b. Bottom-up and Top-down Regulatory Litigation
Once regulatory litigation has been framed as a means of addressing risk, it is possible to distinguish between various types of risk. (137) For example, some types of risks can be anticipated in advance while others cannot. One type of regulatory litigation--that which operates "top down"--focuses on "risks that have already come to pass. In such instances, the law fills the regulatory gaps by providing individuals the means to achieve compensation for their injuries.... [T]he legislature can do so either through the establishment of administrative agencies or through the use of substantive law." (138)
In these sorts of cases, "courts become regulatory instruments" (139) to the extent that they enforce various statutes and administrative pronouncements. This sort of regulatory litigation is quite common, and "[i]t is for this reason that some authors have suggested that all litigation is regulatory and, in this sense, they are correct." (140)
One example of top-down regulatory litigation involves the European regulation (141) on passenger rights, which gives airline passengers the right to private compensation arising from delayed or cancelled flights. (142) The risk of cancelled or delayed flights is already known and can easily be anticipated to arise again in the future. Providing passengers with a right to individual compensation serves as a means of regulating the future behavior of industry actors, with the "penalty" of a right to individual compensation acting as the catalyst for airlines to take all reasonable steps to avoid or insure against cancelling or delaying flights in the future. (143) Although the regulation does not currently include the right to pursue claims collectively, that could change as a result of procedures contemplated by the Resolution. (144)
While injuries arising from delayed or cancelled flights are easily foreseeable, not all risks can be identified in advance. (145) This has led to a second and more controversial type of regulatory litigation, namely the "bottom-up ... use of law by judges and litigants." (146) It is this type of regulatory litigation that is primarily at issue in this Article.
Bottom-up regulatory litigation shares certain functional attributes with top-down regulatory litigation, in that bottom-up regulatory litigation, "[l]ike legislative efforts to regulate, ... aims to address risk." (147) However, it does so in "a different way," using "the legal remedy or the settlement equivalent in order to influence future, risk-producing behaviors. In cases properly described as regulatory, the remedy is structured either by a party or by the judge with the intent of altering future behavior." (148) Although there is some difference of opinion about certain aspects of bottom-up regulatory litigation, the three critical elements are: (1) intent, meaning "not only the desire to influence behavior as the conscious object of the one who would regulate, but also the desire to prevent some future, risk-producing behavior," (2) a pre-existing substantive norm which is to be enforced by "the litigant, the judge, or the two acting in concert," who "intend to produce some action on the part of the target of regulation because of the risk (and the litigant's or judge's apprehension of the risk) that the target actor's future behavior will fall short of the relevant norm," and (3) a rule, typically in the form of a remedy, "that expresses the norm to the world and attempts to limit the threats (risk) to that norm." (149)
This definition of bottom-up regulatory litigation is quite useful. (150) Not only does it identify a functional objective that cannot be readily addressed by legislative or administrative bodies (i.e., unanticipated risk), it also provides a principled, predictable basis on which such actions may be based (i.e., a pre-existing substantive norm working in …