The cost-benefit hurdle for safety case regulation

Following the Gulf of Mexico blowout of 2010, various parties called for the introduction of safety case regulation in the US. Such regulation is well known in various other jurisdictions around the world and is regarded as best practice for the regulation of rare but catastrophic events. New regulation in the US must pass the cost/benefit test or alternatively show why strict cost/benefit analysis is inapplicable. This paper argues that safety case regulation can surmount this hurdle. It argues that strict cost/benefit analysis is impossible for safety case regulation and it demonstrates this by providing a detailed critique of the attempts by the European Commission to provide a cost/benefit justification for the introduction of safety case regulation for offshore oil and gas production in its jurisdiction. The paper argues that such regulation can be justified in the US on other grounds; first, the polluter pays principle, second, the fact that society regards multiple fatalities occurring together far more seriously than the same number of fatalities occurring separately; and third, that the incidents to be prevented are viewed by the courts as criminal and therefore to be prevented as a matter of principle.