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Several areas of expanding corporate responsibilities are evident from current practices. This article penetrates one such field, economic compensation through litigation, and discusses the possibility and desirability of reversing the trend. In court, companies are fined increasing amounts for an ever wider range of faults, or they settle out of court under this legal threat. This is not a local American problem, but European companies are increasingly involved because of globalization. The development in Europe is also driven by the same factors as in America – the mechanics of litigation and conventional ethics. The greed of plaintiffs and lawyers can mobilize the perceived virtue of sympathizing with a victim. Therefore it seems likely that a precondition for tort reform is an ethical reevaluation. Is it desirable and politically possible to make the individual more responsible for his own fate? [ABSTRACT FROM AUTHOR]

Much has been said recently about the risky legal environment in which outside directors of public companies operate, especially in the USA, but increasingly elsewhere as well. Our research on outside director liability suggests, however, that directors’ fears are largely unjustified. We examine the law and lawsuit outcomes in four common law countries(Australia, Canada, Britain, and the USA) and three civil law countries(France, Germany, and Japan). The legal terrain and the risk of‘nominal liability’(a court finds liability or the defendants agree to a settlement) differ greatly depending on the jurisdiction. But nominal liability rarely turns into‘out-of-pocket liability,’ in which the directors pay personally damages or legal fees. Instead, damages and legal fees are paid by the company, directors’ and officers’(D&O) insurance, or both. The bottom line: outside directors of public companies face a very low risk of out-of-pocket liability. We sketch the political and market forces that produce functional convergence in outcomes across countries, despite large differences in law, and suggest reasons to think that this outcome might reflect sensible policy. [ABSTRACT FROM AUTHOR]