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

2 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.

# 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.
3 # 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.
4 # 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
5 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.
6 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.
7 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.
8 “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.

9 CHAPTER 2: LIBERALISM, FORMALISM AND THE RULE OF LAW

9 (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.

9 (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)
10 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.
12 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.)

12 (c) THE ELEMENTS OF LIBERALISM
13 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

13 (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.
14 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.
15 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.
16 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.}
17 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?

18 (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.”
19 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.)

20 (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.
21 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.
23 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.

23 (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”.) 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)
24 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).
25 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.

26 (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).
27 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.
28 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 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.
29 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.

30 (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….”
31 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.)}

31 (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.
32 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 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.

33 (d) MANIFESTATIONS OF LIBERALISM The following section links the elements of liberalism outlined in the previous sections.

34 (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.
35 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.}

35 (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.
36 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 co-operation. 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)}

37 (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 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.)
38 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.)

39 (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)

40 (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).
41 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.)
42 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.
43 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)

43 (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.}
44 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?).
45 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

45 (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.

46 (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/
47 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. 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.)

48 (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)

50 (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)}
50 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.
51 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.]}
51 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.)
52 Some relevant points (≠ full summary): Alan Hutchinson, Dwelling on the Threshold, (1988) (Hutchinson attacks the plausibility of Formalism.) 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”.
53 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”.
54 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!)
56 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.} PART B - LAW AND SOCIETY

57 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.
58 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).

59 CHAPTER 3: ACCESS TO JUSTICE

59 (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.

59 (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.}
60 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.
61 “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).

61 (c) STUDIES OF ACCESS TO JUSTICE
61 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 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.”
63 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.)
64 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.
65 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.
66 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.}
67 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.
68 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.
69 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).

70 (d) RESPONSES TO THE PROBLEM
70 Provision of Legal Aid has been the most common response to legal problems in Western countries.

70 (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)

71 (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.
72 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).
73 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.

74 (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.
75 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.

76 (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.
77 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.
79 2/ Legal aid will expose the legal system to a broader range of clients, as thus assist its evolution.
80 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) 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)

81 (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?)}
82 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.
84 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.}
85 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

87 (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.

87 (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.}
88 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. 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.”
89 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.
90 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.

91 (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.
92 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.
93 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.
94 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.

95 (d) CRIMINAL LITIGATION Doreen McBarnet’s study of criminal cases in lower courts suggests the criminal courts have produced a two-tiered 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.}
96 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 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.
97 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.
98 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?}
100 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.”
101 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.
103 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.”

105 (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%.}
106 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.}
107 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.
109 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 courts, but says in criminal courts the routinisation of justice is not openly publicised, whereas in civil courts it is “intended and public.”
110 “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.
112 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)

113 (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

114 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.

115 (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.
116 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)}
118 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.
119 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.}
120 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. 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.
121 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.)
122 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.
123 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).

123 (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.’
127 Blumberg, a USA criminal lawyer looks at criminal defence there in, AS Blumberg, “The Practice of Law as Confidence Game.” (1967):
128 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.”
130 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.
133 Carol Smart (a third phase feminist, See 269) in “The Ties that Bind” considers solicitors’ views about social security and marriage breakdown: 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.”
136 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.”
136 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.”
139 The disparity between theory and practice in these matters is important to recognise given the ‘positivist’ predictions used by many economists.

140 (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.}
141 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.)
142 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.)
144 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.
145 “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.}
146 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.
147 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.
148 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.”
150 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.” PART C - LAW AND ECONOMICS

151 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.
152 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.”
153 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

156 (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.”

157 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)

158 (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;

158 (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.)

159 (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)
159 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.”
160 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.”
161 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’

162 (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.)
163 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.”

164 (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.”
166 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.
166 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.}
167 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 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
167 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.
168 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.
168 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,
169 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)

169 (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.)
170 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”.

171 (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.
172 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.}

173 (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?)
174 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.}
174 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.)

176 (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.}
176 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 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)
181 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.”
181 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.”
182 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).”
182 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):
183 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.”
184 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.)
185 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 an interest in building into their contract a mechanism for resolving disputes. Williamson refers to this mode of governance as ‘trilateral’.
187 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.
188 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)

188 (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.}
188 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.
190 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”
191 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.
192 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.” 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] No-Fault 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.
193 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.
193 This is an incomplete summary of The Economics of Law: Economic Imperialism in Negligence Law, [and] No-Fault 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.”
194 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.
195 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 ‘no-fault’ 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)
196 No-Fault and the Question of Deterrence 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.
197 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!”
198 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.”
199 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.
200 “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.” 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.”
201 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);
202 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)
205 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)

CHAPTER 8: PUBLIC CHOICE THEORY

206 (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.
207 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.)
208 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.
209 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.

209 (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)
210 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.)
210 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 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.
212 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)
213 “[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.”
214 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 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 co-existing 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…”
215 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.

216 (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.”

217 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)

218 (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.”
219 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.”
220 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.”
221 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…”
222 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.

222 (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 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?

224 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.}

224 (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 well-articulated 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.
225 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?) 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.”
226 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.”
227 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.
228 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: Dave) Balkin says this is akin to “shooting arrows at a board and then drawing bullseyes wherever the arrow lands.”
229 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.”
230 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.”
231 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.”
232 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.”
233 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.”

233 (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 ‘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)
235 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)
236 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.”
237 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.”
238 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 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.”
240 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.”
241 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.
242 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.”

244 (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 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.”
245 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.)
246 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).

246 (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).
247 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.”
248 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. PART D - LAW AND POWER

251 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. Non-Marxist 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.
252 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.)
253 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.)
254 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

255 (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. 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)}

256 (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.)
257 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.
258 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.
259 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.”
260 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.
262 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.
265 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.”
268 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.)

270 (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.
271 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 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;
276 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.
277 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.
278 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.)
281 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.
282 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.

284 (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?

CHAPTER 11: ABORIGINES

285 (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.}

287 (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.}
288 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.”
290 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.” 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.
291 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 non-Aboriginal 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.)
292 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.”
294 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.

295 (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.
297 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.
299 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. 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.

299 (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?)
300 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.
301 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.
302 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.
303 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.
304 IMPORTANT: Aboriginals have experienced to their detriment, one of liberalisms major failings, being its inability to adequately recognise anything other than individual rights.

305 (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, 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

306 (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.
307 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 under-report the wealth of the super-rich (with money in the Cook Islands, etc.)
308 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.’)
309 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.

309 (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.
310 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 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.)
311 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.”
311 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.
312 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).
314 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 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.”
315 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 self-serving 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.
316 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.)
317 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.”
318 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.)
319 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 state-owned 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.) 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.
320 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.”
321 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)
322 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)
323 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.) 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)
324 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.

325 (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.
326 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…”
326 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)
327 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.)
328 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.
329 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.”
330 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.”
331 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 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.”
336 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.

336 (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.}
336 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)
337 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.”
338 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.
340 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”. 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.
341 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.”
342 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.”
343 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.”
344 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.”
345 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 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.”

346 (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

348 (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.”
349 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.
350 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).
351 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.
352 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. Schumacher, E., 1973, Small is Beautiful; Economics as if People Mattered, London, Blond and Briggs.