Regulating CRAS’ civil liability: a common law vs civil law comparison

Authors: Lorenzo Sasso

ABSTRACT

The article focuses on the civil liability of credit rating agencies (CRAs) in a comparative way. It starts from the historical evolution of CRAs as international standard setters to justify an economic rationale for their liability regime. It discusses the statutory law introduced in the US and the EU for CRA’s civil liability and analyses the approaches of common law and civil law to private enforcement. The analysis shows that common law countries are better equipped to tackle global market challenges since the judicial reforms of certain common law courts have been more effective than statutory rules implemented in many civil law countries. For an effective private enforcement, the EU countries must harmonise national legal traditions of private law and procedural law tools. Such a result can be achieved not much through statutory intervention but especially through developing new interpretative tools that might best assist the civil law courts.

Keywords: CRA civil liability – Tort – Aquilian liability – Causation– Proximity – Fraud-on-the-market presumption

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