Safe harbor (law)
A safe harbor is a provision of a statute or a regulation that specifies that certain conduct will be deemed not to violate a given rule. It is usually found in connection with a vaguer, overall standard. For example, in the context of a statute that requires drivers to "not drive recklessly," a clause specifying that "driving under 25 miles per hour will be conclusively deemed not to constitute reckless driving" is a "safe harbor." Analogously, "unsafe harbors" may be employed to describe conduct that will be deemed to violate the rule. In the above reckless-driving context, a clause saying that "driving over 90 miles per hour will be conclusively deemed to constitute reckless driving" would be an "unsafe harbor." In this example, driving between 25 miles per hour and 90 miles per hour would fall outside of either a safe harbor or an unsafe harbor, and would thus be left to be judged according to the vague "reckless" standard.
Safe harbors have been promoted by legal writers as reducing the uncertainty created by simply employing a vague standard (such as "recklessness"). On the other hand, this type of rule formulation also avoids the problem of creating a precise rule that leaves a judge with no available discretion to allow for "hard cases." In theory, the safe harbor formulation can combine the virtues of vague standards and precise rules, allowing legislatures to prescribe with certainty the advance outcome for specific foreseeable cases, and to leave to judges to decide the cases that remain.
An example of safe harbor is performance of a Phase I Environmental Site Assessment by a property purchaser: thus effecting due diligence and a "safe harbor" outcome if future contamination is found caused by a prior owner.
Another example is regarding insider information laws. Broker-dealers are required to have in place Chinese walls (also called information barriers) that prevent the transmission of insider information from one department to another. Each broker-dealer firm is required to have its own barriers and to enforce them on its own. Thus, there is no safe harbor regarding this issue.
The Digital Millennium Copyright Act has notable safe-harbor provisions which protect Internet service providers from the consequences of their users' actions. (Similarly, the EU directive on electronic commerce provides a similar provision of "mere conduit" which, while not exactly the same, serves much the same function as the DMCA safe harbor in this instance.) The US Patent and Trademark Briefing on ISP Liability states that in order to be eligible for safe harbor, the ISP must have adopted and reasonably implemented a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.
The EU Data Protection Directive is an example of a safe harbor law. It sets comparatively strict privacy protections for EU citizens. It prohibits European firms from transferring personal data to overseas jurisdictions with weaker privacy laws, but creates exceptions where the foreign recipients have voluntarily agreed to meet EU standards under the Directive's Safe Harbor Principles.
- Peter Swire, Safe Harbors and a Proposal to Improve the Community Reinvestment Act, 79 Va. L. Rev. 349, 372 (1993)
- Andrew Morrison Stumpff, Case Law, Systematic Law, and a Very Modest Suggestion (July 18, 2013) 14-21, available at SSRN: http://ssrn.com/abstract=2295245.
- Andrew Morrison Stumpff, Case Law, Systematic Law, and a Very Modest Suggestion (July 18, 2013) 16-18, available at SSRN: http://ssrn.com/abstract=2295245. ]
- Peter Swire (1993), Safe Harbors and a Proposal to Improve the Community Reinvestment Act, 79 Va. L. Rev. 349
- Andrew Morrison Stumpff (2013), Case Law, Systematic Law, and a Very Modest Suggestion, at SSRN: http://ssrn.com/abstract=2295245