Orbach seeks to
make a contribution to the understanding of how legal rules can reduce the social costs of disasters. The Article identifies and studies a pattern of decisionmaking failures whose existence may appear implausible: situations where decisionmakers know (or should know) that a high-impact negative event is about to happen or is already happening yet they fail to consider the implications of the coming or unraveling disaster. For example, awareness of the real-estate bubble of the 2000s did not prompt policymakers and boards of a few large financial institutions to evaluate the inevitable collapse. Similarly, credible warnings about unsustainable risks do not always persuade decisionmakers to take action until disasters happen, such as large-scale foodborne outbreaks, the frequency of extreme weather events, shocking gun violence incidents, and financial schemes that hurt the public. The Article explains why the traditional legal and economic thinking are generally skeptical of the proposition that decisionmakers could fail to consider the inevitable consequences of catastrophes they know about. It argues that this skepticism directs both public policies and legal rules that address predictable disasters. Specifically, the Article shows that several core legal presumptions regarding decisionmaking are crude and inadequate for extreme situations. The Article concludes that the present denial of familiar patterns results in limited accountability for failures to consider the inevitable consequences of known catastrophes.
