The Liability of the Public Administration Arising from Custody in the Italian Legal System: A Law & Economics Perspective

Abstract

In this paper, we seek to demonstrate that, in the case of the public administration’s liability for the property in its custody, the rule of strict liability which seems to be accepted by the Italian Civil Code can be justified in terms of efficiency only if we are trying to allocate risks in an optimal manner. The strict liability of the public administration can be justified by supposing that it is the best risk bearer. To find solutions that control the level of activity of the injured parties, in the paper we suggest distinguishing between highly utilized property and rarely utilized property. In the first case, a rule of strict liability seems to be a second best solution, while in the second case a rule of fault-based liability is preferable.