One of the perennial issues in regulating the safety of technological systems is how prescriptively one should write the regulations. At one end of the spectrum is a rule based approach, where very specific norms are imposed and at least in theory there is little ambiguity in either their interpretation or application. At the other end you have performance standards, which are much more open-ended, allowing a regulator to make circumstance specific determinations as to whether the standard has been met.
Both rules and standards introduce uncertainty, but do so in different forms. Standards, because they must be interpreted as to application introduce uncertainty over future judgements, in contrast rules admit of no ambiguity of interpretation, instead uncertainty is introduced in circumstances where one is uncertain that you have complied with a rule. The first is about predicting an uncertain future while the second is about postdicting an uncertain past.
Classically there’s been much focus on different the economic and compliance costs of these differing styles of regulation. For example rules cost a lot to establish but are relatively easy to comply with (in principal). Standards on the other hand cost less to establish, but cost more in terms of application as they involve a regulator (and industry) in greater efforts to interpret their effective application.
However because uncertainty exists over compliance there exists two types of risk and as it turns out human beings do not look at these two different types of risk in the same way. When we consider risk perception in the context of past versus future events, the evidence indicates that people significantly prefer to take risks about events that may occur in the future, rather than events that have occurred in the past even though the probability of the events are exactly the same.
So from a regulatory compliance perspective rule based regulations have a greater degree of deterrence because the risk is perceived as greater. Further the more complex the rule set the greater the generated uncertainty and the greater the degree of risk aversion and deterrence (Guttel, Harel 2007).
All this suggests that performance based safety strategies, such as the SFAIRP principal enshrined within current WHS legislation, may not be as effective as we think in comparison to an equivalent rule based approach.
Guttel, E. & Alon Harel, A., Uncertainty Revisited: Legal Prediction and Legal Postdiction, (Working Paper 54) American Law & Economics Association Annual Meetings 2007.
1. This may be due to illusion of control where we believe that we have more control over future events than we do in actuality or the perception of uncertainty about past events as personalised and subjective e.g as ‘ignorance’..