Rather than comprising a specific body of law, preventive law principles define a methodology for approaching and preventing legal problems.  This methodology can be used to address a wide variety of legal risks and concerns.  This lesson will describe several of the key considerations as preventive law methods are applied to new types of legal liability and liability-threatening activities.

Determining the Proper Scope of Preventive Efforts

Efforts to prevent liability will generally be justified only if the cost of those efforts is less than the likely expense of the liability prevented.   It will normally not make sense to spend $1,000 on preventive efforts that avoid liability of $100.  In a wide variety of situations, it will be cost effective to avoid behavior that is injurious to others and to take whatever preventive efforts are necessary to avoid injurious behavior.  However, this will not always be the case.   A careful consideration of the merit of preventive efforts will turn on identifying the costs that will prevail if no such efforts are undertaken.  From a full understanding of these costs, a party can determine how much preventive effort to avoid those costs is justified.

There are three sources of costs associated with risk-taking behavior. The first is the direct cost of an occurrence of the risk. This includes the loss of skilled personnel time because of litigation as well as the payment of compensation to an injured party.  The second is the cost of the efforts to prevent or manage the risk before its occurrence. The third is the cost of the new risks that arise from the efforts to control the existing risks. An example of such newly created risks would be the complications that arise from medical laboratory tests that are ordered because of a fear of malpractice suits.

The following reading examines these costs in connection with efforts to manage and prevent medical malpractice liability.  While the focus is on the particular types of liability risks associated with medical practices, the same steps in cost estimation and preventive practice construction carry over into other fields.

The Economics of Prevention

Systematic Techniques for Managing Risks and Avoiding Liability

Liability risks can be approached like other risks of poor performance facing a company or organization.  Management processes in these settings typically implement what is called a "control loop."  A properly constructed management control loop will ensure that information that is relevant in shaping good performance that furthers company or organizational objectives is considered before related actions are taken.  In the context of law compliance, this sort of management approach would ensure that legal requirements and the employee actions necessary to meet those requirement are undertaken before relevant activities are completed.  Further aspects of control loops would also ensure that the effectiveness of this information delivery and consideration process in achieving law compliance is evaluated and necessary changes are implemented.

Management control loops typically involve the following elements:

The following reading examines the use of this type of control loop as a management technique for preventing medical malpractice liability.

Control Systems for Liability Prevention

Evaluating Preventive Practices

As parties operate systems for preventing liability, they will usually wish to evaluate the effectiveness and completeness of these systems.  One way to approach this type of evaluation is to treat these systems as quality control systems and to apply evaluative techniques that are already available for such systems.   In this setting, the aspect of performance quality that preventive practices aim to control is the degree of law compliance and liability avoidance achieved in everyday business practices or other activities.  An incident of liability or liability-threatening misconduct is viewed as the equivalent of a defective product in a manufacturing setting.  Just as manufacturers would assess the strength of their management practices for avoiding the production and distribution of such products, businesses and individuals can evaluate the effectiveness of their activities in avoiding sources of liability and in detecting liability-threatening misconduct to prevent is harmful consequences.

Methods for evaluating the quality control and liability reduction success achieved by a preventive law program will typically focus on the following:

The reading at the link below examines these types of preventive program evaluations in the context of a medical malpractice prevention program.

Evaluating Systems For Legal Risk Reduction

The Role of Computers in Liability Prevention Systems

The prevention of liability in many contexts requires the systematic collection and evaluation of information on aspects of legally significant activities or conditions.  Computer systems now provide the means for undertaking some of these data collection and evaluation activities in an effective and timely fashion.  In addition to speeding the analysis of certain types of complex data, computer systems can expand the range of practices evaluated, potentially identifying similar problems in widely separated facilities or activities that might have otherwise gone undetected.  Computer systems can also play a key role in distributing information about liability threats and avoidance practices to numerous concerned parties.

This reading at the link below explores some of these uses of computer systems as means for implementing preventive practices and reducing liability threats.