Discussions of socioeconomic liability and compensation must necessarily start from an understanding of the socioeconomic, legal, and scientific basis for identifying, assessing, managing, and apportioning blame for hazards related to innovations. Public discussions about the nature of the liability challenge related to genetically modified (GM) crops and other modified organisms have focused less on direct, traditional health, public safety, technical, or environmental failures (e.g., innovations that generate hazards directly for users or indirectly to bystanders) and more on socioeconomic concerns, such as comingled product that offends product quality standards. This article examines the theoretical and legal underpinnings of the current risk analysis framework used in most Organization for Economic Cooperation and Development countries and uses it to assess two areas of significant controversy--the release of herbicide-tolerant canola and flax varieties in Western Canada. The article offers lessons for the management of liabilities arising from the introduction of GM crops. (Contains 1 figure, 4 tables and 6 notes.)