The Law and Economics of Tort Liability for Human Rights Violations in Global Supply Chains

Mark A. Geistfeld, The Law and Economics of Tort Liability for Human Rights Violations in Global Supply Chains, 10(2) J. European Tort L. 1-36, DOI: 10.1515/jetl-2019-0108 (Forthcoming)

NYU Law and Economics Research Paper No. 19-22

32 Pages Posted: 22 Jul 2019

See all articles by Mark Geistfeld

Mark Geistfeld

New York University School of Law

Date Written: July 1, 2019

Abstract

The human rights of foreign workers in global supply chains are routinely violated, yet the problem so far has largely evaded a legal solution. Economic analysis shows why domestic tort liability can partially address this problem. Many consumers in developed countries have a lower willingness-to-pay for products produced by global supply chains that systemically subject foreign workers to egregiously dangerous working conditions in gross violation of their human rights. This attribute of consumer demand provides a basis for subjecting the domestic chain leader to domestic tort liability for the bodily injuries suffered by these foreign workers, including those employed by independent suppliers. Chain leaders, like other product sellers, are obligated to warn about foreseeable safety risks that are not known by consumers and would be material to their decision about whether to purchase or use a product. The tort duty also requires sellers to instruct consumers about the ways in which the purchase or use of the product might foreseeably harm third parties. A domestic seller that is the chain leader of a global supply chain would breach this duty by not warning domestic consumers that the product is produced by foreign workers who are systemically subjected to working conditions that are so unsafe as to amount to a gross violation of their human rights. Because the purchase of the product foreseeably exposes foreign workers to this ongoing risk of physical harm, they are protected by the tort duty and can recover for its breach. Causation can be established by the logic of the breached tort duty. If consumers had been warned that the product is produced in such a systemically unsafe work environment, a substantial number of them would not have purchased it--they would instead have purchased the same product at the higher price necessary to protect the foreign workers from these ongoing safety violations. By distorting consumer demand in this manner, the domestic product seller’s failure to warn domestic consumers of these human rights violations in the global supply chain proximately caused injury to these foreign workers, entitling them to compensation. By remedying these human rights violations, domestic chain leaders would satisfy the reasonable expectations of domestic consumers who have altruistic preferences to rescue foreign workers from extreme dangers within the production process. Tort law cannot redress the full range of human rights violations in global supply chains, but consumer demand provides a sound basis for tort liability that addresses a limited, though important component of the problem.

Suggested Citation

Geistfeld, Mark, The Law and Economics of Tort Liability for Human Rights Violations in Global Supply Chains (July 1, 2019). Mark A. Geistfeld, The Law and Economics of Tort Liability for Human Rights Violations in Global Supply Chains, 10(2) J. European Tort L. 1-36, DOI: 10.1515/jetl-2019-0108 (Forthcoming); NYU Law and Economics Research Paper No. 19-22. Available at SSRN: https://ssrn.com/abstract=3423108

Mark Geistfeld (Contact Author)

New York University School of Law ( email )

40 Washington Square South
Room 411A
New York, NY 10012-1099
United States
212-998-6683 (Phone)

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