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9 Asian J.L. & Econ. 1 (2018)

handle is hein.journals/ajle9 and id is 1 raw text is: Pan Su' Economic Analysis of Serious Accident Law in China ' Shanghai University of Finance and Economics, Shanghai, China, E-mail: su.pan(mail.shufe.edu.cn Abstract: In recent years, serious accidents in China caused by negligence have resulted in tremendous damage to both human life and property. Taking a cost-utility analysis, law and economics considers that accident law can induce injurers to internalize the costs of harm through liability rules such as victim compensation and criminal imprisonment. Consequently, the injurers are motivated to avoid or reduce accident risks at a more effective level. This article applies the approach of law and economics into the analysis of serious accident laws in China. It argues that the current provisions should be revised to include criminal fines on injurers, so as to enhance legal deterrence, stimulating them to improve the level of care as well as the level of behavior to reduce the incidence of accidents. Keywords: cost-utility analysis, criminal fines, deterrence, serious accidents DOI: 10.1515/ajle-2017-0023 1 Introduction The occurrence of serious accidents (major accidents) in contemporary China is shocking. Accidents in risky industries, such as coal mining, firecracker production and road traffic construction, remain at a high level and bring serious social damage. For example, on 27 September 2016, a coal mine exploded in Ningxia, Northwest China, causing 18 deaths.' More catastrophically, the warehouse explosion in Tianjin Port in August 2015 killed hundreds of people and caused $10 billion of economic damage.2 Although the occurrence of accidents was not intentional, the responsible injurers did violate Chinese Criminal Law. However, this article argues that the current criminal provisions fail to deter high risk accidents. As discussed by Calabresi, Posner, Shavell, and Polinsky, legal economics sets up a relatively complete frame- work for analyzing accident law.3 Scholars mainly use the cost-utility analysis method to evaluate the function of specific contingency liability system and determine which rule can lead to the maximization of social welfare. The former is a descriptive analysis, while the latter is a normative analysis. The analytical framework of law and economics provides a different perspective for us to observe accidents. This article analyzes the accident law of China from such a perspective. The framework of accident law is usually applied to the analysis of infringement, such as product liability accidents. However, because the accident criminal law involves the regulation of infringing action, it can also be applied to the criminal law, notwithstanding minor difference. This paper mainly focuses on serious criminal accidents, which means the accidents causing serious harm to public safety. 2 Economic Analytical Framework of the Accident Law Accident law, through damage compensation, criminal imprisonment and other accountability mechanisms, encourages injurers to internalize the cost of injury and act more safely. The mechanisms constitute the basis of the entire accident law. Only by promoting the internalization of injury costs can serious accidents be reduced.4 In the general tort liability system, accident law mainly affects the motivation of the parties to take measures to reduce accident risk through the principle of liability - fault liability or strict liability. The analysis of law and economics consists of two levels. First, the contingency model is defined as two basic types - unilateral liability accident and bilateral liability accident. Then, two important factors are considered separately under this model - the level of care and the level of behavior. Unilateral liability accident refers to that the situation in which only the injurer's attention or preventive action will affect accident risk, while the victim's behavior does not have an impact. Bilateral liability accident Pan Su is the corresponding author. 9218 Walter deGruyter GmbH, Berlin/Boston. 1 DE GRUYTER Asian Journal of Law and Economics. 2018; 20170023

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