Discretion and the economics of defensive behaviour by public bodies

Abstract

While in many countries the liability of public authorities in negligence resembles the liability of ordinary persons quite well, several exceptions which shield public authorities from liability remain important. A policy consideration which often seems to be given weight is the risk of defensive behaviour by public officials. From a legal perspective, concerns regarding defensive behaviour are often dealt with by the rules related to discretionary decisions. We examine to what extent these rules in England, France and Germany are in accordance with the most elementary principles of the economics of defensive behaviour. We find that the rules are compliant to a considerable extent in France and Germany, and to a lesser extent in England, with the economic principles underlying defensive behaviour. Immunity is mainly granted when there is considerable uncertainty in decision-making and often is not granted when the law specifies the precise action to be taken by the public authority or when no reasonable person could come to the decision made by the public authority.