Economic analysis of compensation for oil pollution damage

Michael Faure, Wang Hui

Research output: Working paper / PreprintWorking paper

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In this paper the economic analysis of law is used to analyze the international regime with respect to the compensation provided to victims of oil pollution damage. It concerns more particularly the regime which came into being through the international maritime organization IMO which resulted in the Civil Liability Convention of 1969 and the Fund Convention of 1971. First the general lessons from the economic analysis of law are used to argue how optimal compensation for victims of oil pollution damage should be constructed. Than the contents and evolution of the international origine is briefly sketched. Finally the lessons from economic analysis are compared with the actual structure of the international regime. Specific attention is paid e.g. to the fact that a strict liability rule applies to tanker owners, to the limitation of liability, to the channelling of liability to the tanker owner and to the introduction of compulsory insurance. Some of the features of the international regime suggest the introduction of a duty to seek financial coverage and the shift to strict liability are judged in compliance with economic analysis. Other features more particularly the limitation of liability and a channelling of liability to the tanker owner do not seem to fit into the economic model.
Original languageEnglish
Place of PublicationMaastricht
PublisherFaculty of Law, Universiteit Maastricht
Number of pages58
Publication statusPublished - Oct 2006

Publication series

SeriesMaastricht Faculty of Law Working Papers


  • Oil pollution
  • Economic analysis
  • Strict liability
  • Compulsory insurance
  • Channelling

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