Lenders' Liability for Environmental Damages in the Absence of Statutory Regulation -- Lessons from the Israeli Model: Part 1

5(5) Law and Financial Markets Review 367, 2011

13 Pages Posted: 23 Apr 2014 Last revised: 14 Aug 2014

See all articles by Ruth Plato-Shinar

Ruth Plato-Shinar

Netanya Academic College, Israel

Marcia Gelpe

Mitchell Hamline School of Law

Date Written: September 1, 2011

Abstract

Most countries lack regulations directly addressing liability of lenders for environmental problems caused by their borrowers. Nonetheless, lenders may be held liable under various theories of banking, environmental, tort, and corporate law. This article examines the justifications for holding lenders liable and the limits of those justifications, analyzes the American model that explicitly regulates lenders' liability, and explores potential lender liability under various theories of Israeli law. The Israeli analysis illustrates theories that can be used in other countries to impose liability on lenders. The conclusion discusses the advantages and disadvantages of defining lender liability through the variety of legal theories discussed in the paper, as compared with defining such liability in a special regulatory scheme.

Keywords: lenders liability, environmental liability, Israeli law, CERCLA, bank regulation

JEL Classification: K13, K23, K32, N20

Suggested Citation

Plato-Shinar, Ruth and Gelpe, Marcia, Lenders' Liability for Environmental Damages in the Absence of Statutory Regulation -- Lessons from the Israeli Model: Part 1 (September 1, 2011). 5(5) Law and Financial Markets Review 367, 2011, Available at SSRN: https://ssrn.com/abstract=2427561 or http://dx.doi.org/10.2139/ssrn.2427561

Ruth Plato-Shinar (Contact Author)

Netanya Academic College, Israel ( email )

1 University St
Netanya, 4223587
Israel

Marcia Gelpe

Mitchell Hamline School of Law ( email )

875 Summit Ave
St. Paul, MN 55105-3076
United States

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