Good Governance of Private Standardization and the Role of Tort Law

Abstract

This article enquires into the potential of tort law to control private standardization and foster good governance in regulatory decision-making. Private standardization has been characterized as a political game of winners and losers: while for some firms it brings about opportunities for product development, innovation and market access, for others it means switching costs and barriers to trade. With so much at stake, firms have strong incentives to influence standardization and ensure that it meets their narrow private interests. This dynamic puts pressure on the integrity and quality of private standardization and has led policy-makers to require standards development organizations (SDOs) to adhere to good governance principles such as stakeholder participation, transparency and the use of state-of-the-art scientific research. Drawing on case law from the United States and Europe regarding the liability for negligent standardization, the article finds that tort law currently offers limited incentives for SDOs to comply with good governance norms. The degree to which compliance with such norms can be required appears to fundamentally depend on an ex post weighing of interests under the circumstances. This balancing, the article argues, should at least involve consideration of (i) the magnitude of risk private standardization is concerned with; (ii) the existing internal rules and procedures for private standardization; (iii) the costs concerned with the (re)organization of such rules and procedures; and (iv) the character and societal benefit of private standardization.

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