ABSTRACT
Regulation and tort law are alternative methods for preventing accidents. The former requires a potential injurer to take measures to prevent the accident from occurring. In catastrophic injury cases the amount of damages per victim is also likely to be large even though both the probability of an accident and expected damages may be small. The relationship between size and the number of victims is not one to one but it does raise the question whether solvency limitations are in fact a greater problem in catastrophic accident cases than in other cases. The chapter considers a concrete example to analyze the basic problems of catastrophic accidents—causal uncertainty and the passage of time between accident and injury. The economic literature on tort law contains a parallel analysis, the choice between periodic and lump-sum payments in compensation for a continuing tort such as a nuisance.
