10.4.3 The entrepreneurial risk principle as justification

The third sub-question is: what is the justification for the effect described above (departure from ‘conduct-based’ liability and a lower liability threshold)? I argue that the entrepreneurial risk principle (alongside the fault principle) underlies the extra-contractual liability of entrepreneurs. The entrepreneurial risk principle is based on the idea that, in some cases, it is fair to pass on damages resulting from entrepreneurial activities to the entrepreneur, rather than putting them at the risk of the injured party. The entrepreneurial risk principle is a composite of the risk principles closely related to being an entrepreneur. These are: the hazard principle, the profit principle, the risk spreading principle, the risk management principle, the deep pockets idea, the unity of undertaking and victim protection. The enterprise risk principle is closely related to the theory of enterprise liability, which is particularly known in American jurisprudence on tort law. Enterprise liability has influenced US law in several ways. For instance, on the one hand, the development of indemnity funds and group insurance can be attributed to this principle. On the other hand, the enterprise liability idea is reflected in a form of harm-based strict liability.

I believe that the entrepreneurial risk principle is a universal expression of justice and underpins Dutch enterprise liability law. The principle may be reflected in positive law in more subtle ways than the American literature suggests. For instance, the entrepreneurial risk principle forms the basis for the channelling of vicarious liability to corporations and functions as the basis of a more objective perpetratorship criterion, which does not rely on a physical act of an individual person. Furthermore, it provides the justification for assuming a higher level of knowledge, an increase in danger, a greater degree of care, culpability and liability without fault, if the tortfeasor is an entrepreneur.