NOT FOR DISTRIBUTION: USE ONLY IN COMPLIANCE WITH COPYRIGHT: DAVID RISSTROM
AN INTERPRETATION OF
LAW IN CONTEXT
Bottomley, S., Gunningham, N. and Parker, S., 1991, Law in Context, The Federation Press, Leichhardt.
{ } = additional material from lectures.
( ) = my comments.
(See ‘x’) refers to book page number.
A short (somewhat boring) message from the summary executioner before you dive in; These notes are an interpretation of
the book Law in Context and the lectures given as part of the 1991 Course. They are not a satisfactory substitution for reading
the text. You are only likely to get the maximum value out of this summary by reading it in conjunction with the text.
The question of ‘the law in whose context’ may be worth keeping in mind as you read. This is an interpretation seen
through my eyes, not yours. My comments are not unbiased, as it is as equally unlikely that yours may be. So my ‘advice’ is
consider what is said here and in the book considering the need to understand the ‘mechanics’ that help make sense of the
more involved themes that develop in the book as you progress through Law in Context. The observations, important in their
own right, may be particularly useful for seeing how their often ubiquitous expression is taken as ‘normal’ in the areas of
wider society, such as in discussions of economics and power. It is unlikely that you will find any ‘right answers’ from this
summary, but I do hope it helps you in synthesising opinions. A bibliography of books I used is given at the end of this
summary.
If your head isn’t spinning too much, maybe it is worth getting together earlier in the semester with friends and talking
about some of the issues that particularly interest you. Don’t be worried if ‘you don’t know anything’. It’s probable that you,
as for most of us, are neither as enlightened nor as naive as you suspect. Anyway, I’m heading off in a bit of a lecture here, so
I’ll stop. I hope this summary is of some use. I am quite happy for it to be photocopied during 1992 for use within the
university as long as it is not a breach of the original text’s copyright: Dave
No man person is an island.
John Donne (revisited)
†††††††
PART A - LAW IN A LIBERAL CONTEXT
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CHAPTER 1: INTRODUCTION
Mason CJ (1991): [T]o treat the law as a discrete set of principles in a vacuum and without a context is to
misconceive its dynamic and ubiquitous nature and, more importantly, to undervalue or even overlook the
manner in which it contributes to the fundamental fabric of modern society.
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# Law cannot be treated as a discrete set of principles without a context.
# Up to 1920’s the dominant unchallenged framework was legal Formalism, in which there was a “logic of the
system.” (Leff) Formalism = formally rational legal reasoning.
# After WW1, legal formalism was challenged by Realists who were interested in “the way law actually
functioned in society.” (For a good two-page discussion of Legal Realism See Barry’s introduction to Modern
Political Theory, 44 - 45)
# Legal Realists said:
° legal rules inevitably have social consequences.
° law (and judges) cannot be objective.
° formal legal reasoning can never be conclusive (ie, justification is outside the law).
° law must be studied “as it works in practice by making use of the social sciences”.
Legal Realists didn’t provide a systematic critique of USA legal thought and the movement died out with
welfare legislation of the 1930’s New Deal, though it did have a lasting effect of challenging Formalism.
# A post Realist movements, ie; feminist jurisprudence, sprouted, but didn’t quite get a hold in Australia,
Australian law schools have been largely formalist.
Rough breakdown of the book;
PART A = liberal philosophy, the rule of law, legal formalism
Ch 2 = the core elements of liberalism.
PART B = the law and its interaction or causal relationship with aspects of society.
Ch 3 = equality before the law is only partly achieved.
Ch 4 = procedural protections are by-passed in litigation.
Ch 5 = lawyers are not always the disinterested servants of their clients.
PART C = economic analysis of law, “law serves essentially an incentive function in rewarding efficiency...and
(in) punishing inefficient aberrations”, applications to tort and contract law, “public choice theory”.
PART D = law and power, a complex picture of power exercised along lines of gender, race, social class and
interest group.
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The book Law in Context (LIC) contrasts the ideal with reality. “Law can be seen as a collection of prescriptions
about what ought to happen.” Gap Theory = the idea that there is a gap between what should (is designed to)
happen and what does happen.
“The Law and Society movement began as an attempt not to be deceived.” LIC is designed to help readers
decide whether or not they are.
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CHAPTER 2: LIBERALISM, FORMALISM AND THE RULE OF LAW
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(a) INTRODUCTION
LIC considers at the interaction between liberalism and the law, theory and reality.
Def; Liberalism as a type of ideology, looks at legal issues central to liberal philosophy, the rule of law and
requirements of a legal system, formalism as legal reasoning.
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(b) LIBERALISM AS IDEOLOGY
{Liberalism is the dominant ideology in Western civilisations. One liberal tenet is, ‘if you do not have an
obligation not to do something, you are free to do it’.}
(Def: LIBERALISM = Doctrine of those who broadly supported the French Revolution, and which came to
include equality before the law, representative government, economic individualism and rationalism as a guide
in politics and society. (See accompanying notes on Liberalism by Gamble)
An ideology is a set of closely related beliefs, ideas or attitudes that are characteristic of a group or community.
It contains ideas about what is and what ought to be.
Liberalism is a label given to the dominant ideology of modern western society from C17, though labelled
liberals only evolved in C19. Liberal beliefs span from conservatism to libertarianism to social democracy.
The rule of law is symptomatic of liberal’s suspicion of state authority.
The constructions of modern law in countries such as Oz, with divisions between contract and torts,
responsibility and excuse, etc., formed during mid C19 in the heyday of classical liberalism. {Basic common law
principles were laid down in C19} (The word ‘classical’, in this context generally means as in the form its early
proponents viewed it, which often equates here to a period roughly from C18 to C19.)
(c) THE ELEMENTS OF LIBERALISM
Three ideals were paramount in the North American and European breakaway from the social traditions based
on hierarchy, privilege and status: Liberty, Individualism and Equality
Seven headings are given for the elements of liberalism (discussed in more detail below);
(i) Liberty
(ii) Individualism
(iii) Equality
(iv) Justice
(v) Rights
(vi) Utilitarianism
(vii) Rationality
(i) Liberty
Liberal comes from the word liberty, and subscribes to the idea that people owe no obligations unless they have
entered into agreements with each other.
Classical liberalism: the most important thing is the absence of external constraint = negative liberty. Negative
liberty = freedom from (vs positive liberty) = freedom to (ie Austudy)
Hobhouse (1911) talked about spheres of liberty: civil, fiscal, personal, social, economic, domestic, local, racial
and national.
Civil liberty was freedom from arbitrary control by government.
Fiscal liberty = part of the sanctity given to ‘private property’ and the libertarian idea of tax as theft.
Liberal philosophers believed in life as containing public and private spheres. The private sphere (the home,
where you withdrew from the ravages of the market) puts a limit on equality (women cook the meals and do the
dishes).
History of UK and USA Liberalism is to attack government intervention in economic activity.
Australian (and USA) treatments of Aborigines may be explained by liberal attitudes to race and its assumption
that higher liberties were for those with particular moral and mental capabilities. (See 290)
“Harm to others” principle of John Stuart Mill (famous UK political philosopher 1806-79) = “the only purpose
for which power can be rightfully exercised over any member of a civilised community, against his will, is to
prevent harm to others.” (This is reflected in Lord Atkin’s neighbour test in Donoghue v Stevenson.)
Application of this principle has been used as a justification for the state to decriminalise some innocuous
actions; ie, homosexuality.
Avoidance of harm to others was a principle assisting state intervention begun in classical contract and tort law,
with torts being more prominent. This was because tort law said people should not do certain things and,
therefore, was limited to cases of harm through proven fault. Contract was (in theory) the exercise of freedom to
bind oneself in agreement. {Raz wrote about the nexus between substantive and formal equality of opportunity.}
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The liberal state has increasing moved away from negative liberty (freedom from) to positive liberty (freedom
to), with compulsory state education as a good example; ie, engaging in education is justified as this may
increase the freedom of choice of the individual.
An argument against positive liberty is that it may presuppose what is good for people; ie, in Cambodia, was
education on rural farms advantageous to the individual?
(ii) Individualism
Liberals assert it is liberty of the individual they seek to protect. They see society as composed only of individual
human beings, therefore society is an association no greater than the sum of its individual parts ie humans.
Maggie Thatcher allegedly said, “There is no such thing as society.”
In a liberal society, impersonality, formal equality and indifference are hallmarks, reflected in C19 common law
development. The state bureaucracy assisted the formation of associations between individuals (freedom to
contract) allowing individuals, to serve their own ends.
Tort law, before Donoghue v Stevenson, 1932, rejected the idea of neighbourliness, despite ideas or reasonable man
and duty of care were about.
Communitarian theory challenged the liberal view of the isolated self. (This is more in line with modern ‘wets’,
whilst Communitarian theory says wealth is distributed according to social criteria.)
Social Contract Theory; the idea that individuals are held together by certain bonds. (That government rests on
the consent of the governed: Rousseau, C18.) In its classical form, societies or governments were seen as the
product of contract between individuals, in which the limited ‘nightwatchman’ government’s role was mainly to
provide external defence, preserve negative liberty (freedom from) and property rights. (Ie; the minimalist
government in UK described by Marx in the issued materials for contracts.)
(iii) Equality
‘Equality of what’ is the central question. {Liberals believed were are all free to make choices.}
The libertarian right (the far right) see formal equality as the most important consideration. (Such as the freedom
of rich and poor alike to stay at the Hilton.) Anatole France (1894) described, ironically, “The majestic
egalitarianism of the law, which forbids rich and poor alike to sleep under bridges, to beg in the streets and to
steal bread.” Formal equality therefore allows equal opportunity to the individual without any reference to the
unequal ability to use it.
Classical Liberals of C19 believed that while the state should provide equal treatment of individuals and avoid
unequal treatment for the disadvantaged; ie, there should be no state provided obstacles to the enjoyment by
some of citizenship rights enjoyed by others; (this is partly in response to past arbitrary treatment by the
monarchy, whose will could meet out unequal treatment ‘lawfully’.)
IMPORTANT: Hayek was interested in “equality before the law,” claiming that there should be no state
provided obstacles to the enjoyment by some of citizenship rights enjoyed by others.
Connections between formal equality and negative liberty: formal equality (equal treatment by the state)
requires everyone to have the same negative liberties (freedom from interference) protected in the same way.
Dworkin (1978) looked at how equality worked in with liberalism using an imaginary state (as in country). It
went something like this: In fairyland, with all the people having similar ideals, the state could divvy up
resources roughly equal and people could be happy. Though if people differed in their view of what was
desirable ie form of living, job, etc., a market economy and democracy could be introduced. The market will
then arrive at prices for things for trading, which people then do. This he says is cheaper and maybe more
reliable than allowing a central bureaucracy (ie, Moscow) to guess or know what the people need. People would
spend, earn, lose or gain different amounts and end up with an unequal amount of worth. Therefore inequality
is an inevitable consequence of choice and fortune.
As in real life, people not only vary in their wishes but also their talents, needs and fortune. Dworkin therefore
finds it “obviously obnoxious” that superior skill, luck or family allows someone to have more than the equal
share of the community would apportion.
Though it may be confusing at first, many (especially socialists) argue formal equality produces real life
inequality. (Ie, formal equality to pay university fees results in real inequality in access to education.)
Protectionism increased from the third quarter of C19. Whether it survives the ‘new right’ agenda being
increasingly implemented in Oz, such as financial deregulation, enterprise bargaining, consumption tax, up front
university fees, etc., is uncertain.
(iv) Justice
A formalist view of justice = if the court has observed the rules then the decision is just. (“A just outcome is
arrived at only by a conscientious application of rules”.)
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Realists (See 3) believed justice was always administered with substantive conceptions of justice, ie reference to
the belief that the law was not perfect, therefore application of the law need not always be just. (Eg: deportation
for stealing bread)
Substantive concepts of justice hinge on three ideas:
(a) Justice as equality
(b) Justice as desert
(c) Justice as entitlement
(a) Justice as equality is based on the belief that like cases should be treated alike, with people being treated
equally unless there are obvious/significant differences between them (the case should be judged on its merits
and not on who is involved.)
(b) Justice as desert is the notion that people should get what they deserve; ie, In a contract in which each party
had given up something and so deserved performance in return. {Liberals say individuals receive according to
their contribution and should be accorded to what is necessary to encourage them to contribute.}
Desert theory (what a ridiculous name) is also known as meritorian theory (ie; merit).
Meritorian theory is used in criminal law and penology in the definition of guilt and its punishment, and is
expressed in the idea of mens rea concerning intention or recklessness (lapse of duty of care).
(c) Justice as entitlement is the idea that people have a right to good things (also = rights theory.)
Simpson (1988): “A just system of laws is one which distributes good things, of one kind or another, so that they
are in the hands of those who are entitled to them, who have the best claim to them, who, as we often say, have a
right to them.”
The idea of natural rights was discussed in C17 and C18 by people such as Thomas Paine, who set out a fairly
anthropocentric view of the rights of autonomous individuals (ie; the king could no longer cut of someone’s head
if he felt like it).
John Rawls (1971) developed a social contract theory incorporating 1/ equality in the assignment of basic
liberty as compatible with a similar liberty for others and, 2/ that social and economic inequality are just only if
they result in compensating benefits for everyone, particularly the disadvantaged.
(v) Rights
Some Western country’s adoption of the principle that people had natural rights to life, liberty and property, is
arguable a precondition for liberalism flourishing. In C19 the idea of natural rights became popular. Inalienable
rights as laid down (posited) in law now had a meaning. If rights exist only by law, rights can be lost when the
law changes (ie: the right to negative gear a property loan)
The ‘positivist’ view that rights were only socially or institutionally constructed (ie; Did Robinson Crusoe have
rights?) criticised this view, and is associated with utilitarianism (the liberal idea that the value of things can be
measured by their utility, to men usually). Jeremy Bentham, English lawyer and philosopher (1748-1832) was
the most famous utilitarian. Many argue Australia is a Benthamite society.
{Rights Theory says: protect natural rights and liberties of the individual. There should be laws, police, etc. to
protect rights but not intervene to redistribute wealth, ie; USA libertarian right liberalism.}
In C20 the idea of human rights, the proposition that people have rights because they are people rather than the
law having given them rights, is much stronger (giving the ability to blacks in Australia and S. Africa the
opportunity to challenge the law).
Liberals who subscribe to pre-legal rights are ‘deontological liberals’ and get many of their ideas from a
bloke called Kant (1724-1804) who argued ‘individuals are ends in themselves’ and should not be used merely as
means to ends. (This comes up in arguments about aborting deformed babies, and the question of voluntary
death of the infirmed (the right to die).)
Deontological liberals give priority to right over good and so do not try to evaluate an act in terms of
consequences. This is based on the idea that society is pluralist (many people with different ideas) therefore it is
better for society not to presuppose what is good for its members. An ‘opposite’ to deontological liberalism is
teleological liberalism.
Teleological liberalism, expressed as utilitarianism, is the idea that things can be measured by their utility.
The pleasure or pain the consequence of an action provided was a measure of its utility (usefulness). It is
applied to society as roughly that ‘the good life is one which promotes the greatest happiness for the greatest
number’.
Utilitarians define morally right as that which maximises the good. This annoys the deontological liberals
because it allows individuals to be used as means to an end beyond themselves (ie: shut off the life support
system for the good of those others in need of treatment). An action that is sought to commence outside the
statutory time limit questions whether the right of the individual to sue or the collective good of orderly actions
is more important.
Two prominent deontological liberals are Ronald Dworkin and Robert Nozick (both contemporary)
Dworkin says “law can always produce a right answer” and believes there are ways for substantive justice to be
incorporated in formal justice, claiming to bridge the ‘gap’ between law and morality.
Nozick says the most extensive state that can be justified is the nightwatchman state, which only protects
citizens against violence, theft and fraud and the enforcement of contracts. Therefore a distribution of goods is
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just if it is acquired in the correct way. Taxation may be seen as a form of theft. Nozick is on the ‘libertarian
right’ of liberalism.
An important ‘libertarian right’ notion begins with the assumption that all things can be subject to
ownership by an individual unless there is a justifiable reason to the contrary. (Therefore a medicine factory can
close it down if the owner wants it to. This contrasts with a socialist idea that the needs of the recipients of the
medicine should weigh heavily.)
Whilst all things can be subject to ownership, modern states have laws preventing the ownership of some things;
ie, flick knifes.) This is based on J.S. Mill’s ‘harm to others’ principle.
(vi) Utilitarianism
Utilitarianism (a teleological theory based on the word utility) = the greatest happiness for the greatest number
and its maximisation the proper end of humankind (Bentham)
{In a utilitarian society the function of government is to maximise social welfare; ie maximising pleasure and
pain, usually involving a great deal of government intervention. (Ie, as in the Swedish social democracy, and less
so in Australian politics.)}
Utilitarianism measures the worth of actions or decisions by reference to the general welfare. (Such as riding
a pushbike to reduce exhaust emissions.) IMPORTANT: However, it is not fully egalitarian, for if a project is in
the general interest but will benefit people unequally the Utilitarian will support it (ie, a toxic waste dump in
your neighbourhood that alleviates the city’s disposal problem).
H.L.A. Hart says liberal moral and political philosophers in the last two decades have tended to move away
from, “the old faith that some form of utilitarianism must capture the essence of political morality”, to a new
faith that, “The truth must lie with a doctrine of basic human rights, protecting specific basic liberties and
interests of individuals….”
Utilitarianism has increasingly been challenged by the emergence of Human Rights, which disallows the
‘sacrifice’ of a minority for the common good. (An analogous question concerns animal experimentation)
Communitarianism and republicanism (individuals are members of a group and have rights or opportunities
because of their membership) has seen the waning of utilitarianism, though economists and lawyers still love it.
Environmentalism and the growing idea that not only present day human ideals are important may provide a
strong challenge to Utilitarianism.
“Utilitarianism...has been a working hypothesis for most western economists and constitutes a fair reflection of
the concentration on economic growth as the central policy goal in modern politics.” (Tom Campbell, 1988)
{Most liberals agree the state should be neutral in different ways of life ie no collective goals, no ultimate shared
purposes except for the goal of preserving the rule of law so individuals can pursue their own individual ends.
(Some on the left believe the Rule of Law is solely a tool of oppression; eg, social security is useful in reducing
the tendency towards dissatisfaction amongst unemployed workers that may lead to revolution.)}
(vii) Rationality
“Rationality describes thoughts and actions which are conscious, in accordance with rules of logic, based on
factual knowledge and aimed at objectives which are coherent, mutually consistent and to be achieved by the
most appropriate means” (Albrow) (Def by Gamble: Rationality = 1/ Purposive-rational action, involving the
specification of goals and calculation of the most effective means of achieving them. 2/ Activity governed by
explicit rules and involving the use of specialised knowledge. 3/ Commitment to certain ends: the idea of reason
and the rational society; critical autonomy; the all round development of the individual; the removal of obstacles
to a just and harmonious social order). (Do you think humans are directed by rational thought? Is racism
rational?: Dave)
A central theme in philosophy is that man is different because he can reason, though this may be challenged by
more enlightened biologists.
Max Weber (1864-1920) argued the trend towards rationality is the most important in modern Western
society. (One’s life becomes subject to clocks, measurement, science and bureaucracy.) Weber’s ideal system
determines outcomes logically from within the law itself (formalist?). “Human beings are innately capable of
reasoning and should do so in becoming authors of their own lives.” Weber was interested in institutional
arrangements in modern societies, explaining his emphasis on rationality in government and law. (He also
believed that if society continued on its path of bureaucratisation, it would end up in an ‘iron cage’ of
bureaucracy where rules hoping to assist liberty overtook freedom.)
A complicated argument about the role of reason follows:
David Hume (C18) said reason will tell us how to attain ends we have already chosen, not which aims to pursue,
therefore our moral beliefs are based on preferences which are neither reasonable nor unreasonable. The one
thing we all desire is happiness (say utilitarians, though this has been questioned a lot more recently), therefore
the rational way of acting morally is to aim at the maximum happiness.
Kantians (See Kant,
27) believe there are ways of reasoning towards correct moral positions from the premise of respect for persons.
This means a moral theory must be universalisable. (Can a proposed action affecting one person be applicable to
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all?) “By virtue of the basic Kantian principles of trust and respect, it is wrong to invoke that convention in order
to make a promise and then to break it.” (Fried, 1981)
The common thread between Hume and Kant, the belief that individuals determine their own actions, is
important in law for it gives great weight to the responsibility of the individual.
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(d) MANIFESTATIONS OF LIBERALISM
The following section links the elements of liberalism outlined in the previous sections.
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(i) Political Manifestations
A common theme in liberal thought is that government should be limited.
Deontological liberals would say keep it to a ‘nightwatchman’ government to protect the rights of the
individual. Teleological liberals may prefer a bigger government that assists in providing social welfare. (Ie: the
left Australia, Sweden)
Deontologists have leaned towards a more restrictive role of government than utilitarians, with the ‘harm
principle’ justifying interventionist policies to redistribute wealth and advantage. (Medicare) Thatcherism
(Reaganism also) is a good example of the libertarian rights aim of ‘rolling back the welfare state’
Deontologists believe the state should remain neutral and allow the continuation of pluralism, whilst
utilitarians see the role of the state in interfering with the liberty of individuals to promote the good life.
Pluralism is a term used to describe the involvement or toleration of many influences, interests or ideals.
An important issue in Australia, as for S. Africa, is that the right to vote has not always extended to all members
of society, such as the propertyless, women, aboriginals, children, and therefore liberalism has operated within
specific spheres.
{Liberals lean towards limited government, the extent depending on which type of liberal: Rights theorist
emphasis infers restrictive governing, whilst utilitarian infers larger interventionist government, but both agree
with pluralism and respect for varying goals.}
(ii) Economic manifestations
Individuals have an equal right to engage in economic activity, to enter into contractual agreements to work, to
exchange and to consume.
Classical liberalism is often associated with Adam Smith’s Wealth of Nations (1776), in which ‘economic agents
act out of self-interested motives in the pursuit of his or her utility’. A free individual will act for the benefit of
others by seeking to please them and so obtain their custom, with no compulsion involved.
The laws of supply and demand in a free market (theoretically) allow the maximising of wealth (with maybe a
help here or there from the ‘invisible hand’. The term ‘free market’ relates to freedom from human aspirations
other than those described by the laws of economics, particularly as related to ‘government interference’: Dave).
Free marketeers claim this is not only a process for distribution, but it also provides an ethical basis for cooperation. However “inequality of individuals with regard to wealth and income is an essential feature of the
market economy.” (Von Mises 1949). Active government participation in the economy by the manipulation of
demand (Keynesian economics) has been used in C20 to maintain growth and reduce poverty, though the 1970’s
saw the return of libertarian policies. (Such as promoted by the New Right.) A hybrid form of argument, like
that of the Chicago School, arguing statutory intervention is unnecessary as judges are capable of maintaining
efficient allocation of incentives. The Libertarian Right’s idea of the welfare this provides is in line with negative
liberty, ie: freedom to perform in the market, rather than assistance if you fail to do so. These issues are
discussed more fully in Part C, See 151)
{Economic liberty is an important part of liberalism = right to work, to enter contracts. Classical liberalism is
very close to classical economics ie; Adam Smith, who believed the market economy is most desirable and
economic liberty is essential, competition between individuals all pursuing their self interest will maximise the
‘output’ of the society as; competition produces efficiency and due to laws of supply and demand wealth goes
where it is most valued. (Theoretically, though I would call this a dangerous fallacy: Dave.) Adam Smith did
not believe in anarchy (an absence or minimisation of rules) as the purpose of the state is to ‘hold the reign’.
Many C19 laws showed hostility to combinations; ie unions, federations, cartels, etc., which inhibited
competition, therefore anything hindering competition should be outlawed. Von Meises was a classical liberal
who believed inequality is an essential feature of the market economy and assumed everybody is ultimately
better off in the market system. (Marxists would not agree, often finding capitalism’s inherent presence of
inequality repugnant: Dave)}
(iii) Social manifestations
Liberals believed strongly in freedom, liberty and equality in the public spheres of politics, the law and
economics, yet did not necessarily extend this to the private sphere of the family. (See gender 225) The family
provided a refuge from the self interest and competition of the market. The family was a “haven in a heartless
world”. (Lasch 1977). The rise of liberalism however seemed to coincide with a period of increased regulation
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concerning entering marriage, with only recently the ‘liberal’ divorce being available to women (who had been
viewed as chattels of the man. Your parents or grandparents may have interesting insights on this: Dave.)
Privacy has been very important to the liberal, with recent privacy legislation in response to the potential
increased invasiveness provided by modern technology. (I believe new torts of privacy re media are in the
pipeline?: Dave). Some people see the distinction between public and private spheres as central to liberal
philosophy, as being gender based. Liberal philosophy is therefore patriarchal. Social contract theorists (See 19,
25) expressly excluded women as contracting parties. John Locke, an English philosopher (1632-1704) argued
that while political power was conventional, rather than natural, and could only be exercised with consent, he
said a wife’s subordination to her husband was found in nature. (Unmarried women seem to have been
ignored.)
The upshot is that politics and public life are seen as for blokes only. The family is exempt from state
interference, but it just so has it that blokes have it over the women anyway. (Fred Nile?) John Stuart Mill in The
Subjection of Women (1869) saw this as wrong in principle, and should be replaced with formal equality (What
would Joan Kirner say?) Lord Denning (UK) seemed to have similar ideas. Women (in Australia) have all but
attained formal equality, though some feminists say the patriarchal system is prevalent, with the (in practice?)
subordination of women being off limits for public debate (Violence in the home is rarely adequately addressed
as a major source of offences.)
(iv) Legal Manifestations
Legal manifestations of liberalism follow from ideas of the autonomous individual, the limited state, and the
public-private distinction.
This is a rough list of probable liberal beliefs:
1/Deontological liberals believe the law should not be used as an instrument of power, especially in pursuit of
specific ideals. (See 27)
Teleological liberals (which include utilitarians) define right in terms of good, therefore law can be used to
promote human happiness (an ends), though this is typically tempered by limits on the desirable extent of
government power and size. (See 27)
2/ The law is a means for political authority to protect rights and provide conditions for economic activity.
(See 25)
3/ Government should be constitutional. This is known as the “THE RULE OF LAW” (Important!) Ie; run
according to a set of rules or strong conventions (unwritten rules or customs). (This issue arose in the
sacking of the Whitlam Government in 1975.) (See 43)
4/ Legal knowledge is about identifying legal rules in some empirically based manner. (It is ‘cooking’ of
measured and known ingredients in a rational way. (Remember Weber? Ie, the law is not about the
dynamic will of God or by inconsistent whim of the King or Queen.) (See 32)
5/ Judges do not make political decisions drawing on their own values. (See 46)
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(e) AUSTRALIA AS A LIBERAL SOCIETY
Australia is usually described as liberal democratic. (Like USA.) Australian society was strongly influenced by
British ‘authority’, though it has developed its own character (Aboriginals often have an interesting perspective
on this.) {Hugh Collins describes Oz as a Benthamite society}
Many describe Australia as a Benthamite society; utilitarian, legalistic and positivist. (See 26).
Utilitarianism is displayed in its hostility to social contracts and natural rights (ie: no Bill of Rights), and
rational, secular, instrumental politics. (Bentham also had the idea of a thing called the panoptican, which some
prisons were modelled on. This is the idea of a central authority with the ability to look out upon subordinates.
This is equated by some to Sydney in early colonial days, and now Canberra as authors of authority. (federalism)
The Accord and party political pragmatism (aiming to please the most rather than being tied to principle are
other indicators of utilitarianism).
Legalism (Bentham’s: a preference for reducing phenomena to rules) is demonstrated well in our system of
tripartite arbitration: government, business and employers.
Positivism: An insistence of separation between fact and value, law and morality, is reflected in Oz’s
institutions (In Oz universities “it is my opinion” is usually insufficient ie ‘reason’ must be given (as if your
opinion is not a good enough reason - contrast this with the will of God or King.)
The rapid development of instrumentalities and services in Australia, at least in comparison with England,
which developed with the evolution of capitalism, saw a utilitarian ethic imposed for the balance of maximum
good achieved through state trading and relations.
Since abolition of appeal to the Privy Council, the greater freedom allowed for Australian judges have seen
the ‘Australian’ characteristics of fairness and equality emerge in law (which had been a part of public life since
C19). The rise of the Libertarian Right in the UK and USA was paralleled by the New Right in Oz, (Hewson et al
and maybe the ALP Right (Keating?)) may see major changes in the direction of Oz law (maybe towards
sentiments of the USA. Do we Want This?: Dave)
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(f) THE RULE OF LAW
A good definition of society re the Rule of Law = “society was increasingly regarded as a voluntary association
of formally equal, rational individuals with their own interests and differing conceptions of good, who conferred
on the state only the minimum powers were necessary for the preservation of liberty.” Unger
Official adherence to the Rule of Law is a hallmark of liberal societies. It requires government to be executed
according to rules, so there is 1/ no arbitrary use of power (theoretically) and 2/ that government should be
limited and exercise within limits.
{It is believed to 1/ curb the power of government, 2/ protect the rights and liberties of citizens, 3/ promotes
personal autonomy by allowing individual to predict whether the government will intervene in your life.}
To liberals, The Rule of Law is about duties on governments rather than on citizens. Some philosophers say
the Rule Of Law justifies disobedience in the case of governments acting outside the rules. (A chap called
Hobbes in Leviathan (1651) looked at this. He suggested that citizens are willing to give up a small part of their
freedom in order for the state to impose rules that help to protect their interests, by coercing the public to act in a
civil fashion ie; personal safety, safety from theft, crime, etc. This is how the liberal may come to accept
interference in his life. Implicitly, if the government goes beyond or attacks the rules that promote the well being
or freedom of its citizens, the citizens may legitimate choose to reject or withdraw support for the government.
This is the idea of revolution.)
The Rule of Law is valued for three reasons;
1/ It theoretically curbs the power and influence of government.
2/ It theoretically protects the rights and liberties of citizens.
3/ It promotes personal autonomy by making government predictable.
As an ideal, The Rule of Law may be seen as a commitment to liberty, individualism and rights.
Utilitarians regard it as being about as close to maximising the general good through individual happiness, as to
be slightly short of an (absolute value?).
One view of The Rule of Law says that, “The Rule of Law is not to be confused with the rule of good law.”
(The ideas of a bloke called Raz, 1977.) This is in contrast to others, such as the International Congress of
Jurists, 1959, which see the Rule of Law as central to encouraging good citizenship. Some people believe The
Rule of Law may also be the tool of tyrants (ie: Pinochet’s Chile or Malaysia’s Internal Security Act?). LIC’s
authors believe the historical link between liberalism and the Rule of Law down plays this aspect.
An analysis of the Rule of Law may include:
(i) Constitutionality (ii) Formal Legality (iii) Procedural Legality
(i) Constitutionality
{Constitutionality = there must be laws and conventions about how the laws should be made. There are some
superior rules which say how to operate and that even governments are not beyond the law.}
The ideas of Constitutionality have been formally evolving since about mid C17, when the UK jurist Dicey
(1835-1922) argued that the Rule of Law involves not only government through laws, but government under
laws.
Constitutionality = there must be superior rules (the constitution) above the political arena, which say how the
governors are to govern.
One facilitating tool is the Theory of the Separation of Powers = Power should not be concentrated in any one
part of the State and each part acts as a check or balance to the other. The important separation in Oz is between:
1/ the legislature (parliament), 2/ the executive (cabinet), 3/ the judiciary. To avoid undue political influence,
judges are often only dismissible by a vote in the legislature (though I think the ruling party has some influence
over the appointment of judges?) In response, judges are expected to only apply the law in a way intended by
legislature, which can be seen as a forming factor in the prevalence of legal formalism.
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(ii) Formal Legality
Laws should be 1/ general, 2/ promulgated, 3/ clear, 4/ specific, 5/ prospective, 6/ predictable {practicable}, 7/
stable
1/ Generality is linked to the idea of equal respect for persons, usually expressed in the idea of impersonality in
legislation.
2/ Promulgation requires that governments do not act in secret. Though modern society is far too complicated
for it to be expected of a citizen to know all the law, the idea is that knowledge of the law provides an
opportunity to co-operate (act within) it.
3/ Clarity
4/ Specificity require that a law should be intelligible and give guidance for purposes in 2/
5/ Prospectivity (broadly) “requires that a law should only operate on events that take place subsequent to its
enactment”
6/ This is in line with providing ‘predictable’ leadership by Rule of Law. “A law that requires the impossible is
unjust.” Retrospective legislation is sometimes used to correct legislative mistakes.
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7/ Stability is the idea that a law which continually changes “is no law at all.” (The role of law as a coercive
instrument that allows people to plan their own lives autonomously is important here.)
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(iii) Procedural Legality
Procedural Legality concerns the procedures for execution of the law: ie ‘due process’ and ‘natural justice’. (ie:
how the law is applied). It requires trials be conducted publicly in an unbiased fashion by those without vested
interests. Procedural legality may vary according to legal system.
Disparity between ideal and practice creates debate (as an arena where the imperfections of the law may
coalesce). (Gap theory, 7 may be relevant.)
(Some (especially Marxists) see the law as a coercive instrument, largely of the ruling class, that continues to be
used to encourage others (labour, the working class) to engage in the system, particularly in reference to
accepting a scenario where the ruling class are capable of extracting the surplus value (profit) of the worker. (See
316) Whilst this may seem very crude to practising liberals, it did carry much truth, particularly in the times of
Marx. (See Marx’s Capital: Contracts Issued Materials. In my opinion, much of this area is not a matter of being
able to prove motives, but rather, is an instinctive evaluation of the expression of self interest by the owners of
capital and the people employed by them (labour): Dave)
E.P. Thompson (a socialist historian, 1977) however, in a study of C18 UK saw the Rule of Law as an
unqualified good. Horwitz, 1977 described the significant element that “[The Rule of Law] creates formal
equality...but promotes substantive inequality by creating a consciousness that radically separates law from
politics.” The debate sparked by Thompson was founded on the idea that Liberalism and the Rule of Law are
linked, therefore socialists who saw liberal-capitalism as bad extended it to the Rule of Law (I do not agree with
this as a reason for giving less weight to their arguments.) The more established views of liberty and equality, as
well as the increasingly rapid complexity and change in Western society are also put forward as arguments
against a strong use of Rule of Law. Some claim that changes to law in western countries indicate the arrival of
post-liberalism. (Roberto Unger, 1989)
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(g) FORMALISM
{Formalism is a way of reasoning (versus substantive reasoning) = the idea that you can apply the law in an
isolated manner, you do not need to refer to social influences and that there is justice in the outcome because the
rules are pre-existing. Formalism is closely associated with Positivism = the law is something which has been
laid down [ie: posited], and is meant to be completely separate of politics, etc. Formalism’s foundation is in the
C19 principle of separation of powers, which gives different functions for societal administration to different
arms of bureaucracy. Therefore the job of judges is to apply the laws laid down by others. Judges may prefer
formalism as it removes them from the accusation that they introduce their own values, allowing them to claim
that the law is impartial and the law is outside politics. (This denies the influence that all people hold biases and
ideologies that mould their perception of what should be ‘taken as given.’ Do you agree?) (See 244)}
This is exemplified by the hypothetical description by Alan Hutchinson (1988) of the one armed swimmer
who failed to be awarded first by not touching the end of the pool with two hands.
Legal formalism = the idea that, “It is possible to learn and apply the law as if it were a self-contained system”,
and that, “A decision maker should not refer to external considerations such as her own values, social
consequences or the justice of the outcome in making a decision.”
Formalism has been criticised recently;
1/ as the need for avoiding unjust decisions overrides slavish adherence to (ambiguous?) law.
2/ especially allegedly as a deception that a gap exists between law, politics, morality, etc. exists.
3/ that it is based on Rationalism = the idea that social existence can be broken down through rational
reflection, to a series of eternal verities and that knowledge and truth can be objectively grounded.
{Further criticisms; 1/ it does not necessarily lead to substantive justice. 2/ involves deception, as language is
imprecise therefore the law is inevitably indeterminant; ie legal rules do not lead to only one answer, usually
there are a number of plausible outcomes. (How do formalists explain dissenting judgements?: Dave) The
deception is that there is a single correct answer. Moderate formalists may say; legal rules are determinant ie
precise, though there always exist cases where the rules are no longer capable of providing a single answer =
hard cases [which usually are appeal cases.]}
A fictional example of R v Ojibway (a man shoots his ‘feather carrying’ pony and is charged under the Small
Birds Act 1960, is used to describe “Slot Machine Justice.” (Which some people are again seeing as practicable
with the advent of more powerful (and infinitely wisely programmed!) computers.) It highlights how
apparently relevant facts can induce inappropriate conclusions. (Like the vending machine out of cups that
dispenses coffee to its drain.)
Some relevant points (≠ full summary): Alan Hutchinson, Dwelling on the Threshold, (1988) (Hutchinson
attacks the plausibility of Formalism.)
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This is a discussion of the nature of formalism (remember Formalists (See 23) vs Realists (See 3)) He refers to the
‘one-armed swimmer’. “‘The moral structure of the common law demands that each person can only do the best
they can and no more; they cannot be expected to do the impossible”.
Modern lawyers rest their claims to authority on the two major components of formalism:
1/ that there is a defensible and workable distinction between legal reasoning and open ideological debate,
2/ and such legal reasoning itself represents a defensible and workable scheme of social justice.
Both recognise and consider achievable the responsibility of the decision maker to eschew personal preference
and to be guided by the dispositive force of the law. Both defend any decision by reference to an implicit vision
of social justice.
Hutchinson: “The only difference between a person without a philosophy and someone with a philosophy is
that the latter knows what [his or her] philosophy is”.
Hutchinson sees formalism as indicative of the problems presented by Rationalism (See 51). It has been
described as the Enlightenment Project = “the attempt to escape our finitude and its thoroughly contingent
contexts and to establish a body of principles that are unconditionally valid for all persons at all times.”
“Modern legal scholarship remains firmly within the rationalist tradition.” (But) “Human reason remains the
touchstone for valid knowledge about ourselves, our socio-historical situation and the legal order. Law is still
packaged and promoted as a scientific study.” (Which is meant to be valueless, but isn’t. (See 244)
“Law … is deeply and thoroughly political.” (Dworkin cited in Hutchinson)
“Truth...is truly an acquired taste.” (End of Hutchinson piece)
“A belief in some kind of formalism is a necessary part of a liberal legal system”
Feminist jurisprudence (and its examination of male hegemony) has become a powerful challenge to the
orthodoxy in most law schools. (Lawyers seem to be a bit slower than some!)
Formalism’s role in (the history of) law will re-emerge in other areas of the book.
IMPORTANT; {Summary: Individualism and liberty should lead to limited government, which operates under
the rule of law that requires clear specific general prospective laws to be applied by an independent judiciary.
Judges apply those laws formalistically for constitutional reasons, because their job is to apply law, not to make
it. Formal equality is preserved because justice is blind because the rules are applied mechanically. [The scales
of justice are blind.] Formalism sits neatly with the values of individualism and rationality which encourages
autonomy, for, if the law is clear and concise, it is predictable, therefore allows people to plan their own lives.
Formalism fits in with utilitarianism, for likewise, if the law is predictable, people have a better chance of
planning their lives and achieving their aims.}
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PART B - LAW AND SOCIETY
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Law = sociological, anthropological, political, science, historical and psychological studies (at least) of legal
phenomena (Friedman). Law is too complex to study excluding these factors.
Tomasic saw three phases in the study of law:
1/ mid C19 to 1930’s, dominated by Weber, Durkheim, Renner and Gurtvich, who wrote about
law
as part of a broader concern with society. (While at the same time legal scholars were tied up
with
formalism.)
2/ from 1930’s to late 1960’s dominated by sociological jurisprudence (especially Roscoe Pound)
emphasised studying the law as it was applied.
3/ from late 1960’s to now? - Return to theory, especially influenced by Marxist social theory in
criminology.
Some people claim a distinction between a/ “socio-legal research” (= empirical research; (derived from or
guided by experience or experiment) into pragmatic problems aimed at producing suggestions for reform within
the law: ie reference to ‘the gap’) and b/ “the sociology of law” = (understanding the nature of the social order
through a study of law. (Campbell and Wiles, 1976).
CHAPTER 3: ACCESS TO JUSTICE
(a) INTRODUCTION
Legal scholarship looks at: who uses law?; How is it used?; What are the impediments to its use?; For what
purpose is it used? Its major postulates revolve around the work of the late 1960’s to the early 1980’s.
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(b) THE PROBLEM OF ACCESS TO JUSTICE
{Def: Access to justice = access to Australian legal and administrative systems, including access to the civil,
criminal and administrative justice systems, appropriate legal representation, independent legal advice and
adequate information about the law and legal systems. If you were a strict classical liberal you would want
formal equality and negative liberty; ie no formal obstacles to someone using the law. (You would probably also
be a real bastard!) Modern liberals would advocate substantive equality and positive liberty; ie, people should
be assisted to achieve use of the law.}
The focal point of this work in Australia was the federal Government’s Commission for Inquiry into
Poverty, headed by Robert Sackville. The catch cry was “unmet legal needs.” Despite a lot being written about
it, “access to justice” is a vague concept. The 1990 report ‘Legal Aid for the Australian Community’ of the National
Legal Aid Advisory Council (NLAAC) described “access to justice” as: “Access to the Australian legal and
administrative systems including access to the civil, criminal and administrative justice systems, appropriate
legal representation, independent legal advice and adequate information about the law and legal systems.”
{They found property transactions were the main reason for contacting lawyers, therefore if those with less
property = the poor, then poor were not using lawyers much. Poor used them for criminal defence and injury
but not for tenancy or consumer matters.}
{Two Oz researchers, Cass and Western, sought to find out why poor do not use lawyers. Findings: Due to
expense, psychological barriers, migrants and poor did not define many problems as legal matters. Even those
who did find a lawyer hit further hurdles; not all litigants benefit equally from the legal system once they get
into it. (See 62)}
Access to justice = access to formally constructed, politically impartial courts and administrative agencies.
The problem of unequal access to justice has been constructed from within a legal ideology. (Therefore it may
emphasis particular areas: Dave.)
Access to justice is synonymous with the idea of Rule of Law, where access to courts (legal redress) is
provided by the formal guarantees of liberalism and structured by its rules.
“The right to participate in the legal process is fundamental to liberal theory.” (Sarat, 1986) Sarat argues
access to courts is also protection against the power of government and bureaucracy . Classical liberals may see
unequal access to justice as an acceptable consequence of limited state intervention, whilst some modern liberals,
such as Rawls, subscribe to the idea that in order for rational people to fulfil their plans they must be guaranteed
access to certain primary goods, natural and social. “..It seems inevitable that equal access will remain
unattainable in practice; Katz (1982) {though this shouldn’t stop you from striving for it.} (It’s a bit like staying
awake in contracts lectures. Rawls said a society can be judged best by how it treats its poorest citizens.
Whatever, it seems absolute equal access to justice seems improbable).
(c) STUDIES OF ACCESS TO JUSTICE
Oz research has looked mainly at who uses lawyers, which fostered the idea that ‘better’ legal solutions may
solve legal problems (versus looking outside the legal structure for answers). In Victoria >75% of legal work is
economic- property, probate, estate, tax, etc. In NSW it was >50%. Where conveyancing is limited to legal
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profession = 23 to 46% of turnover. Home owners use lawyers much more than home users. If poor = those
with less property, inequality exists. Cass and Western (1980) said “those who need legal advice and do not
seek it include many who are not poor, and those who seek advice include many who are poor, (and) found bulk
of legal work for poor = advice on family and criminal law and motor vehicle accident matters, also “lawyers
working for the poor generally occupy the lower regions of the legal profession.”
If the definition poverty = individual economic status is used, access to the legal profession is a consumer
problem.
The “social organisation thesis” of Mayhew and Reiss (1969) = just as access to income, etc is stratified in
community, access to property induces varied access to the legal profession (which deals a lot with propertied
people). Zander (1978) says support networks (intermediaries) and peer expectation may encourage a potential
client to act upon a desire to seek legal advice. (Ie a mining company is more likely to pursue legal redress than a
single mum.)
Some reasons found for not using the legal system:
# inadequate knowledge of law (NLAAC, 1990).
# cost (NLAAC, 1990).
# the frequent need to pay both sides cost on losing (Vic Law Reform Comm, 1990).
# structure and organisation of legal services (Mayhew, 1975).
SUMMARY: Access studies have concentrated on why not everyone who encounters a legal problem takes steps
to mobilise the law in relation to it. = personal, social, organisational bias and legal system structure.
Access to justice does not necessarily mean access to equal treatment in that system (more money will always be
advantageous (in a democratic capitalist society)) Galanter, (1974) takes this is in “Why the ‘Haves Come Out
Ahead: Speculations on the Limits of Social Change”. Galanter describes two arbitrary classes of participants in legal
actions, the One-shotters (OS) and the Repeat Players (RP), being along a continuum rather than strictly
separable. Anticipating repeat litigation, RP’s have low (relative) stakes in the outcome and have resources to
pursue an issue. (Insurance companies, Public prosecutors, DSS, Finance companies, etc.) OS’s are smaller units
and have (relatively) large claims, or too small to justify court action. (Car accident victim, evicted tenant, etc.)
The advantages to RP’s may include:
1/ RP’s experience gives them intelligence (information).
2/ RP’s develop expertise and have ready access to specialists.
3/ RP’s have opportunities to develop facilitative informal relations.
4/ The RP must establish and maintain credibility as a combatant.
5/ RP’s can play the odds.
6/ RP’s can play for rules as well as immediate gains.
7/ RP’s can also play for rules in litigation itself, whereas an OS is unlikely to. (Therefore tending to guide
precedent towards those principles favouring the RP.)
8/ RP’s familiarity with the law allows it can discern what is ‘symbolic vs. pertinent’, and thus “penetrate”
the law
9/ RP’s are more likely to have funds available to penetrate (investigate) pertinent issues.
{# RP’s can avoid legal problems by writing standard form contracts.}
{# RP’s are likely to enter the court on their own terms.}
{# RP’s have bargaining credibility.}
RP’s don’t necessarily = ‘haves’ (wealth, power, status) or vice-versa. Derelicts may = have nots.
Galanter describes a 2 x 2 matrix of P v D for OS’s and RP’s, and goes onto describe characteristics.
Box 1: OS v OS ie divorces and insanity hearings.
Box 2: RP v OS = majority of litigation - personal injury claims, insanity and divorce
hearings.
Box 3: OS v RP: infrequent except for personal injury claims
Box 4: ie, employer group versus union, church-state litigation, government-corporation.
Guts of Galanter’s argument = strong parties are more likely to gain favourable court decisions.
U.S. Study of 6,000 Supreme Court decisions between 1870 and 1970 provided limited support. (Wheeler et al,
1987), though the haves generally fared better than those with fewer resources; (the have nots).
(d) RESPONSES TO THE PROBLEM
Provision of Legal Aid has been the most common response to legal problems in Western countries.
(i) Non-Legal Responses to the Problem
Those confronted with a legal problem may avoid the legal system altogether, as other avenues may be more
effective. In the case of consumer problems, the “exit” or “avoidance” option of shopping elsewhere may be
used, or sometimes by “lumping it.” (ie; migrant workers continuing in sweat shops.). Often expectation of a
continuing relationship, (ie, being a neighbour) encourages non-legal response. Likewise in business. “You
don’t read legalistic contract clauses at each other if you want to do business again.” (cited in Macaulay, 1977)
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(ii) General Legal Responses to the Problem
General Legal Responses = responses to issues of unequal access that focus on reforms within the legal system.
Galanter considers four possibilities in “Delivering Legality: Some Proposals for the Direction of Research” (1974);
Legal system = Four Basic Elements: 1/ LEGAL SERVICES 2/ RULES 3/INSTITUTIONS 4/ PARTIES.
Possible changes that may vary access may be effected by;
1/ changing legal services by influencing the culture, training etc, of the profession (ie Law in
Context)
2/ change the rules; ie, no-fault schemes, reducing need for professionals, varying court procedure.
3/ Changes in the levels of institutions:
A/ creating new courts (ie small claims tribunals).
B/ providing mediate and conciliatory institutions (marriage guidance).
C/ change the character of courts, to make them more approachable.
D/ encourage private sector tribunals (ie: funded by a dry-cleaning association).
E/ providing ombudsmen.
F/ provide active institutions (where judges may assist proceedings).
4/ influencing the capability of engaged parties to improve
The Victorian Law Reform Commission report The Cost of Litigation (1990) would add: The characteristics of the
written law: its drafting, jargon, style, proliferation, etc. contribute greatly to difficulties.
(iii) Legal Aid
Three methods of providing legal aid have evolved: 1/ judicare 2/ public salaried lawyers 3/ a combined
model.
1/ Judicare: Legal services are provided by the private sector, with the state picking up the bill.
2/ Public salaried lawyers involve waged lawyers working directly for the government.
3/ Combined model, a combination of 1 and 2 is favoured in Australia. Legal aid is not a Commonwealth
matter but tied grants influence it. As most of the work is down by legal aid commissions established as
separate statutory authorities, interstate differences exist. Legal aid commissions provide by referral to private
practitioners and in-house salaried lawyers. Most also employ public solicitors.
Salaried lawyers constitute a very small part of the legal profession, yet they carry out a significant portion of
the legal work. (31% in Vic; 87/88) In Vic and NSW the State only pays 80% of legal costs. About 91
Community Legal Centres also exist in Oz, which offer referrals or general advice, employing lawyers, social
workers and para-legals. Special services such as Aboriginal Legal Services also exist.
(e) ASSESSING LEGAL AID AS A RESPONSE
Three broad claims have been made about legal aid, (from narrowest to broadest)
1/ Legal aid is necessary to ensure equality of access to the legal system. In reality it may mean financing the
litigation for the right to a ‘day in court.’ It is looked on by some as an “equality of starting point.” It assists in
‘guaranteeing’ procedural equality making the court “a contest between equals [where] the outcome of such a
contest is justice.” (Abel, 1979). Others argue legal aid isn’t enough to overcome inequality in access, due to
pressure on courts, OS’s v RP’s argument, etc.
Some formalists deny that legal aid is necessary to achieve just outcomes; argued in McInnis v Queen (1979) 143
CLR 575, (McInnis was charged with rape and unlawful restraint. Due to stuff up, applied for legal aid was not
available, and then denied one day before trial. The trial judge refused adjournment, and McInnis appealed.
The WA Court of Appeal dismissed the appeal and leave to the High Court was refused.
Barwick CJ said “It is proper to observe that an accused does not have a right to be provided with counsel a
public expense. He has no absolute right to legal aid. (This still stands in Australia.)
Murphy J (dissenting) argued for “starting point justice.” He said, “Where the kind of trial a person receives
depends on the amount of money he or she has, there is no equal justice.” “It is no longer tolerable that persons
accused of serious crime who are too poor to pay for legal representation can be forced to trial without
representation.”
Legal aid = only 0.2% of total outlay on social programs in grants (1986/87).
Restrictions on eligibility are more to do with economic constraints rather than need.
NSW 1989 Legal Aid survey found of legal aid applications: 30% = born outside Australia, 61% lived in rental
accommodation. Of recipients: 61% rented housing or boarded, 69% were female, 13% were in paid
employment, 74% were welfare recipients, 92% had a weekly household income of $300 or less, 12% had no
income. Therefore legal aid recipients appear to be mainly the very poor.
2/ Legal aid will expose the legal system to a broader range of clients, as thus assist its evolution.
This may encourage the poor to pursue not only divorce matters, but consumer and tenancy issues also,
which they previously would have be too poor to consider. Bankowski and Mungham’s study in Wales (1976)
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suggests legal aid systems have a price “the preservation of the right of solicitors to work without interference
and with high profit at their usual line of business”. Highlights the problem that most legal aid is provided to fit
in with traditional modes of practice.
3/ Legal aid is a mechanism and part of social reform (the realists would probably think this). This argument
was prominent in the 70’s (the good old days of Whitlam). “Legal aid services are the means by which the goal
of equality before the law will be transformed from an ideal into a reality.” (Second Main report of the
Commission of Inquiry into Poverty, 1975) The question remains, despite problems of access to justice, is the
legal system capable of effecting substantial redistribution? (What do you think?: Dave)
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(f) ALTERNATIVE DISPUTE RESOLUTION
Provision of legal aid can be seen as the ‘first wave response’ to the access problem.
Alternative Dispute Resolution (ADR) falls between the win or lose court case and private resolution.
Arbitration: It may also take the form of arbitration where a third party hears both arguments and comes to
a decision. It may be voluntary or compulsory. {ADR may be arbitration, mediation, conciliation. (etc?)}
Mediation: It often involves adjudication that assists in an agreement or resolution being formed between
parties, with a minimum of procedural formality usually desired.
Wendy Faulkes describes the variety of ADR’s existing in Australia in “The Modern Development of Alternative
Dispute Resolution in Australia” (1990):
Earlier systems appeared to concentrate on resolution of what were seen as disputes, provided for dispute
conciliation in response to this problem. The Land and Environment Act 1979 allows for the conducting of
preliminary conferences to resolve issues. The Consumer Claims Tribunal’s establishment in 1974 allowed for
third party referees. Industrial disputes have been resolved using the Arbitration and Conciliation Court, set
up in 1904. The Family Law Act 1975 provided counselling facilities. Community Justice Centres in NSW,
Community Justice Centres Act 1983, provided mediation of disputes. Four similar centres were set up in
Victoria in 1987, and three more in 1989. The movement in Oz and USA is for CJC’s to have closer associations
with the Court.
Mediation is put forward as a useful response to the problems of applying legalistic solutions to issues such
as ‘neighbourhood disputes’ where parties must live with the aftermath of an imposed decision, (= negative
justification). It also opens up the legal process to the public (= positive justification). Some feminists view CJC’s
as a move towards a more caring form of dispute resolution. (To keep the economists happy) ADR’s also
provide low cost service and possible longer term efficiency.
{ADR’s advantages: Hopes for open democracy and humane decision making. Are more money and time
efficient than courts. Can focus on underlying cases rather than symptoms.}
Critics of ADR’s say formal procedure provides rights, safeguards against unequal procedural treatment,
and specialists (lawyers) who can mitigate imbalances between parties; ie, husband or wife, and therefore should
not be under valued. Informal justice may therefore reinforce inequality through prevailing relations of power
and authority, by diffusing conflict and missing opportunities for social change; ie, a public wife assault trial
highlights the issue in the public mind, and assists in the states’ formulation of remedying procedure.
Importantly, ADR’s speed up resolution by reducing court backlogs. Discussion of ADR’s is helpful in
moving our minds away from the idea that justice is equated only with the formal court system. {ADR’s.
Criticisms: Only deals with disputers between individuals; Not suited to disputes between OS’s and RP’s;
Conflicts with the idea of procedural legality.}
CHAPTER 4: LITIGATION
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(a) INTRODUCTION
Liberalism promotes a court-centred view of the legal system, partly because, as central to the rule of law
ideology, liberals regard the court system as a primary site of authority in society, and because the trial process is
formally depicted as one of checks and balances and of public accountability in the unbiased exercise of power.
Is theory matching practice?
Chapter 4 describes the traditional ideal of litigation in Anglo-Australian legal systems = the adversarial trial.
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(b) THE ADVERSARIAL IDEAL
Oz, UK and USA court systems are formally structures on an adversarial model. (Remember Perry Mason)
{In the adversarial system the judges are not involved (theoretically). The UK judge is equivalent to an umpire:
this is a product of British liberalism’s hostility to the state and desire for limited government, as the court plays
a limited role in deciding which issues will be placed before it. It does however have strict controls on evidence
stemming from rules of the laws’ procedural legality. It sees parties as formally equal. The role of the legal
profession in the adversarial system is major because passive judges bring power; therefore lawyers are crucial.}
Some parties involved in trials = the judge, the parties and the lawyers. Implicit in the belief in procedural
neutrality is faith in formalism.
The adversarial model prescribes a non-interventionist role for the judge.
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Denning J in Jones v National Coal Board 1957 argued; “…the judge sits to hear and determine the issues raised by
the parties, not to conduct an investigation or examination on behalf of society at large… His object, above all, is
to find truth, and to do justice according to the law.”
Lawton LJ in Laker Airways Ltd. v Dept. of Trade 1977 said; “I regard myself as a referee.”
Dawson J in Whitehorn v R 1983 said; “A trial does not involve the pursuit of truth by any means.”
Griffith (1985) says the traditional view is one in which the judge “must act like a political, economic and social
eunuch and have no interest in the world outside his court when he comes to judgement” (ie it is a falsehood).
Adversarial model = bipolar contest in which only one party may succeed.
The trial = ‘a competitive struggle between two formally equally parties’, and is a self contained event. The
role of substantive procedure in presentation of evidence, etc. is important and one some argue represent a bias.
In practicability, lawyers have an effective monopoly on the representation of litigants, though despite this,
the formal idea of the parties as presenting arguments is accepted by suggesting the lawyer facilitates this.
(Though lawyers in reality are players.) Many people regard the role of the lawyer as active (versus passive
judge), the lawyer partisan, the judge neutral. The lawyer as imaginative, the judge as reflective.
One argument is that the adversarial system is about ascertaining which party has the strongest case, rather
than what is the truth.
Some see a parallel between laissez-faire, free market economics (minimum external controls) and the
adversarial system. “The ‘fight’ theory of justice is a form of legal laissez-faire.” (Jerome Frank, 1973) In court it
is assumed parties are equally competent, with the onus being on securing the best representation. (The authors
think you need to be cautious about economic links.) Many capitalist countries have adopted the inquisitorial
procedure (I don’t think this is either proof or inference: Dave)
SUMMARY: The rule of law is regarded as the guarantor of liberalism, with a passive judge and procedural
formality theoretically assisting in the search for truth, with the minimum intervention by the state outside the
court, and concentrating on the facts parties wish to present.
(c) CRITICISING THE ADVERSARIAL IDEAL
Problems exist: delays, costs, shortage of experienced and/or technically capable judges, problems with bail, etc.
Most of the literature seems to accept the formalist view of individual rights as of ultimate importance.
The Inquisitorial (from word ‘inquiry’) process (Europe) incorporates: a judge who can call and examine
witnesses and suggest further points of law. “...the English judge is an umpire...the German judge is the
director.” Zeidler (1981)
Though non-intervention by judge is ideal, practice is not as formal, (Perry Mason), “in some jurisdictions,
esp re commercial clauses, the judge is not just a spectator but also a manager; Vic Law Ref Comm, 1990). Royal
Commissions are an established example of this.
Tribunals are key feature of modern bureaucratic state, though they don’t sit neatly with the classical liberal
view of law. Under the doctrine of the separation of powers, tribunals are said to be part of the executive arm,
not the judicial arm. Tribunals thus pose problems for liberals who see the rule of law as the ideal curb on
government power and protection of individual rights. “To deprive the courts of jurisdiction in favour of others
who do not have the independence of the judiciary must weaken the rule of law.” (Vic. Sup. Ct. Annual Report,
1988) Gaps (actual v theoretical) are seen as problematic because the court system is assessed in the terms of the
ideal.
These sociological perspectives have produced three insights:
1/ Traditional model of litigation = ‘top down’ view of the courts; ie, the higher courts are presumed to be
representative of the lower. Many sociological studies see different things by looking ‘bottom up.’ This view is
supported by Tomasic.
2/ As the courts are only a part of the process for solving legal problems, empirical court studies may lead to
different conclusions.
3/ The adversarial ideal is rarely achieved in practice.
(d) CRIMINAL LITIGATION
Doreen McBarnet’s study of criminal cases in lower courts suggests the criminal courts have produced a twotiered system of justice. The upper tier; the superior and appellate courts, provide the public image of justice;
“where the ideology of justice is put on display”, while the busier less formal Magistrates Court, etc. is less
thought of. “Conveyor-belt justice” sometimes describes this.
{McBarnet notes formality is inappropriately abandoned in the lower courts by two justifications (by
practitioners): 1/ offences are too trivial and 2/ don’t require law or lawyers. McBarnet disagrees with these
practices and says 1/ although cases may seem trivial, they are not, 2/ cases only seem to have simple facts
because lawyers are only marginally involved. Two paradoxes emerge: [Matters are] 1/ too trivial for the public
to be interested in, but important enough to prosecute, 2/ too trivial to need due process, but not for the law to
intervene.}
McBarnet describes this response by participants as the “ideology of triviality,” being regarded as requiring
little skill, which may evolve from the presence of the poor, the unemployed, etc. “The average or typical
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criminal trial is no trial at all; it is an administrative procedure or a deal hammered out by lawyers.” (Friedman,
1983)
In NSW Local Courts 1987, 75% of pleas were of guilty, 11.5% not guilty, Melbourne Magistrates Courts
1980, 69% plead guilty. Magistrates are rarely called upon to determine a defendant’s guilt or innocence, and are
concerned primarily with sentencing defendants who have pleaded guilty.” (Lippmann, 1979). In Sheffield
lower courts, 1976, found 93% pleaded guilty.
{As a large majority of def’s plead guilty, the majority of cases go through without use of the adversarial system,
which is in contrast to the inquisitorial system. (Remember: many pleas are an outcome of bargaining, often
with parties of different bargaining power.)}
The arcane language of the law, procedure and fear of the court processes may lead many to pleading guilty.
The process by which a particular charge is laid is determined substantially by discretionary police
decisions. UK and USA research suggests plea bargaining is sufficiently prevalent to be an integral part of the
court process; with maybe up to 5% of USA guilty pleas negotiated.
Lippmann argues plea bargaining works because all parties involved in the criminal courts, for their own
reasons, see some value in it. In Victoria, the Penalties and Sentences Act 1985 formalises the assumption of
reduced sentences for guilty pleas.
If traditional due process image of courts is inappropriate, what should replace it?}
Herbert Packer (1968) founded two models of the criminal process.
The “Due Process” model which “enshrines the assumption that an accused is legally innocent until proven
guilty.”
The “Crime Control” model sees the role of the criminal justice process as the repression or the containment of
criminal activity. “In the crime control model the repression or control of criminal conduct is seen to be the
central function of criminal justice.”
Bottoms and McLean suggested a third paradigm, the “liberal bureaucratic model” that asserts; “…the
protection of individual liberty and the need for justice to be done and to be seen to be done, must ultimately
override the importance of the repression of criminal conduct.” They found that some lawyers commonly
advised their clients who were “possibly innocent” to plead guilty to avoid a trial and risk a higher penalty.
McBarnet in Conviction: Law, the State and the Construction of Justice (1981) describes how the legal system
may routinely depart from the rule of law and simultaneously preserve the rhetorical power of that ideology,
mainly through the use of case law. She says: “Case law is discretionary and particularistic; it does not operate
at the level of general rules, (and so allows a reasonable degree of discretion in which the desired emphasises
and selections can help to create a favourable precedent that can then be woven into the process again. ie: how
do you present a challenge against “illegal squatting?”) “The result is that the law is so far from being certain as
to be almost impossible to pin down.” “People may not be bamboozled by the wigs and ceremony and jargon of
the law, but they are quite likely to be bamboozled by the law itself.”
(e) CIVIL LITIGATION
{Civil litigation is believed to be concerned with private rights and private duties, and is thought to be voluntary,
therefore is a significant liberal tool. Following on, conduct is left in the hands of the parties themselves; ie,
though there are procedural guidelines, the party can agree to other guidelines, therefore the state is merely
supplying a means for citizens to resolve their disputes.}
In comparison with criminal cases, there has been little research done of the operation of the civil courts. For
civil cases in NSW, ACT and Victorian Supreme Courts, 1977-80; personal injury = 25.75%, liquidate claims for
owing money = 26.25%, mortgage default and landlord tenant matters = 18.1%.}
Civil cases are seen as voluntary actions conducted by two parties, (versus the compulsion involved on
criminal cases) where simplistically the state provides infrastructure and knowledge to facilitate this.
{Consent judgements = parties seek a court order embodying the terms of a settlement they have agreed to; ie,
court acts as administrator rather than judicially, therefore lawyers have enormous power. The reality is that
there are many rules in the system to encourage settlements.}
Ross Cranston in Law, Government and Public Policy (1987) said:
Formal adjudication of civil law cases is atypical. Australian civil courts dispose of the bulk of cases by routine
administration or by providing a forum in which cases are settled.
Routine administration constitutes the majority of court cases. One aspect of routine administration is the
consent judgement, where parties have settled a case and simply entered judgement. Court officials engage in
limited inquiry, usually re correctness of paperwork. There are no contested issues ie: divorce cases. Debt
collection and mortgage default are frequently routine cases. The financial predicament leading to debt
collection may mitigate against defence of an action. Ross Cranston suggests greater procedural safeguards
should be introduced in routine processing of cases, maybe including the requirement for a prima facie case
against the defendant to be furnished. Adjudication does not always provide authoritative rulings, nor match
the adversarial role wisdom. Delays, expense and tactics all distort the ideal adjudication model.
Successful adjudication outcomes do not necessarily bring the plaintiff what and when she expected as fair
payment, etc. Cain (1983) argues bureaucratic processing is an important feature of both civil and criminal
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courts, but says in criminal courts the routinisation of justice is not openly publicised, whereas in civil courts it is
“intended and public.”
“The settlement of disputes before they become cases, and of cases before they reach the stage of a contested
trial, is an integral part of the civil process.” Many motivations encourage parties to seek settlement rather than
a court settlement; ie, an insurance company wanting to avoid publicity or precedent; a dodgey claimant wishing
to avoid further scrutiny, etc. These may be significant because Galanter found “private individuals formed
only 10.9% of plaintiffs, with the civil process being used in 86.3% of cases by state agencies and private
businesses, with defendants in 98.5% of these cases being private citizens. Cain found >80% of these were debt
recovery actions, finding that organisational plaintiffs being concerned with a ‘general deterrence’ being
provided by the courts. This challenges the dominant view of the civil courts as voluntary dispute forums.
For cases between similar powered parties; NSW business v business = 11.5% of cases commenced and 3.2%
of cases listed in NSW Supreme Court between 1977-80. It was found that business often was hesitant to engage
in legalistic battle, preferring to maintain good relations between parties they are likely to deal with again in the
future. Some say even these negotiations are likely to be conducted in ‘the shadow of the law’, though this
generalisation does not extend to the recent spate of takeovers in Oz. (See 70)
(f) CONCLUSION
The traditional view of the courts seems out of place in daily court practice, with the ideals of litigation scarce.
While the empirical evidence in this chapter suggests the courts are not closely following theory, the evidence is
not irrelevant. Rather it is a symbol of how the courts should operate in a liberal world.
CHAPTER 5: LAWYERS
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Practicing lawyers can be seen as gatekeepers between the law and citizens, assuming he, she or it has the
admission money (How do animals receive representation?). This chapter selectively looks at; the role of
lawyers, lawyers as theoretically impartial mouthpieces (beaks), and legal ethics.
(a) WHY LAWYERS MATTER
Lawyers are often painted as near invisible in the formal university study of law. This is in contrast to the
popular “Perry Mason” high profile of lawyers. This may have evolved from the initial resistance of law firms to
‘give up’ their apprenticeship role to the newly formed study of law at university, which due partly to academic
politics, led law study to be limited to the theory of law that would complement, (but not overtly compete?) for
students or apprentices.
Sugarman claims that the influence of the academics, arguing to create a niche for their own jobs and those
of students, may have argued for a cohesive nature within the myriad of rules and judgements, allowing a
“narrow ledge” where they could sit and attempt to appease both sides. “The profession’s task was to deal with
the empirical dimension of training; pleadings, dealing with lay people and so forth. The academics’ task was
exclusively about extracting internal coherence from the law at a safe distance from “reality”.’ This has
compounded the belief (illusion?) that law is separate from philosophy, politics and morality.
{Sugarman describes how university law training evolved from an apprenticeship situation - uni’s focuses on the
abstract rules to keep academia happy and then allow students to pick up practice later.}
{3 assumptions preserve labour setting of law: 1/ lawyers are mere neutral agents (passive), which is why they
are not mentioned much (in texts, etc.) 2/ law is about litigation (in reality it has to do with non contentious
matters ie wills, deeds; translating clients wishes into legal language. 3/ Litigation means a trial or a hearing. In
appeal cases, facts are given and only principles of law are in dispute, which is the opposite of reality in a large
number of cases. (Twining, Megarry: (1982)}
The legal profession and law schools work closer together in Oz than in the UK, therefore degrees, which
include subjects such as Procedure and Evidence, are considered as complete training.
As realism didn’t really get a hold in Australia or the UK (it did in the USA), a “laboratory view of law in
legal education (based on three assumptions) may have arisen. They are (3 points):
1/ The law is about litigation. This is because litigation is useful to study as a way to consider the contentious
issues raised in law, but in reality the majority of issues are non-contentious matters (such as boring things like
drafting wills and conveyancing). Cain (1979) concluded that “discursive translation” is a lawyer’s defining
skill.
2/ That litigation means a trial or a hearing. Most civil disputes never reach a contested hearing. The
obsession with appeal cases may also induce a distorted view of legal work. The propensity for reports
(especially of appeals) to present a matter as if only the principles of law are in dispute, and not the facts, may be
the opposite of the balance in ‘the world’. {Maybe the law is not what the judges say, it is what lawyers say.}
This is described by RE Megarry in “Law as Taught and Law as Practised.” (1967). He describes five issues:
A/ In ‘the world’ the facts are often uncertain whereas in reports they appear not to be.
B/ The relative importance of facts may be artificially highlighted in law study.
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C/ The prevalence of irrelevant facts in ‘the world’ is at odds with the propensity for law study problems to
include only relevant issues or facts.
D/ Law studies usually consider issues where the relevant facts are presented.
E/ The suitability of arguments (to particular judges and in particular circumstances) is fluid in ‘the world’,
where the practitioner lives in a world of “provisional facts” yet is not painted so in law study.
W. Twining takes up the case that lawyers are “Doctors of Facts” in “Taking facts Seriously” (1982) in which he
considers the setting up of Xanadu Law School. (It is a spoof on how the ridiculous may evolve to be endorsed
as the credible, in the setting up of a fictional university course.)
3/ That lawyers are mere neutral agents and not active participants in their clients’ cases. The paucity of 1/ and
2/ suggest that the area of settlement may allow a great deal of influence from the lawyers involved, who do not
face the scrutiny of the court in matters not reaching trial.
Maybe “law is not what judges say in the reports but what lawyers say, to one another and to clients, in their
offices.” (Shapiro, 1981).
(b) HOW LAWYERS DEAL WITH THEIR CLIENTS
{2 questions: How do lawyers deal with their clients? How do lawyers’ ethics affect litigation?}
Implicit in the literature is an assumption that there is a power imbalance between lawyer and client, though this
may take the form of middle class clients instructing lawyers who often function simply as legal translators.
(Cain, 1979).
Naffine suggests that the law is constructed with a (fictitious?) model person, who is male, monied,
educated, middle-class and thrives in the competition of the marketplace. (Yuk!) This may allow law to mask or
accept inequality. (The right of animals or plants to a defence mentioned earlier, may be seen by some as
ridiculous as the rights of slaves and women in the past?)
N. Naffine in Law and the Sexes (1990) says:
The basic principle is that lawyers must obey the directions of their clients = “the taking of instructions.” In
theory, the idea that the lawyer is the servant of the client, fits well with the ideal man (client) scenario. (This
ties in with the liberal view of rationality and formal equality.) The lawyer does not take a moral stance or act
in his own interests; his sole aim is to provide the best advice and representation. Unfortunately, (as for much
of classical liberal theory: Dave), reality may differ. Lawyers may perceive someone on criminal charges to be
incapable (not the most suitable person) to make sensible decisions about their future. Lawyers may also tend
to distance themselves in like cases, partly due to identification with other court peers, rather than the client,
sometimes believing their superior knowledge of the law authorises this.
This “lawyer-control” approach may sacrifice the idea; of the legal subject as an intelligent and
independent individual. A study from New York suggests better outcomes were achieved when subjects
participated in their cases. Some legal circles see the wresting of control from the client as a useful strategy to
help ‘frightened people’. The ethics set down for representation are ‘a bundle of contradictions’. Lawyers have
attracted criticism where they appear to view their clients’ interests as purely incidental. Bankowski and
Mungham (1976) suggest the purpose of ‘courtroom degradation’ of defendants is to subdue and pacify them.
While clients may call the lawyers tune in commercial law, the widely held perception of the accused in the
magistrate’s court as ‘dim’ does not offer them much autonomy in lower courts.
A longitudinal study of accused persons by Ericson and Baranck (1982) suggested “the accused was a
dependant in the legal process”. Lawyer control is argued as valid by some in the case of the desperate who
‘authorise the best possible avenue of action the lawyer suggests.’
Blumberg, a USA criminal lawyer looks at criminal defence there in, AS Blumberg, “The Practice of Law as
Confidence Game.” (1967):
He claims the social setting of the court room, particularly with “lawyer regulars” and their relationship with
other members of the legal system, tends to see the individual aspects of cases being overridden. He suggests
accused are coerced and/or bureaucratised into pleading guilty. Bail (refusal) and other ‘short-cuts’ may be
used to break a defendant’s resolve. Blumberg says even if a guilty plea is objectively best, it is hard to know.
Therefore, much law is brokerage. He says the criminal lawyer is a ‘double agent’ performing services for both
sides, “Serving higher organisational rather than professional ends.”
Similar work has been done with divorce matters (Sarat and Felstiner, 1986) finding 1/ lawyers often have a
different view of the law to their clients, 2/ differences re how these differences are resolved, 3/ differences re
how this may affect the case. Sarat and Felstiner, (1986) explore these issues in “Law and Strategy in the Divorce
Lawyer’s Office”: They look at the dilemma of whether to pursue negotiated settlement or a court hearing(s).
Most lawyers thought it was better to settle than contest divorce disputes. Lawyers tend to present themselves
as an ally who is trying their best for their clients, but there may be a subconscious or covert incentive by the
monopoly of negotiation outside the prying eyes of the judge and the world. Lawyers also tended to focus their
clients’ attention on what they felt was important, in deference to the client’s priorities.
The issue highlighted is that cultural settings (of lawyers and clients) are important issues to consider.
Carol Smart (a third phase feminist, See 269) in “The Ties that Bind” considers solicitors’ views about social
security and marriage breakdown:
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She found the majority of solicitors ‘placed primary emphasis on state support’ (for maintenance, etc.),
which is in conflict with majority case law. During interviews with solicitors, Smart asked whether they take
into account potential Social Security benefits she received varying responses. Of those she said, “It should be
perhaps pointed out that these solicitors did not ignore its existence altogether but their concern was mainly
that husbands should not avoid the responsibilities or that the taxpayer should be protected.” Interviews
included comments including; “With low income families...what we are talking about is their ability to survive,
not maximising their financial position.” Descriptions of the two approaches probably fit into the scenario;
against state benefits = ‘right-wing’, and the other ‘left-wing’. Also; (against state benefits) “you’ve got to leave
him with an incentive.” Another example was, “Yes experience shows that if you push a man too far he stops
paying altogether and doesn’t work so the court has to decide in each case how far it thinks it is fair to push any
given man. He’s got to have some beer money at the end of the week otherwise he won’t work.”
IMPORTANT: A significant issue raised in a number of these instances is that in many instances the modern
practice of law does not provide much platform for formal rule structures incorporating stable, clear and a
predictable legal system, a central plank of liberalism.
One lawyer said; “There are no rules, just people, the judge, the lawyers, the litigants.”
A Sarat and W Felstiner in Lawyers and Legal Consciousness: Law Talk in the Divorce Lawyer’s Office (1989) consider
the way lawyers interact with their clients;
‘“They begin with formalism and open their advice with some account of the applicable rules.” “After that
formalism fades rather quickly as the interaction progresses, and further reference to rules is only in response to
questions from clients, often being incomplete, with little chance for the client to comment on them. Lawyers
were generally cynical of the rules. The message to the client is that it is the judge, not the rules, that really
count.”
The disparity between theory and practice in these matters is important to recognise given the ‘positivist’
predictions used by many economists.
(c) LEGAL ETHICS
{Two primary ethical duties to clients: 1/ partisanship; and 2/ zealousness}
{Lawyers must do everything they possibly can on behalf of the client, as enforced by a mixture of legal and
professional rules. Duties owed to the client is overridden by a higher duty to the court; ie, lawyers must not
perjure or present false information. The legal profession also has in such rules, inter alia, no advertising.}
Sometimes the word ‘ethics’ is used interchangeably with the word ‘morals’. Conversely, ‘a professional
code of ethics’ may indicate members are required to behave in a way that non-members are not. Ethics are
taken to be the legal and professional rules governing lawyers’ behaviour by virtue of the fact that they are lawyers.
Lawyers are supposed to comply with rules, but some (especially sociologists) claim the professional status is
delineated from ‘mere occupation’ by the existence of a code of ethics.
{What do ethics achieve? 1/ They make the lawyers act against their clients’ interests if higher principles of
justice are at stake. 2/ Supporters say something about conflict of interest. Some firms have ‘overcome’ this by
creating a Chinese Wall, in which departments are supposedly meant to remain separate.}
Ethics require lawyers to act against the interests of their clients where the ‘higher’ interests of justice are at
stake. Defenders of the system might say a principled legal profession that is not governed purely by market
considerations and the general law is needed to translate liberalism into reality.
{Critics say the vagueness of the rules provides plenty of leeway. Schnapper says ethics are so vague as to be
platitudes. Some say ethics are there just to distinguish the group, that they may be used to justify undesirable
practices; ie, the privilege of doing conveyancing.}
Critics claim ethics are rarely enforced as lawyers close ranks and complaints are difficult to pursue. Also,
lawyers main function is to maintain the profession’s social status and justify market privileges.
Most legal ethics study is American. (Where contingency fees may pose further problems.)
E Schnapper: The Myth of Legal Ethics (1978) looks at issues surfacing in USA, especially following Watergate.
(Select quotes) “…no reliable comparative honesty of lawyers has been made or is necessarily possible.” “…a
number of factors suggest lawyers are not likely to be the pinnacle of morality.” “…in law a resort to sharp
practices does not tend to threaten continued employment.” “In many instances the very art of the lawyer is a
sort of calculated disregard of the law or at least of ordinary notions of morality.” “If, as a former federal judge
has urged, legal justice is a special type of truth finding, legal advocacy - urging a decision with knowledge of
contrary facts hidden behind the claim of privilege - is, to coin a euphemism, a special type of truth telling.”
“…disciplinary proceedings are almost exclusively limited to three abuses: attorneys who steal the funds of their
clients, attorneys who accept fees but fail to pursue their clients’ case, and lawyers who commit felonies.” “As
enforced [an ethics code], it is intended solely … to protect the few individuals rich enough to hire a lawyer from
misconduct, although not from incompetence.” [Some (3) reasons for disparity between theory and practice are]:
1/ “the standards are enforced by lawyers who will be subject to the code themselves.” 2/ “…disbarment and
suspension are so drastic that no-one wants to use them except in the most extreme cases.” 3/ (Complaints are
difficult to pursue.)
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Broadly, two ethical duties apply; duties to the client and duties to the administration of justice, with the
latter theoretically overriding the former amidst conflict. This was highlighted by the Lake Pleasant case in the
USA when lawyers located the murdered victims of their client, but didn’t admit this until the facts became
known during trial.
“Whistling blowing” on immoral companies is a classical case of conflict between duties. The remainder of
the chapter concerns the duty of confidentiality and the potential impact on the determination of truth. William
Nelson (1989) argues lawyers face a crisis re ethics.
{Why do we have the ethical rules we have? Remember the adversarial system of justice, re 2 gladiators
contesting the battle on behalf of the litigants. The more partisan and zealous the lawyers, the more likely it is
that the truth will be found. In theory, legal ethics help to preserve the adversarial system by providing bigger
and better gladiators. How do lawyers affect the flow of information? Under liberalism the rule of law requires
a pre-given rule be applied on the basis of the truth. The outcome of the case is enormously affected by the flow
of information. The lawyers are in the key position to decide what information gets to the judge.}
Adversarial systems rely heavily on information flow through advocates. “Lawyers cannot (without the
clients’ consent) volunteer information that harms the client because that would breach the principle of
partisanship.” Neither can they divulge directly to the court or to prospective witnesses the client’s
communications.
In Tuckiar v the King, 1934, Tuckiar was accused of murdering a police officer. He was convicted and
sentenced to death. Tuckiar’s lawyer then made a public statement about what Tuckiar has said to him because
he wanted to clear the reputation of the dead officer. Tuckiar’s conviction was quashed.
Luban, 1988, said, “Lawyers have to assert legal interests unsupported by moral rights all the time.”
In theory, the prosecutor in criminal proceedings is simply one of the adversaries, though the Crown tends
to constrain itself, due to the overwhelming facilities available to it during prosecution, protecting the liberal
ideal of the individual.
In the USA case Spaulding v Zimmerman, the defendant’s doctor identified a life threatening heart problem
following a motor accident. He notified the defence lawyer, who did not notify the plaintiff. Other
circumstances allowed him compensation as Spaulding was a minor, but this was ‘coincidental.’ Luban, 1988,
said, “That may be a reason to risk one’s own life on a mountain, but it is no reason to risk Spaulding’s life in a
law office.”
This chapter has been about the interplay of ethics and the adversarial system. “Arguably, lawyers have a
vested interest in the current structure of legal ethics and would resist any change.” “The legal profession has
certainly resisted community involvement in the regulation of its affairs.” One writer said, “Professions are a
very hard thing to take on … they really are a form of very strong, untouchable union.”
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PART C - LAW AND ECONOMICS
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INTRODUCTION
{The economic approach usually has the most immediate impact (unfortunately), as it dominates much USA law
teaching, has influenced much judicial decision making, and is generally concerned the ideal of economic
efficiency. In Oz and UK it has taken longer to infiltrate law schools. McQue J: “We cannot lose sight of the
economic consequences of law making.”}
Economic analysis of law has established itself in the last thirty years in the USA, meaning many Right leaning
‘characters’ (gentlemen?), both lawyer economists were appointed to the USA Court of Appeal during those
golden days of Ronnie Reagan. (When the Soviet ‘Evil Empire’ was informed that it was better to die than not to
have liberal democracy: Dave.) Economic judgements have permeated many of the 80’s higher USA court
judgements.
Economics has been less successful in colonising law teaching, etc. There are reasons why the teaching and
application of law is affected by economic analysis. 1/ Law and economics assume a purity (precision?) that the
social sciences are less likely to profess, therefore it becomes easier to use in creating public policy. 2/ It has an
advantage because it treats and encourages people to be ‘rational utility maximisers.’ 3/ The ‘rod of money’ is
easier to work with (than nasty complicated things like equality or education: Dave) A chap called Ronald
Coase (1978) claims; “since what is measured by money are important determinants of human behaviour in the
economic system, the analysis has considerable explanatory power.”
The ‘New Right’, ‘Libertarian Right’, ‘Chicago School’ policies converged with the Reagan policies (just ask
the poor black population of Harlem, etc. in New York who allegedly has a higher child mortality rate than in
Bangladesh, and may have more people who have been in jail than have ever been in employment: Dave).
Though many strands of economic analysis have emerged, the Chicago school ideology will be examined in
more detail. Not all agree with the implied association of ‘economics and law’ by the Chicago school, but
credible alternatives to their analysis are not as prominent or missing. (Anyone into politics may be interested in
Claus Offe’s Disorganised Capitalism, which, though heavy reading, offers some suggestions in this area: Dave)
(Chicago school economists and other ‘right wing’ American scholarly writing appears to be very more prolific
than others in the areas studied in the economic analysis of law. I think this may be worth keeping in mind
when reading this material, as, otherwise, it may provide what I see as an unfortunate bias as to the claims,
expectations and influence of this field of scholarly endeavour. You may not agree with me. Dave)
A man called Schumacher, in a book called Small is Beautiful; A Study of Economics as if People Mattered (1973),
made some interesting observations about human motivations and the role of economics, especially concerning
our interaction with the natural environment. It travels some of the way to place economics in a context that I
think is more realistic and appropriate than the Chicago school opinions. Schumacher beginning a Chapter
called ‘The Role of Economics’ says;
“To say that our economic future is being determined by the economists would be an exaggeration; but that
their influence, or in any case the influence of economics, is far reaching can hardly be doubted. Economics
plays a central role in shaping the activities of the modern world, inasmuch as it supplies the criteria for
what is ‘economic’ and what is ‘uneconomic’, and there is no other set of criteria that exercises a greater
influence over the actions of individuals and groups as well as over those of governments. It may be
thought, therefore, that we should look to the economists for advice on how to overcome the dangers and
difficulties in which the modern world finds itself, and how to achieve economic arrangements that
vouchsafe peace and permanence.”
Perhaps this is a matter of opinion. See what you think once you’ve read Part C.
CHAPTER 6: FOUNDATIONS OF ECONOMIC ANALYSIS
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(a) WHY STUDY LAW AND ECONOMICS?
Easterbrook J (1988), asserts the ‘inevitability’ of law and economics: “Economics is the study of rational
behaviour in the face of scarcity. Economics and law are, therefore, inseparable. The legal system, too, is about
coping with scarcity… I give you a theorem. Those who employ economic analysis will drive out of the market
those who do not, because the non-users cannot achieve their instrumental objectives.” Further, claiming
economics trumps law (!). He says;
“It has a rigorous set of assumptions and rules, quite unlike the ad hoc utilitarianism cum moralism so common
to legal teaching and thought, a ‘method’ showing only that with enough inconsistent assumptions you can
prove anything.”
LIC says economics claims there is no external logic, one which is to be found not in law itself, but in the
notion of “economic efficiency.” (Consider how people and societies operate with given values or ideologies
while not necessarily recognising their influence: Dave.) Contract law “might now be seen as striving to achieve
efficiency in individual exchange relationships.”
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Klevorick talks about the roles economists may assume;
1/ as ‘technician’ (claiming) “at some point an understanding of how markets work, how markets value
commodities, services, and assets, and how individuals interact in their economic roles may become critical in
deciding the ultimate disposition of the case.”
2/ as a ‘supertechnician’, where the economist is called upon to evaluate and give advice about the best ways to
achieve the specified objective (If monetary considerations are paramount, as some economics assume: Dave).
3/ where the economist considers the area of law considered and puts it in economic terms. (This, 3/, is the one
examined in LIC)
(b) ASSUMPTIONS, METHODOLOGY AND CONCEPTS
{Seven key assumptions of economic analysis relate to: 1/ rationality, 2/ incentives, 3/ concern with marginal
effects, 4/ notion of opportunity cost, 5/ methodological analysis, 6/ cost-benefits as uniformally measurable, 7/
Individuals determine their own cost-benefit values.} {Economists often employ generalised assumptions about
uncomplicated interactions to generalise about more complicated ‘real life’ scenarios.}
Neo-classical economics is premised by basic assumptions, described in;
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(i) The Role of Assumptions and the Development of Models
The theory is this: “Models simplify in order to enable a better understanding of the real world.” “The
economist will generally begin with the simplest possible model isolating one or two factors, analyse it, then
relax some of the unrealistic assumptions in order to develop a more complex model which more closely
approximates behaviour in the real world.” (I believe this approach often evolves from an ignorance the
motivations of behaviour, ie; unjustified faith in rational decision making and efficacy of incentives; Dave.)
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(ii) The Core Assumptions and Concepts of Economic Analysis
{Key assumptions of economic analysis are: 1/ rationality; 2/ incentives. Individuals are assumed to adjust
their activities to avoid the costs or to obtain the subsidies created by the law as [assuming] individuals act
rationally in the face of the law. Therefore, it is natural to look on law’s effect on behaviour, rather than on
justice or rights. Non-economists may say people are not necessarily rational unless they are in the market.
Economists respond by saying ‘the proof is in the pudding’; our assumptions may look realistic, but they seem to
work. (Their isolation from the less comfortable places in the world may assist them to believe this!: Dave)}
IMPORTANT: 1/ “The central assumption of all economic analysis, including the economic analysis of law, is
the assumption of rationality. That is, it is assumed that individuals have objectives and tend to act in a way that
will achieve them. More specifically, it is assumed that individuals are rational maximisers of the satisfactions,
of their self interest. In economic terms, they are assumed to maximise their utility” (Where does the Salvation
Army fit?: Dave)
Easterbrook says rationality means, “People choose their own ends, which may include emotional
satisfactions and altruistic endeavours.” “Rationality implies no more than a good fit between means and ends.”
“We cannot do better in predicting than to assume rationality of groups of people.” “The (relatively) rational
calculators will set the standard (an economist would call it the price) to which the group conforms. “The stock
market is a good example; the market as a whole then behaves as a compound of the canniest predictors and
evaluators.”
Posner: “It is implicit in the definition of man as a rational maximiser of his self-interest, that people respond
to incentives.” This model has been increasingly used to describe non-market behaviour such as marriage,
criminal action, social association, etc. (Spurious?: Dave)
IMPORTANT: 2/ Second assumption: That rules of law operate to impose prices on (or sometimes subsidise)
these non-market activities and that individuals (acting rationally) adjust these activities to avoid the costs of
laws or obtain the benefits. (This may be a response to an unproductive condition described as the ‘rent-seeking’
society, where knowledge of government manipulation through tariffs, etc, lead potential producers to invest
energy in seeking concessions rather than increasing output or quality. Understand?: Dave) “Economists
perceive law as being very much like a giant pricing machine.” “In a crude way, the law prices and taxes
individual human behaviour and therefore influences that behaviour.”
IMPORTANT: 3/ Third assumption: That individuals have stable preferences, assumed not to change
substantially over time, nor be very different between wealthy and poor persons.
Becker (a Chicago character) says: [this assumption] provides a stable foundation for generating predictions
about responses to various changes and prevents the analyst from succumbing to the temptation of simply
postulating the required shift in preferences to ‘explain’ all apparent contradictions to his predictions” (ie you
don’t need to worry about the nasty complications of reality when your models don’t, or in predicting the future,
may not work: Dave).
IMPORTANT: Analysis is concerned with marginal rather than with average or gross effects. Therefore “those at
the margin” respond in a change to the law (or prices).
IMPORTANT: Opportunity cost is an important concept to understand = ‘its value is its next best use’
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(iii) The Economic Perspective
Economic analysis of law differs substantially from conventional legal scholarship. Lawyers tend to perceive a
problem in terms of dispute settlement amongst identifiable parties, favouring an ex-post approach. Their main
focus is the case before them. In contrast, economists view the law as an incentive system affecting future
actions, favouring an ex-ante approach. (See Foucault: Discipline and Punishment for a fairly heavy duty
sociological examination.)
Veljanovski: “[The economic approach] focuses on the incentives and implications for prospective
behaviour that changes in variables or policy may have. Thus the economic analysis of tort law would examine
the effects that different liability rules have on investment in [future] safety rather than their adequacy in
resolving a dispute or redressing the violation of individual rights.”
(iv) Economic Efficiency, Markets and Prices
IMPORTANT: While Lawyers debate the value of legal rules re fairness or justice, economists look at efficiency,
the relationship between the aggregate benefit of a situation and the aggregate costs. While the lawyer
concerned with ‘equity’ will focus on how a pie is divided, economists concerned with the efficient use of
resources focuses on how to produce the biggest possible pie. The starting point for neo-classical analysis is
generally the model of the perfectly competitive market and the role of prices in achieving such a market.
IMPORTANT: C. Veljanovski looks at the notion of efficiency, its difficulties as a model and the role of markets
and prices in economic analysis in The New Law and Economics (1982):
Market and Prices: play a central role in economics, and may be applied to areas where there is not an explicit
market. Subject analysis is often by notions of supply, demand and price. “A market is simply a decentralised
mechanism for allocating resources.” (Most) Economists follow the idea of Adam Smith’s Wealth of Nations that
individuals trade in markets because exchange is mutually advantageous. The interaction between buyers and
sellers in the market has been formalised by economists in the ‘Laws of Supply and Demand’.
“The Law of Demand states that as the price of a good rises, less is consumed as the consumer reduces his
purchases or turns to substitute goods. The willingness of individuals to produce goods is also assumed to
depend on the price. The Law of Supply states that there is a positive relationship between the price received by
a producer and the quantity he is willing to produce and supply to the market. “To take an extreme example, a
person’s willingness to pay for a loaf of bread is greater when he is hungry than after he has consumed his
second loaf. The market demand curve is also negatively sloped because as the price decreases individuals with
lower valuations of the commodity enter the market.” Price rations the supply of goods and provides incentives
for production. It does both of these simultaneously by itself adjusting until the plans of consumers and
producers are mutually consistent. If supply exceeds demand, the price will fall to encourage more purchases
and discourage production...The market price also provides information to individuals in the economy.”
Concepts of Efficiency
Economists usually separate allocative efficiency from distributional matters. Allocative efficiency, the
organising principle of much of the (right wing) economic analysis or law refers to the composition of output
that satisfies consumer demand as measured by willingness to pay at the lowest costs of production, therefore
distribution is about the division of wealth in society.
Pareto Efficiency: A Pareto efficient situation is one in which the welfare of one individual cannot be
improved without reducing the welfare of any other member of society.
This criterion is based on several ethical principles;
1/ that the individual is the best judge of his own welfare;
2/ that the welfare of society depends on the welfare of individuals that comprise it;
3/ that any change that increases the welfare of at least one individual without diminishing
the welfare of any other improves social welfare. (= Pareto Criterion)
Pareto efficiency is usually linked to the model of perfect competition, a textbook model of the market that
assumes, inter alia, individuals maximise utility, firms are profit maximisers, individuals cannot influence
commodity prices, and they have perfect information about market opportunities. Given these, “A perfectly
competitive market produces a Pareto efficient allocation of resources in the sense that resources gravitate to
those users where their economic value is greatest.”
{Almost all economists would accept Pareto efficiency = value judgement that resource allocation is undertaken
in which nobody is losing out (people only usually!), even though there are very few real world situations where
the formula can be applied, as usually some change makes someone worse off. The most favoured test would be
the Kaldor-Hicks formula = allocation of resources should be adopted if it produces gains for the beneficiaries
that are sufficient for them to compensate their victims and still be better off, even though there is no
requirement for compensation.}
Kaldor-Hicks Efficiency “A policy is Kaldor-Hicks efficient if those that gain can in principle compensate
those that have been ‘harmed’ and still be better off.” (Kaldor-Hicks efficiency is a situation where redistribution
is possible, but say nothing re compulsion to do so: Dave) “Kaldor-Hicks efficiency (somehow?) thus appears to
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separate efficiency from the question of wealth distribution and provides the theoretical underpinning for social
cost-benefit analysis.”
Difficulties with the efficiency criterion;
First-Best Problems
Kaldor-Hicks approach has several problems (An understatement: Dave). 1/ Unlike Pareto efficiency,
there is no sense of voluntarism in Kaldor-Hicks efficiency. 2/ Because losers of ‘efficient’ legal reforms go
uncompensated for their losses, the criterion is capable of generating quite drastic, capricious and inequitable
redistribution of wealth. 3/ It is not self evident why an increase in potential welfare is the relevant maximand
particularly when there are individuals suffering losses and others reaping windfall gains more than sufficient to
compensate losses. Improvements in actual welfare would appear to be the more appropriate benchmark...The
Kaldor-Hicks approach in practice assumes that the worth of a $1 is the same to everyone, and this is a
demonstrably false assumption.
Second-Best Problems
“In an imperfect world where some sectors of the economy persistently and irremedially deviate from
efficiency...[t]he constraint imposed by deviant sectors of the economy must be taken into consideration and this
will require immensely complex, if not impossible, calculations to determine the optimal policy.” = The problem
of second best.
Distributive Justice
Even if not principally involved with the distribution of wealth, “it is necessary to recognise that efficiency and
the economic value of goods and services cannot be separated from distributional questions”. A situation is
allocatively efficient if all the (potential or actual) gains from trade have been exhausted, given the initial
distribution of wealth among individuals. If the wealth in society were redistributed then there would be a
different efficient allocation of resources...Thus each different distribution of wealth generates a different pattern
of demand, a different set of prices and different production decisions. (Ie; If our priorities were to feed the
world rather than drive large cars, the energy spent producing cars would move towards food production
resulting in the commodities that were then to be distributed existing in different proportions. Comprehend?:
Dave) Therefore there are an infinite number of allocative efficient scenarios. Allocative efficiency is a necessary
but not sufficient condition for the maximisation of a social welfare function that incorporates a value judgement
regarding the ethical deserts of various members of society. The orthodox (right wing) view is that the
desirability of a given income distribution is not a question of efficiency.
“The recognition of the inseparable relationship between the distribution of wealth and efficiency gives rise to
certain propositions that have not been sufficiently emphasised:
1/ the only Pareto efficient outcome that is socially desirable is that based on a just distribution of income and
property rights,
2/ inefficiency may be acceptable in practice if it leads to a more desirable or ethically attractive distribution of
wealth.”
“Thus it appears that normative economics needs a theory of distributive justice that will enable the analyst to
rank efficient outcomes in terms of their ethical attractiveness. Economists have shied away from this task
largely because of a widely held professional view that distributive justice is a nebulous concept that defies
scientific evaluation”, therefore is discredited as ‘unmeasurable’, therefore non-existent. (The role of science in
the development of history is important, especially amongst ‘technicians’: Dave.)
Posner (See 152), invoking a variant of the Kaldor-Hicks criteria he calls the “wealth maximising principle”,
does claim to provide an ethically attractive theory of distributive justice. (We shall see!: Dave)
(c) TYPES OF ECONOMIC THEORY
Three types of economic theory: 1/ Positive, 2/ Descriptive, 3/ Normative, may be applied to law in different
ways.
1/ Positive = seeks to discover the effect of laws (also called positive or predictive economics), especially how
legal rules affect human behaviour, particularly resource use. This theory assumes people are rational
maximisers of self interest, basing their preference on relatively constant preferences or desires. Veljanovski
says the predictions of positive economics must be treated with caution for inter alia “…The prediction states
that in practice the quantity demanded will increase only if all other factors affecting demand such as income,
tastes and the relative prices of other goods remain constant.” (Which Marxists say is unlikely under the ‘liberal
capitalist’ class system.)
2/ Descriptive = seeks to explain why the laws are the way they are and why we have the sorts of laws we have.
Best example of this is Posner’s Economic Analysis of Law, which argues common law rules are best explained as
efforts to bring about an efficient allocation of resources.
3/ Normative = uses economics to recommend what the laws should be, ie; assumes what ‘is normal’) They
embody values judgements about what the law ought to be. “The most common value judgement underpinning
normative analysis is that rules should seek to maximise social welfare, and that to achieve this, rules should be
evaluated primarily in terms of their allocative efficiency.” Posner and others adopt a “wealth maximisation test
of efficiency and argue this can provide conclusive normative criteria for evaluating laws”.
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(d) ECONOMICS AND LIBERALISM
There are close links between mainstream (Western) economic analysis of law and many of the central tenets of
liberalism. “…classic liberalism is commonly identified with classical economics and neo-classical economics
today (which almost all the literature on economic analysis of law is located) retains strong associations with
18th and 19th century liberalism”
Lawrence H. Tribe (1985) said, “Many of the tools and concepts, and its underlying assumptions, are
already engineered, whether intentionally or not, to serve a specific agenda… This brings those ideas within a
paradigm of actions guided by the pre-existing set of personal preferences - a paradigm inclined toward the
exaltation of possessive individualism, “efficient” resource allocation, and maximum productivity, as against
respect for distributive justice, procedural fairness and the irreducible and sometimes inalienable values
associated with personal rights and public goods.” (See 12)
Economics, like C19 liberalism commonly invoked utilitarianism as a justification for action. Neo-classical
economics treats the individual as the basic unit of analysis. Chicago school economics in particular has
expressed a strong preference for the market mechanism (especially freedom of contract) over state intervention
and where the market malfunctions, for common law (which ‘mimics’ the market) over statute law.
Gary Minda (1989) said: “Law and economics can be understood to be a liberal movement which is seeking
to build on the vision of the liberal state.”
The essential point is that modern economics has remained remarkably faithful to its classical liberal origins.
CHAPTER 7: APPLICATIONS TO CONTRACTS AND TORTS
The principle focus here is on Chicago School (New Right) approaches to economics and law. This is contrasted
later with the neo-institutional and “Yale liberal realist” analyses.
{Free market economists argue the system of voluntary exchange = the most efficient way of using resources, as
resources are assumed to find their way to the person who values them most. Contract law facilitates free
exchange.}
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(a) THE COASE THEOREM
Coase theorem = the most important development within the economic analysis of law.
IMPORTANT: Coase theorem = In the absence of transaction costs, an efficient allocation will result, irrespective
of legal rules: that is, irrespective of which party is assigned the property right in a situation of conflicting uses.
{Coase theorem = in the absence of transaction costs, an efficient allocation of resources will be achieved,
irrespective of legal rules, therefore it won’t matter if A or B is made legally liable.}
AM Polinsky (1989),in The Coase Theorem, looks at how it may apply to a scenario of a polluting factory;
Problems associated with a smoking factory chimney, causing $75 damage to each of five residents, may be
solved by a filter costing $150 or an electric dryer for each house costing $50 each. The most ‘efficient’ solution is
to use the filter. (Ok?)
Zero Transaction Costs
As it is assumed negotiation cost nothing, this is called the assumption of zero transaction costs. Therefore (a
simple version of Coase Theorem =) “if there are zero transaction costs, the efficient outcome will occur
regardless of choice of legal rule” (ie liability for initiating problem), but, although the choice of the legal rule
does not affect the attainment of the efficient solution whether there are zero transaction costs, it does affect the
distribution of income. (Remember Thatcherism and the apparent lack of concern re disadvantaged.) Because it
is assumed for now that income can be costlessly redistributed, this distributional effect is of no consequence - if
it is not desired, it can be easily corrected.”
{def: Zero Transaction cost = all parties have knowledge and therefore no costs of transfer, therefore all
misallocation of resources will be solved by the market because the parties will continue bargaining until they
reach the optimal outcome.}
Positive Transaction Costs
The assumption of zero transaction costs obviously is unrealistic in many conflict situations. The (more
complicated version of) “the Coase Theorem = If there are positive transaction costs, the efficient outcome may
not occur under every legal rule. In these circumstances, the preferred legal rule is the rule that minimises the
effect of transaction costs. These effects include actually incurring transaction costs as well as the inefficient
choices induced by a desire to avoid transaction costs.”
So where there are positive transaction costs, what is sought is an assignment of rights as between the parties
that will maximise the joint value, or minimise the joint costs from the interaction between them.
{The important thing is how do you apply the Coase Theorem when there are transaction costs. Ie It will cost the
factory to put in a $100 scrubber and $200 to put in the extractor fans, therefore it is more efficient for A to put in
the $100 scrubber, therefore it doesn’t matter who has the property rights. (It’s no wonder the law and
economics validates so much environmental degradation!: Dave.)
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(b) CONTRACT LAW
{The Coase Theorem can readily be applied to Contract law. Following Coase Theorem, that laws can and
should be designed to maximise the joint value or minimise the joint costs involved in the interactions of the
buyer and seller. Ie, the law should reduce the friction involve in bargaining. Neo-classical economists say
contract law is about making the market work efficiently. It does this in 4 ways:
1/ Ensures legal incentives are reserved for exchange activity; ie, the doctrine of consideration ensures
exchange is being made.
2/ Discourages inefficient breach, ie, contract encourages optimal breach. The simplest case in contract =
buying a chocolate bar, but when exchange and performance are not simultaneous, difficulties arise; ie, building
a house: See Contracts case, Wigan v Edwards 1973 HC). If there were no sanctions like this, less exchange would
take place, therefore there would be less mutual gains from trade. One solution may be to cut the time between
contract and performance, as the law provides breach of contract and appropriate sanctions, usually in the form
of damages. Opportunistic breach raises the question is their benefit from the breach, therefore the law
responses by providing damages high enough to deter its use. Ie an overall loss is likely.
3/ To reduce transaction cost and uncertainty, by implying a set of standard or implied terms. The law
stipulates the consequences of non-performance and reduces the need for formality in all contracts.
4/ To provide a framework for the regulation of abuses, ie, response in remedy to fraud and misrepresentation.
The desired outcome of these 4 rules is to create incentives to efficient behaviour. Chicago School people assume
market efficient outcomes are desirable, nearly always using the sale of goods example for illustration.}
Contract law has an obvious relevance to economic analysis because it governs individual exchange
relations. (Both are somewhat depressing: Dave) Kronman and Posner (1979): “The fundamental economic
principle with which we begin is that if voluntary exchanges are permitted - if, in other words, a market is
allowed to operate - resources will gravitate toward their most valuable uses. The principle that voluntary
exchange should be freely permitted in order to maximise value is frequently summarised in the concept (or
slogan) of ‘freedom of contract’.”
So, if the free market is the mechanism best able to maximise economic welfare, then contract, which
facilitates voluntary exchange, is the legal mechanism best suited to achieving that end.
Two economic models have emerged: 1/ neo-classical model (associated with the Chicago school) 2/
transaction-cost model (associated with the Virginia school)
1/ Neo-classical (free market) economics is strongly influenced by the Coase Theorem (See 173)
Economists have found that the cost of an undertaking is inversely related to the time allowed to do it. (It costs
more to have it done quickly. It would also be expensive to make things that do not last long (for the consumer
and society as they will break and they will need to buy another.) Therefore, market model proponents say ‘the
law should be structured to maximise the joint value or minimise the joint costs involved in the interaction of
buyer and seller.’
Contract law does this in 3 ways. They are:
1/ It provides for remedies that will discourage inefficient breaches. According to a USA judge Veljanovski,
“…if such [reneging for gain] were permitted, people would be reluctant to enter into contracts and the process
of economic exchange would be retarded.”
2/ The law reduces the costs of the exchange process and thereby generates efficiency by implying a set of
standard terms into each contract. Polinsky gives an example: [re a contract] “since the parties would have
included contract terms that maximise their joint benefit net of their joint costs - both parties can thereby be
made better off…”
3/ “Contract law provides a framework for the regulation of abuses in the contracting process such as fraud,
misrepresentation and duress that impede or are poorly controlled by market forces, thereby discouraging
careless behaviour.” Kronman and Posner say: “Enforcement [of acceptance of an offer which was
misunderstood] does promote the contractual process by discouraging a costly form of carelessness that would
tend to impede it.”
Posner in Economic Analysis of Law (1977) analyses a market based approach to the principle of contract damages;
“A starting point for analysis is Holmes’ view that it is not the policy of the law to compel adherence to
contracts but only to require each party to choose between performing in accordance with the contract and
compensating the other party for any injury resulting from a failure to perform.” He describes a fictional
contract for the supply of 100,000 widgets. (Which are fictional things which economists talk about in examples.
They appear to have a limited imagination: Dave). “The objective of giving the party to a contract an incentive
to fulfil his promise unless the result would be an inefficient use of resources…can usually be achieved by
allowing the victim of a breach to recover his expected profit on the transaction.” “In some cases a party would
be tempted to breach the contract simply because his profit from breach would exceed his expected profit from
completion on the contract. If his profit from breach would also exceed the expected profit to the other party
from completion of the contract, and if damages are limited to the loss of expected profit, there will be an
incentive to commit a breach.” “…the lost-profit measure is necessary to assure that the only breaches made
are those that promote efficiency. But there is another answer: that on average, though not in every case, the
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lost-profit method will give a better approximation than the reliance (?) measure to the actual social cost of
contract breach…What law and accounting often call profits are frequently not, but other reimbursements of the
costs of capital, of entrepreneurial effort and of other inputs…”
Even if the rules of contract in their present form were not efficient, market based analysis would still have
“much to offer” in suggesting what the rules should be. (= normative approach, ie, what is normal)
Kronman and Posner say, “the relevance to contract law does not depend on proving that the logic of law is
economics. Since efficiency is an important value in our society (we need to decide how important) a critique of
contract law based on efficiency is a potentially powerful tool of legal reform.”
2/ The second school of thought in this area is the “transaction costs”, “neo institutional model which has as a
sub-category, the “relational” model. The transaction cost model begins by highlighting the limitations of the
dominant market model that tends to use the relatively infrequently ‘spot contract’ ie, exchange between passing
strangers, and applies it to the majority of contracts that do not occur in this way; ie, in which parties are likely to
repetitively contract. They say (re the dominant market model) there is an assumption that, “No duties exist
between the parties prior to the contract formation and…the duties of the parties are determined at the
formation stage.” MacNeil says this “could only occur if at all, between total strangers brought together by
chance.”
Rational theorists say most contracts are not like this. This is backed up by empirical research done by
Macaulay: “…the participants never intend or expect to see the whole future of the relation as presented at any
single time, but view the relation as an ongoing integration of behaviour which will grow and vary with events
in a largely unforeseeable future (a marriage: and a family business).”
Goldberg says; “The emphasis instead will be upon establishing rules to govern the relationship.”
Therefore the market model has limits and it may be better to “move beyond it” by “placing heavier emphasis on
the friction and uncertainties associated with contractual activity; by confronting more squarely the difficulty
and comparative cost of planning, adapting and monitoring contractual performance under alternative
governance modes” (the market, law, arbitration, contract negotiation). If contract fails, then maybe non formal
contract scenarios can replace it. The leading exponent of the transaction costs or neo-institutional economics is
Oliver Williamson. Williamson’s ideas are summarised by Frank Stephen in The Economics of the Law (1989):
Williamson’s central focus is on how a transaction or exchange will be mediated, possibly addressing the
question, why are some transactions not handled by a market exchange while others are? He suggests the costs
of using the market [finding contractees, reaching agreement, etc.] are sometimes too high. Williamson looks
at what makes these costs differ between situations, suggesting (i) human characteristics and (ii) environmental
characteristics, are important in determining transaction costs. The first human characteristic is bounded
rationality = human behaviour is “intendedly rational but only limitedly so.” The second human characteristic
is opportunism. Ie Economists usually analyses behaviour on the assumption that humans are self-interested,
assuming that they seek to maximise their utility.”
Opportunism extends this to self seeking with guile. The opportunistic economic agent will use any ploy
available to gain a strategic advantage in bargaining: he uses threats; he holds back information; he will take
advantage of his adversary’s ignorance. Williamson doesn’t suggest that all economic agents behave
opportunistically only that some do, but it is costly to sort out who are who in advance.
The first environmental characteristic is uncertainty or complexity. If all possible outcomes are known with
certainty…it may be easy to draw up a fully comprehensive contingent claims contract, …but the world is
uncertain. Thus the pairing of bounded of bounded rationality with complexity or uncertainty can generate
transaction costs; difficulties in drawing up a contingent claims contract. However, the pairing of bounded
rationality with uncertain or complexity would not be a problem but for opportunism. In the absence of
opportunism all contracts could include a clause by which each party undertook to act in all circumstances in
the best interests of the parties jointly.
The second environmental characteristic of relevance is the small numbers condition. Opportunism is not
really a problem where a transaction (or concern) is of a recurring nature: if a party behaves opportunistically
on one occasion he is unlikely to be awarded the contract on another occasion…Thus the larger number of
potential suppliers the less likely ex ante opportunistic behaviour will be to arise, [though] it may still occur ex
post due to a first mover advantage; that the party successful for the first round may have a strategic advance
in negotiations for subsequent contracts (Marxists might identify this as characteristics of monopoly capitalism.)
Williamson also uses the word ‘atmosphere’ to describe the overall conditions within which the transaction
takes place.
Much of Williamson’s work has focussed on the ‘small numbers condition’ and considers transaction
specific investment: “costs that must be incurred to support the transaction but which cannot be covered if the
transaction falls through (Law exams and HECS fees!?: Dave) Stephen looks at an example of a car
manufacturer considering setting up in car body production, and the negotiations involved. “The law is used
to settle claims not to deter.” Williamson says this situation corresponds to what MacNeil (1978) called
classical contract law that sought to emphasise discreteness and presentation. Formal matters were of principal
importance. The parties have an interest in maintaining the contractual relationship. “Going to law” to resolve
a dispute is unlikely to maintain the contractual relationship. In this circumstance both parties will ex ante have
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an interest in building into their contract a mechanism for resolving disputes. Williamson refers to this mode
of governance as ‘trilateral’.
What is the difference between the [market] approach to contract law…and the neo-institutional approach?
The [market approach] is efficiency based, therefore it sees the law of contract as providing rules and implicit
contract terms that will result in efficient resource allocation. Efficiency is also encouraged by reducing
transaction costs and uncertainty (by supplying standard terms). The neo-institutional approach may be seen
as superior because it gives greater recognition to the temporal nature of contract and the uncertainty that
arises. The neo-institutional approach is also efficiency oriented but it is more concerned with ‘procedural’
efficiency than ‘allocative’ efficiency.
Perhaps the most useful contribution of the transaction approach is its implicit critique of the neo-classical (or
market based) model (for which there is plenty of scope for critique). Chicago school boffins tend to apply the
market based model, shaped from spot contract situations, to apply it “across the board.” (I believe spuriously:
Dave) Williamson gives a critique of this. According to Veljanovski, Williamson’s transaction model needs
development, and MacNeil’s classifactory framework is “too descriptive and complex to be usefully employed
in analysing contract problems.” Nevertheless, both these (1/ transaction and 2/ classifactory) models provide a
corrective force to the neo-classical model. (It needs it: Dave)
(c) THE LAW OF TORT
{According to Coase, we should design law to minimise transaction costs. Where bargaining is impossible, the
law should mimic the operation of the market. In motor accidents there are enormous transaction costs involved
in bargaining, therefore, as it is impossible to bargain, the law should mimic the market, and through Coase
Theorem, arrive at a position that would have occurred if there were no transaction costs. Remember, as
participants are assumed to act rationally, their behaviour will be modified through incentives.
Three costs should be considered: 1/ accident avoidance costs 2/ expected cost of the accident 3/ costs of
administering accident law.
If drivers drove: fast and carelessly; 1 would be low and 2 high therefore unlikely to be efficient
slowly 1 would be very large and 2 low, also inefficient.
Most Chicago school economists believe ‘negligence’ is the most efficient form of liability.
Hand Test: In USA, according to Hand J, re failing to avoid an accident, where the benefits of avoiding it concern
the cost of an accident > the cost of avoiding it. If probability = P, gravity = L, burden of adequate precautions =
B;
If P * L > B = negligence. If P * L < B ≠ negligence.
Wyong S. C. v Shirt with Mason J analogous. ‘Hand test’ does not take into account requirement for
administration.}
Chicago school economists see law’s purpose as primarily to promote efficient resource use (resource in its
widest sense). In torts this translates to providing incentives to encourage the ‘optimum’ degree of deterrence,
rather than just or equitable compensation. Reducing harm to an ‘efficient’ level is paramount, with equitable
distribution of income post incident, as secondary costs’. (If accidents are considered as unforeseeable mishaps,
this reasoning would not extend to this category: Dave.) This can be demonstrated by weighing up the costs of
making cars drive at walking pace to promote safety. The trade-offs could be placed in three categories; 1/ the
expected costs of an accident, 2/ the costs of accident avoidance, 3/ the costs of administering accident
avoidance measures. The economist asks, ‘how is this most likely to be achieved?’
In tort, as relying on bargaining prior to an accident is often unrealistic (maybe not re construction site
accidents), transaction costs are high and market bargaining unreliable, so liability rules may indeed be the most
efficient process.
Accepting the Coase Theorem, the best strategy may be to minimise the effects of transaction costs, allowing
the law to “mimic” the market; for example, the law should assign rights to the party who would purchase them
if the market worked perfectly and transaction costs were zero, allowing those to bear liabilities who could do so
at least cost.
According to the Chicago school, this is best decided by the market, discussed by Polinsky in Economic
Analysis as a Potentially Defective Product; “the market and common law methods…bring about more efficient
results than government regulation.” [This is said to be because] “at a general level the legislative process is said
to exhibit a less pervasive concern with efficiency and a much greater concern with wealth distribution”
The discussion (described above, re probability, gravity and prevention costs) looks at no-fault liability,
though it does not attempt to thoroughly examine the question of negligence vs strict liability schemes. The
thesis of Polinsky is that we can derive efficient legal rules by imagining what rules the parties to an accident
would have been chosen if they could have costlessly got together before the accident.
The Hand formula has a number of limitations. Four are examined (I think more exist.)
1/ The relevant cost of accident avoidance is not the total cost, but is a marginal cost. Posner highlights this
saying; “to be a correct economic test, the Hand Formula must be applied at the margin: the court must examine
the incremental benefit in accident avoidance of an incremental expenditure on safety.”
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2/ The formula only provides incentives to injurers, and fails to adequately take into account accident victim’s
behaviour.
3/ The Hand formula only addresses the achievement of reduced accident levels by encouraging more careful
behaviour, not by reducing the amount or nature of the activity as well.
4/ The costs of administering accident law and/or a system of accident compensation are largely ignored, even
though they may at times be crucial (in the weighing up of cost-benefit, pros and cons.) This is largely ignored
by both Hand and Swan in their piece The Economics of Law: Economic Imperialism in Negligence Law, [and] NoFault Insurance (1984) (discussed below)
Peter Swan attacks proposals for no-fault schemes, such as that forwarded by the New South Wales Law
Reform Commission in the early 1980’s, predicting accidents will rise to socially inefficient levels. He claims
negligence based systems encourage a social gain from the exercise of greater care.
Maureen Brunt argues that the extent to which people are influenced by purely economic factors such as
incentives created by liability rules re accidents had been exaggerated, claiming drivers already have a strong
self-interest in avoiding accidents. She also points out that negligence law is extremely expensive to administer,
and may cause ‘substantial injustice’, both in assigning fault and in compensating victims. She says a no-fault
scheme would avoid the need to prove fault, would largely bypass the courts, would be cheaper to administer
and may better satisfy social goals other than efficiency.
This is an incomplete summary of The Economics of Law: Economic Imperialism in Negligence Law, [and] NoFault Insurance (1984), by Hand and Peter Swan:
The Laws of Negligence and the Question of Fault
“If the two parties to an accident are designated the injurer and victim, the effects of different liability allocation
rules can be described. In the case in which the victim is strictly liable regardless of the behaviour of the injurer,
the potential victim will predicate his level of care on the assumption that the injurer will take the minimum
degree of care so that the level of care taken by potential victims will tend to be excessive relative to the social
optimum. Similarly potential injurers will tend to take too little care relative to the social optimum. The law of
the jungle, “might is right”, would prevail under these conditions… Automobiles would be reluctant to share
roads with semi-trailers and pedestrians would be very wary about stepping onto roadways at all, even at
pedestrian crossings. Naturally no compensation would need to be paid under this system.”
C19 common doctrine, tending towards strict liability of the injurer, permitted excessive carelessness by
potential victims. “Full compensation is payable even when the careful injurer harms the careless victim.”
The most important negligence rule in American courts since 1850 has been the ‘negligence rule with
contributory negligence’, whereby ‘the injurer is liable if he is negligent and the victim is not.’
Justice Learned Hand in the USA Carroll Towing case said: “a party to an accident is negligent if the
probability of the accident or injury occurring times the gravity or severity of the accident or injury exceeds the
burden of adequate precaution.” “…this is an efficient economic criterion for the determination of negligence
because given sufficient information it seeks out the socially optimal degree of care to be taken by each party to
an accident. This is because an individual is only negligent when there is a social gain from the exercise of
greater care.” Analogous cases in Australian law include Paris v Stepney Borough Council, Bolton v Stone and
Daborn v Bath Tramways Motor Co. Ltd.
“Negligence rules are particularly significant when co-ordination is required in the provision of care by both
parties to an accident”, such as those involving animal straying onto roads or, especially with the advent of
faster trains, levels of safety at road-rail crossings.
Arguments in favour of strict liability laws rather than negligence laws, as made by Calabresi, Shavell and
Polinsky, were based on a distinction between general deterrence and specific deterrence…” Without some
form of general deterrence brought about by (say) strict liability by injurers, there may still be too many large
powerful vehicles driven too many kilometres so long as some accidents still occur when the due level of care is
achieved.”
“Strict liability of the injurer will thus help to bring about a general deterrence which will reduce accidents
so long as the behaviour of the victims can be taken as given.” Most supporters of the ‘no-fault’ scheme see
merit in the general deterrence argument.”
Strict liability however may lead to increased activity and less care by victims and so an excessive number of
accidents. Motor cycles are a good example. “Many accidents involving motor cycles are the “fault” of
negligent driving by other road users, yet strict liability of injurers would encourage a shift from driving
relatively safe automobiles to less safe motor cycles with a consequent rise in motor cycle accidents.
“No-Fault” Accident Insurance
In recent years in Australia and overseas there has been a move away from the fault system towards the ‘nofault’ system of ‘first party’ rather than ‘third party’ insurance. The scheme originates with the scheme
proposed by Keeton and O’Connell in 1965, whereby the right to sue for negligence is either abolished or
limited to cases of major loss. Victoria and Tasmania adopted ‘no-fault’ schemes in 1974, though the right to
sue has not been abolished. (The NSW legislation has changed since 1984 so I have omitted a reference to this:
Dave)
No-Fault and the Question of Deterrence
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Risk spreading may involve shifting the liability for negligence from the individual to the insurance company.
No penalties are imposed on negligent injurers under existing third party insurance in Australia. (Though
statute or criminal law may impose some.)
“Since most road users cannot be sure in advance whether they will be an injurer or a victim in an accident,
some scope at least is left for negligence laws to affect the degree of care taken by road users.” Compensation
for all, regardless of fault combined with the absence of co-insurance and no-claim bonuses would remove the
remaining incentives for specific deterrence by encouraging generalised moral hazard problems, thus more
careless and less attentive behaviour by road users who are guaranteed compensation even if blind drunk,
falling asleep at the wheel, disobeying rules or other negligent behaviour. (Note how factors other than
economic incentives are either downplayed or dismissed: Dave)
The New South Wales Law Reform Commission rejected this view (the pure economic rationalist) saying;
“…the fear of injury to oneself and to one’s passengers are more likely to be effective deterrents to unsafe
conduct than the possibility of being the defendant in a common law action.”
“It is surprising the Commission should believe that with potentially tens of thousands if not close to a
million dollars are at stake in some cases, that negligence laws have no deterrent effect.” (I didn’t think they
said negligence laws have no effect, just a greater effect: Dave. See previous paragraph.)
“Of course I do not wish to deny that the “risk of prosecution, conviction and disqualification” and the fear
of personal injury will have some deterrent effect. My concern is with the effect of the “incremental” optimal
deterrence provided by the fault laws and the effects of its removal on deaths and injuries on the road.” (This
seems to contradict the previous strong statement.)
Swan describes a 1982 study by Landes that looked at fatal motor accidents in the USA, finding “a
prohibition on taking legal action for non-economic loss unless medical expenses exceed $500 implies a
statistically significant increase in fatal accidents of 4%…a medical threshold of $1500…more than 10%…”
Nevertheless, Swan qualifies the value of the study re methodology.
Conclusions
“…relatively rigorous and quantitative economics is in the process of an imperialist and territorial invasion of
legal scholarship, and law and the law reform process. … Law reform is too important to be left to the lawyers!”
Maureen Brunt in Comment: The Economics of Law (1984) discusses no-fault schemes:
No-Fault Traffic Accident Schemes
Quoting Swan, Brunt says “I cannot agree with his conclusion that a common law fault system is the one to be
preferred”, as
1/ “I do not believe that there is the requisite impact of negligence law upon behaviour… In Atiyah’s words…
Fear of injury to oneself must surely always be the most potent deterrent to dangerous driving.” Brunt
continues; “Most traffic accidents, in short, are the outcome of random hazards and a failure of imagination.”
2/ “…there is considerable doubt as to whether the bases for differential premiums - such as accident
involvement generally or population characteristics - can operate as an effective ex ante decision.”
3/ Actions for negligence are initiated by only a fraction of the victims of traffic accidents…by reason of
ignorance of the law, lack of resources to fund the action and the impact of the cost rules of the court system.
4/ The costs of the tort law fault system are very substantial…”
5/ “…an essential element in the cost-benefit calculus is accounting for the use of alternative techniques to
achieve one’s objective…”
Brunt suggests two alternatives to the tort law system; A/ greater reliance upon criminal sanctions and
Calabresi’s suggestion of non-insurable tort penalties. B/ a system of general deterrence, through a no-fault
system. Brunt suggests B/ would be preferable.
“On reflection, the choice between fault and no-fault systems is really a choice between more and less efficient
forms of general deterrence…While the fault system may be defended as a technique for achieving general
deterrence, it is an expensive technique in that it requires case by case determination. … Thus a no-fault system,
if funded by taxes on motoring activity, offers a more efficient way of utilising, in effect, those insurance
dollars…”
Swan’s critique appears to question the entire Chicago School application of Coase (Especially its use as an
absolute predictor of behaviour.) Other doubt that mimicking the market is necessarily the best way to achieve
this result, seeing the relevant comparison is not between the ideal market and the imperfect real world, but
between alternative feasible, imperfect and costly alternatives (= the approach Coase took), with the examination
of whether governments could improve (assist) the outcome provided by the market, rather than mimicking the
market. (Understand? What do you think?: Dave)
Guido Calabresi provides a sophisticated alternative economic analysis of tort law, which he has
synthesised into five propositions:
1/ “that economic efficiency standing alone would dictate that set of entitlements which favours
knowledgeable choices between social benefits and the social costs of obtaining them, and between social costs
and the social costs of avoiding them.”
2/ “this implies, in the absence of certainty as to whether a benefit is worth its costs to society, that the cost
should be put on the party or activity best located to make such a cost-benefit analysis.”
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3/ “in particular contexts like accidents or pollution this suggests putting costs on the party or activity which
can most cheaply avoid them.”
4/ “in the absence of certainty as to who that party or activity is, the costs should be put on the party or activity
which can with the lowest transaction costs act in the market to correct entitlements by inducing the party who
can avoid social costs most cheaply to do so.”
5/ “…a decision will have to be made on whether market transactions or collective fiat is most likely to bring us
closer to the Pareto optimal result the “perfect” market would reach.”
Calabresi’s thesis is that, “The costs of accidents can be minimised if the party which could avoid the accident at
least cost is made liable for the loss.” Ie; accident costs should be allocated to the party who has a comparative
advantage in reducing risk or in achieving safety. Calabresi’s theory has most application where the ‘least cost
avoider’ can be identified, such as employer-employee scenarios. Given that transaction costs are never zero,
“The question of whether a given law is worth its costs (in terms of better resource allocation), is rarely
susceptible of empirical proof.” Calabresi says (in contrast to Chicago School doctrine) “it is precisely the
province of good government to make guesses as to what laws are likely to be worth their costs [and], …there is
no reason to assume that in the absence of conclusive information no government action is better than some
action.” This argument is expanded in an essay by Guido Calabresi called Transaction Costs, Resource Allocation
and Liability Rules - A Comment (1968);
In considering some of the assumptions made by Coase in his article The Problem of Social Cost … “we can state as
an axiom (= a recognised truth) the proposition that all externalities can be internalised and all misallocations,
even those created by legal structures, can be remedied by the market, except to the extent that transactions cost
money or the structure itself creates some impediments to bargaining. …lawyers who use economics have in
virtually every case been hopelessly confused on the subject.”
“The primary implication is that problems of misallocation of resources and externalities are not theoretical
but empirical ones.” “…is this most accomplished most accurately and most cheaply by structural rules (like
anti-trust laws), by liability rule, by taxation and government spending, by letting the market have free play or
by some combination of these? The question depends in large part on the relative cost of reaching the correct
result by each of thee means…and the relative chances of reaching a widely wrong result depending on the
method used.”
This is premised on two observations 1/ transaction costs do cost money (never = zero) and 2/ “The
unreachable goal of “that point which would be reached if transactions were costless” …are not usually subject
to precise definition. They are, in fact, largely defined by guesses.” Calabresi says these indeterminate areas
are in precisely the realm of good government to be able to address.” “There is no reason to assume that in the
absence of conclusive information no government action is better than some action.” This is especially true if
guesses made take into account two factors; A/ Action is justified if correcting it will be easier than remedying
an unamended situation. B/ Action in an uncertain case is more justifiable if it serves other goals such as
income distribution. (Remember Kaldor-Hicks, 166, which says a situation is Kaldor-Hicks efficient if it enables
but doesn’t require income distribution.)
Calabresi goes onto to consider the implications of these ideas in three areas of public policy: 1/ monopoly
2/ highways or parks 3/ motor vehicle accidents, making distinctions between the short and long run effect.
(This is worth reading in full to comprehend it properly: Dave)
Calabresi concludes by saying Coase’s analysis suggests that many government actions are justified. (Even
though Chicago School scholars tend to argue the opposite. This is explained by the potential gulf between
jumping from a model based on assumptions to invariably more complex real world scenarios: Dave)
In summary, Chicago school ideology applied to unintentional torts presents more difficulties than its
proponents have acknowledged, based partly in their highly idealised view of tort (amongst many other areas of
social behaviour), based on assumptions as elaborated during this chapter; ie, low administration costs, rational
response to incentives, etc.
However, “The picture is considerably more confused and complex.” (We live in the world and the world is
thus: Dave.) In the USA in 1985, $16-19 billion was spent in transaction costs re tort law to provide $15 billion in
net compensation to victims. (The Salvation Army probably didn’t do their legal work!: Dave) Calabresi’s
response is that the most efficient response is often to not mimic the market (but assist it in some areas) then
Coase, etc. becomes problematic. Calabresi (like all good academics?) suggests more empirical research is
needed. (Do you agree? Maybe more recognition of the irrationality of some areas of human behaviour may
assist the inquiry by leading us down a more ‘realistic’ pathway?: Dave)
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CHAPTER 8: PUBLIC CHOICE THEORY
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(a) INTRODUCTION
A view of the ‘law as common law centred’ is essentially inaccurate. Prof. Patrick McAuslan said: “…we cannot
hope to understand the real world of public law without at the same time understanding something of the real
world of politics, government and how decisions are made, etc.” Public choice theory is one attempt to explain
this.
Public Choice Theory (PCT: also called ‘the economic theory of regulation’) is the application of economic
analysis to political decision making (= the non-market arena) and is the result of an attempt to understand the
motivations and choices of those in political roles such as voters, politicians, bureaucrats, planners and party
leaders. It looks at the cost-benefit of policy outcomes.
It applies economic interrogative tools and methods to government and collective political action, based on
the classical liberal ideal that man is “an egoistic, rational, utility maximiser. Therefore (with its inherent
scepticism) people are believed to act in a market like fashion in political decision making. In both scenarios
(politics and the market) people are assumed to be rationally motivated to trade in order to maximise the utility.
PCT has strong links with liberalism and neo-classical economics.
PCT is a response to the previously dominant welfare economics theory of the ‘public interest’ model,
authored by Arthur Pigou. It suggested that the government regulates in the public interest to rectify “market
failure.” (Market failure is a term that describes the proposition that the market alone cannot, or is extremely
unlikely to, service the community in the way it desires.)
Shughart says; “Left alone, private markets would produce too much environmental pollution and not
enough education.” Government’s role is then in part, to intervene, in ‘the public’s interest’ (ie social security,
Austudy, flood relief, etc.)
PCT reacts to this by claiming ‘government failure’ may be a bigger problem than ‘market failure’, which
they suggest may be described as ‘market imperfections.’ Shughart and others, believing that the ‘public interest
model’ did not satisfactorily explain the action of governments or interest groups. Though sociologists and
political scientists offered analyses and potential reasons for these, as these were seen by economists as not
sufficiently scientific, PCT evolved.
PCT has two forms; 1/ one that offers an understanding of “the complex institutional interactions that go on
in the political sector, attempting to explain and predict outcomes, which at a normative level, says what should
happen, suggesting a range of constitutional and deregulatory mechanisms to minimise “inefficient” state
intervention. 2/ The Chicago school which is very sceptical about governments.
(b) POSITIVE APPROACHES TO PUBLIC CHOICE
Conventional PCT, in particular the Virginia school version, seeks to develop a “theory of political institutions”
that incorporates theories of voting, electoral and party competition and bureaucracies. It is postulated that
legislators, voters, leaders and members of political parties and bureaucrats act primarily out of self interest. It is
argued various self-interested strategies will be adopted by participants in the political process to achieve their
own ends, with elected representatives seeking votes and legislators engaging in log rolling; trading votes on one
issue for another. Individuals affected by government action (and with sufficient self interest) will engage in
“rent seeking”, “Devot[ing] scarce resources to the pursuit of a degree of monopoly rights granted by
governments.” (Ie Business leaders will spend time lobbying for tariffs rather than producing more or the Forest
Industry Association may spend money on TV advertising and political lobbying with more vigour than it
applies to the issues of how to preserve old growth forests: Dave)
Bureaucratic behaviour is also viewed with scepticism. William Niskanen, responsible for the most
developed model of bureaucratic behaviour within a public choice perspective, has argued that the goal of
bureaucratic decision makers is to maximise “satisfaction”, which includes variables such as salary, job security,
office space, working conditions, power, patronage and public recognition. Niskanen argues bureaucracies can
manipulate the policy debate through its information advantage over the legislature, thereby distorting
legislation in favour of its own interests, and that their need to maximise budgets (which ‘satisfaction’ requires)
will lead bureaucrats to engage in excessive (sub-optimal) regulation. Buchanan says: “…the bureaucracy can
manipulate the agenda for legislative action for the purpose of securing outcomes favourable to its own
interests.”
A crucial question for Public Choice theorists is ‘how legislation emerges and whose interest it reflects.’
Mancur Olson in The Logic of Collective Action demonstrated that “unless the number of individuals in a groups
is quite small, or unless there is coercion or some other special device to make individuals act in their common or
group interest, rational self-interested individuals will not act to achieve their common or group interests. (For
those keen to follow this up, a good critique of Olson is provided by Claus Offe in Disorganised Capitalism, Ch 7:
Two Logics of Collective Action, 182.)
Kahn has summarised Olson’s argument saying: “The success of a group in outbidding competing interest
groups and achieving legislative success depends largely on the total level of aggregated demand in the group
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for a particular legislative result and on the ability of the group to manifest that demand in an effective bribe to
the legislator.” “The larger the group, the less likely it is that the individual will be willing to pay for the group’s
consumption, and the greater is the individual’s incentive to try to pass the cost to other group members.”
“Larger groups, particularly those as large as the ‘general public’, will be most subject to these free rider
problems. However since no member of the group may benefit sufficiently to bear the costs of learning the
politics of a particular issue, even that form of political action may be problematic.” “Small groups may be able
to outbid larger groups even when their aggregate benefit is less than that of the larger group. Hence, actual
legislative outcomes may predictably differ from the optimal.”
Built on Olson’s logic, James Q. Wilson (Children: Remember what Grandma said: Never trust anyone who
quotes their middle initial!) has developed a typology of regulatory behaviour in different interest groups,
predicting (i) if benefits are dispersed and costs concentrated, regulation is likely to be blocked, (ii) if benefits go
to a small group and benefits are diffused, regulators tend to serve the interests of the smaller group, (iii) if costs
are concentrated between competing groups, the regulator will act as arbitrator.
While Stigler, Posner and Peltzman et al (Chicago School) explain regulation largely in terms of supply and
demand for political outcomes, [in contrast] the Virginia School may “have a richer insight into the workings of
democratic political markets”. Stigler suggests demand will be stronger when the beneficiaries are relatively
few, expect to make large gains, have similar interests and can exclude others from sharing those gains, and
suggests producers [rather than consumers] are more likely to fit these requirements. (Don’t go on a picnic with
this guy unless there’s plenty of food; Dave) Stigler’s ‘private interest theory’ suggests industry uses its
lobbying advantage (they have more suits in the cupboard) “to secure for itself such regulatory favours as direct
cash subsidies, control over the entry of new rivals, restrictions on the outputs and prices of complementary and
substitute goods, and the legitimisation of price fixing schemes.” Why do governments accept these demands by
industry? Sam Peltzman argues politicians desire to maximise electoral majorities, so by satiating powerful
groups (business) they can obtain more votes …[as] “the politicians’ goal is to maximise net political support.”
(See Schumpeter’s definition of democracy in notes re 308)
So for the Chicago School, legal rules are the outcome of political struggle among special interest groups to
redistribute wealth in their favour (usually in terms of favours) and on the supply side they reflect the effort of
politicians to maximise the political support they receive from interest groups’ constituencies, usually in the
“form of campaign contributions, votes, implicit promises of future favours and sometimes outright bribes.”;
Landes and Posner.)
Using both Chicago and Virginia school material, Jonathan Macey provides an ‘admirable summary’ of how
Public Choice Theory has been applied in the production of laws by legislatures and regulatory agencies, in
Public Choice: The Theory of the Firm and the Theory of Market Exchange. (1988)
“[T]he economic theory of legislation (PCT) “asserts that legislation is a good demanded and supplied much as
other goods, (and) all citizens are both demanders and suppliers of laws, but certain citizens share legislative
goals within highly organised interest groups which provide them with an advantage over other citizens in the
procurement of favourable legal rules.” “…legislatures use ‘taxes, subsidies, regulations and other political
instruments…to raise the welfare of more influential pressure groups. Groups compete within the context of
rules that translate expenditures for political pressure into political influence and access to political resources.”
“The model (PCT) holds that politicians maximise the aggregate political support they receive from all
interest groups…Competition among rival pressure groups…leads to legislative compromise, not because
compromise is in the public interest, but because it is the most effective strategy politicians have for maximising
political support…[because]…politicians…will attempt to customise law to maximise the total support they
receive by alienating as few groups as possible.”
“The major portion of government activity is devoted to the transfer of resources among citizens. The
political support maximising regulator or legislator serves both as broker and as entrepreneur. As a broker he
gains political support by transferring resources among the various groups in society. As an entrepreneur he
seeks to create groups that he can benefit, in order to receive political support from them…[This] implied not
only that certain sorts of groups are more effective in obtaining desirable legislation, but also that certain sorts
of issues will be most attractive to entrepreneurial politicians.”
A: Groups and Issues Likely to Drive Legislation in the Public Choice Model.(PCM)
Information and organisation costs are two problems facing individuals seeking political influence.
Information costs include ascertaining the effects of an issue on his [/her] individual welfare. Identification
costs are the costs of identifying other similarly situated individuals who will join him [/her] in the quest for
legislation. Individuals have very little incentive to inform themselves about the relevant issues in apolitical
campaign, much less to inform themselves about the process… because, “[t]he probability that an individual’s
vote will be decisive in… [the legislative process] is effectively zero (A 1985 Victorian election saw the
incredible situation whereby the balance of power in the Upper House was to be decided by a vote that was
split evenly in the seat of Nunawading. Ie one vote determined whether the Labor party acquired control of
both Houses of Parliament.) [Therefore] … “for most people it simply does not pay to become sufficiently
informed on most issues to have an opinion, much less to attempt to affect the outcome.” Where a piece of
legislation will cost taxpayer $50, and the net cost of obtaining information about the effects of the
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legislation…are greater than $50, no rational taxpayer will obtain the information necessary to begin to affect
legislative outcomes. (If money is the only measuring rod used in the rational analysis! = a dubious
assumption. How do you think campaigning for wilderness areas might be explained by this theory?: Dave)
Individuals wanting to affect the process will find it advantageous to organise into groups, and groups
already organised such as trade unions, trade associations and corporations already formed will have an
advantage. “Free rider problems inhibit the efficacy of interest groups in achieving their ends…as those who
stand to benefit in a particular law is enacted do not suffer a diminution in benefits if they fail to lobby for its
enactment.”
“These insights predict that politically successful groups will tend to be small, relative to the size of the
groups taxed to pay their subsidies. An example, where agriculture is a small component of a country’s
economy as in Japan, Israel and the U.S., it is heavily subsidised. But where it is a large component…as in
Poland, China, Thailand or Nigeria it is heavily taxed.”
“…in the PCM, the ideological underpinnings of the government whose actions are being studied play no
role in determining the substantive legislative outcomes generated.” (Do you think an environment lobby in
Tasmania would have the same success with a conservative Liberal government as they would with Green
Independents?) “…there is a market for laws. Taking interest groups’ preferences as fixed, interest groups and
politicians will bargain to a “Coasean world. Ie …where the only factor…is the level of transaction costs faced
by parties” that are fixed by the constitutional structure. “Thus, a country’s constitutional framework, not its
ideology, is the most important exogenous variable in determining the level of interest group outcomes…”
Concerning public regarding [for the public good] laws, the existence of anti pollution laws, which the coexisting minimal administration of their statutes, fits in with the PCM, as laws “cost voters little to “ask” for,
but is susceptible to the influence of other pressure groups in its implementation. Lee says: “Well organised
groups often will “get on board” and “support” legislation that is inimical (adverse in tendency of effect) to
their economic interests. But…will be unrelenting in their efforts to influence the day-to-day details of the
legislation’s implementation.”
“The proposition that interest groups express themselves through seemingly public-regarding legislation
also flows from the fact that legislation that appears to benefit voters can be enacted at a lower cost…”
B. The Role of Congressmen in the Public Choice Model
Some PCM exponents reduce the politician’s role to that of a passive broker in the political process, merely
translating the aggregated revealed preferences of previously organised into groups into law by pairing “those
who want a law or a transfer the most [as expressed by willingness to pay] with those who object the least.”
This article suggests the legislator [is a political entrepreneur who actively works to gain political support by
overcoming the information and organisation costs that conspire against them, …[suggesting] politicians would
discover new issues…and organise their own interest groups.”
A final manifestation is reflected in the rent-extraction model of political behaviour of Fred McChesney …
in which the politician can extract the specific and expropriable capital that is an inevitable by-product of the
economic activities of firms and individuals…[by] obtain[ing] political support…by threatening to
regulate…unless side payments are made in exchange for regulatory forbearance.”
Public Choice Theorists conclude that representative democracy gives disproportionate emphasis to the interests
of small groups who have most to gain from the legislation. This is consistent with empirical evidence which
suggests many regulatory programs have “large social costs, small public benefits and (often substantial
transfers from the public to some discrete group, typically the industry ostensibly controlled by the regulatory
program”. (Kahn). (The consumption tax?: Dave) From this perspective, government regulation provides
means by which special interests profit at public expense, neither reflecting the median voter’s interest nor
achieve liberty, efficiency nor justice.
(c) NORMATIVE APPROACHES TO PUBLIC CHOICE
Public choice theorists argue appropriate political institutions can and should (Do you remember the use of the
word normative as an interpretation of what is ‘normal’ and what ‘should be’?) be designed to enhance
individual liberty and freedom, to constrain the scope of government spending (and so reduce taxation) and to
build barricades against affirmative government action. The Chicago school would favour ‘rolling back the
state’ (Ala current Aust. Liberal party), while the Virginia school would also support deregulatory processes,
though would advocate constitutional reform and limiting government activity through precise constitutional
specifications. (Ala Federal ALP Right Wing?). Geoffrey Brennan and James Buchanan have strongly argued
the virtue of constitutional rules to protect individuals from intrusion on their rights by special interest groups.
(The USA Bill of Rights tends to support a climate of inalienable individual rights in many citizens’ minds. It is a
recurring theme in the potential question of government versus individual or social versus individual rights. Ie,
the ‘right’ to bear arms. (If it truly is a dichotomy: Dave)) Buchanan says: “basic political institutions must be
re-examined and rebuilt so as to keep governments as well as citizens within limits of tolerance.”
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Rowley in an essay called Public Choice and the Economic Analysis of Law says (paraphrased):
1/ “First…special interest groups [may]…also control any constitutional convention…especially where multiple
issues are under consideration…
2/ Second…those called upon to draft Constitutional clauses [may]…seize the opportunity so provided to
incorporate loopholes favourable to their respective constituencies objectives.”
3/ Third, unforeseen escape routes [might] offer to various actors in the political marketplace opportunities to
evade the spirit, if not the letter, of the Constitution.
4/ Fourth, constitutional rules are vulnerable to activist judicial interpretation, most especially by the Supreme
Court. In reality, political penetration of the Bench is a long-seated aspect of the U.S. separation of powers…”
(Remember the 1991 fiasco re appointment of a conservative judge to replace a retiring liberal judge?: Dave)
Public choice arguments favouring deregulation were embraced enthusiastically by Reagan and Thatcher
administrations during the 1980’s, and less so by the Hawke administration, possibly being more influential than
the ‘New Right’ in this respect. The spate of financial disasters, and the public’s increasing awareness of the
truth re some of the ‘deregulation fiascos’ (my words: Dave) may see the pendulum swing back. (Hopefully
before clean air becomes ‘privatised’: Dave)
(d) ASSESSING THE EVIDENCE
Much of the early work within Public Choice was not satisfactorily empirically testable, with current Chicago
school work still being ambiguous. Posner confirms this saying, “…the economic theory of regulation…is so
spongy that virtually any observations can be reconciled with it.” At its best it may be a theory of government
regulation, not the (definitive) theory of government regulation. Posner in Theories of Economic Regulation (1974)
said, “…we are at a loss to say whether observing a geographically concentrated - or dispersed - group obtaining
- or failing to obtain - regulation confirms or refutes the economic theory of regulation. And this illustrates the
essential deficiency of the economic theory of regulation in its present form. At best it is a list of criteria relevant
to predicting whether an industry will obtain favourable legislation. It is not a coherent theory yielding
unambiguous and therefore testable hypothesis.”
Australian empirical research has focused on Stigler’s producer-protection version. Pincer and Wither’s
general survey suggests there is some evidence supporting it, saying: On first examination it appears that
producers in all major sectors have obtained favourable legislation.” Nevertheless, Pincer and Wither, claiming
a complete testable “private interest” theory has not yet been formulated, point out that there is considerable
evidence that does not fit with the theory.
Elsewhere, the empirical evidence re Chicago and Virginia school versions of PCT is equally inconclusive.
Some critics of PCT say it is inconsistent with the available data, saying that the economic view of man as an
egoistic, rational, utility maximiser is a caricature that distorts understanding. Kelman in On Democracy Bashing
(1984) says: “…people are rarely unambivalently unconcerned with their financial positions, and profoundly
false, to the extent to the extent it purports to completely capture behavioural motivation.” Fels criticises
Stigler’s view on the factors relevant to the demand for, and supply of regulation as inadequate and
misconceived. Fels in The Political Economy of Regulation says: “The industry demand for the establishment and,
more particularly, the continuation of regulation, is influenced not only by profit-maximisation but also, very
importantly, by a quest for economic security or protection against the changes which an unregulated market
may impose.”
Amongst other criticisms re PCT, one is the supposition that the free market is an accepted good, and
regulation must be justified. Edward Rubin in Deregulation, Reregulation and the Myth of the Market says the “free
market constitutes; “…a master premise, an independent, unarticulated concept of a good society that silently
controls the views of its proponents about both individuals and political organisations.”
PCT proponents are also highly critical of democratic institutions and of what they call “majoritorianist
democracy”. (This is a strong theme in fascist movements, which may be one of the motivations for allegations
of ‘economic fascism’ made about the Libertarian Right) Kelman says: “…The “market” in their view
transforms private greed into social progress and harmony, mutual benefit and positive sum games; democracy
transforms (indistinguishable) private greed into stagnation, wasteful rent-seeking and negative sum games…”
In summary, PCT is criticised as being “grossly incomplete in ignoring the complexity of actual functioning
institutions”, and as such is charged with being best seen as ideologically distorted depictions of reality.
(e) CONCLUSION
Public Choice Theory has become a leading approach to understanding political behaviour and the legislative
process, as well as being very influential in policy making in the USA, Oz and the UK, being responsible for the
deregulation of a number of major industries (It sounds a bit like a virus to me: Dave). It plausibility makes it
attractive, though its shortcomings include limitations imposed by its assumptions and ideological
underpinnings. LIC’s authors say its main failing is that its proponents have not acknowledged its limitations,
tending to portray its observations as conclusive (at the fire sale when they are flogging off the farm). “Public
choice, like its parent discipline, economics, does itself a disservice by overstating its case. Both tend to suggest
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behaviour in the public sphere invariably works in a perverse manner. PCT is better at explaining industry
specific regulation than social regulation. The black and white notions of ‘market good-government bad’ or vice
versa are too crude. PCT may provide some qualified insights to the middle ground, where small groups as
beneficiaries for lobbying produce a more intricate scenario. Patrick McAuslan says; “It would be as foolish of
us to ignore public choice, as it would be to accept it uncritically.”
CHAPTER 9: THE EFFICIENCY OF COMMON LAW?
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INTRODUCTION
This chapter considers the claim that ‘the common law does and should address economic efficiency’ = the best
known and most controversial theme in the economic analysis of law, as associated with Chicago School
characters such as Posner. Chapter 6 also looks at link between mainstream economic and liberalism, with
reference to claims that the law is objective and scientific, arguing (correctly) that economics is an ideology, not a
science (which may be an ideology (See Gamble notes.)) Chapter 9 concludes by looking at strengths and
weaknesses of economic analysis.
{3 points: 1/ Chicago school (Posner) say the common law should seek to achieve maximum economic efficiency.
2/ Though the efficiency claim is associated with Posner, the majority of lawyer economist probably agree with
it (to varying degrees). 3/ If the efficiency claim is weak then specific Chicago school claims should be
questioned. Three main forms of law and economics descriptions: 1/ Predicative (= predict) 2/ Descriptive (=
describe) 3/ Normative (= says what should be; ie, normal.)}
{Posner says common law rules are efficient by allocating rights in ways that are wealth maximising overall.
(Remember: increasing the size of the pie is given greater priority than how it is divided.) Argument =
Inefficient rules generate litigation, and if the rules are not satisfactory, there is the impetus ‘over time’ to shape
the law ‘as if by an invisible hand’; ie, Repeat Players will keep challenging the system until it is overturned. So,
where transaction costs are low, the common law provides incentives to challenge bad transactions. Therefore
the common law reduces the friction to bargaining (relevant to contracts) as the law mimics (assists) the market.
Another eg. = litigants who benefit from an efficient rule will invest more in obtaining decisions than those who
don’t (access to justice is not referred to as far as I can see). Therefore efficiency comes through inequality (=
Chicago school ideology that helps to justify inequality as a functional part of (a capitalist) society.)
Posner et al say these principles could extend to all areas of common law and gives arguments why judges could
decide things on economic grounds 1/ because intuition and common sense may be the same as economic 2/
efficiency is an important social value, particularly important in C19 when utilitarianism (See 30) was extremely
important. 3/ costs are not well placed to distribute wealth, as this is supposedly the job of legislation (which
the right and big business usually oppose anyway), therefore concentrate on efficiency. 4/ because judges do
not use the language of economics, it doesn’t mean they are not influenced by it.
Counter arguments to Posner: 1/ Posner’s thesis is not proven in any acceptable way. 2/ Efficiency claims
were more plausible in C19 than today.
Posner’s efficiency theory does provide information on some areas of law ie contracts (= market activity) vs
torts (non-market activity) Posner says theory is workable as the ultimate economic goal is efficiency, and even
losers often get ex ante compensation. (Crumbs from his Chicken Kiev to feed the masses?: Dave)
Reuben’s theory may be more persuasive = If you do have RP’s, they are more likely to wear down the rulers.
2/ Those who will litigate most are those most affected by the occurrence, (but qualify this as small concentrated
interest groups are most likely to organise).
Dworkin et al disagree with Posner, pointing out that legally imposed decisions are not necessarily justified.
Posner’s argument boils down to, ‘why not give people what they want and that can be measured in terms of
wealth’. He equates what people want with what they will pay, and by treating unequals unequally it allows the
strong to dominate the weak.}
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(a) THE DESCRIPTIVE CLAIM
Law and economics are an heir to legal realism, with both challenging the view that the law is a set of wellarticulated rules conforming to some internal logic. It rejects legal formalism, (See 2 and 50), accepting the
influence of the values of decision makers on outcomes. The question arises, [which] values influence judicial
decision making and what values should influence it? Posner has argued for two ‘simple’ hypotheses: at a
descriptive level, 1/ the common law is efficient, and at a normative level; 2/ cases should be decided using
efficiency considerations. These two sections [9(a) and (b)] consider these approaches in turn.
Three explanations are given for why the common law may tend towards (greater) efficiency.
1/ Inefficient rules may generate litigation, which eventually induces changes of the law… ‘as is by an invisible
hand’.
2/ Litigants who would benefit from a more efficient rule are likely to invest more in the litigation than those
who favour an inefficient rule. (Do you agree this would be true?)
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Together, these two explanations are often referred to as “the economic theory of the evolution of the common
law.” The law is seen as primarily a process tending towards efficiency, with more efficient rules replacing less
efficient rules and potentially persisting longer.
One proponent of ‘evolutionary’ theory is Paul H. Rubin, who says in an article called Why is the Common Law
Efficient?: “In short, the efficient rule situation…is due to an evolutionary mechanism whose direction proceeds
from the utility maximising decisions of disputants rate than from the wisdom of judges.” [As] “If rules are
inefficient, parties will use the courts until the rules are changed: conversely, if rules are efficient, the courts will
not be used and the efficient rule will remain in force.”
3/ Judges actively seek to promote efficient outcomes. This argument is closely associated with Posner who
says: The common law method is to allocate responsibilities between people engaged in interacting activities in
such a way as to maximise the joint value, or, what amounts to the same thing, minimise the joint cost of the
activities.”
Chapter 7 explored the claim that where transaction costs are low, common law promotes efficiency by
fostering market transaction through contract. If transaction costs are high enough to discourage private
contract, common law will ‘generate an outcome which “brings about an allocation of resources that stimulates
that which the free market would have brought about had it been operable.” Posner says, “…the common law
establishes property rights, regulates their exchange, and protects them against unreasonable interference - all to
the end of facilitating the operation of the free market, and where the free market is unworkable of simulating its
results.”
Posner uses the 1870 USA case of Eckert v Long Island Railroad to show that where transaction costs are high
and market transactions are not feasible, common law doctrine “mimics the market” to achieve what the free
market would otherwise have sought in the absence of transaction costs. Describing an incident in which a man
was struck and killed by a train whilst successfully rescuing a young child, Posner says: “If…the probability that
the child would be killed if the rescue was not attempted was greater than the probability that Eckert (the
rescuer) would get himself killed saving the child, and if the child’s life was at least as valuable as Eckert’s life,
then the expected benefit of the rescue to the railroad in reducing as expected liability cost to the child’s parents
was greater than the expected cost of rescue. In that event, but for prohibitive transaction costs, the railroad
would have hired Eckert to attempt the rescue, so it should be required to compensate him ex post.”
Posner also discusses the differing liability rules in the USA re cattle wandering outside an owner’s
property. Posner extends his claims about the economic efficiency of the common law to areas including “the
law of property, of contracts…criminal and family law” amongst others. He even accounts for issues like “rape,
murder and theft” and economic terms, claiming these are banned not so much as for being moral wrongs, but
because they, as coerced transactions without the presence of proper bargaining, are economically inefficient.
Posner claims three factors lead to the efficiency of judge-made law:
1/ Wealth maximisation (which LIC’s authors say “which as we will see, is what Posner means by efficiency”)
is closely connected with utilitarianism. (See 30)
2/ Judges are not well placed to engage in wealth distribution and are therefore more likely to address
achievable goals.
3/ The process of common law adjudication leads to the survival of other rules.
Elaborating these three factors, Posner in The Economic Analysis of Law makes five points:
1/ Many common law doctrines are economically sensible but not economically subtle…Their articulation in
economic terms is beyond the capacity of most judges and lawyers but their intuition is not.
2/ What Adam Smith referred to as a nation’s wealth (See 35), what this book refers to as efficiency, and what a
layman might call the size of the pie, has always been an important social value.
3/ “The competing goals have mainly to do with ideas about the just distribution of income and wealth - ideas
around which no consensus has yet formed.” … “Efficiency is highly controversial when viewed as the only
value a society’s public institutions should pursue, but it is not very controversial (LIC: ‘outside academic
circles’) when viewed as just one value.” As common law judges do not have much power to alter the slices of
the pie, they may as well concentrate on increasing its size.
4/ Many traditional legal scholars believe judges don’t have any truck with social goals (especially formalists?:
Dave)
5/ That many judges and lawyers are not self consciously economic in their approach to law is a trivial
objection.
LIC’s authors say ‘not everyone found these arguments persuasive, and the ‘economic efficiency of common
law’ thesis, especially Posner’s version, which is not backed up by direct evidence re judicial decisions, has been
widely criticised. (What do you think?)
Some of the critics identify shortcomings in the thesis:
1/ Stephen in The Economics of Law says; “…The proper positive scientific method requires the scientist to
attempt to refute his theory,” While LIC’s authors claim “Posner and his colleagues do their utmost to verify
their theory…[and], rather than letting their theories be informed by the world, they try to make their
perceptions of the world fit their theories.” (I agree. These theories, as often applied to Third World countries
in the guise of ‘adjustment programs’ can in my opinion, have devastating affects, especially on the poorest:
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Dave) Balkin says this is akin to “shooting arrows at a board and then drawing bullseyes wherever the arrow
lands.”
2/ The efficiency of common law hypothesis lacks rigour, due to the flexibility introduced re transaction costs.
Stephen says: “This…makes any refutation impossible unless transaction costs or information costs can actually
be measured which is very difficult.”
3/ The efficiency claim is most plausible when related to C19 development in the common law, when
utilitarianism and market oriented economics were at their height. Even so, considerable evidence suggests
common law didn’t incline towards efficiency in many areas, as described by Lawrence Friedman’s discussion
re liability for C19 work accidents; “…a worker who had an accident was usually out of luck.”
Critics also point out that the application of efficiency principles has produced “variation between
jurisdictions which cannot be readily explained in efficiency terms.” They also appear to fail to take into
account the complexity of actual functioning institutions. Friedman says: “Theories about the way courts
operate mean nothing unless they are grounded in studies of what happens in real life.”
4/ As evidence supporting the efficiency thesis is questionable, the onus is on its proponents to demonstrate a
causal explanation for its action. Michelman says re the positive economic theory of the common law; “…the
conformity of the data to an empirical hypothesis, while detectable, is also irregular enough, that a plausible
causal explanation is required to make us believe the theory.” As Ryan and Mercuro, highlighting
inconsistencies in Posner’s writings, point out, “The linkage between (a) the behaviour of individuals
participants in the legal economic arena and (b) the incentives and thus the behaviour and decisions of judges is
not well developed.”
Stephen highlights the use of the “as if” principle often used by Chicago school proponents, which suggests
legal practitioners tend to act ‘as if’ they are using economic criteria, even if they are not doing so consciously.
5/ Is it often unclear as to which decisions are efficient and which not. Stephen says; “Legal rules determine
property rights and therefore influence the distribution of income and wealth. Thus evaluating the “efficiency”
of an existing legal rule has a built in bias in favour of the rule.”
In summary, at a descriptive level, the claims of Posner et al re the economic efficiency of the common law seem
to be overstated, being based on dubious foundations and difficult to verify given the methodological problems
and scant empirical data, of which much refutes the theory. Nevertheless Posner maintains that it provides a
‘deeper understanding of the common law’ saying; “…despite our inability to explain in an entirely convincing
way why the common law should be efficient, and the incomplete and unequivocal character of the data that
support the theory, at least one can say that the theory deserves to be taken seriously, especially in its more
moderate form of a claim that efficiency has been the predominant, not sole, factor in shaping the common law
system.”
The efficiency of common law thesis may well have application to contracts, where the aim is to promote
market activity, but more expansive claims are less certain. LIC’s authors suggest more attention should be paid
to the “evolutionary theory of common law,” such as proposed by Rubin,(See 2/ on notes re 225), though
criticisms of it need to be considered also. They include; Rowley’s comments that; “Rubin’s theory is dependent
on an explicit process by far sighted self inters on the part of a significant number of litigants…[but because this
cannot always be assumed] [t]he litigation process alone…cannot be relied upon categorically to drive efficient
rules universally and permanently into the common law.” Kahn adds criticism, arguing against the theory,
saying; “Distributionally vulnerable rules, not inefficient rules, are the more likely to be overturned.”
Public Choice Theory suggests it is probable that those groups which devote the greatest resources to
litigation will be those who have the greatest incentives and ability to do so, and probably, over the long run, the
greatest chance of success. Kahn supports this claiming the political forces of chance described by Public Choice
Theory are likely to apply in principle in a similar fashion in the common law arena.
Therefore, “It follows that common law outcomes cannot be used as a benchmark of efficiency, any more than
can those arrived at through the political process.”
(b) THE NORMATIVE CLAIM
This section looks at the issues of why should common law promote efficiency, justice, redistribution or other
like principles? (What is the ‘norm’ we are seeking using the legal system and why?)
Posner has tried to answer these questions, defining efficiency in a very specific way to mean wealth
maximisation: the adoption of rules and laws that will maximise the aggregate wealth of members of society
without regard to distribution among them. (≠ utility maximisation, which may take into account intangible
factors.) He claims wealth maximisation is an ethically appealing principle to normatively base a theory of law.
Posner says the wealth maximisation norm yields a “comprehensive and unitary theory of rights and duties”
and the “foundation for a theory of justice both distributive and corrective,” claiming the legal system should
seek these ‘as their over-arching goal.” (Do you understand? Do you agree? Do you think an increasing
awareness of environmental constraints will affect the confidence of these statements?: Dave)
Posner’s original claim was that the courts and other arms of government should make political decisions in a
way to maximise social wealth, with the claim that common law judges should pursue wealth maximisation as
the sole normative goal will be discussed more here. Posner says there is an argument for any policy that is
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‘Pareto superior’ to the status quo; ie, adopt o policy if it makes at least one person better off without making
anyone else worse off. (See Pareto efficiency, 166. Do you think animals, plants and the future figure here?) He
claims Pareto superiority is a ‘consensually supported social goal’, as it does not require anyone to do anything
they do not want to do and at least one person’s position is improved. Nevertheless, as Coleman says, “Most, if
not all, changes that take place in the real world produce winners as well as losers and the Pareto criteria cannot
help us to evaluate them.”
Posner embraces a modified version of the Kaldor-Hicks test (also known as the “hypothetical compensation
test), which aims to maximise wealth rather than utility. (See 167)
In reality, because losers go uncompensated, the wealth maximisation principle is consistent with, “Quite
drastic, capricious and inequitable actual redistribution of income.” (The influence of the Chicago school
economic rationalism while strong in Australia, has become increasingly evident in Australia with the
movement ‘post Whitlam’ away from government driven redistribution, typical of social democracies such as
Sweden to a greater reliance on ‘the market.’ For those interested Michael Pusey has written an excellent book
called Economic Rationalism in Australia, with Ch 1 being a very good read: Dave)
Posner responds by saying the actual losses some would suffer under Kaldor-Hicks are not morally
objectionable, (Do you think he really anticipates accepting these costs on a personal basis?), by invoking the
liberal concepts of autonomy and consent. Mercuro and Ryan summarise Posner’s argument saying; “…The
notion of consent employed by Posner is that of ex ante compensation. Posner equates the notions of ex ante
compensation and consent by pointing out that individuals would consent to wealth maximisation as a criterion
for establishing common law rules for adjudication provided that there is a sufficient probability that the
individuals will benefit in the long run from such rules, though they may be losers in the application of a
particular rule. In effect, this constitutes the Kaldor-Hicks criterion…Posner requires only that the increase in
value be sufficiently large so that losers could be fully compensated.”
Two of Posner’s arguments emerge;
1/ That everyone may have deemed to have consented in advance to the principles or rules that judges who
seek to maximise wealth will apply. (In my view, the law is based on the assumption that all citizens within its
jurisdiction either comply to the law’s precepts or must surrender some rights as a penalty. This idea is similar
to that of Hobbes in Leviathan: See 44: Dave) Posner equates this to the ‘who best pays for factory pollution
issue’ considered earlier in which payment of a lower price for land effected by pollution is alleged to
satisfactorily compensate the occupiers for disadvantage. (Are the people near the Sellafield nuclear power
plant in the UK likely to agree?) He also looks at the voluntary purchase of a lottery ticket, in which participants
(generally) consent to the loss. (But still enjoy complaining about them. PS: Avoid those scratchie things like the
plague, they’ve got all my money!: Dave)
IMPORTANT: For Posner, consent means the willingness to pay a price that discounts the risk of loss.
2/ (As summarised by Dworkin, who is critical of Posner) “The…argument from consent - is supposed to
introduce the idea of autonomy (and therefore a strain of Kant (See 27)) to the case for wealth. The second - the
argument from universal interest - insists on the continuing relevance of welfare to justice, and therefore is
supposed to add a dose of utilitarianism. Posner suggests [the combined arguments] …provide the best of both
these traditional theories of political morality and avoids their famous problems.”
Dworkin suggests Posner has confused the two questions of ‘Is it fair that someone should have the same
loss?’, and ‘Has he consented to bear that loss?’ Dworkin says [Relating to Posner’s discussion of the lottery
ticket scenario], “[It is not] true, that I have consented to that loss…In some circumstances it may be said that I
consented to the risk of loss, which is different…The importance of distinguishing between fairness and consent
is even clearer in the case of the “entrepreneurial risks”. In discussing [the ‘who best pays for factory pollution
issue], [Posner] says that the loss was compensated ex ante (and hence consented to because “[t]he probability
that the plant would move was discounted in the purchase price that they paid.” [Dworkin says]: “The latter
suggestion is mysterious.”
Posner’s second argument from universal interest is also seriously flawed. Kuperberg and Beitz say;
“…how a person’s antecedent interests should be identified or why those interests should carry moral weight
after the fact. It might have been in your interest yesterday to promise to buy you friend dinner tomorrow in
return for some favour, but if you did not in fact make the promise yesterday, then you do not in fact owe your
friend dinner tomorrow.”
Re consent and interest, Veljanovski who believes people voluntarily participate in the market beaches they
know they will benefit on some occasions, adds; “The consent that can be implied from the voluntary acceptance
of risks in the market does not exist when efficient solutions are imposed by legal coercion and which may inflict
selective losses on particular sections of society.”
Posner would need to demonstrate, that as a minimum, each consumer can expect to come out ahead in the
long run. (He doesn’t.) In support of Posner, Polinsky says; “There is no assurance, however, that each person
will in fact gain but only a presumption that he could expect to gain.”
In summary, Posner fails to confront the crucial question of, ‘How does one ethically justify losers going
uncompensated when the gainers by definition reap benefits more than sufficient to compensate them?’ The
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principle for wealth maximisation as a normative principle (ie: It is assumes to be ‘right’ to pursue wealth
maximisation.) is discussed in more detail.
Wealth maximisation can only be pursued effectively if there is some initial delineation of rights, by prior
distribution of wealth and income, yet Posner’s theory is ‘incapable of identifying adequately what this
distribution should be,’ claiming that the existing distribution of rights and income in society is just. (It may well
appear so in his neighbourhood: Dave.) Veljanovski explains what Mercuro and Ryan call the ‘circularity’ of
Posner’s argument; Rights must be assigned before trading can take place and the way they are assigned will
determine the set of outcomes that are Pareto efficient.” (See discussion in notes re 168) In summary,
Veljanovski says; “the only wealth maximising outcome that is ethically attractive is one based on a ‘just’
assignment of initial rights.”
Furthermore, Posner measures wealth “in dollars or dollar equivalents…of everything in society.”
Commenting of this, Leff says; “If you do not “buy” something, you are unwilling to do so. There is no place for
the word or concept ‘unable’. Thus, in this system, there is nothing that is coerced…Leff describes bargaining
for bread between a rich and poor man. … What this all means is that Posner has not played fair with the
question of power, or inequalities, thereof. … In brief, …only some kinds of inequality are to be accepted as an
unquestionable grundnorm (basis) upon which to base efficiency analyses…Some inequalities are apparently
more equal than others - and all without reference to any apparent normative criterion at all.”
Since valuations of what are “wealth maximising” are dependent on willingness to pay, it is uncertain
whether society will maximise utility, even if it provided with more goods. (This is an important issue to
consider considering the environment movements’ challenge to the high levels of consumerism that are often
embedded in the perception of economic growth as a desirable attribute of modern economies: Dave) Dworkin
has suggested judicial reliance on the wealth maximisation principle may lead to allocative efficiency. LIC’s
authors suggest maybe Posner’s efficiency criteria, rather than being the [sole] aim of the legal process, efficiency
should be an [one amongst others] aim of that process.
Calabresi and Melamed, after distinguishing between efficiency, distributional goals and “other justice
considerations”, ‘see a place for efficiency within a normative theory’. Calabresi says: “The recent economic
analysis of law…does not mean that the values that economic analysis tends to further can be ignored.
Avoidance of wastes is part of a common notion of justice, even if “waste” in any given society can be defined
only on the basis of those deeper values that establish entitlements and starting points.”
1/ The first problem with positions such as Calabresi’s is that it is then necessary to address the relative
merits of the different constituent parts of that definition [of the ‘most desirable’ motives of the legal process].
(Which is what Posner said the market was the best mechanism for ‘managing’ this uncertainty.) A frequent
and major conflict arises between the pursuit of efficiency and the values of distributive justice, as a significant
problem with income distribution [even if the will to do so is present] is often very costly.
Polinsky argues; “…Since redistribution is costly, the problem of designing the law, even within the
economist’s framework, is one of trading of efficiency and equity. …Determining which assignment of property
rights is to be preferred depends on the cost of alternative forms of redistribution income and the cost of
foregone efficiency in assigning property rights to the less valuable use. … To avoid consideration of
distributional consequences, it is not sufficient to appeal to the fact that the gainers could compensate the losers
and still be better off, even though no compensation is actually paid.”
Given the [potential] tension between equity and efficiency, a normative theory must address these by
providing a mechanism for determining in what circumstances and to what extent one or the other prevails.
2/ A second problem with the moderate position is that it tends to assert, rather than convincingly establish, the
virtue of efficiency. Burrows and Veljanovski question whether any weight should be given to the goal of
efficiency; “Our question…is why one should care about efficiency when it conflicts with these other goals
[distributive justice and ‘other considerations’”]. Dworkin says you shouldn’t care saying, “Social wealth may
be thought to be itself a component of social value - that is something worth having for its own sake…Money,
or its equivalent is useful so far as it enables someone to lead a more valuable, successful, happier, or more
moral life…”
In summary, Posner’s wealth maximising principles provides neither an acceptable theory of ethics nor
address the question of distributive justice in any coherent manner, and as such lacks any basis as a normative
theory of law. LIC’s authors conclude by saying, “While we have argued that efficiency has no values as an
independent social goal, the economic approach is valuable in determining whether, in allocating resources
among competing uses, society is getting value for money.”
(c) ECONOMICS AND IDEOLOGY
(The title of this section could be ‘Economics is an Ideology’.)
Economic analyses of law claim to be objective, neutral and apolitical, (They are not.) making claims to being
scientific, value free and rigorous. It is simply presumed that market arrangements are better able to maximise
economic welfare than government intervention. This unarticulated concept of a good society that silently
controls the views of its proponents.”: Leff. The presumption concerning the undesirability of state intervention
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in the economy has deep roots in liberal ideology. Daintith says: “[It is] …based on the liberal conception of a
separation of the State from the economy, which constitute distinct worlds operating according to different
principles.” “[T]he laissez-faire position is very simple; State intervention in the economy will lead to
misallocation of resources, economic efficiency and a net wealth loss.”
Other core assumptions have built in biases, and as Leff points out, “They are all generated by “reflection” on
an “assumption” about choice under scarcity and rational maximisation.” “Efficiency is a technical term: it
means exploiting economic resources in such a way that human satisfaction as measured by aggregate consumer
willingness to pay for goods and services is maximised. Value too is defined by willingness to pay.” (It seems to
forget some wallets are bigger than other purses.)
These assumptions have their foundation in central tenets of liberalism and as Kelman says, “The theory of
economics is really the theory of a coherent liberal individualism that sees society as fundamentally successful
when it responds to the will of individuals, and mediates the conflicts between individuals simply by making
everyone pay his way.”
One should read economic analysis, not as pure science, but as persuasive and value-laden, (as with anything
claiming absolute objectivity) and is subject to misuse if its limitations, and its underlying ideology, are not made
sufficiently explicit. (Maybe this is a good principle to apply to political systems as a whole, with the suggestion
that we understand what we are ‘defending’ before we endorse invasions and the threat of nuclear terror to
‘protect our interests’: Dave).
(d) CONCLUSION
This section assesses the strengths and weaknesses of economic analysis, emphasising the positive contribution
made by the ‘law and economics’ movement, of which the most controversial claim is Posner’s argument that
the common law can be satisfactorily explained by the principle of efficiency. Leff (thankfully) seems to
disagree. The appeal of the simplicity of the efficiency argument may be one explanation why it appeals widely,
(unfortunately) also to the most venerable Mrs. Margaret Thatcher and Mr. Ronald Reagan (both who, in the
pursuit of efficiency, have moved onto fresh fields).
Kelman describes the Chicago School as “imperialistic, complete, catechismic.” Posner’s (et al) attraction in
claiming answers to every legal problem, promises (a lot) more than it can deliver. (I knew a pizza shop like
that.) Posner “has failed to provide adequate empirical or theoretical support”. LIC’s authors say you shouldn’t
write off an economic analysis of the law because of this, suggesting it may contribute to law: “economic analysis
still has value, but only if the limitations of its assumptions, and the complexity of the real world issues it seeks
to explain, are acknowledged.”
As Calabresi says, “The gains from mimicking the market are usually unquantifiable and based largely on
guesses.” Also meaning the cost (and desirability) of redistributing income must be acknowledged, rather than
trivialised, and that the need to balance efficiency and equity must be faced squarely. The “old economically
influenced realists” such as Calabresi and the neo-institutionalists such as Williamson must be fully recognised.
Economics may be useful as a tool to make some sense of a chaotic world. (I think kids are better at it.) While
lawyers frequently forget “every law involves a choice, entails a trade-off and hence gives rise to a cost”
(Veljanovski), economics tries to reveal what those costs are. Easterbrook says “Economics is an integral part of
the study of legal rules and the rule making process. The only question is whether we do this well or poorly.”
Leff, though critical of law and economics, concedes economics had ‘fundamental important’ things to say
about the law, in Economic Analyses of Law: Some Realism about Nominalism (1974) He says: “The central tenet and
most important operative principle of economic analysis of law is to ask, of every move (1) how much will it cost;
(2) who pays; and (3) who ought to decide both questions. He describes a scenario re a mother of six who
mortgages her house. The economists say it may be best to permit her eviction, as good Samaritans are unlikely
to allow them to die, and if economic coercion is not used she may begin to spend money on ‘an occasional piece
of chicken’ (heaven forbid), financiers would be less likely to offer loans to people of their class (unless you are
borrowing $ millions?) and ultimately the choice of where to live will diminish, and they will continue to live in
poverty.
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PART D - LAW AND POWER
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INTRODUCTION
The following three chapters look at how power and the law affect issues concerning Gender, Aborigines, and
Class and Legislation. Political scientists have related power to the way economists relate to money. NonMarxist economists have tended to relegate power to a subsidiary, though important role, ie; monopolists have
power that distorts the free market. Marxist economists may say ‘the economy’ is a struggle between classes.
Some working definitions of power may be:
“A has power over B to the extent that A can get B to do something that B would not otherwise do.”
“Power may be the preponderance of A over B in a significant, non-trivial manner.”
“Power might be the ability of A to prevail over B (in a significant way) in formal, political decision-making such
as takes place in a government.”
Power is a ‘contested subject’ in the social sciences. (For a good reference piece See Lukes, On Power.)
The idea of having a power is often linked with having a right. Thus a standard theory on the nature of
rights is that rights involve the power to have one’s will predominate over that of another. A major criticism of
orthodox legal scholarship is its failure to address the nature of systemic power. The rule of law is an ideology
designed to limit the power of government. (Socialists may say, also to limit the power of individuals through
subjugation to economic ideology.) Radical feminists claim that societies are dominated by patriarchy: the
majority of power is in the hands of men (It’s hard to disagree.) Similar claims are made re the domination of
ethnic groups. (How much power do Australian and American aborigines have in their own territory?) The
law’s ‘insular’ nature may be causal, but so may be the systemic basing of the law on liberalism. (Which accepts
inequality as acceptable and probably necessary.)
Three assumptions are relevant:
1/ The liberal ideal of the individual as ultimate, which may incorporate the view of society as simply an
association of individuals and no more (See 18), means it is unlikely much attention will be paid to entities or
collectives such as gender groups, classes or races.
2/ If, as liberals seek, the state is to be neutral between people, these distinctions are meant to be irrelevant.
The blind-folded figure holding the scales of justice is meant to symbolise the rule of neutral law.
3/ If freedom of the individual must be protected by law, the law becomes seen almost as the antithesis of
power, allegedly controlling the exercise of power by others.
What if legal administrators are not neutral? Suppose law does not check all kinds of power, but actually
perpetuates some kinds of it. What if they are cooking the whole thing so that power resides with them?
A wonderful French sociologist, Michel Foucault, was concerned more with the mechanisms of power than
with who exercises it. He argued that certain kinds of discourse make stronger claims to “truth” than others.
Their power lies in their ability to triumph over lesser truths, such as the disposition of mysticism by the
ideology of C17 science. (He looked at the authorship and currency of power, claiming socialisation produces
norms and expectations that are more guiding doctrines than the formal law. For a heavy but interesting read,
See Discipline and Punishment: The Birth of the Prison and come and chat to me about it next year.)
Foucault’s observations are being pursued in other analyses of society, though some see the law as more
powerful than Foucault portrayed. Smart (1990) argued from a feminist perspective in Feminism and the Power of
Law that power lies within the idea of law. She has argued that law has power because it can lay claim to the
truth. (I think Ned Kelly may have agreed.) A legal perspective seems to seek to impose its judgement of what
is true; ie, re abortion and the determination of at what point life can be ‘truly’ said to exist. Likewise rape and
also re custody cases and the ‘best interests of the child.’ (Having slept out whilst travelling, especially in the
USA I put vagrancy in this category; ie, Is it an offence to not have accommodation?) Smart says life has become
more bureaucratised and legalised, disqualifying other versions of the truth. (Hussein may sympathise here, re
UN determination that attacking Iraq was the best option.)
Foucault’s work has expanded the debate re power. Before it was about a fixed amount of power that was
divisible, (maybe between classes). Debate is now considering that power may expand with the legitimacy of the
discipline. (Ie: Environmentalism’s power is expanding.)
Ch 10 on Gender considers one feminist view that legal rules, reasoning and processes are imbued with maleness
and that they disempower women. Ch. 11 looks at how the imposition of UK Common Law following the
invasion and its love of property rights is counter to Aboriginal customs of land-holding.
CHAPTER 10: GENDER
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(a) INTRODUCTION
Feminist jurisprudence arose in the 80’s, claiming the law is not gender blind: there are biases.
At least two strands of feminist literature on law are explicit rejections of liberalism as a political ideology. Some
feminists have decided that liberalism is the reason for the history of gross inequality between the sexes despite
espousing the ideals of individualism, equality, justice and rationality.
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Three ‘phases’ in feminist thought have been identified and received some acceptance:
First phase feminism. Male monopoly. Liberal feminism argues that it is possible to have gender equality within
a liberal society and that inequality within the past has been brought about solely through male prejudice.
Second phase feminism. Male culture. Radical feminism sees patriarchy as a fundamental division based on
biological divisions. The social and economic system is not the cause. Cultural feminism = women have their
own culture which has inherent value and the law as is a result of male culture and male values.
Third phase feminism. Marxist and socialist feminism believes that rather than traditional class divisions based
on ownership and status, etc., gender is the primary division in society.
As an example of how the male paradigm of justice fails to perform in the real world, business people tend
to engage in conciliatory behaviour which is more typically a feminine response than male, as written about by
Macaulay (See 70)}
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(b) FEMINIST JURISPRUDENCE
Feminist theories have commonly been divided into three or four categories. These are;
1/ Liberal feminism argues it is possible to have gender equality within a liberal society and that past inequality
has been brought about solely through male prejudice.
2/ Radical feminism argues that male political dominance over men (‘patriarchy’) is the fundamental division in
societies and is largely independent of the economic or social system. (Ie It is integral to the society’s
operations.)
3/ Cultural feminism argues that women have their own specific culture which has inherent value and that the
‘distinctive voice’ or viewpoint of women must not be ignored or undervalued.
4/ Marxist and Socialist feminism see society as being composed of antagonistic social classes, with gender being
the primary division in society.
Phases have also been described in feminism with first phase being concerned with the pursuit of formal
equality, the second phase arguing that the male bias extends to virtually all aspects of law, the third phase,
which in essence develops the second phase but suggests a more complex picture.
Ngaire Naffine, in Law and the Sexes (1990) describes three phases in the evolution of feminist jurisprudence:
1/ First-phase feminism: the male monopoly. Origins in C19, when women were fighting for the vote, to
enter certain professions, for married women to own their own property, and to keep their wages. The struggle
was about liberal values and to extend formal equality to both men and women (kids and non-whites still
tended to cop it). It focussed on specific laws and tended not to critique the entire legal system. Sash and
Wilson in Sexism and the Law (1978) wrote that, from the point of view of women, law constituted a male
monopoly and rather than being agents of change legal men fought to prevent women from entering the
professions and public life. (See Re Goodall, 1875. Women, for their own protection were not allowed to
practice: 265, See also UK person cases.): Ryan CJ said: “It is public policy to provide for the sex and not for its
superfluous members, and not to tempt women from the proper duties of their sex by opening to them duties
peculiar to ours…” The major, if not sole objection first phase feminists had was the failure of the law to live up
to its own ideals.
2/ Second-phase feminism: the male culture of law. Implicit in second phase feminism is the idea that the
law has a male character, embodies a male norm, is thus an expression of masculinity, and as a result favours
men. The view of the law as objective is highly suspect as it conceals the male bias. “The truth is that men have
fashioned the legal system in their own image. They have developed a harsh uncaring combative adversarial
style of justice which essentially reflects their own way of doing things and therefore quite naturally advantages
the male litigant. Law treats people as unfeeling automatons, as selfish individuals who care only for their own
rights and who feel constantly under threat from other equally self absorbed holders of rights. This is a male
view of society which ignores and devalues the priorities of women, those of human interdependence, human
compassion and human need.”
The most widely quoted writer of the second phase is Catharine Mackinnon. She says in A Feminist
Discourse: Moral Values and the Law, that feminists have misread the problem. “For too long, feminists have
interpreted the problem of women’s oppression in terms of women’s differences from men. Women’s inferior
position has been explained in terms of their failure to achieve the standards of men.” Naffine paraphrases
MacKinnon saying, “It is not a question of difference, but a question of dominance” … “The law sees and treats
women the way men see and treat women.” Ann Scales, an exponent of MacKinnon, draws on the work of
Carol Gilligan who contends that, “Girls and boys are brought up to see the social world in different ways and
so develop opposing styles of moral reasoning.”… “Boys who are encouraged to detach themselves from their
mothers, and flourish as independent beings develop an “ethics of rights” (She writes about a hypothetical
scenario whereby needed drugs are too expensive to buy, and suggests females approach the situation from “an
ethic of care”, while males approach it with “the logic of justice.” The male saw the issues in terms of
‘separateness’, whilst the female saw it as one of ‘connectedness’. Their [males] priority becomes the
preservation of individual autonomy against the claims of others. By contrast, girls are allowed to stay close to
their mothers (because they are the same sex and one day will become mothers) and so come to value
relationships.
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3/ Third phase feminist theory concedes that the law is both male dominated and full of biases, however it
resists the notion that the law represents males’ interests in a co-ordinated fashion. (This is closer to the ideas of
power espoused by Foucault: 253) While the male ideal of law is not a reality, the law should not be regarded
as a neutral dispassionate institution, reflecting the priorities of the dominant patriarchal social order, and
while these priorities are not always coherent they generally view women as subordinate. It rejects grand
theory (theories that seek to ‘explain all’: Dave) and so is committed to the study of particular instances of law’s
oppression of women.
Two writers, British author Carol Smart and the American legal critic, Frances Olsen dominate the
literature. Carol Smart rejects male conspiracy theories, as the law sometimes benefited women: ie
maintenance. Another concern is that laws that treat women fairly may be hampered in practice, by stifling its
implementation. A good example is the domestic violence legislation in Britain in the 1970’s, in which laws
were passed helping to protect women, but the police were reticent to implement the laws. According to
Olsen, our male dominated law presents a view of social organisations that is positively damaging to all
women. She says the law splits the world into public and private and into male and female and then identifies
itself with the public, and leaves the private unregulated, allowing all sorts of atrocities to occur.
LIC describes the well-known case Re Goodall (1875) Sup Ct Wisconsin USA where Ryan CJ said: “It is public
policy to provide for the sex and not for its superfluous members and not to tempt women from the proper
duties, and not to tempt women from the proper duties of their sex by opening to them duties peculiar to ours.”
Carol Smart (a third phase feminist) in Feminism and the Power of Law (1990) amongst raising others, critiques
Carol Gilligan and Catharine MacKinnon (second phase feminists). Carol quotes Gilligan; “I propose that the
state is male in the feminist sense. The law sees and treats women the way men see and treat women. When [the
state] is most ruthlessly neutral, it will be most male…However autonomous of class the liberal state may
appear, it is not autonomous of sex.” Carol says: “The basic insight of these passages lies in the argument that
all social relationships are gendered. There is no neutral terrain, and law least of all can be said to occupy that
mythical space…Carol continues: “MacKinnon goes beyond this to argue that the gender order is one of
domination, in fact one of totalitarianism…Carol continues; “In doing this MacKinnon gives to much authority
to law, it becomes the central plank to her political analysis and strategy even against her wishes (Dave ie: Carol
may be saying MacKinnon claims the law has more power in ‘forcing’ people to do things than it has versus the
idea that the law presents a choice between obedience and disobedience with a penalty. It’s more along
Foucault’s line in which power is more diffuse than the old idea that the law completely and almost solely
shapes people’s behaviour.)
(c) ANTI-DISCRIMINATION AND AFFIRMATIVE ACTION LAWS
Legislation designed to outlaw discrimination against women is in theory one of the most direct and efficient
ways in which the law can be used to challenge male power. If coupled with affirmative action, the attainment
of gender equality should be all the quicker. Feminists approve of such measures in varying degrees, as do some
liberals, ie, Dworkin. Dworkin has a stronger conception of equality than the formal idea common in classical
liberalism. His ideas permit greater interference in individual liberty for the purposes of achieving substantive
equality. However, both forms of legislation have potential to offend against particular formulations of
liberalism; ie, the state should not interfere with individual choice in employment situations. Also some
conservatives (old farts) think the division between the sexes helps to maintain social stability. The next few
pages (270-281) appear to concentrate on the influence of the public-private sphere split.
LIC defines discrimination as having two separate elements: 1/ the unreasonable disadvantage of a person
or group 2/ on grounds that are irrelevant to the matter at hand. Discrimination may be conscious (the denial
by Ansett of employment of a female who had achieved higher qualifications than seven other male applicants).
or unconscious (ie upbringing induces culture blindness such as Lord Denning’s idea of women in their sphere
fits in with liberal stereotypes of public and private). Liberal thought divides social life in public and private
spheres, which is seen as right at the heart of gender inequality. Men can proclaim individualism while
denying it to women, therefore individualism and equality operate in the public sphere, but not the private
sphere of home, allowing patriarchal forms of social domination to continue even though they are denied in
public life.
Carol Pateman in Feminist Critiques of the Public/Private Dichotomy deals with the question of whether
liberalism and feminism are compatible. She says: “feminism is often seen as nothing more than the completion
of the liberal or bourgeois as an extension of liberal principles and rights to women as well as men. The
demand for equal rights has always been an important part of feminism. However the attempt to universalise
liberalism has more far reaching consequences than is often appreciated because in the end it inevitably
challenges liberalism itself. Liberal feminism has reaching and radical implications, not least in challenging the
separation and opposition between public and private spheres, which is fundamental to liberalism.”
Against the dichotomy of the public-private distinction, a number of statutes have been introduced in Australia
since the 1970’s to deal with discrimination on the grounds of sex; eg, Sex Discrimination Act 1974, which when
introduced prompted a public furore, highlighting how even moderate reform can inflame the passions of
conservatives! These acts are neither criminal nor actionable at civil law, and are processed by the Human
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Rights and Equal Opportunity Commission. Complaints are dealt with solely by conciliation. While useful in
instances of alleged indirect employment discrimination attacking unreasonable job requirements, feminists have
pointed out the legislation’s weaknesses as;
1/ It covers only the private sphere. (Maybe consider the possibilities of reform in the home, as was initiated in
Norway, though remember this may compete with many liberal ideals!) and,
2/ The main way of dealing with complaints is by conciliation rather than traditional litigation.
Margaret Thornton, a feminist legal scholar, in describing conciliation, says, “the inference is that it is a private
matter, as it does not occupy public adjudicative space” (as is the case with other social harms). Thornton says
the conciliation process makes these disputes look like a private matter somewhat immune from public
accountability. However, she sees the absence of formalism is also a strength as women and minority groups
have felt disempowered within the alienating adversarial system that is dominated by white blokes.
3/ The concept of equality. Nicola Lacey, in Legislation Against Sex Discrimination, described different
conceptions of equality. Formal equality has been one of the long cherished goals of liberal feminism, though is
limited as a feminist goal as women tend to be disadvantaged by socialisation and domestic responsibilities.
Ensuring formal equality is seen as being of very limited use, as men can more easily satisfy substantive
requirements, therefore treating those with unequal opportunity equally has only qualified successes. In
summary, according to Lacey, equality of opportunity is only rhetoric.
IMPORTANT: People are born and live as unequals, therefore if you treat them with formal equality the outcome
is unequal = substantive inequality (which classical liberalism would see as the natural outcome of ‘even playing
field’ competition.). If you value substantive equality, you will seek to treat people unequally so that the
outcomes are equal (a Marxist would say each according to his needs, to achieve equality). (See Raz 16 and 45
who talked about the gap between substantive and formal equality.)
Catharine MacKinnon in Toward a Feminist Theory of the State seems to be saying; women and men have
different qualities that both have value, but one of the major failings of our society is that we have use male
values as the measuring rod to compare women with men. This may be expressed by legislation that measures
women against a male created or influenced measuring rod.
As I see it, the private-public dichotomy is a major stalwart to substantive equality for women, as for
amongst other things, members of our society spend a great deal of their time in an environment (the home)
which, under liberalism, is not subject to the same requirements of substantive equality as the public sphere is.
Georgina (a fellow student) believes sexual discrimination legislation cannot invoke fundamental change, as the
laws do not challenge domestic inequality.
Affirmative Action is the notion, that where there is an imbalance you positively discriminate, preferring the
smaller group over the larger, so that the number even up (become representative of the proportions that exist).
Bailey in Implementing Affirmative Action for Women (1990) explains why affirmative action for women was (is)
needed to balance their low representation in the formal workforce. This is because women are concentrated in a
narrow range of occupations and industries; ie, clerical, sales (and homecare). Where women are employed in
significant numbers they are mainly at the lower end of the hierarchy. Unemployment amongst women is
higher, and when employed tend to occupy in lower status professions. (Meg Switzer and Val Wood, in a 1991
ANU study, found gender analysis was almost totally lacking in the recent Sustainable Development Working
Groups co-ordinated by the Federal Government.)
Tom Campbell believes affirmative action should not be construed as discrimination as it is a repatriation
for past inequities. He says if you take an individualist meritorian view of justice (you get what you deserve) he
can understand it seems unjust, but he says you should realise the extent to which theories of justice are fallible
anyway. (Ie, white, middle class males should realise it’s easier for them to pass law school, than black, lower
class women: Dave)
Feminist criticisms of affirmative action include; 1/ the weak enforcement of legislation where it does exist.
2/ that weak reforms undermine the possibility for needed paradigm shifts. 3/ The “tipping effect” as described
by Jocelyne Scutt, which is, as females move into previously male dominated profession, the status of the
profession (and its monetary returns) tends to fall. Jeanne Gregory goes further in saying the least
disadvantaged of the disadvantaged group is co opted (token individuals) therefore pressure for change is
removed, only increasing the despair of those left behind.
(d) CONCLUSION
Anti-discrimination laws and affirmative action legislation meet mixed responses from feminists. Some see it as
a necessary step, whilst others see them as a palliative making major reform more difficult to achieve.
Re the question; is liberalism sufficiently elastic to satiate desires for radical change?, depends on whether
formal or substantive equality is used as a guide. The more you head towards substantive equality (equality of
opportunity) the more liberals (especially classical) are likely to resist. (They would have no one to bring their
pipe and slippers to them: Dave)
A further point = would women want to be ‘joint tenants’ in the male dominated world of today?
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CHAPTER 11: ABORIGINES
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(a) INTRODUCTION
This chapter considers how a society committed to the values of liberty, equality, the rule of law and the sanctity
of property allow such inequality, as experienced by Australian Aborigines. {Common law and liberal principles
were meant have dominated Australian life, especially the Rule of Law, sanctity of property, individualism and
equality.} Maybe this is the result of liberal values and with emphasis on individualism and economic liberty.
{Aborigines = the most disadvantages sector of society. Following the invasion, they were deemed to be under
British law. For a great deal of time, there were very many different rules for Aborigines; ie, evidence by an
Aboriginal had to be corroborated by a white.}
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(b) THE FORMAL LEGAL POSITION OF ABORIGINES
The formal legal position of Aboriginals can be described simply: “as a consequence of British settlement
Aborigines became subject to British and later Australian law. Any rights arising from their own system were
formally extinguished by that very act of settlement.
In Coe v The Commonwealth of Australia (1979) HC, whilst considering the idea that the Australian continent
was regarded as uninhabited at the time of the ‘invasion’ and could be justly described as “terra nullius”,
Murphy J described it as a “convenient falsehood”, whilst Gibbs J, for the majority regarded it as
“fundamental”.
Murphy J in The Commonwealth of Australia v Tasmania, 1983 said: “The history of the Aboriginal people since
European settlement is that they have been the subject of unprovoked aggression, conquest, pillage, rape,
brutalisation, attempted genocide and systematic and unsystematic destruction of their culture.”
Social indicators confirm that Aborigines are the most disadvantaged section of the population.
{Since late 1960’s, all formal differences in treatment have now been removed, though Aboriginals are grossly
over represented in criminal justice system: 6x arrested, 16x more likely to end up in prison and are grossly over
represented in anti-discrimination bodies.}
Lumb argues; “As a matter of fact…those actions (vigilantes, police and/or military) could not be classified
as acts of conquest. Many of them occurred well after the time in which the actual settlement took place.”
For the legal formalists, arguments about history are to a large degree beside the point. In Milirrpum v
Nabalco Pty Ltd and The Commonwealth of Australia [1971], Blackburn J argued; “the attribution of a colony to a
particular class is a matter of law which becomes settled and is not to be questioned upon a reconsideration of
the historical facts.”
Therefore, since the 1830’s, Aboriginals were regarded as British subjects, though failing to recognise
Aboriginal laws, customs, traditions, re marriage, land rights and dispute settlement. This may be related to the
idea of formal equality which seeks one law for all.
Three qualifications to this;
1/ Many instances where the law has deviated from the principles of formal equality.
2/ The idea of formal equality means substantive differences between legal persons are ignored, which means
formal equality produces substantive inequality.
3/ When formal equality has been adhered to it has been used to inhibit the introduction of measures to benefit
Aborigines.
Looking at these three issues in detail:
1/ There are many instances where the law has deviated from the principles of formal equality. Different
legal treatment of Aboriginals has been embodied in the law; ie, they were not permitted to vote in Queensland
until 1965 and WA in 1962. In mid C19 some states introduced a legislative policy of “protection’ or
‘guardianship’ in the response to the perception that Aborigines were “dying out.” This brought the response of
‘kidnapping’ Aboriginal children from their parents, to place them in boarding houses where they could be
given a European education (civilised). This was ‘modified’ to become a policy of “assimilation”, formally
adopted by the Federal Government in the 1950’s, lasting until the 1970’s. It’s aims were to “attain the same
manner of living as other Australians and to live as members of a single Australian community, enjoying the
same rights and privileges.”
This raises an important aspect of liberalism and the law: ‘equality only applies to “civilised” people’ and
that until recently, ‘Liberalism…was never applied universally.’
As John Stuart Mill (See 15) described in On Liberty “It is perhaps hardly necessary to say that this doctrine is
meant to apply only to human beings in the maturity of their faculties” … “we may leave out of consideration
those backward states of society in which the race itself may be considered as in its nonage (nonage = period of
legal immaturity).” (Aborigines?)
LT Hobhouse in Liberalism, was more cautious (a little less arrogant) in Liberalism. He said: “A specious
extension of the white man’s rights to the black may be the best of ruining the black…Until the white man has
fully learnt to rule his own life the best of all things that he can do with the dark man is to do nothing with him.”
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2/ The idea of formal equality means substantive differences between legal persons are ignored, which
means formal equality produces substantive inequality.
LIC says that racism is often manifested in the way the law operates. Institutional arrangements and procedures
are able to occur because the law is enforced through the exercise of discretion by police, lawyers, bureaucrats
and others.
3/ Though formal differences in law between Aborigines and non-Aborigines in Australia are now absent,
the application of law to Aborigines still induces inequality. Tatz in Aboriginal and Civil Law said: “Many laws
omit reference to Aborigines, but are applied to them with excessive vigour by police and lower courts: being
drunk and disorderly, using unseemly words and vagrancy in particular.”
Paraphrasing Anatole France (See 20) “the law which forbids whites and Aborigines alike to drink alcohol
on the streets is in formal terms, egalitarian and non racist,” conveniently overlooking that it is mainly
Aborigines who drink in those places. Tatz also observes the over representation of Aborigines in the criminal
justice system. For example, Aborigines = 1.4% of population, but 14.5% of the national prison population. Of
the total prison population, 77.3% of Aborigines prisoners had a previous record, compared with 52% re nonAboriginal prisoners. Aborigines are 27x more likely than whites to be in police custody. The liberal ideals of
due process are (frequently unrealised) in the practice of the lower courts. The situation is even worse for
Aboriginals, because they have often engage in the legal system without fully understanding its nature or
requirements. Health problems (hearing and vision problems) may also inhibit effective participation.
(Aboriginals may also be more likely to comply with suggestions of guilt, without understanding its
implications.)
Chris Cuneen writes about Aboriginal deaths in custody in The Death of Malcolm Smith, referring to the
high incidence of Aboriginal deaths in police custody, which has been the subject of a Royal Commission headed
by Commissioner Wootten. Malcolm Smith allegedly committed suicide whilst being held in the Malabar
Assessment Unit at Long Bay Gaol in the 1980’s. She said: “The Report is uncompromisingly strong in its
condemnation of government policies to Aboriginal people: “The brutal cruelty of what was done in the name of
protection and welfare by a smug self-righteous and racist community is only now becoming to be generally
recognised.”
Although governments have had the opportunity to make special laws for people of any race they haven’t
done this, and so in effect, whilst the reality is that the law is applied unequally to the detriment of Aborigines,
laws are not formally employed to positively discriminate to benefit Aborigines.
(c) LAND RIGHTS
The labelling of Australia post invasion as “terra nullius” left Aboriginals with no formal recognition of
proprietorial interest in land, which has been a major ongoing source of friction for the Aboriginal community.
Non-Aboriginal culture purports to have difficulty in comprehending the significance of land to Aboriginals,
though as Henry Reynolds said in The Law of the Land (1987) that; “The truly amazing achievement of Australian
jurisprudence was to deny that the Aborigines were ever in possession of their own land, robbing them of the
great legal strength of that position and of compensation which should have been paid following resumption by
the Crown.”
In Milirrpum v Nabalco Pty Ltd and The Commonwealth of Australia [1971], the Commonwealth had granted
mining leases to Nabalco on land the plaintiffs had occupied “from time immemorial as of right.” The clans
argued that as a matter of common law their communal occupation of the land, gave them a legal enforceable
right; they called this “the doctrine of communal native title.” A major issued raised by the case was whether the
common law recognised ownership by a fluctuating group of people. The plaintiff’s in effect were arguing
common law and Aboriginal law may co-exist. Blackburn J, relying on a Canadian decision that was later
overturned, held that he doubted the relevance of such a doctrine unless it was expressly recognised by
legislation. Although he did concede the existence of a native system of law, in Blackburn’s view the common
law of Australia did not, and never had, recognised communal native land title. (This is important considering
that individualism is listed by the authors of LIC as one of the seven pillars of liberalism. (See 12 and 18) Also,
(to compound the insult) apparently, even if this argument had been successful, in the view of the judge, they
would not have been able to show on the balance of probabilities that it was their ancestors that had the relevant
links with the land. Blackburn J’s decision has been widely criticised as “out of step with overseas decisions”:
Blumm and Malbon.
According to Johnston in Native Rights as Collective Rights: A Question of Groups Self Preservation, “Liberal
rights theory is predisposed to recognising two categories of rights holders: individuals and society. There is
however, little conceptual space for the rights of groups. Typically, it is assumed that group interest can be
accommodated within the framework of either individuals or social rights. (Ie: form a company?). The outcomes
of Milirrpum do not necessarily transpose to other liberal democratic countries such as New Zealand or Canada.
Henry Reynolds in The Law of the Land (1987) said the reasons for the whole terra nullius doctrine, which
provide the ammunition for cases such as Milirrpum include political expediency, economic greed and legal
formalism. The Australian Law Reform Commission has expressed doubts that recognition of Aboriginal land
rights will evolve from the common law, and so will continue to remain an issue of statute.
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Some people regard ‘positive discrimination’ such as land rights for Aboriginal as unjust (though this depends
greatly on your recollection of the two hundred years of injustice against the Aboriginals. See the Pitjatjanjara
case on 298 for more info.)
The common law adoption of ‘terra nullius’ implies Aboriginal people were absent of rights prior to the
invasion, which facilitated the ‘stealing’ of their land. This ‘absence of rights’ belief allows people to view the
return of land to Aboriginals as taking property away from the Australian government and people at large. As
an example of the ‘gap’ between theory and practice in liberalism, in relating to Aboriginal issues, Kerruish says:
“Given the strongest anti-land rights lobbies in Australia are the internationally financed mining and pastoral
industries, legal rights backed by State laws are easily avoided by multi-national corporations.”
Despite Land Rights legislation existing in the Northern Territory for 10 years, and the Government having
spent $10 million, and having taken challenges to High Court, the Federal Court or NT Supreme Court on 24
occasions, only one has been successful.
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(d) THE LIMITS OF A LIBERAL RESPONSE
A variety of responses exist. Some are that 1/ Aboriginals should be compensated with either money or land: ie
“pay the rent.”, 2/ Australian legal system should recognise Aboriginal customary laws, 3/ that a treaty be
signed. (How about it Mr. Hawke?)
1/ The idea of compensating Aboriginals (for merely invading their country and taking it over) may conflict
with the individualistic basis of liberalism. The argument runs something like; that all happened two hundred
years ago, and since most of the people ‘affected’ are allegedly dead and gone, how can you trace a legal entity,
ie, A person, to whom compensation should be paid? (This is very convenient for mining companies, etc.)
2/ The second response of recognising Aboriginal customary laws, could be described as ‘legal pluralism.’
As this entails the presence of more than one authority of laws, although it is recommended as a response by the
ALRC, it is purported to conflict with the ideas that laws should be clear, predictable, promulgated, etc., it is and
so is unlikely to be adopted.
3/ That a treaty should be signed. In June 1988 the Federal Government and Aboriginal rep’s met in the NT
producing what is called the “Barunga Statement”, consisting of two documents. One was on behalf of
Aboriginals, referring to a range of rights, the other signed by Bob Hawke, listed five statements including a
desire to create a treaty. The history of the treaty concept is outlined by Garth Nettheim in Developing Aboriginal
Rights (1989). He said:
Australia is the only British domain to have not signed a treaty with the original inhabitants. Batman’s
purported treaties (whose fairness was more recently strongly questioned) were private, being not on behalf of
the Crown, and disowned in 1936 by both Governor Bourke of New South Wales and the Colonial Secretary of
Van Dieman’s Land. Despite London authorities wishing for the settling of S. Aust in 1830 to be a more
reasonable affair than the original settlement (invasion), they were not successful. Britain’s acquisition of
sovereignty proceeded without “the consent of the natives.” This is despite dozens of treaties being made in
Canada, which are recognised in their constitution.
The Makarrata Discussions, held between 1979 and 1983, followed the establishment of the National
Aboriginal Conference in 1977. In September 1979, Mal Fraser agreed to meet the NAC to discuss the treaty
proposals. Fred Chaney met and talked, with a set of demands being presented by Aboriginal groups to
Minister Baume in late 1981. Legal issues raised by Melbourne lawyer Keon-Cohen were examined by the
Aboriginal Treaty Committee and the Aboriginal Law Research Unit at NSW Uni. The Government published
a document titled “Two Hundred Years Later” in 1983, endorsing amendment of s105A of the Constitution.
Unfortunately, for a number of reason, the momentum died, with differences of opinion amongst Aboriginals,
given the fight they faced, as to the worth of the treaty. The NAC effectively ceased to exist in 1985.
Treaty discussions were held between 1987 and 1989, in conjunction with Hawke’s suggestion of a “treaty or
compact.” Gerry Hand tabled “Foundations for the Future” in 1987, which lay the foundations for ATSIC, The
Aboriginal and Torres Strait Islanders Commission, which helped to recognise the rights of some indigenous
groups. With the demise of the NAC, the National Coalition of Aboriginal Organisations, NCAO, who
continue to approach the treaty idea with caution, identifying a number of areas needing resolution that
include: process, resources, monitoring, legal status, interpretation, implementation and enforcement.
IMPORTANT: Aboriginals have experienced to their detriment, one of liberalisms major failings, being its
inability to adequately recognise anything other than individual rights.
(e) CONCLUSION
Differential treatment of racial groups has and continues to exist, and is deeply embedded in liberal legality.
This had a lot to do with liberalism’s shortcomings in responding to the issue of how to achieve substantive
equality. (Which socialism, one of the evolutions of liberalism, believed could provide answers. See ‘Socialism:
The Unfinished Revolution’ in Gamble notes) Many of the issues of inequality relating to gender appear to
reflect in issues relating to race also. (Two areas where C18 white male liberal philosophers tended not to shine.)
Liberalism, and its expression through the common law, appears unable to prevent prejudice and disadvantage,
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and may promote it. The short comings of the liberal desire for individualism, justice and a limited role for
government express themselves as inadequate against the pressing issues of racial and gender discrimination.
Liberalism’s universal treatment of individuals as formally equal does not equip it well to response to the less
rational responses of racism and gender discrimination. Marxists generally argue it is not only incompetent in
achieving this, but that these results sit happily with the interests of certain classes. ie, the ruling class.
CHAPTER 12: CLASS AND LEGISLATION
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(a) INTRODUCTION
This chapter concentrates on two areas 1/ emergent studies and 2/ implementation studies. Though
inadequate to fully explain issues of power, law and class they may be useful in demonstrating the liberals false
view that the law is removed form ‘the fray of competition in political life’; ie; legislation, class and power may
be closely linked.
Structural inequality exists in other arenas of Oz life than gender and race. (Marxists would have a more
generous list.) Claims of Oz being egalitarian and classless are tenuous. Australia’s (white) history leads it less
vulnerable to infusion of strong class structures, such as in the UK. Sol Encel believes it is a mistake to think
Australia is classless. Social mobility may be higher in Oz than in most, though most indicators suggest gross
inequalities in wealth and income ares strongly correlated with class position at birth. Berry also (correctly)
contends that “equal opportunity” does not exist in any comprehensive fashion in Oz.
Bob Connel points out that Australia has only had one comprehensive study of inequality, and that was in
1915. He says, “Our knowledge about the spread of wealth, and with what it correlates, is worse for Australia in
the 1980’s than it was seventy years ago.” While 1986 census figures are now available, these are likely to underreport the wealth of the super-rich (with money in the Cook Islands, etc.)
According to Dilnot: the wealthiest 1% of the population hold almost 20% of the wealth, while the bottom
30% have no wealth at all, or even negative wealth (ie; credit card debts, etc.). 1984 figures suggested the top 1%
of adult individuals hold about 25% of private wealth and the top 10% about 60%. (Alarmingly), this appears to
be similar to wealth patterns of the USA, but less inequitable than Britain (fortunately). Graetz and MacAllister
claim, “out of Australia’s present population of around 16 million people, some 30,000 individuals enjoy wealth
in excess of one million dollars, while about two million people live below the poverty line.” Parkin argues that
the distribution of power in society is merely a concept or metaphor used to describe the flow of rewards
(income, wealth and prestige). Parkin says; “the very fact that the dominant class can successfully claim a
disproportionate share of rewards vis-a-vis the subordinate class is, in a sense, a measure of the former’s power
over the latter’s. (Do the ‘team’ workers’ at McDonalds receive equal pay for effort?: Dave) The idea that power
is synonymous with wealth relates to elite theory. An elite can be powerful because its members are strategically
placed in those organisational structures where there is little common interest. (Lawyers?) (Schumpeter, writing
about elites, said democracy is a means for choosing between leaders; also Democracy = ‘that institutional
arrangement for arriving at political decisions in which individuals acquire the power to decide by means of a
competitive struggle for the people’s vote.’)
Most studies (written in Australia) are concerned with modern industrial liberal societies, and until about a
decade ago were described using a continuum of models with conflict or consensus at opposing ends. The next
section describes this continuum and its limitations.
(b) CONSENSUS, CONFLICT AND BEYOND
A model is a kind of “ideal type”, with the adoption of one or another affecting what you see. The two societal
models that have most influenced our understanding of the emergence of laws and their implementation are 1/
the consensus (or “order” model and 2/ the conflict model.
1/ The consensus or order model (analogous to functionalism) describes how ideally power should be
exercised in a liberal democratic society, stressing cohesion, solidarity, integration, co-operation and stability. It
presents society as united by a shared culture and by agreement of the norms and values that underpin it. It
does deny some level of disagreement, but considers it can be resolved. Power represents legitimate authority,
upholding commonly held beliefs and sentiments, with the law in books and in action reflecting the ‘core’ values
of society.
2/ In contrast, the conflict model sees society as an unstable system involving continuous political struggle
between hostile groups with different goals and values, with the maintenance of power requiring inducement
and coercion. Law is seen as an instrument of repression for perpetuating the interests of the powerful, at the
cost of alternative interests, values and norms.
The representation:
(Consensus)
∫
(Conflict)
with the introduction of another concept called ‘pluralism’, evolves to a four part model.
Pluralism (def = Theory countering ideas of absolute sovereignty by viewing the state as one association
amongst many, and arguing that power is dispersed among all the associations and interests of civil society, not
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concentrated in the state. Gamble) has been introduced to this dichotomy to produce a rough ‘continuum’ that
can be displayed as such:
1/ Pure Consensus
2/ Consensus pluralism
3/ Conflict Pluralism
4/ Pure Conflict
This four way model is still predicated on the assumption that conflict and consensus are the fundamental
alternatives, though some recent Marxist theory suggests that power is exercised through the manufacture of
consent, and does not fit well with this model. (We’ll see why later.)
1/ “Pure” consensus theories say the law is the product of societal values which transcend the immediate
interests of groups or individuals, with law generally believed to emanate from a “collective consciousness”,
deriving from a source “equally authoritative for all mankind.” (Hall, 1960). Legal norms are seen as “emerging
through the dynamics of cultural processes as a solution to certain needs and requirements which are essential
for maintaining the fabric of society.” (Chambliss, 1969). Within classical social theory the consensus view is
closely associated with Emile Durkheim (1858-1917), who saw primitive societies as a unified whole, with a
common culture and a collective conscience, agreed values and aims and consensus on the content of criminal
law. (Def: Collective Conscience = The common values that shape individual experience and maintain social
order and community; Durkheim, cited in Gamble.) Durkheim said: “[I]n effect, the only common
characteristic of all crimes is that they consist in acts universally disapproved of by members of each society.”
Durkheim saw conflict as being caused by a pathology within the organism of society which causes system
imbalance, (I feel that way sometimes.) which can be rectified and a healthy (consensual) society restored by the
development of the “spontaneous” rather than the “forced” division of labour.
C20 versions, such as by Wolfgang Friedmann, see legal change as closely influenced by “public opinion”,
regarding liberal democracies as geared to do this. He says; “In a democracy, public opinion on vital social
issues constantly expresses itself, not only through the elected representatives in legislative assemblies, but
through public discussion in press, radio, pressure groups, and on a more sophisticated level, through scientific
and professional associations, universities and a host of other channels.” Legislation is seen as reflecting at the
very least the opinions of the majority of society, equalling a “barometer of the moral and social thinking of a
community.”
Both in its C19 and C20 forms, pure consensus theory represents the orthodox view of law; as neutral,
protecting individual equally. (But) The methodological individualism that characterises a lot of this work tends
to preclude an analysis of group power, and so is accused of naivety of the way powerful interests influence the
law. An important point is for an issue to become a vital social issue often depends upon it largely being seen
subjectively as a social problem. (ie, domestic violence. Some statistics tend to suggest you are more likely to
suffer violence within the home than on the streets, therefore is it appropriate to worry so much about walking at
night?: Dave). Moral entrepreneurs (Mr. Nile?) then tend to impose their definitions on what is normal, etc.
Cohen suggests that pure consensus model supporters may have to limit their claims to the general character of
the law. (As exceptions always exist.) Tomasic goes further, saying consensus is limited to the level of the
rhetorical or normative.
2/ Consensus pluralism is more sophisticated, acknowledging the presence of competing groups and
interests. It recognises stratification in society but believes it follows from legitimate criteria. Social class is
determined primarily by reference to occupation and income levels.
Two tenets of the consensus pluralism model: 1/ It maintains the essential element of consensus, seeing the
state as providing a value-neutral framework within which the struggle of ‘competing but balanced interests’ is
contained. It proposes that there is a plurality of norms and values and that the population is heterogeneous,
seeing conflict resolved through consensus. There is consensus on how laws are to be made and disputes settled,
therefore it is in everyone’s interest to maintain a political apparatus for peaceful resolution. Ie, the state. 2/
Power is more or less equally divided between different groups and interests. No group can become a ruling or
power elite because power is scattered among a number of groups and associations. Thus “everyone, including
those at the end of the line, gets served.” It may be seen as a description of how modern western democracies
actually (vs theoretically) work.
Critics of the consensus pluralist approach suggest it ignores a considerable amount of evidence that some
groups do win (business?) more frequently than others, and that the state does not act neutrally, commonly
functioning to reinforce class, racial and sexual inequalities. Schattsneider says: “the flaw in the pluralist heaven
is that the heavenly chorus sings with a strong upper class accent.” Critics also say those with the power are in a
better position to increase it. Chambliss and Seidman contend: “Whosoever is in control of the State uses it in
his own interest”, reflecting the value free model of the State because the activities of government are not
confined merely to the application of fixed rules to facts, therefore whoever gets to make the rules will us them
in their own favour. LIC’s authors say Conflict theories largely grew out of this criticism, having fundamental
conflict between them over means and ends (re human endeavour).
3/ Conflict pluralism (sometimes known as radical pluralism) is consistent with various forms of elite or
interest group theory. Conflict pluralism sees power in society as being divided between a range of groups and
interests, maintaining there is no ultimate system of values to provide the existence of these groups with
legitimacy. Contrary to the consensus models, power is not seen as held more or less equally among many
different groups, rather disproportionately by groups such as “big business”. They cite this as a reason why
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despite the emergence of labour and social reform movements there has been relatively little redistribution of
wealth or income from the rich to the poor. Conflict pluralism challenges the assumption that the state is a value
neutral framework. Chambliss and Seidman believe this saying: “Legislation arises to further the interests of
one group or another, against other interest groups and, sometimes the entire society.”
Conflict pluralism differs from consensus pluralism in asserting that particular groups are
disproportionately advantaged in the law creation process, as they say there are strong links between such
groups (Business Council of Australia?) and the State. Gordon says: “[the legal system is] not a set of neutral
techniques available to anyone who could seek control of its levers and pulleys, but a game heavily loaded in
favour of the wealthy.” Conflict pluralism, though backed up by a reasonable amount of empirical research,
may have serious limitations. One is that, “It has never developed beyond a case by case indictment of selfserving interest groups into a systematic analysis of conflicting claims and the order into which they are likely to
be resolved.” (Stein). It lacks any developed concept of the basis of power.
4/ Some of the shortcomings of conflict pluralism led to some American sociologists placing instrumental
Marxism (which does identify the ‘who’ by saying the law is an instrument of the ruling class) at the pure
conflict end of the scale. The conflict pluralism model is useful as a tool for recognising the state and law making
have values, and sensitises us to any gap between liberal ideals and the reality of liberal societies. The range of
models provide a way of seeing (a critique) of the law. Two criticisms: 1/ It doesn’t claim to represent the reality
of law creation in every case. 2/ The concept of power implicit in the conflict model is inadequate in that it is
instrumental and uni-dimensional. Most conflict studies assume ‘A’ is powerful if she or he succeeds in affecting
what ‘B’ does, though this may ignore the ideas of Steven Lukes in Power: A Radical View, that power is at its
greatest when it is unrecognised, and it is most effectively and insidiously used to prevent conflict from arising
in the first place. (If the coercion is seen as overt.)
Matthew Crenson’s study of a USA steel mill’s avoidance of anti pollution laws in “The Un-politics of Air
Pollution” described how a company’s tendency to “not do was probably more important…than what it did do”,
re avoidance of a conflict.
In an attempt to overcome some of the shortcomings of then consensus-conflict dichotomy, some social
theorists turn to Marxism. (For other reasons as well probably: Dave) Re Marxism, Hugh Collins says in
Marxism and Law (1982):
“Marxism is a theory about the meaning of history. However aimless the wanderings of mankind may have
seemed to others, Marxists have discerned a regular evolutionary pattern controlling the human condition.
Behind the complexity and particularly of isolated events human civilisation has been gradually moving
towards the goal of history. Once the direction of this progress and the reasons for social change are perceived,
then the secrets of the future can be glimpsed. According to Marxism, the meaning of history is that man’s
destiny lies in the creation of a Communist society where men will experience a higher stage of being
amounting to the realisation of true freedom.”
Marxist methodology is usually described as ‘historical materialism’, with its primary assumption being that
the source of social change lies in the “material conditions of life.”
Marx believed the history of societies was a history of changing “modes of production”. ie, primitive, slave,
feudal and capitalist, with the socialist mode of production being a transitional stage towards the end state of
communism.
Modes of production are seen as comprised of two basic elements, those of production and those of the
relations of production. The forces of production broadly = the skills and resources in a society (ie technology),
while the relations of production are the relationships that people enter into (willingly or otherwise) in the
course of producing goods and services.
In capitalist society, the relations of production are based on a class system divided in two:
1/ the owners of the means of production (= the bourgeoisie), such as the factory owners, 2/ and those who sell
their labour (= the proletariat). The two classes are seen as having irreconcilably conflicting interests.
Historical materialism contends that the catalyst behind the evolution of societies lies in the contradiction
between the forces of production and the relations of production, with technological change bringing change in
the relations of production, such as that brought by industrialisation in many western societies with the rise of
the bourgeoisie and a distinctive proletariat and the demise of aristocracy. (It is worthwhile recognising that
Marx’s life (1818-1883) was in an era where revolutions in Europe were much more frequent than we are likely
to assume; ie, Scientific Revolution; C17, English Revolution 1640-1688, American Revolution; C18, French
Revolution; C18, ‘Industrial Revolution’; C19. This list is approximate and non exhaustive. The contributions of
Marx, who lived at a time when some families literally lived and died in factories are often undervalued for lack
of this consideration. See extracts from Capital by Marx in the issued materials for contracts.)
Communism, the ultimate mode of production, will not have these class distinctions “Each person will give
according to ability and take according to need. The notion of private property, typical of capitalism, or stateowned property typical of the transitional socialist stage, will be redundant. As the word communism implies,
productive property will be communal. (Socialism is seen as the transitional stage of historical development
preceding communism.)
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The relationship between the motivations for human behaviour and the mode of production is sometimes
described using the metaphors of superstructure and base, with the forces and relations of production being the
base and the social, cultural and political practices being the superstructure. The extent to which one determines
the other is a matter of debate, which is raised in discussion (following) re Marxism and the Law.
Marx did not have much to say directly about the law, (though an incredible amount directly), with his work
concentrating on the operations of capitalism, especially in the UK. (Have you read the contracts notes yet?:
Dave). Hugh Collins describes the are of Marxist jurisprudence in Marxism and Law. He says: “The principal
aim of Marxist Jurisprudence is to criticise the centre-piece of liberal political philosophy, the ideal called the
Rule of Law” (See 43) …Their efforts merge into the general purpose of Marxism which is to mount a sustained
offensive against the existing organisations of power in modern society…Marxists examine the real nature of law
in order to reveal its functions in the organisations of power and to undermine the pervasive legitimating
ideology in modern industrial societies known as the Rule of Law.
Marxist jurisprudence sees the law to be as in an all embracing conflict theory. LIC’s authors describe it as ‘a
total ideology (See 10), enabling a ‘systematic account to be constructed of the way that powerful groups use
law. The authors of LIC say Marxist jurisprudence has not realised this potential however.
The ‘crude materialist’ positions of Marxist jurisprudence fall into two categories.
1/ Those adhering to the base-superstructure metaphor, claiming law is simply a ‘reflection’ of the economic
base. This approach does not provide explanation of how laws change when a society moves from one mode of
production to another, or consider non-economic areas of law such as traffic and assault, etc.
2/ The second position is commonly called class instrumentalism, proposing that rules “emerge” because the
ruling class want them. Collins: “Instead of laws being described as a reflection of the mode of production, they
were explained as creations of the state apparatus to further the ends of the ruling class.” Class Instrumental
Marxists may see criminal laws as ways of protecting property (owned mainly by the ruling class). “Class
Instrumentalism is the strand of liberalism which could be most plausibly described as ‘pure conflict’ re
placement on the consensus-conflict continuum.”
Criticisms of Marxist approaches: LIC’s authors claim the instrumental position ‘does little justice to the
complexity of social class,” by claiming the inevitable conflict within members of the ruling class (owners of
capital = ‘capital’) diminished its potency as a coercive force. They say “the instrumentalist position, therefore,
offers little to explain how such a diverse groups as the ruling class can act with sufficient unity to produce and
maintain complete legal order. (I would disagree, saying for its many faults, Marxist approaches at least
provide a reflection for the liberal democratic suppositions many Westerners develop within.)
Another criticism by LIC’s authors, relating to class consciousness, is based on the supposition that the rate
and complexity of modern life suggest an “all knowing and all seeing” ruling class is improbable. Class
instrumentalists may respond by claiming the bourgeois state acts as a form of management committee (NSW
Greiner Govt?), with the arms of government operating to minimise the likelihood of such an event. They say
“an account has to be offered of why the state should be seen as merely the tool of the ruling class. (Some
Marxists may say the state is not merely a tool of the working class, but that the handle used to guide it may be
both well worn and warmed by the influences of those with power in the state, typically those associated with
industry. Do you think David Dale [past editor of the Bulletin} has as much power as Kerry Packer, or a worker
anything that approaching a factory owner? Should they have? These are questions for you too answer
according to your subjective truths: Dave)
LIC’s authors also criticise the instrumentalist viewpoint for its apparent down playing of the interactive
process between law formation by imposition upon industry, etc. They also cite the diminished distinction
between labour and capital since the times of Marx as [breaking] ‘the direct nexus between ownership and
control implicit in orthodox Marxism.’
The instrumentalist approach may also fail in not satisfactorily explaining the large body of law which has
no obvious economic aspect, such as road safety, witnessing of wills, etc. Some Marxists may respond by
saying people make sense of their world by using ideological frameworks, which they tend to be unaware of.
(Have you considered why the Commonwealth of Australia provides law schools?: Dave) “People think they
are seeing the world the way it is” (See my explanation re the social construction of reality, on notes re 346:
Dave) That opinion, especially re which laws are just, etc. may be influenced strongly by subconscious
preferences or delineations, and not necessarily be related to one’s immediate interests. (What would you think
if you, as a law graduate, were required to provide their skills free of charge in given circumstances, as a
recognition of the support the state provided in your education?: Dave)
The notion of hegemony is explored as the power to make people see their world in a particular way so that
they think they are observing a natural and inevitable state of affairs. (Why is it assumed to be ‘normal’ to “get a
hair cut and a job’?: Dave) Antonio Gramsci and Louis Althusser have analysed modern societies especially re
the transmission of ideology. Antonio Gramsci, ((1891-1937), an Italian communist and Marxist theorist, who
whilst imprisoned by Italian fascists in 1926 wrote The Prison Notebooks, which went on to influence modern
Marxist thought, described hegemony as {para.}: Leadership and influence exercised by the bourgeoisie over the
proletariat, particularly through its control of education, the Churches, and the media, so gaining control for its
contained rule.)
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From this perspective, adopting the facility of hegemony, the ruling class ‘create consent’.
One institution for establishing hegemony is the law. If the law seems to provide what is wanted, people are
less likely to revolt against it, tending instead to blame their own disadvantage on other causes. The ideology
imbued in liberalism surfaces regularly in the expression of our laws, as Part A discussed. Bob Gordon says:
“Law, like religion and television images, is one of these clusters of belief - and it ties in with a lot of other non
legal but similar clusters - that convince people that all the many hierarchical relations in which they live and
work are natural and necessary.”
We might now see the law as an instrument of the ruling class which operates at an ideological and material
level. Legitimation of the hegemony helps explain those rules not connected with the pursuit of profit and
protection of property. (It may also be explained by the observation that economics cannot quantify or
adequately describe many human traits: Dave)
This discussion has shown up the limits of the consensus-conflict continuum model, suggesting ‘rule by the
powerful few might be quite consistent with a kind of consensus.’ But the absence of a ‘clear connection between
ownership and the enactment of law’ has been a theoretical departure for Marxism: the idea that a single state
may be relatively autonomous from the relations of production.
The relative autonomy thesis suggests the state, which is relatively autonomous from the ruling class, may
enact laws favouring the proletariat, thereby potentially ‘legitimising’ capitalism. This may help to explain why
versions of socialism have been adopted in modern capitalist societies, leaving the capitalist system relatively
unscathed. Marx and Engels (a friend and collaborator of Marx), said the state in bourgeois society must as a
matter of theory, be accorded some autonomy, representing at best the average interests of the ruling class. Also,
as the proletariat become more informed and sophisticated, real autonomy is needed to achieve the workers’
consent. (Or you could do what is done by the Right Wing death squads in El Salvador and drive into the
universities occasionally and shoot people with machine guns: Dave.)
Hugh Collins denies that the state is completely autonomous: “[T]he dominant class determines the
direction of political initiatives and ensures that the legal system serves to perpetuate the mode of production.
The democratic process disguises the presence of class domination behind the mask of formal equality of access
to power.” In summary, relative autonomy theory appears to ‘accord more with reality’ than orthodox class
instrumentalism. An analogy could be drawn to the claim that laws are determined by the background of the
judges making them. (Compare many HL decisions with those of the Australian HC.)
The dichotomies re hegemony versus ‘control’ by capital may be explained by the postulation that the best
way of making a system appear just is for it actually to be just, on occasion. The Rule of Law is therefore a sop to
absorb revolutionary energies. Likewise, legislation providing improved working conditions may satiate
workers enough to subdue their desire for radical change. (Factory conditions before the 1917 Russian
Revolution were appalling, with children often dying in the factories. Some people suggest social security’s
main purpose is to maintain a healthy and relatively compliant labour force: Dave) While many more
perspectives and arguments re consensus and conflict in society exist (including yours) those covered hope to
provide a reasonable landscape to help you develop your ideas.
(c) STUDIES OF THE EMERGENCE OF LEGISLATION
This section continues to look at the interactions of the law, class and power. Almost all the studies suggest laws
do not just happen when they are needed, rather that an individual or group must have a strong enough interest
in their creation to induce it.
The question of what factors will determine their success in doing so is considered by the USA sociologist
Howard Becker, who claims such success depends on the ability of that group to bring it to the attention of
others, convincing them that public action is necessary, defending particular definitions against those of others
(ie The Wilderness Society vs the Mining Industry Council), and on access to publicity and political power.
Becker calls the key participants in these activities “moral entrepreneurs”, who unite to eliminate social evils
from society, demonstrating this by detailing the evolution of the USA Marijuana Tax Act 1937. He shows that
the sustained and large scale moral enterprise provoked by the activities and ideology of the USA Federal
Bureau of Narcotics in the 1930’s, particularly by its head, Harry Anslinger, led to an ‘awareness’ of a major
social problem and forces subsequent legislation. Becker claims deviance is always the result of such enterprise,
saying: “…Rules are not made automatically. Even though a practice may be harmful in an objective sense to the
group in which it occurs, the harm needs to be discovered and pointed out People must be made to feel
something ought to be done about it…”
DJ Dickson interprets the evolution of the Marijuana Tax Act 1937 differently to Becker, claiming the
emergence of the Act is explained by the needs of a bureaucracy under severe pressure, re morale, funds and
status. He suggests the Narcotics Bureau had a strong interest in persuading others that marijuana was a
dangerous substance that should be made illegal, and so embarked on a campaign to ban it, despite it having
only been the subject of a few infrequently enforced state laws. (An analogy is the 1930’s prohibition of grog,
which I believe was portrayed very well in the film ‘The Outsiders’: Dave) The Bureau also contacted other
groups to increase its power base. (Consider this in light of Macey’s essay on Public Choice Theory, pp 213-216:
Dave)
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A significant common factor in Becker’s and Dickson’s analysis is that neither portrayed law creation as
initiated by mass society, as “public opinion…was “manufactured” to lend support to the legislative campaign.
The potentially crucial role of personal, financial and other material interests that may have played a larger part
in the enactment of the Marijuana Tax Act than Becker and Dickson accounted for, should not be ignored.
Galliher and Walker’s subsequent re-interpretation argues that drug laws are generally passed to help control
specific ethnic, economic or racial minorities, and in this instance to control Mexican Americans during an
economic downturn. Lemert also criticises Becker’s analysis as “narrowly centring on issues like alcohol and
drug use, gambling and sex (Collecting the data was more fun!: Dave) …In decided contrast, the law of
theft…scarcely can be said to have resulted from Moral Crusades.”
Many other emergence studies have emphasised the centrality of economic and financial (rather than moral)
interests in influencing the shape of the law, such as the observation that politically and economically powerful
groups have more chance of success in the large majority of issues, than have moral entrepreneurs.) (Ideas
concerning monopoly capitalism seem to agree; ie, the bigger, the stronger.)
In a study of English vagrancy laws, Chambliss concluded that “vagrancy laws were mobilised differentially
in different periods of history”. He describes how population declined following the C14 ‘Black Death’ (bubonic
plague), and vagrancy laws were mobilised to minimise the ability of workers to use discretion in their
acceptance of labour in other localities. A 1343 statute deemed it a crime to give alms to any person who was
unemployed while of sound body and mind, and seeking of higher pay for these people was forbidden.
Chambliss says; [Vagrancy statutes were designed for one express purpose: to force labourers (whether
personally free or unfree) to accept employment at a low wage in order to insure the landowner an adequate
supply of labour at a price he could afford.” He also cites how the laws were remobilised to ‘clear the trade
routes for the furtherance of commerce’ later in C16.
Chambliss’ study is frequently cited in support of “interest group” theory and is located within the “conflict
pluralist” framework, though Marxist class theory probably provides a better framework for it. In subsequent
studies re C19 and C20, Chambliss has reinterpreted his data to develop a more sophisticated ‘Marxist inspired’
theory of law creation, saying, ‘the emergence of vagrancy law, in common with others laws, is the result of a
process in which lawmakers attempt to deal with the contradictions, conflicts and dilemmas inherent in the
political, economic and social relations of a particular historical period.”
In other words, legislative changes are seen as a response to contradictions inherent within capitalism,
leading to conflicts that lawmakers must then “decide what laws are needed to resolve or at least ameliorate the
conflicts.” (Some Marxists would say this is impossible within the existing system of capitalism, hence the need
for ‘revolution’, rather than ‘evolution’: Dave) One criticism of Chambliss’ earlier studies re vagrancy was his
supposition that individuals or groups had ‘instrumental’ aims, wishing to achieve a concrete identifiable goal
and utilised legislation as a mechanism (“instrument”) to achieve it.
Gusfield’s description of the USA Prohibition on alcohol in the 1930’s recognised the possibility
(likelihood?) that legislation may be ideological, or symbolic rather than instrumental, saying those who
supported outlawing alcohol use (abstinent, Protestant middle class) were far more concerned with what the law
symbolised (moral superiority over Catholic drinkers) than with whether the law could be enforced. Gusfield
says: “Legal affirmation or rejection is…important in what it symbolises as well as or instead of what it controls.”
Carson’s study of 1833 English factory legislation, which brought physical squalor and long working hours
for workers and prosperity for owners is interesting. Carson says pressure from Tories (UK conservatives) for
legal protection had symbolic overtones of the landed gentry striving to reaffirm traditional values and their
power over the growing power of the middle class manufacturers. E.P. Thompson (See 49) said the views of the
Tory reformers “reveal deep sources of resentment and insecurity among traditionalists before the innovations
and the growing power of the moneyed middle class.”
Many manufacturers “saw the reformers’ allegations as a reprehensible attack upon the manufacturers as a
group, and upon the factory system as a whole.” The 1832 Reform Bill, which substantially increased the
parliamentary representation of the manufacturing districts at the expense of the landowners, gave the Whigs a
victory over the Tories, by allowing the establishment of a Royal Commission “to clear their reputation from the
aspersions of the Select committee and to blame the worst abuses on the smaller mills and vindicating the larger
ones. Legislation then enacted limited women and children’s working day to ten hours which Creighton says,
“was expected either to reduce the total hours worked by smaller factories.”
So the 1833 Factories legislation, apparently more a case of conflict within a class than between, (Do you
agree?: Dave) suggesting the power of the working class was still subordinate to the capitalists’ interests, by
supporting legislation which they perceived as in their economic interest to do so.
LIC’s authors say Carson’s analysis emphasises the necessity of “portray[ing] symbolic meaning as an
emergent property of the interactional sequences occurring in connection with particular pieces or types of
legislation.” As a theme, it seems that only when the unpalatable symbolic element was neutralised were they
able to return to the original instrumental agenda. (Like providing tax cuts when you introduce a 15%
Consumption tax: Dave)
As Marxists and the Critical Legal Studies movement suggest, it is worthwhile recognising that the law can
be important ideologically as well as instrumentally. Some of the best work in this area is Douglas Hay’s
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analysis of C18 English criminal law, which concentrates on the presence of the large number of capital offences
(mainly concerning property) and the relatively low number of simultaneous convictions. Hay argued the
ideology of the law was manipulated to use it as “an instrument of authority and a breeder of values,” with the
elements of 1/ majesty, 2/ justice and 3/ mercy serving these ends.
1/ The majesty of the law was encapsulated in the spectacle and elaborate ritual that surrounded public
trials, which Hay describes, claiming the judges used the trial as a platform for addressing “the multitude”. (For
those with a strong stomach, Foucault’s book Discipline and Punishment has a very powerful Ch 1 on this issue in
France. See these notes, 253) Hay says the aim of these ritual ceremonies “was to move the court, to impress the
onlookers by word and gesture, to fuse terror and argument into the amalgam of legitimate power in their
minds.”
2/ The ideology of justice, generally that all men were equal, was also important, helping to give legitimacy
to existing power relationships. Hay says; “When the ruling class acquitted men on technicalities, they helped
instil a belief in the disembodied justice of the law in the minds of all who watched. In short, its very
inefficiency, its absurd formalism, was part of its strength as ideology.”
3/ The element of mercy allowed ferocious penalties to be mitigated by the widely exercised discretion to
pardon offenders. By displaying ‘mercy’ to the weak the class nature of the oppression was subdued in the
minds of the populace, making the law appear a humane force operating in the interests of all. Roshier and Teff
say; “[T]he extremely harsh formal punishments provided an important backdrop of terror which helped to
endow the law with its quality of mercy…which enabled the ruling class to legitimise their position in the eyes of
the ruled; to command the deference and establish the authority which constituted the basis of their successful
hegemony throughout the eighteenth century.”
These techniques facilitated a spirit of consent and submission that was important to maintaining the
[existing] social order, that would have been difficult to achieve solely by force. Law as ideology, legitimised the
entire class structure of the C18.
In conclusion, LIC looks at Carson and Henenberg’s study of the Victorian 1985 Occupational Health and
Safety Act, seeking to “make sense” of it by “linking its enactment and import to the wider social structures,
processes and developments within which it is embedded.” Carson and Henenberg say; “[The Act]…signalled
an ideological separation of occupational health and safety issues from the war torn terrain of industrial
relations.… [T]he clear legislative message was that these issues need no longer be canvassed as one of
conflictual class relations or of class domination.”
Commenting of the working of the Act, LIC’s authors say, [traditional practices] “supported the view that
safety was a ‘matter for managerial prerogatives on the one hand and for the State on the other.” Where workers
were involved in the inspector’s practices the emphasis was usually on the “careless worker syndrome,”
implying that what needed fixing was the worker, not the workplace. Inspection practices also helped avoid
intervention by the criminal code. Carson says the inspectorates have operated on the basis of consultation,
education and co-operation with management.
The 1983 wages accord allowed government and trade union attention to move onto health and safety, and
with concerted efforts from groups such as the Victorian ALP Left, secure legislation allowing establishment of
both sight safety rep’s, and to encourage self regulation by workers and management. Nevertheless, Carson
warns against over estimating the extent of substantive reform, with LIC’s authors saying “The basic power
structure of society does not shift that easily.”
On this issue, Panitch says legislation which creates the appearances of equivalence (here between workers
and management) may obscure historically resilient differentials of power. (Do you think the 1990 dispute at the
Victorian Hoechst Chemical plant may provide an analogy?: Dave) Neil Gunningham (the same) says;
“Ultimately, the threat of “capital flight” (In the case of industry, owners liquidating assets and removing them
from a territory, usually to a region with less stringent guide-lines: Dave) may be enough to silence most union
demands for changes in occupational health and safety practices.”
In summary, Carson and Henenberg ‘sensitise’ us to the ideological and hegemonic properties of law in areas
such as occupational health and safety, but caution that reform is limited by the power inherent in the unequal
relations of production. As the next section discusses, the emergence of legislation is only part of the struggle,
with the implementation of unpalatable measures providing plenty of scope for frustration of the intent of
legislation. As Gunningham says re early pollution legislation in Britain, “well nigh impregnable barriers” were
built into the legislation which…made it “nearly impossible to prosecute the recalcitrant industrialist who is still
largely responsible for black dust and dark smoke.”
A similar scenario of legislation without enforcement is outlined in a study of a Norwegian stature aimed to
regulate the conditions of women who work as housemaids.
The Reagan administration’s treatment of the Environment Protection Agency in decimating its enforcement
agency’s budget is another ‘wonderful’ example.
This next section continues the theme that the struggles re law, class and power do not stop with the creation
of legislation.
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(d) THE IMPLEMENTATION OF LEGISLATION
{The struggle for power does not end when legislation is passed. A group may not be able to stop a law, but
possibly can complicate its implementation. A ‘flow chart’ of sorts that is aimed to reflect the expression of
‘public interest’ but it is susceptible may include;
Public interest > Legislation > Implementation > Social Goals
There are a variety of reasons why the implementation process might be deflected, including subversion by
private interests who deliberately interfere. Most governments are unlikely to threaten capital in a big way (ask
Gough!). Stuart Macaulay talks about how lawyers can subvert the implementation of legislation, especially if
they favour larger clients. Susan Hatty’s study showed how police are unlikely to enforce the law re domestic
violence.}
The strong utilitarian theme in Australian society, which allows a degree of state intervention into the
privacy of individuals to maximise the general welfare of society, also makes the important assumption that the
law can be used to achieve predetermined results in social and economic arenas. (Reform with the goal of
achieving socialism through legislation is the realm of a group you may have heard of called the Fabians, and
have modern associations with the ALP: Dave)
The instrumentalist view which assumes that the law is an effective instrument of social engineering,
regarded laws once enacted as independent of their political and social contexts. Griffiths claims this
assumption is false, citing the difficulty with which the instrumentalist view defines the criterion by which a law
can be deemed ‘effective’. Griffiths has distinguished between four different effects a legal rule may have: 1/
Direct, 2/ indirect, 3/ independent and 4/ unintended effects
1/ Primary direct effects occur when the primary (target) audience at whom the rule is directed conform with
the letter of the rule. Secondary direct effects are said to exist when the law’s administrators carry out their
function. He uses the example of implementation and compliance with drink driving laws.
2/ Indirect effects are those that are not directly intended but accompany the legislation, such as reduced
fatalities re drink driving laws and/or the bankrupting of some pubs.
3/ Independent effects are those occurring independent of any conforming behaviour, (such as the ability to do
more roadworthies on cars during anti-drink driving programs) or as illustrated, workplace reform allowing
the government to promote itself to constituents, demonstrating that laws may be as important for what they
symbolise as much as, or instead of, what they achieve directly. Griffiths says, “[i]t would be sociologically
silly to describe a law as ineffective just because it is not obeyed.”
4/ Unintended effects, such as the rise of bootlegging during the 1920’s prohibition, often unintended, make the
means of achieving social change problematic. (Much like using too many pesticides: Dave) Griffiths
concludes that the implementation process is so variable and pliable that generally “legal rules, considered as
instruments of social change, are not very important”.
Griffith’s view points out that contrary to the instrumentalist perception, [directed] social change via legislation
is far from straightforward. (Just ask Gorbachev: Dave) Bardach expands this saying, noting the inevitable
influence of a plurality of interests; “A single governmental strategy may involve the complex and interrelated
activities of several levels of government bureaus and agencies, private organisations, professional associations,
interest groups, and clientele populations.”
In synthesis, “the political processes are important in determining and conditioning the implementation of
law”, as the law is, in addition to being an abstract body of rules, a variety of processes, practices and/or
conventions. (How do you think John Kerr would view this?: Dave)
So, as with emergence studies, the implementation process can be analysed by reference to the
(consensus/conflict) continuum of political models identified earlier. (See notes from 309) Bardach provides an
example of this, labelling the emergence of legislation as the “adoption of policy mandates.” saying;
“implementation is the continuation of politics by other means.” The politics Bardach refers to is that of
consensus pluralism, of more or less equally powerful competing interest groups, with an important point being
that implementation of legislation is about politics and power
Explaining how implementation processes are important in shaping our legal system is more difficult than
identifying it, due to the inherent significant methodological problems, the problem of establishing causation
between rules and their effect, and the crucial issue that any single theory of implementation could adequately
account for any given instance.
Nevertheless, LIC’s authors suggest general observations can be made about the relationship between the
implementation of laws and power. These include the obvious consideration that the agencies administering
laws can influence its expression, with agencies often responding to the power exerted against them in their duty
by expanding or modifying their influence.
Tomasic notes that studies of agencies such as the Trades Practices Commission or the Australian Securities
Commission encounter an inevitable failure of regulation. (This point was made strongly by the ASC’s past head,
Henry Bosch: Dave). Some describe the exertion of power over agencies by those it is charged to scrutinise as
“capture theory”.
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Capture theory proponents allege the enforcement practices of regulatory agencies tend towards being
‘captured’ by the ideals and interests of those ‘regulated’. This may arise out of an exchange or reliance on
technical information provided by industry, and/or the movement of individuals between regulation bodies and
industry. (Who usually pay a lot of money for people with these ‘skills’: Dave.) The enforcement of occupational
health and safety legislation is an area of industry where evidence of capture is evident. Despite estimates of
work related injury and illnesses costing $10 billion in 1989 (amongst other major social costs), numerous studies
have shown that (some) safety standards are either not enforced or are applied inadequately, with needless
injury and death resulting: Gunningham.
The mining industry is a specific example of the non-enforcement of safety standards. Evidence suggests
inspections are 1/ often infrequent, 2/ may be accompanied by advance warning and 3/ that the responses of
inspectors to any breaches of safety conditions may be inadequate.
Grabosky and Braithwaite’s study of Australian regulatory agencies found mining safety inspectorates had
a low level of prosecution activity accompanied by a low level of fines on mine owners. (Consider this in light of
the alleged instance of the Northern Territory’s Ranger Uranium Mine in Kakadu releasing potentially
radioactive water into the creek system with only a matter of some hours warning to Aboriginal groups living
downstream: Dave). They noted the (intimate) association between industry as mining inspectors are usually
recruited from ‘the ranks of mine managers’. Grabosky and Braithwaite say; “mine inspectors in all
[Australian] states are required to have at least three years experience in mine management. …most states do not
like to employ people who have not had at least ten years mining experience including experience as a mine
manager.” (Mining: One of Life’s Essentials?: Dave) This means the inspectors are likely to be the professional
peers of those they are inspecting.
Neil Gunningham’s study of asbestos mining at Baryulgil in NSW, found when mine inspectors were
confronted with powerful industrial interests they tended to prefer an enforcement strategy that emphasises
friendly persuasion, cooperation and conciliation rather than accusation, confrontation and coercion.
Hopkins found a similar scenario in his study of the 1979 Appin coal mine explosion which killed 14 miners,
which was initiated by a gas build up exploding. Hopkins said; “The pressure to [request management to do
something about the problem but allow mining to continue] is overwhelming and since such situations rarely
arise routinely on mine inspections a pattern of non-enforcement develops.”
One explanatory landscape may be to see these situations as the result of political processes of compromise
between more or less powerful interests, which though may fall within a broadly pluralistic framework, is
probably better explained by conflict theory. Transposing the labels of the actors to the state (the mining
inspectors) and capital (the mine owners) the threat of inducing a slow down in economically significant
operations becomes a clearer dilemma. Nevertheless, De Michiel says; [t]he existence of some protective
legislation and a bureaucracy to administer it give the appearance that something is being done to prevent
accidents and disease and that the interests of capital are not permitted to dominate those of labour. The state
simultaneously maintains the appearance of neutrality and legitimacy.” [And] “Corporations depend on state
regulatory agencies to stabilise the business environment.” (These comments strike me as having similarities
between the activities of the NSW, Victorian and Tasmanian Forestry Commissions and those of the private
industries they respectively regulate: Dave)
Another important group in the implementation processes is the legal practitioners and judges. If lawyers
do not inform their clients of developments in the law, its implementation is less likely. LIC looks at Macaulay’s
study of the implementation of a USA consumer law, (probably of similar intent to the TPA in Oz.) which found
that lawyers acting for business clients tended to interpret it in a way that it minimised its burden on their
clients, while those acting for consumers knew little if anything about the Act. Macaulay says; “…Liberal
reforms such as consumer protection laws create individual rights without providing the means to carry them
out… [I]n practice, justice is rationed by cost barriers and the lawyer’s long range interests.”
The influence of judicial interpretation in determining the effect of legal rules ranges from the implausible
claim of some formalists to those claiming a judge’s decision may be influenced by his breakfast. Gerald Fugg
provide an argument somewhere in between these saying; “Legal decision makers operate within a legal system
that they both inherit and construct. … The relationship between legal decision makers and the legal system is
far too complex to be captured by either the concept of objectivity or subjectivity.”
Hatty’s 1988 study of the implementing of the Crimes Act 1900 in NSW, shows the police to be a powerful
interest group in both interpreting and enforcing the law. Amendments were passed that sought to treat
‘private’ domestic settings as any other ‘public’ criminal assault, and where affirmed by the then Police
Commissioner in a policy directive. In conclusion, amongst other details, Hatty found, “Police are not
implementing the Crimes (Domestic Violence) Amendment Act as intended.”
During interviews Hatty found over one third of the police officers were unaware of the new legislation,
with mixed messages being found in training manuals and lectures. Hatty also found a significant factor was
police anger and frustration at the practices of magistrates when it came to sentencing domestic violence
offenders. One police officer said; “The legislation breaks down because the courts don’t enforce it.” When
police were asked about their attitude to the cause of domestic violence, Hatty summarised their response
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saying; “…officer beliefs regarding the causation of the incidents were remarkably similar to rationales by the
male partners in their verbal abuse…”
The important point is that despite clear directives, attitudes of police were able to structure and constrain
the implementation of the new laws. In a (justifiably) strong summary Hatty says; “The findings of this research
clearly indicate that police discretion in incidents of male violence operates to reduce the likelihood of the
offender being arrested. The decision making processes affecting discretion are guided by misogynist ideologies
in which women are blamed for their own victimisation, men are absolved of responsibility for their violent acts,
and police officers continue to support the use of violence against women.”
It is important to note that the police (as agents of the state) are not only able to define the operation of the
legislation, they also are crucial in structuring public perceptions of the problem. Hatty notes that after release
of her study, the police bureaucracy was able to “gain widespread media coverage of arguments that; deflected
attention from the attitude of the police to the apparent onus on women to be responsible for avoiding violence,
sought to promote a more positive image than revealed in the study and tried to isolate and minimise the
significant of feminist concerns about the study.”
In summary, rule enforcers and rule interpreters may have an enormous impact on the implementation of
legislation by the way they process and modify legislative changes, described by Kidder as ‘filtering agents’.
Kidder says, [T]he routines which filter the impact are not the result of impersonal impartial, structural
pressures, and their effects are not impartial. Rather they favour the wealthy, the powerful, because they are
produced by pressures put on the law’s interpretative institutions by those seeking to preserve and enhance their
power and having the resources to do it.”
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(e) CONCLUSION
Structural inequality along lines other than race and gender(maybe including them?), appears to be endemic and
worsening in Australia. (Marxists may say; “what else do you expect of capitalism, which requires inequality to
maintain incentive to trade, etc.?) Inequalities in wealth bring inequalities in power (in a capitalist society).
This chapter looked at whether the law is removed from the initial distribution of inequality, is confined to
the protection of formal equality, and whether it is removed from the causes of substantive inequality. Does it
maximise social welfare and minimise social harm as a liberal utilitarian would want? Protect the rights of (all)
individuals as a rights based liberal asks? You decide, but the picture is likely to be too complex to provide a
definitive or universal response, partly because what you see, which will differ from one to another, influences
what you will think. (If you’re confused ask me, or interested, see The Social Construction of Reality by Berger
and Luckmann; ie, reality is socially created.)
A lot of sociology and politics cast doubt on the consensus model, with emergence and implementation
studies forming part of the evidence.
If you agree with the conflict model, that sees order maintained only by repression, the gap between liberal
theory and reality is huge. LIC’s authors see the conflict position as more applicable to times of extreme social
upheaval and say it is difficult to maintain it as a description of the norm in western industrial societies. (The
increasing vigour of environmentalism et al may end up challenging this assertion. Do you agree?: Dave)
Studies of legislation also tend not to endorse it. Whatever your view, assessing the size (and nature) of the ‘gap’
seems to demand a view that” a true understanding of legislation cannot be divorced from an understanding of
power in society.”
CHAPTER 13: CONCLUSION
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349
(This is a collection of comments re issues raised in the book LIC I have re-arranged them in roughly Chapter
order.)
Chapter 1: LIC seeks to explore the relationship between ‘law’ and ‘context’, even though distinguishing the
two is problematic as there is no consensus about where law begins or ends. Nevertheless, the law is too
important to study in isolation from other areas of society.
Liberalism provides an organising framework within which the behaviour of the courts and the legal profession,
the allocation rights and responsibilities and the differential treatment of certain groups can be understood.
Ziegert says: “What is puzzling is that after decades of growing sociological consciousness…legal education is
still dishing up pretty much the same hotch-potch of legal training as before.” Stewart Macaulay continues:
“[M]any law professors experience vertigo when they open the doors and look outside appellate
courtrooms…Those whose personalities need order slam the door quickly and turn back to rules and great cases
decided by appellate courts.”
A strategy of exposing the ‘gap’ between the law in books and the law in practice can come across as
negative, though this is inevitable.
Chapter 2 The Rule of Law holds a central place in liberal theory, requiring that judges apply rules in certain
predictable ways so that individuals can plan their lives rationally. A claim by legal academics that the world is
not like this (which it isn’t) is potentially very threatening to their [conservative academics?] political outlook.
An Interpretation of ‘Law In Context’ / David Risstrom / 1991 / Page 59
350
351
352
Contract law is still frequently as a collection of abstract rules which are subject to bewildering exceptions,
though on reflection there is ‘a certain architecture in contract law at the level of values’ which begins with a
focus on the relations of exchange between competitive, self-interested individuals, epitomised by the
requirements of offer, acceptance, consideration and intention. Contract law is about enhancing and facilitating
exchange relations. It is premised on the idea that individuals are rational, autonomous and equally powerful
maximisers of their wants. Values of community and altruism prevail more commonly now in the courts than
before, as witnessed by the doctrine of consideration being under attack from promissory estoppel, and amongst
others, legislation (such as the TPA, which imposes the yardstick of unconscionability or unfairness onto
everyday commercial and financial transactions).
Tort law, when viewed with the spectacles of liberal theory provides some interesting insights into our
motivations such as Lord Atkin’s neighbourhood test which says we ‘each owe a duty not to injure our
neighbours.’ It requires us not to harm our neighbours, but not necessarily to help them. This may have
foundations in ideas such as John Stuart Mill’s ‘harm to others’ principle (See p15) and the classical liberals’
abhorrence of state interference in the imposition of obligations beyond that which help to directly serve self
interest.
Richard Abel argues; “contemporary tort law in intimately related to the rise of capitalism, as both cause
and effect”, and with industrialisation and commercialisation in western society has come new means whereby
workers, consumers and citizens can be injured by “capitalist indifference or miscalculation”. Abel says the
need of the capitalist class for profit maximisation, market expansion and increased consumption have been
supported in tort law, by measures such as the preference for negligence over strict liability, the doctrines of
contributory negligence and voluntary assumption of risk. Abel also says class discrimination may be expressed
by a propensity for blue collar workers to be covered under less generous state run schemes than the common
law provides for in tort action.
Chapters 6,7,8 and 9 looked at economic arguments re the optimal way to allocate resources. Chicago school
people stress the free operation of the market, claiming the market provides a necessary discipline against
corporate misconduct. On the other hand (moving away from some right wing perspectives) it is argued that
inequality between participants in modern political and economic life dictates a need for state regulation of
business activity so as to remove impediments to a fair and efficient re-allocation of resources, and that
regulation is needed to produce a ‘level playing field’ for all participants.
Chapter 3 considered the problem of ‘access to justice.’
Chapter 4 looked at the realities of litigation.
Chapter 5 looked at the role of lawyers in a system where negotiated settlements are the norm and contested
trials the exception.
Chapter 7 looked at the way law and economics scholars attempt to provide a framework within which rule
structures allocating tortious liability can be assessed in terms of efficiency.
Chapter 9 looked at some of the ethical implications of one kind of economic analysis.
Chapter 10 on gender suggests feminist jurisprudence may not be sufficiently developed to provide ‘answers’,
but is a reminder that some of the problems with the law are literally man-made.
Chapter 12 cautions against drawing strong conclusions about the correctness of the battle to reduce inequality,
whilst Chapter 8 on Public Choice Theory suggests we should be wary of the actions of regulators.
Claims have been made in recent times that the law is moving away from a formalistic rational application
of rules to an approach that relies on standards and discretion. Unger describes the rapid expansion of the use
of ‘open ended standards and general clauses in legislation, administration and adjudication.’ He argues this
indicates a “turn from formalistic to purposive or policy-oriented styles of legal reasoning and from concerns
with formal justice to an interest in procedural and substantive justice.”
As a final note, LIC ends up with an acidic quote from C Veljanovski, an American judge;
Law is parasitic on the social sciences, philosophy and other disciplines precisely because of its narrow intellectual base
which has deprived the subject of a theoretical framework. It is as Judge Bork has said, ‘a ship with a great deal of sail
but a very shallow keel.’
(What do you think and do you think you will do anything about this?: Dave)
Chapter 13. You’ve just finished reading it. Good night.
Books mentioned or used in the compilation of this summary:
Barry, N., 1989, An Introduction to Modern Political Theory, London, Macmillan Education Ltd.
Berger, P. and Luckmann, T., 1975, The Social Construction of Reality, Middlesex, Penguin.
Foucault, M.,1979, Discipline and Punishment-The Birth of the Prison, Middlesex, Penguin.
Gamble, A., 1981, An Introduction to Modern Social and Political Thought, Macmillan Education.
Lukes , S., 1974, Power: A Radical View, London, Macmillan.
Offe, C., 1985, Disorganised Capitalism-Contemporary Transformations of Work and Politics, Oxford, Polity Press.
Pusey, M., 1991, Economic Rationalism in Canberra: A Nation Building State Changes its Mind, Sydney, Cambridge
University Press.
An Interpretation of ‘Law In Context’ / David Risstrom / 1991 / Page 60
Schumacher, E., 1973, Small is Beautiful; Economics as if People Mattered, London, Blond and Briggs.
An Interpretation of ‘Law In Context’ / David Risstrom / 1991 / Page 61