By Gary E. Marchant, Ph.D., M.P.P., J.D.
Professor of Law, Sandra Day O’Connor College of Law, Arizona State University (SDO’CCL – ASU)
Faculty Director and Faculty Fellow, Center for Law, Science & Innovation (SDO’CCL – ASU)
Lincoln Professor of Emerging Technologies, Law and Ethics (ASU)
Senior Sustainability Scientist, Global Institute of Sustainability, (ASU)
Traditional government regulation of nanotechnology is hampered by a number of limitations, including the lack of a legally-defensible bright line definition of nanotechnology, the scientific uncertainties about risk, the heterogeneity in materials, applications, and products, the rapid pace of technology development, and outdated statutory provisions written in the pre-nano era. To address this “governance gap” in nanotechnology, a number of “soft law” programs have been proposed for risk management of nanotechnology. These soft law programs set forth substantive expectations but are not directly enforceable by government, and can include voluntary programs, codes of conduct, statement of principles, international consensus standards, and certification programs. An example is the Dupont-EDF Nanoriskframework. While these initiatives set forth useful risk management programs, their uptake by companies has been quite limited. In a new article published in the Journal of Risk Research this week, entitled “’Soft Law’ Mechanisms for Nanotechnology: Liability and Insurance Drivers,” I suggest that both liability and insurance, or perhaps the combined effect of both, should push companies to be more proactive in adopting state-of-the-art voluntary risk management programs. Liability insurers should insist that companies implement such programs as a condition for coverage, and companies should be thinking about the future lawsuits that are likely to occur and how they will justify their current practices, which in retrospect and with the hindsight bias inherent in our liability system, are likely to seem inadequate. Yet, a company that implements a voluntary risk management program now will have a credible story to tell jurors in the future that it did the best it could, even if it ultimately failed to provide adequate protection given the present uncertainties about risks. In contrast, a company that fails to adopt such a risk management program, when it is available and is being adopted by some other companies, will stand exposed and vulnerable to a jury. Forward-looking attorneys and executives should be thinking about such future liability risks, and this, combined with the pressure from insurance companies, should provide a strong driver for greater uptake of voluntary nanotechnology risk management programs. My article is available at http://www.tandfonline.com/doi/full/10.1080/13669877.2014.889200#. (A subscription is required to access full text, but I would be happy to send you an electronic pre-print if you email me at gary.marchant@asu.edu).