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We live our life as it comes and it is not always an examined life – but in retrospect we can make sense of it, not only for ourselves, but for a community, and for the benefit of younger generatio...

This paper discusses a few meta-theoretical questions about Behavioural Law and Economics (BLE) in order to better understand both its popularity and the criticisms it has received. It argues that BLE provides a litmus test to reveal dividing lines, manifest latent tensions and polarize debates between various camps or traditions in both positive and normative (law and) economics, thus making epistemic and methodological commitments of economists more visible. These dividing lines include the methodological character of rationality assumptions, naturalistic and mentalist models of human behaviour, and the normative force and relevance of individual preferences, autonomy and objective metrics of welfare. Cet article discute de plusieurs questions métathéoriques sur l’économie du droit comportementale afin de mieux comprendre sa popularité et les critiques dont elle a fait l’objet. L’article défend l’idée que l’économie du droit comportementale présente un test décisif entre plusieurs postures méthodologiques. Ce test révèle les lignes de fracture, met au jour des tensions latentes et polarise les débats entre plusieurs camps ou traditions, à la fois en économie (du droit) positive et normative. Il rend ainsi plus visibles les positions épistémologiques des économistes. Parmi ces lignes de partage, on compte la nature des hypothèses de rationalité, les modèles naturalistes et mentalistes du comportement humain, ainsi que la force normative et la pertinence des préférences individuelles, l’autonomie et des mesures objectives de bien-être.

Economic analysis has contributed to a better understanding and a better functioning of law at different levels of generality. As far as legal reasoning is concerned, these contributions fall into two large groups. Economics in legal reasoning concerns arguments about the purposes and consequences of legal rules and principles that are acceptable in court as legally relevant, including (1) predictions of the likely consequences of alternative legal decisions; (2) technical normative arguments about the best means to achieve a legally determined purpose; and (3) welfarist normative arguments about the desirable goals of specific laws. Economics of legal reasoning, in turn, includes (1) explanatory models of legal processes in terms of rational activity of individuals, corporate entities as well as legal officials, and (2) normative proposals concerning the design of legal processes, that is the structure of law as institutional practice.

This Palgrave Pivot is the first book in the field of Law & Economics looking at the relationship between economics and law in legal reasoning. The book constitutes a reference point for the economic analysis of legal institutions, as legal reasoning remains the dimension of legal systems least explored by economists. Despite their differences, economics and legal reasoning interact in many interesting ways. This book offers a fast track to these interactions. Both supporters and critics of Law & Economics will be exposed to a yet-to-be developed area of interaction between the disciplines. This book will be of interest to economists, legal scholars, and Law and Economics specialists, and can be used as teaching material in courses on Law & Economics and legal reasoning as well.

The Introduction puts the contents of the book into perspective, summarizes its aims, and gives an overview of the argument. The relative neglect of the topic of economics in legal, especially judicial, reasoning stems from the opposition of two argumentative styles in modern economics and in ordinary adjudication. Despite their differences, the commonalities between legal and economic reasoning constitute the stepping stone for investigating the role of economics in legal reasoning.

Taking Guido Calabresi’s discussion of preferences and value judgements inThe Future of Law and Economicsas a starting point, this paper analyses some conceptual difficulties, epistemic benefits and normative uses of parsimonious economic analyses of “tastes and values.” First, the paper shows that it is not only possible to analyse and model all the richness of “tastes and values” in terms of rational choice theory with intellectual honesty and epistemic benefit. In fact, economists and economically inspired legal scholars have been doing this for a while. Second, it discusses three arguments that economists can mount in support of parsimonious models. Third, it shows that in spite of these benefits the merits of such an exercise in parsimony do not always clearly outweigh its drawbacks. In doing so, the paper distinguishes three types of limits of such parsimonious modelling.

The aim of this chapter is to reflect on the types of knowledge various approaches to Law and Economics can produce. While this topic lies at the crossroads of different ways of doing research in both parent disciplines of law and economics, it has rarely been addressed in a systematic fashion. Rather than a contribution to the philosophy of science as such, this chapter is an attempt to enrich our understanding of the interdisciplinary interactions conventionally lumped together under the label Law and Economics. While providing a typology of the most relevant interactions of theoretical and practical endeavors in Law and Economics, the chapter also puts forward a meta-theoretical claim: disagreements in the parent disciplines are transposed into but only partly determine the dynamics of Law and Economics as an interdisciplinary practice.

Through a close reading of Konrad Zweigert's 1961 essay and related writings, the paper discusses his use of the term ‘style’ in the classification of legal families, making three arguments. First, Zweigert's use of style is methodologically naive. He uses style as a cluster concept, grouping an eclectic mix of features characteristic for the history, language, techniques, doctrines and values of national laws. His explicit sources seem to have provided associative and superficial inspiration rather than a theoretical basis for this terminological move. Second, Zweigert's methodology could have been improved by using more rigorous style concepts – and he seems to have been aware of the necessary theoretical resources. Third, such a commitment to a humanistic and cultural approach to comparative law is not easily reconciled with the blunt functionalism of Zweigert's programmatic methodological statements. His style doctrine is only compatible with a weak version of functionalism as a ‘methodological metaphor’: the version he actually espoused.

This paper has been written as an invited contribution to a symposium on Guido Calabresi’s book on The Future of Law and Economics. Taking Calabresi’s discussion of preferences and value judgements in law and economics as a starting point, this paper analyses some conceptual difficulties, epistemic benefits and normative uses of parsimonious economic analyses of “tastes and values.” First, the paper shows that it is not only possible to analyse and model all the richness of “tastes and values” in terms of rational choice theory with intellectual honesty and epistemic benefit. In fact, economists and economically inspired legal scholars have been doing this for a while. Second, it discusses three arguments that economists can mount in support of parsimonious models. Third, it shows that in spite of such benefits the merits of such an exercise in parsimony do not always clearly outweigh its drawbacks. More importantly, it points at some conceptual limits of such parsimonious modelling.

Economic analysis has contributed to a better understanding and a better functioning of law at different levels of generality. As far as legal reasoning is concerned, these contributions fall into two large groups. Economics in legal reasoning concerns arguments about the purposes and consequences of legal rules and principles that are acceptable in court as legally relevant, including (1) predictions of the likely consequences of alternative legal decisions; (2) technical normative arguments about the best means to achieve a legally determined purpose, and (3) welfarist normative arguments about the desirable goals of specific laws. Economics of legal reasoning, in turn, includes (1) explanatory models of legal processes in terms of rational activity of individuals, corporate entities as well as legal officials, and (2) normative proposals concerning the design of legal processes i.e. the structure of law as institutional practice.

While paternalism has been a long-standing philosophical issue, it has recently received renewed attention among scholars and the general public. The Routledge Handbook of the Philosophy of Paterna ...

This is an overview chapter, published in The Routledge Handbook of the Philosophy of Paternalism. I suggest a classification of contract law rules and doctrines that are potentially or prima facie paternalistic, as constitutive, procedural, informational and substantive limits to freedom of contract. I also discuss non-paternalistic rationalisations of some of these rules in terms of justice or as responses to externalities and collective action problems.

This is the introduction to a special issue of The Theory and Practice of Legislation [formerly Legisprudence] I edited on "Empirical Knowledge, Common Sense, and Legal Cognition". It puts the contributions in the special issue in context by drawing attention to some current trends in lawmaking practices as well as academic research. On the one hand, reference to empirical research in e.g. behavioural economics is increasingly frequent in both policymaking and legal reforms. On the other hand, the use of scientific empirical knowledge in legislation is neither systematic nor uncontroversial. It is suggested that law resists empirical knowledge for three main reasons: epistemic (related to how empirical knowledge is generated), institutional (how this knowledge is channelled and transferred into legislation or other legal procedures) and normative (related to law’s commitment to counterfactual models of human behaviour and non-instrumental goals).

Introduction.- Convergence and divergence, in law and economics and comparative law.- The Draft Common Frame of Reference (DCFR): A giant with feet of clay .- The recodification of private law in Central and Eastern Europe.- Courts and expertise: Consequence-based arguments in judicial reasoning.- From a formalistic to an integrative model: the case of EU economic regulation.- The reform of EU electronic communications law: revolution or evolution? Networks of regulatory agencies in Europe.- Reinventing accountability: judicial control vs. participation.- Legal emulation between regulatory competition and comparative law .- Impact Assessment: the theory.- Impact Assessment: empirical evidence.- Judicial networks.- Conclusions.

In the past two decades, Central and Eastern European countries have experienced a rapid political, economic and social transformation. This transformation has been intertwined with the Europeanisation and modernisation of the law. This chapter analyses the different paths of the renewal of private law in Central and Eastern Europe, with or without recodification, with a special emphasis on the ongoing drafting process of the new civil code in Hungary. The role of top-down harmonisation of national law with European directives, the conflicts between academic and political as well as between material and symbolic interests in the drafting process are discussed. The chapter also identifies how mechanisms of legal transplantation, legal technical assistance, regulatory competition and legal emulation impact on the structure and substance of new codes in the region.

If in deciding a case, the judge finds that the applicable legal rule has more than one plausible interpretation, the judge is said to use a consequence-based argument if she justifies her decision for a particular interpretation with the argument that this interpretation will bring about consequences which are normatively superior to the consequences brought about by alternative interpretations. A paradigmatic case of consequence-based reasoning is when a judge chooses the alternative which is expected to maximise social welfare. Looking at the role of consequence-based reasoning in the canon of acceptable arguments in the main European jurisdictions and in the United States, under different names and with a varying degree of openness, one finds that most of these legal systems allow for consequence-based considerations. This chapter analyses consequence-based arguments in judicial reasoning from a jurisprudential perspective. The conceivability, feasibility and desirability of the judicial appreciation of general social consequences of legal decisions are considered in turn. When courts attempt to justify their decisions with reference to expected consequences, serious problems emerge. The chapter argues that these problems are closely linked to a multi-faced (technical, institutional and normative) feature of adjudication: the competence of courts. The epistemic capacities of judges as ‘intuitive experts’ and the institutional setting of adjudication in a constitutional democracy make it rather unlikely that judicial decisions meet the standards of empirical testing and rationality that characterise impact assessments in legislative and administrative contexts.

The interdisciplinary character of law and economics research has always raised questions about the possibilities and limits of intellectual integration.1 Roughly speaking, one can distinguish three law-related discourses in which arguments from economics can be relevant: normative legal philosophy, an explanatory theory of law, and policy proposals for legal reform.

The previous chapter discussed some methodological and substantive challenges raised by paternalism for economic theory and some ways in which economists have tried to answer these challenges. This chapter moves from theory to policy and then to law.

The problem of paternalism, an age-old subject in moral and political philosophy1 seems to be back in the midst of public policy discourse on both sides of the Atlantic. Sometimes called new paternalism,2 it is not so much about imposing on people what the government or the elite would consider the good way of life, not even about preventing individuals by coercive intervention from inflicting harm on themselves. Rather, new paternalism is said to be about designing policies to help individuals in overcoming their weakness of will, cognitive biases, and inconsiderateness, thus enabling them to make better choices in light of their own well-considered preferences. New paternalism is said to rely on new and solid empirical evidence, the findings of behavioral economics. The term also suggests that its normative conclusions, especially policy recommendations significantly differ from the antipaternalism of classical liberalism such as that of Kant’s or Mill’s.

Should a physician be responsible for the harm suffered by her patient if the patient refuses a certain treatment because he did not want to hear, accept, or believe the information given by the doctor? To what degree is the doctor obliged or allowed to convince, persuade, or coerce the patient into having or not having a certain therapy? We face similar, sometimes less but sometimes more dramatic questions about the interference of family, friends, strangers, and public officials in our life almost every day. Instances of both personal paternalism (between parent and child, doctor and patient) and legal paternalism (between legislators and citizens, judges and parties) abound. The latter ranges from the mandatory waiting time before marriage through safety regulations requiring motorcyclists to use crash helmets and drivers to use seat belts to the prohibition of certain forms of euthanasia, the criminalization of drug use, or the irrelevance of the victim’s consent to mutilation and homicide in criminal law. Intuitively we tend to call many kinds of interference and regulation paternalistic but among the numerous ways modern laws regulate our life, paternalism is a relatively specific phenomenon. We should beware of the indiscriminate use of the term for any interference with freedom of choice.

This chapter discusses the problem of paternalism in the context of contract law. Contract law is understood here as a body of legal rules that pertains to the enforcement and regulation of voluntary private agreements. These agreements, to be sure, do not always come within the ambit of the law, although in modern legal systems they are all potentially subject to regulation by state law or another set of legal rules.

In this chapter I analyze whether economic theory possesses the necessary tools for assessing freedom of choice and paternalism adequately. First, I discuss how economists refine their analytical tools and redefine the concept of paternalism in order to fit the latter in the methodological framework of their discipline. I argue that the traditional economic approach is a non-reflexive mixture of liberalism and utilitarianism. As such, it is ill-equipped to handle the problems that arise when these two principles collide. Economics has striven to justify instances of reasonable, seemingly paternalistic regulations in several ways, often deliberately avoiding the term paternalism. I distinguish several types of this theoretical strategy of redefinition. The methodological lesson of this overview will be that if economic analysis should understand paternalism and have an impact on public debates about paternalistic policies it should both reconsider its normative assumptions and rely more systematically on empirical research.

One of the persistent problems surrounding the discipline of law and economics is the role of economic arguments in legal reasoning. The problem has been extensively discussed in the literature but has not been ultimately solved. The present paper is a contribution to this ongoing discussion. The argument goes as follows. First, I will argue that insights from law and economics, to the extent that they claim to be directly relevant for legal reasoning, should carry a jurisprudential preface that states that this very relevance is limited and conditional. Secondly, I will introduce the concept of consequence-based reasoning and show that the typical normative claims of law and economics based on economic efficiency can be interpreted as consequence-based arguments of a special kind. Finally, in the analytical core of the paper, the conceivability, feasibility and desirability of the judicial appreciation of general social consequences of legal decisions will be considered. Referring to the philosophical, jurisprudential and institutional dimensions of the issue I will argue that in a modern constitutional democracy the scope of consequence-based judicial reasoning is limited mainly by the expertise of courts. A more general implication of this analysis is that the impact of law and economics scholarship on law can only be understood through a close look at legal reasoning in general and consequence-based arguments in particular.

Do laws rely on ‘true’ or ‘adequate’ assumptions? Should they? How do these assumptions relate to 'objective' facts, discovered by empirical sciences? What is the role of legal theory with regard to these assumptions?This chapter analyses a hitherto neglected aspect of law’s objectivity: the epistemic and methodological character of the law’s assumptions about human behaviour. Taking H.L.A. Hart's views on legal epistemology as a starting point, I suggest that the assumptions behind legal doctrines typically combine common sense factual beliefs, moral intuitions, philosophical theories of earlier ages and scientific knowledge. The task of the legal theorist is to provide a rational and critical foundation for these doctrines. Legal philosophy thus does not only contribute to law’s objectivity through conceptual clarification but also involves the legal scholars into substantive empirical and moral argumentation. I also discuss the reasons for and challenges to integrating empirical knowledge on human behaviour into legal policy and legal doctrines and point out the limits set by epistemic, institutional, and normative features of law to this integration.

An important characteristic of necessity cases is that ex ante and sometimes even ex post both parties have an interest in upholding the contract. From an economic perspective, the policy objective of regulating necessity is to give optimal incentives for precaution, search and rescue. These incentive effects have been widely discussed in the law and economics literature, the received view being that price control based on the costs of the rescue plus a small reward provide optimal incentives. In this paper we argue that the received view is unwarranted. Our model suggests that in many cases the socially efficient contract price is higher than the rescue costs. To be sure, due to serious information problems the practical implementation of this theoretical optimum is much more difficult than the cost-plus price setting supported by the received view. While the policy implications of our model are rather tentative we suggest that the judicial costs of estimating policy variables should be taken into account. A second objective of this paper is to argue for an economic interpretation of the term ‘necessity’ in contract law. Instead of various substantive criteria suggested in the philosophical literature we suggest defining the term by working backwards from the possible remedies. The excuse of necessity should be available for contracting parties when, all things considered, a judicial control (modification) of the contract price is desirable. Necessity is thus “defined” by what courts can and should do.

As a matter of theory, paternalism draws attention to philosophical and methodological difficulties involved in the justification of the limitations on freedom of individual choice in market and non-market settings. After a brief overview of the conceptual and justificatory problems surrounding paternalism in moral and political philosophy, this paper analyses whether economic theory, in its current state possesses the analytical tools for assessing paternalism adequately. I discuss how economists refine their analytical tools and redefine the concept of paternalism in order to fit the latter in their own methodological framework. I will argue that if economic analysis should have an impact on rational debates on paternalistic legal policies, it should both reconsider its normative assumptions and rely more systematically on empirical research, especially on the psychology of human judgement and decision making. Philosophical and empirical insights both suggest that the issue of paternalism is an 'uncertain case.' Outright anti-paternalism should not be replaced by uncritical paternalism.