Towards a Rapid Claims Settlement Mechanism for Disasters?

Abstract

The starting point of this contribution is the necessity to speedily compensate victims of an accident, which in reality is often not the case. We look at the term accident in a broad manner, referring to disasters that affect many people rather than only one person. The main obstacles to a fast compensation may be found in lengthy mass litigation. The necessity to proceed quickly is, for instance, crucial because it can prevent further damage, for example the local industry from facing insolvencies after an oil spill. We discuss some real-life examples of such rapid claims settlement mechanisms, the Belgian compensation fund for technological incidents and the American Gulf Coast Claims Facility. Both examples show some strengths and weaknesses, which lead us to conclude that speed cautiously has to be balanced against the requirements of due process and the need to make the tortfeasor face the total costs of an accident to induce deterrence. We give some guidance as to how such a mechanism could be designed in practice.