Techniques to Reduce Legal Expenses Have Not Been Used Often

T-RCED-94-44: Published: Nov 4, 1993. Publicly Released: Nov 4, 1993.

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GAO discussed the Environmental Protection Agency's (EPA) Superfund program, focusing on methods to reduce the costs of resolving liability for hazardous waste site cleanups. GAO noted that: (1) EPA has used settlement tools at only 12 percent of the nonfederal Superfund sites; (2) EPA has not promoted the use of settlement tools at regional offices, since restrictive administrative procedures make the tools difficult to implement; (3) de minimus settlements have the greatest potential for resolving liability and reducing transaction costs when large numbers of parties are involved, and are only effective if EPA removes small contributors early in the process; (4) EPA has concentrated on getting as many responsible-party-financed cleanups started as soon as possible and believes that settlement efforts draw enforcement resources away from that effort, conflict with the Superfund liability doctrine, and are expensive; (5) EPA has given settlement tools a higher priority and improved some administrative procedures in response to complaints about high transaction costs, but it has not addressed all problems associated with their use; (6) increased use of mixed funding settlements could increase government costs and complicate settlement negotiations; and (7) proposals to eliminate retroactive liability are not justified because tools to reduce transaction costs would not be fully utilized, responsibility for contamination would be limited, fund expenditures would increase, the clean-up rate would decrease, and incentives for voluntary cleanups would be removed.

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