However, beyond the compensation for damages, a tort gives rise to other effects: the prevention of unlawful conduct, punishment for reprehensible behavior, and the forfeiture of unlawfully obtained profits. In pluralistic societies, civil law must act more effectively in response to the proliferation of unlawful acts. This will only be possible when civil liability is reexamined from a multifunctional perspective, in which the legal system is not restricted to the objective of restoring victims to the status quo (which is a fiction!), but rather begins to assess aspects related to the activities carried out by the parties, defining each function of civil liability based on objective and reasonable criteria.

Throughout the history of sports marketing, companies have found themselves facing difficult decisions due to the reckless behavior of their athletes. For example, after Tiger Woods’ infidelity came under public scrutiny, it was difficult for Nike to cut ties with him because of the sheer size of the business deal. Nike put the Kobe Bryant brand on hold until his rape trial was dismissed. Everyone remembers the painful end to Nike’s relationship with Lance Armstrong due to his involvement in a doping scandal.

About 10 days ago, New York Attorney General Letitia James filed a civil lawsuit against Donald Trump, the Trump Organization, and their associates, largely seeking disgorgement for allegedly lying “to the tune of billions.” The complaint lists seven causes of action for fraud and conspiracy. Although New York’s Attorney General is seeking other remedies, such as orders barring the defendants from managing public companies in New York, the primary remedy consists of the restitution of ill-gotten gains resulting from irregularities. The claim amounts to approximately $250 million.[1]

Much has been said about the importance of new technologies in solidifying the impacts of the Fourth Industrial Revolution during the transition to the Internet of Things (IoT), and one of the most prominent topics is the development of autonomous vehicles, which is being explored through various innovative solutions.

The most striking feature of climate damage legislation in common law jurisdictions is the lack of civil liability to obtain compensation from negligent parties and to punish those who, through recklessness or intent, cause harm. It is a scientific consensus that the burning of coal, oil, and gas causes global warming. However, civil liability has an exceptionally weak track record in penalizing environmental polluters. For example, oil spills in the Port of Sydney and a subsequent explosion were deemed damages that were too “remote.”¹ Chemical spills polluting Cambridge’s groundwater were also deemed a consequence too “remote” to warrant compensation for damages.² In other words, any lawsuit against polluters faces profound doctrinal challenges at every stage of the process.

The case of Abdulaziz v. McKinsey & Co., Inc. is fascinating. In February 2021, the plaintiff, Omar Abdulaziz, filed a complaint in the New York Supreme Court alleging claims against the defendant, McKinsey & Company, for the negligent infliction of emotional distress. Abdulaziz’s allegations stem from a report prepared by McKinsey identifying him as one of the three most influential critics of the Kingdom of Saudi Arabia (“KSA”) and Mohammad Bin Salman (“MBS”). The plaintiff is a political dissident from the Kingdom of Saudi Arabia who was granted political asylum in Canada because he faces persecution following the murder of his friend Jamal Khashoggi. While studying in Montreal, the plaintiff began using Twitter and other social media platforms to post political commentary about Saudi Arabia. Frequent topics of the plaintiff’s criticism include the regime’s governance of the country, rampant human rights violations, the royal family, corruption, and misguided foreign policy.

In his influential work A Theory of Justice (1971), John Rawls revisits the social contract theory—as found in Hobbes, Locke, and Rousseau—and elevates it to a higher level of abstraction. In his critique of utilitarianism and his emphasis on the imperatives of human dignity and inviolability, the theory of justice as fairness emerges as the most influential perspective on liberal justice today. Rawls incorporates far more of Kantian ethics into his political theory than Kant himself did: the person as an end in themselves is a central idea of the entire Rawlsian framework. Nevertheless, the rules of justice emerge as an institutional arrangement designed to serve an idealized rationality among a specific group of free men—equal in capacity and capable of productive activities—who, to escape the state of nature, devise a scheme of cooperation for mutual benefit. People with physical and mental disabilities are excluded from this pact and end up hidden away in institutions or abandoned. Because they have no representatives in the design of the principle of justice, they ultimately are not provided with measures that address their specific needs. The paradox is that even people with “normal” needs—who are covered by social contract theory—also go through periods in their lives when they require assistance from others, such as during childhood and old age. Occasionally, this asymmetrical dependence results from an accident, or a crisis and depression can render a person temporarily or permanently unable to work, requiring special care.

There is a noticeable trend in U.S. courts toward increasing awards for pain and emotional distress in cases of wrongful death. The New York Court of Appeals, in the case of Greene v. Esplanade,1 issued a ruling in February 2021 to extend the right to compensation to a grandparent under the “zone-of-danger rule.”2 The case involved the tragic death of a 2-year-old child resulting from pieces of a building’s facade breaking off and falling on her. At the time of the accident, the grandmother was standing next to her granddaughter when debris suddenly fell from the building, and the grandmother herself—the plaintiff—was struck by the debris. She had initially based her claim on two causes of action: negligence and wrongful death. Subsequently, the plaintiff added a third cause of action, based on the negligent infliction of emotional distress in accordance with the “zone of danger” doctrine.

For some time now, scholars of civil law have been questioning whether, within the realm of extracontractual liability, there is room for compensation that goes beyond the compensatory function for damages, in cases where no actual loss has occurred, but a person incurs expenses with the aim of preventing harm from affecting an interest worthy of protection. In this context, legal scholarship must find a justification for broadening the concept of damage or, alternatively, develop a methodologically sound approach capable of supporting compensation that covers preventive expenses incurred to avoid consequential damages resulting from an unlawful act.

"On one level, civil liability concerns torts and the compensation for damages. That is its private aspect. And that is what the courts do most of the time. On another level, civil liability deals with the prevention of harm, in accordance with society’s regulatory needs. This is the public aspect of civil liability. It is what the courts do from time to time, and what the legislature and administrative authorities do frequently. If you focus solely on one aspect or the other, you end up failing to appreciate civil liability as a whole.”

As much as the deterrent function of civil liability seeks to prevent unlawful conduct, from a psychological standpoint, the fact that we witness “thousands” of instances of unlawful behavior every day does not strike us as strange or frightening at all. This sounds like a paradox; after all, to effectively prevent unlawful conduct, the law itself should be sufficient. Those subject to the law should be aware of the rules, willing to follow them, and able to align their conduct with legal requirements as they make decisions about the activities in which they should engage, as well as the precautions to be taken.

Companies across various industries have misled the public by concealing the risks of their products. Sugar manufacturers have downplayed the dangers of high-fructose corn syrup and diverted public attention toward fat, causing an epidemic of diabetes, obesity, and heart disease. Fossil fuel companies have misled the public about the causes, certainties, and effects of global warming, resulting in massive, unregulated CO2 emissions and creating one of the greatest threats to humanity.

In 2011, a young couple expecting their first child moved into an apartment in Brooklyn. Their son was born healthy, but a year later, a routine medical exam detected lead in his blood. It turned out that dust from lead-based paint in the apartment was silently poisoning their baby. In the years that followed, he suffered significant cognitive delays, as well as severe social and emotional impairments. The child’s mother filed a lawsuit seeking damages against the landlord, who was found to be negligent. In calculating the damages, a critical issue for the jury was how much this child would have earned over the course of his life had he not been exposed to lead. As usual, the experts took into account the fact that the baby was Hispanic. As a result, their estimates of damages were significantly lower than they would have been if the baby had been white. The only unusual detail in this case was that Federal Judge Jack B. Weinstein of the Eastern District of New York refused to allow such an injustice, defying a century of established case law.¹

In my last contribution to this prestigious publication, in an article titled “Corporate Civil Liability for Human Rights Violations in Global Supply Chains,” I wrote about recent developments in case law at the Supreme Court of England, which has made positive innovations in the field of civil liability claims against “holding companies” in connection with the activities of their subsidiaries abroad. The main issue concerns when a lawsuit may be brought directly against the parent company for human rights violations abroad.

Supply-chain capitalism consists of commodity chains based on subcontracting, outsourcing, and contractual arrangements in which the autonomy of the constituent firms is legally established, even as the firms are regulated within the chain as a whole. These supply chains link seemingly independent entrepreneurs, enabling commodity processes to spread across the globe. Labor, nature, and capital are mobilized in fragmented yet interconnected economic niches; thus, supply-chain capitalism focuses our attention on issues of diversity within power structures.¹

The injured party does not want to be compensated because he has been wronged; he wants to be healed because he has been hurt."

In my previous column, I wrote about the current state of punitive damages in the U.S. We saw that, in U.S. practice, most awards result from jury decisions, and punitive damages are commonly awarded. However, in England, damages are determined by judges and courts, and exemplary damages (the English term for punitive damages) are awarded only in limited circumstances, as defined by precedent. In fact, unlike in the United States and other common law jurisdictions, in England punitive damages are viewed with suspicion by the courts as a kind of anomalous remedy in private law, insofar as punishment does not fall within this branch of the legal system. This understanding is so deeply rooted that it is not even challenged in legal scholarship. To a civil law scholar from Brazil or another civil law jurisdiction, such a claim may seem surprising, given that we tend to view the common law as a unified whole when, in reality, the specific characteristics of each jurisdiction are strikingly distinct.

This is not the first time punitive damages have been discussed in this forum. As Professor Thais Pascoaloto Venturi aptly noted, this legal concept was gradually incorporated into U.S. law, having been established by Supreme Court decisions as early as 1851, and has since spread to nearly all states, always with the aim of punishing and deterring or preventing conduct that proves to be particularly malicious, oppressive, or cruel.

When discussing civil liability under common law, we must challenge deeply held beliefs rooted in civil law.

When we think about the people hardest hit by the coronavirus pandemic, we immediately think of those with preexisting health conditions and the elderly. However, “essential workers” have borne a disproportionate share of this burden. I am referring to those who work in emergency services, healthcare, agriculture, food service, public utilities, energy, transportation, and other sectors. These workers are generally underpaid, unable to work from home, and inadequately protected against workplace hazards, placing them among those hardest hit by the pandemic. The highly contagious nature of SARS-CoV-2, including the infectiousness of asymptomatic and presymptomatic individuals, means that the family members of infected workers are also at risk. According to an estimate in the U.S., between 7% and 9% of the first 200,000 COVID-19 deaths occurred when an individual was infected at work and transmitted the virus to a family member.