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Israeli constitutionalism has long interested comparative constitutional law scholars, whether due to its geopolitical status, the Israeli–Palestinian conflict, its internal divisions, or its unique constitutional evolution. Unlike many other countries that have ratified constitutions after the Second World War, Israel was established as a parliamentary democracy, with an explicit intention to ratify a constitution at a later stage. This did not happen. Instead, it underwent a “constitutional revolution” announced by its Supreme Court. Fitting a revolution, much of comparative constitutional law scholarship has focused on this pivotal moment. The articles in this symposium depart from the scholarship focused on that moment. They seek to critically understand what has become of Israeli constitutionalism in the past decade. In this introduction, we highlight several transformations and features which we believe are essential if one is to understand the extant constitutional order in Israel. These should be understood as background conditions against which Israeli constitutionalism is operating. They include the strengthening of judicial review alongside rising political resistance to the Court’s power; populism in political discourse targeting rule of law institutions; the erosion of individual rights alongside the strengthening of nationalist elements; and increasing divisions inside Israeli society. These challenge the idea of a successful constitutional revolution in terms of its inherent promise to better protect individual rights and safeguard the rule of law. In describing these features, we seek to situate the Supreme Court, judicial review, and the legal-constitutional order generally, in the larger sphere of Israeli society and politics.

A central dilemma in human rights law is how to reconcile the government’s duty to respect freedom with its obligation to protect individuals that might be harmed by the exercise of said freedom. Intolerance toward the dissemination of certain illiberal positions may have adverse social and political unintended results. One central concern is that such a policy would create a common culture that does not appreciate the critical importance of a vibrant public discourse. As such, it might enable governments, in terms of popular legitimacy, to curtail speech beyond the limits of justifiable infringements. Recent developments in Israel illustrate this concern. In recent years, normatively legitimate antiracism legislation was unjustifiably expanded by imposing sanctions on expressions that were deemed harmful to national sentiments or questioning the legitimacy of Israel’s Constitutional Identity as a Jewish state. Similarly, laws against the support of terrorism were followed by prohibitions on advocating boycotts against Israel. This Article proposes to halt the sociological slippery-slope trend of curtailing speech far and beyond the permissible scope of such a policy, by implementing rules-based legal doctrines that may foster a stronger public pressure on the government to protect free speech; restricting the scope of “harm-in-one-step” approach; and providing a clearer definition of the requirement of state neutrality in the context of regulating speech.

תקציר בעברית: בית המשפט קבע שהנורמה הבסיסית בישראל, בדומה לזו המוכרת בדמוקרטיות המערביות האחרות, היא זו שמתוארת על-ידי התפיסה בדבר "ממשלה מוגבלת". עם זאת, טרם התגבשה בעניין זה הסכמה רחבה. המחלוקת היא בשני מישורים: פוליטית, יש הסבורים שמוטב היה לקבוע שהנורמה הבסיסית של מדינת ישראל היא דמוקרטיה הליכית (או "פורמלית"), שלפיה "הרוב קובע". משפטית, עולות מן הפסיקה גישות שונות בשאלה אם חוקי היסוד הם החוקה הכתובה של מדינת ישראל, או שמא הם רק "נורמות בעלות מעמד חוקתי". להבחנה הזו חשיבות הן לעניין אופן ההצדקה של ההכרה בקיומן של מגבלות על הכנסת ואכיפת הציות להן בדרך של ביקורת שיפוטית והן לעניין סוגית גבולות כוחה של הכנסת לקבוע הוראות בחוקי-יסוד. חיבור זה נועד לספק תשתית נורמטיבית ופוזיטיבית לטענה שהנורמה הבסיסית של מדינת ישראל היא דמוקרטיה ליברלית, כלומר סמכותן של רשויות השלטון תחומות מכוח עקרונות יסוד של ליברליזם. חוק-יסוד: כבוד האדם וחירותו מספק הכשר ציבורי לאכיפת המגבלות על סמכות החקיקה של הכנסת; אך ההכשר הנורמטיבי נובע ישירות מן הנורמה הבסיסית האמורה. חוק היסוד מספק את הכשר הציבורי האמור בעיקר לאור תוכנו, לא משום שהוא חלק מן החוקה הכתובה של ישראל. אחת התוצאות שנובעות מכך היא הצדקה להחלת ביקורת שיפוטית על קביעת הוראות בחוקי יסוד. English Abstract: The Supreme Court of Israel has ruled that the powers of government are limited, and it employs judicial review of legislation, but it is still debated whether Israel has a formal, written constitution. At its essence, the controversy is whether Israel’s Basic Norm reflects the ideal of formal democracy or rather one of a liberal democracy. This paper argues for the former, both positively and normatively, and implements the argument regarding the issue of limits on the legislature’s power to amend Israel’s Basic Laws.

The quarter-century anniversary of Israel's ratification of the major United Nations (UN) human rights treaties is an opportunity to revisit the formal and informal interaction between domestic and international Bills of Rights in Israel. This study reveals that the human rights conventions lack almost entirely a formal domestic legal status. The study identifies a minor shift in the scope of the Israeli Supreme Court's reference to international law, as the Court now cites international human rights law to justify decisions that a state action is unlawful, and not only to support findings that an action is valid. This shift may be the result of other reasons, for instance, a ‘radiation’ of the Court's relatively extensive use of international humanitarian law in reviewing state actions taken in the Occupied Territories. However, it may also reflect a perception of enhanced legitimacy of referring to international human rights law as a point of reference in human rights adjudication following ratification of the treaties.At the same time, the Court continues to avoid acknowledging incompatibility between domestic law and international law. It refers to the latter only to support its interpretation of Israeli constitutional law, as it did before the ratification. This article critically evaluates this practice. While international human rights law should not be binding at the domestic level, because of its lack of sufficient democratic legitimacy in Israel, it should serve as an essential benchmark. The Court may legitimise a human rights infringement that is unjustified according to international law, but such incompatibility requires an explicit justification. The Court, together with the legislature and the government, are required to engage critically with the non-binding norms set by the ratified UN human rights treaties.

Welfare economics—the normative branch of economics—is a consequentialist moral theory. Unlike deontological morality, at least in its basic form it attributes no intrinsic value to prohibitions on active or intentional harming of other people, lying, or promise-breaking, and does not allow people to prioritize their own interests over the overall good. The chapter critically examines several methods of incorporating deontological constraints and options into economic analysis of law and into welfare economics more generally. These methods include an analysis of the long-term and indirect effects of apparently efficient infringements of deontological constraints; a move from act- to rule-consequentialism; incorporating deontological concerns into the definition of good outcomes that should be maximized; and the treatment of moral judgments as preferences whose fulfillment should be maximized along with any other. In addition to these indirect ways, the chapter also examines the integration of thresholds constraints and options into economic analysis of law.

Human rights laws substantially differ across legal systems, despite the fact that liberal democracies share the underlying moral principles of human rights. The differences result from “second order” considerations, ones that determine to what extent human rights law is composed of rules-based norms or is mostly a case-by-case, standard-like analysis. Accordingly, a central element that characterizes a legal system’s human rights law is its “locus” along the rules-standards spectrum. The choice along this spectrum should be shaped by moral considerations about the nature of rights, and by sociological ones, evaluating the expected effect of the form of human rights law on developing a common culture of respect of human rights. The relevant considerations do not induce a decisive judgment, but they present the costs of implementing an open-ended “balancing” approach. Specifically, it is improbable that the optimal form of human rights law is a corner solution of the type of an open standard. And yet, this particular form of human rights law is very popular, a fact that calls for an explanation. This Article suggests that the tendency toward standards is not the result of a principled reasoning but mostly a response to the decline in the public trust in the courts. Employing rules is a rational strategy for a court to shield itself from political actors’ pressure. However, standards enable courts to adjust the scope of judicial review in anticipation of the popular and political reaction to certain rulings. Accordingly, the greater the threats to independence of the judiciary, the closer to the standards-end of the spectrum human right law is expected to be. The choice may thus serve as an indicator of the diffuse popular support for the court, across different legal systems or over time in a given legal system.

A central dilemma in human rights law is how to reconcile the government’s duty to respect freedom with its obligation to protect individuals that might be harmed by the exercise of said freedom. Intolerance toward the dissemination of certain illiberal positions may have adverse social and political unintended results. One central concern is that such a policy would create a common culture that does not appreciate the critical importance of a vibrant public discourse. As such, it might enable governments, in terms of popular legitimacy, to curtail speech beyond the limits of justifiable infringements. Recent developments in Israel illustrate this concern. In recent years, normatively legitimate anti-racism legislation was unjustifiably expanded by imposing sanctions on expressions that were deemed harmful to national sentiments or questioning the legitimacy of Israel’s Constitutional Identity as a Jewish state. Similarly, laws against the support of terrorism were followed by prohibitions on advocating boycotts against Israel. This Article proposes to halt the sociological slippery-slope trend of curtailing speech far and beyond the permissible scope of such a policy, by implementing rules-based legal doctrines that may foster a stronger public pressure on the government to protect free speech; restricting the scope of “harm-in-one-step” approach; and providing a clearer definition of the requirement of state neutrality in the context of regulating speech.

תקציר בעברית: בחיבור זה, שנכתב לכבודו של הנשיא אשר גרוניס לרגל פרישתו, אנו מבקשים להצטרף לביקורתו של הנשיא גרוניס על היעדר קו מנחה בפסיקה באשר להבחנה בין איזון אופקי לאיזון אנכי. הטענה היסודית שמוצעת כאן היא שלהבחנה בין שני המבחנים חשיבות רבה בקביעת היקף ההגנה על זכויות אדם ואין מקום לזנוח אותה. ההבחנה בין איזון אנכי לאופקי אינה צריכה להתבסס על קביעת מדרג של אינטרסים או זכויות, ובעיקר איננה צריכה להיות מוכרעת על פי הקביעה אם האינטרס אשר לשם הגנה עליו פוגעים בזכויות מסווג כאינטרס ציבורי או כזכות חוקתית. העובדה שבהקשר מסוים קיימת "התנגשות" בין זכויות חוקתיות אינה מספיקה כשהיא לעצמה כדי לבסס את המסקנה שיש להסתפק במבחן של איזון אופקי. הגישה המוצעת כאן מבוססת על אפיונו של מבחן האיזון האנכי כמבחן עקרוני, שלפיו פגיעה בזכות חוקתית יכולה להיות מוצדקת – בכפוף ליישום אד הוק של דרישת המידתיות – רק אם היא מקיימת שורה של כללים, ובהם הדרישה להסמכה בחוק, ההסתברות שהפגיעה בזכות החוקתית הכרחית לקידום התכלית הראויה היא גבוהה מספיק ועוד. המקרים שבהם יש להחיל איזון אופקי הם רק אלה שבהם ראוי לוותר על דרישות הסף שמאפיינות את האיזון האנכי, כלומר המקרים שבהם אין יסוד לחשש שמעשה השלטוני גורם פגיעה לא מוצדקת בזכויות חוקתיות. אלה הם מקרים חריגים, שבהם הפגיעה בזכות החוקתית היא מימוש חובה המוטלת על השלטון, מכוח דיני זכויות האדם, לפעול להגנה על זכותו של אחד באמצעות פגיעה בזכותו של אחר. במרבית המקרים שבהם מופעלת סמכות שלטונית באופן הפוגע בזכות חוקתית של אחד הפגיעה אינה תוצאה של מימוש חובה כאמור, אפילו אם המעשה השלטוני נועד להגן על זכות חוקתית של אחר, ולכן יש להחיל איזון אנכי. English Abstract: The article, written (in Hebrew) in honor of President (Rt.) Asher Grunis, in the occasion of his retirement from the bench, joins President Grunis’ critique of the lack of settled doctrine in the Israeli Supreme Court’s jurisprudence regarding the distinction between so-called “vertical” and “horizontal” balancing tests. Unlike the use of these terms in other legal systems, to denote the distinction between an infringement of a human rights by a state action (vertical application) and a private action (horizontal application), the Israeli Court applies both tests in evaluating the validity of state action. The Article explores the differences between the two tests and the circumstances in which each should be used. The article suggests that the vertical balancing test is primarily rules-based. According to this test, an infringement is prima facie wrong, a presumption that is refuted only if a set of stringent requirements is met, including: legality, probability-threshold, and more. Horizontal balancing test should be employed only when the state action should not be classified as prima facie wrong. Accordingly, we suggest that the decision when to apply each test should be based neither on setting a ranking of interests or rights nor on the decision whether the interest that the state action aims to enhance is categorized as a human right or a public interest. The existence of a conflict between human rights is insufficient to justify employing the less demanding horizontal balancing test. This test should apply only in exceptional circumstances, in which the state action infringes a right of one person to fulfil the government’s positive obligation to protect another person’s right. We suggest that the Court’s current tendency to apply in a large number of cases the horizontal balancing test, which provides a lesser protection of rights, and is a standard-based, in unjustified. The argument is demonstrated by discussing, inter alia, the evaluation of the permissibility of various anti-terror measures, defamation suits, and the government’s duty to reveal information that infringes the right to privacy.

תקציר בעברית: מקובל להבחין בין שני ענפים מרכזיים של המשפט הציבורי: משפט ציבורי מוסדי ודיני זכויות האדם. אף שההבחנה בין שני התחומים אינה חדה, יש לה בסיס רחב. הפסיקה שניתנה בשני העשורים האחרונים מבטאת שניות מעניינת באשר למעמד החוקתי של המשפט הציבורי המוסדי. מצד אחד, הוכר בפסיקה מעמד חוקתי של שורה של נורמות מוסדיות שאינן מנויות במפורש בחוקי היסוד, באופן שמוביל להגבלה ניכרת של כוחה של הכנסת. מצד שני, בית-המשפט בחר לבסס את המעמד החוקתי של הנורמות הללו דווקא על חוק-יסוד: כבוד האדם וחירותו, באמצעות הקביעה שלכל אדם זכות חוקתית לכך שהשלטון יפעל כדין. גישה זו אפשרה לבסס את המעמד החוקתי של הנורמות המוסדיות, אך היא הובילה להחלה של המבחן הדו-שלבי של דיני זכויות האדם גם על חובת הציות להן. לפי מבחן זה, החובה לפעול בהתאם לנורמות המוסדיות אינה מוחלטת, אלא יש לבחון בכל מקרה ומקרה, מכוח דוקטרינת המידתיות, אם הפרת הנורמה מוצדקת, בהתחשב במכלול הנסיבות הרלוונטיות. יתר על-כן, מגמה זו החלה מוחלת בשנים האחרונות גם באשר לנורמות מוסדיות שמעוגנות במפורש בחוקי היסוד, מכוח מה שמקובל לכנות "פסקת הגבלה משתמעת". חיבור זה נועד לאפיין את ההתפתחויות הללו ולהציע דיון ביקורתי בהן. בצד תמיכה בהכרה במעמד החוקתי של הנורמות המוסדיות, חיבור זה נועד להצביע על החשיבות שבהתוויה מחדש של ההבחנה בין משפט חוקתי מוסדי לדיני זכויות האדם. מוצע כאן להימנע מלהחיל ביחס לנורמות המוסדיות את המבחן הדו-שלבי. ביסוד כך הטענה שאין מקום להניח, כמובן מאליו, שכל נורמה חוקתית צריכה להיות "סטנדרט" ולא "כלל". בהתאם לכך, המאמר עוסק במשמעות הבחירה בין כללים לבין סטנדרטים בפסיקה במשפט הציבורי. English Abstract: It is customary to distinguish between two main branches of constitutional law: institutional norms and human rights law. While the former type of norms primarily regulates the government to enhance the public interest, the latter aims at protecting individual interests. The Israeli Supreme Court’s recent jurisprudence reflects interesting developments regarding the institutional norms. On one hand, the Court has recognized the constitutional status of several such norms, notwithstanding the fact that they are not explicitly enumerated in the set of Basic-Laws that serves as Israel’s Constitution. This ruling has lead to a significant restriction of the Knesset’s power to enact laws catering for special interests groups, privatization of certain governmental powers, and more. On the other hand, the Supreme Court has ruled that the constitutional status of these norms is based on an expansive interpretation of Israel’s Bill of Rights, namely Basic-Law: Human Dignity and Liberty. The Court ruled that a person has a constitutional right that the government will act in accordance with the rule of law, which incorporates the entire set of “institutional” norms. This reading provided a basis for establishing the constitutional status of institutional public law. However, it has blurred the distinction between institutional norms and human rights law. In particular, this development has lead to the implementation of human rights law methodology in reviewing state actions that arguably violate institutional norms. It is a standards-based approach, requiring a case-by-case, all-things-considered analysis, implementing the proportionality doctrine to determine if the infringement of the norm is justified. Furthermore, in recent years, the Court has applied this methodology even to institutional norms that are explicitly anchored in the Basic Laws, developing the doctrine known as “implied” limitation clause. In this article (written in Hebrew), we characterize these developments in Israel’s constitutional law and critically evaluate them. While justifying the recognition of a constitutional status of unenumerated institutional public law norms, we argue that these norms’ constitutional status should be anchored in institutional Basic-Laws, namely Basic-Law: the Knesset, and Basic-Law: the Government, rather than in human rights law. We maintain that the two-stage, standards-based human rights methodology is not suitable for reviewing state actions that violates these norms. Rather, a rule-based approach should be preferred.

In our book, Law, Economics, and Morality (OUP, 2010), we proposed to combine economic methodology and deontological morality through explicit incorporation of moral constraints into economic models. We argued that the normative flaws of economic analysis can be rectified without relinquishing its methodological advantages and that moral constraints can be formalized so as to make their analysis more rigorous. We then illustrated the implementation of constrained CBA in several legal fields, including contract law, freedom of speech, the fight against terrorism, and legal paternalism. In this paper, we respond to critical reviews of the book written by Professors Larry Alexander, Ariel Porat, and Avihay Dorfman. Among other things, we clarify the scope and goals of the book, elucidate the relationships between deontology and consequentialism, discuss the relationships between deontological constraints and options, and address various issues in contract law and remedies.

This Article challenges the premise that the separation of state and religion is a necessary predicate for religious free exercise. The state's duty to treat people as equals requires it to ensure that all citizens enjoy reasonable access to religious services. Public supply of religious services thus enhances the exercise of freedom of religion. The extent of public involvement in the provision of a religious service is not by itself a sufficient justification for the regulation of the relevant activity. In certain cases, the intervention is justified by reasons that are unrelated to the scope of government involvement. A prominent example is the case of competition between different religious congregations over limited resources, such as space and time at a holy site. Regulation of activity is then required in order to ensure reasonable access. In other cases, the government enhances the powers of religious bodies, and thus generates a concern of religious coercion. In these cases the governmental role may well result in an infringement of religious freedom. However, such a conclusion is not self-evident, and a detailed assessment of the over all effect of the government involvement is required in order to determine whether the involvement—and what type of involvement—is desirable.These and related arguments are demonstrated through a discussion of the Israeli experience of almost six decades of intensive involvement of a democratic state in supplying religious services. The Israeli case can serve as a thought-provoking hypothetical on the consequences—and thus of the desirability—of adopting a model of extensive establishment of religion(s) by a democratic state.

At issue is the appropriate legal reaction to so-called “selective” conscientious objections in the current Israeli context, accounting for both consequential considerations and deontological ones. It is argued that a relevant distinction in this respect is between objections committed by members of a permanent minority, which are based on views that are practically excluded from the political discourse, and objections which are guided by what Rawls calls “political principles”, that is, “the principles of justice which regulate the constitution”. This distinction can explain and justify the current policy of the Israel Defense Forces (IDF) of granting exemptions to Ultra-Orthodox Jews and to Arabs (even if not all these cases reflect so-called “full” conscientious objection) while denying an exemption to those who refuse to serve based on their opposition to the IDF's activities in the Occupied Territories. However, it is argued that the important expressive role of such refusals requires a more measured approach, by either legitimizing a limited number of such acts or imposing only minimal sanctions (while formally de-legitimizing such acts). These arguments are preceded by an assessment of an alternative possible justification of legitimizing refusals, to prevent the implementation of unlawful activities by the IDF. It is argued that this purpose does not justify legitimization of refusals except in particular instances that are specified.

Is it permissible to extra-judicially detain a person or even intentionally kill him, based on information that he is a “member” of a terror organization? The prevailing approach calls for applying the international laws of war, where the answer is based on determining the “status” of the targeted-person. Once it is established that a person’s involvement in the hostilities meets some threshold, he loses the protection afforded to civilians and may thus be targeted or detained.This Article questions this approach. It suggests that the unique characteristics of the fight on terror require imposing a duty to justify, on an individualized basis, targeting and detaining persons. Anti-terror warfare is an armed conflict of a special type in two main aspects: the terrorists often disguise themselves among civilians, thus creating an enhanced risk that anti-terror warfare will result in mistakenly targeting innocent people; and the terrorists are not acting as part of a political entity, which may be reasonably held responsible for the terrorists’ choice to employ this practice of blurring the distinction between combatants and civilians. Consequently, a state that fights terror is required to further mitigate the risk of targeting or detaining innocent people. For this purpose, the power to target or detain suspected terrorists should be subject to the constraints that result from human rights law. The Article presents the conditions of the permissibility of employing anti-terror measures: The purpose of the action must be preemption rather than retribution or deterrence, the risk posed by the targeted person should be sufficiently high, in terms of the probability that he will be involved in a terror attack if not thwarted, and the measure taken should be the least harmful alternative to achieve its aim. The Article discusses this doctrine of “individual dangerousness,” and presents the plausibility of its implementation through a discussion of the Israeli Supreme Court anti-terror jurisprudence, which already applies, to some extent, this doctrine.

The Israeli Supreme Court recently decided to strike down legislation to establish a privately operated prison. The Court’s decision to invalidate this legislation is interesting, as it stipulates that prison privatization is unconstitutional per se, irrespective of its specific characteristics or expected outcome. It ruled that executing governmental powers by prison staff employed by a for-profit organization violates the prisoners’ basic rights to liberty and human dignity. This essay discusses this position, and points out some of its difficulties. It suggests that while the decision’s ultimate outcome can be justified, it would have gained greater (normative) legitimacy if it were based on a constitutional norm prohibiting the privatization of 'core' governmental powers rather than on an analysis of human rights.

In deciding whether to grant a preliminary injunction courts compare the expected irreparable harm if the injunction is not issued to the irreparable harm that would result if the injunction is issued. An injury is considered irreparable only as far as it "cannot be cured by a remedy after trial." We argue that efficiency entails that this definition is incorrect. Harm to one party which does not correlate to a corresponding benefit to the other party is a deadweight-loss. The court must take such harm into account in deciding whether to issue a preliminary injunction, irrespective of the availability of an ex-post remedy. Consequently, the implementation of the current doctrine, which allows courts to disregard certain social harms (losses that can be compensated for), leads courts to grant, in some cases, inefficient preliminary injunctions, and to reject, in other cases, applications for efficient ones.

Harsh sanctions are conventionally assumed to primarily benefit vulnerable targets. Contrary to this perception, this article shows that augmented sanctions often serve the less vulnerable targets. While decreasing crime, harsher sanctions also induce the police to shift enforcement efforts from more to less vulnerable victims. When this shift is substantial, augmented sanctions exacerbate--rather than reduce--the risk to vulnerable victims. Based on this insight, this article suggests several normative implications concerning the efficacy of enhanced sanctions, the importance of victims' funds,and the connection between police operations and apprehension rates.

The extent of public sector involvement in providing religious services is an important factor in determining the scope of legitimate regulation of relevant religious activities. However, I argue that the existence of a government role is not a sufficient justification for such regulation. Participation in the supply of religious services does not exempt the government from the constraints of its duty to respect freedom of religion. I point to two main considerations in this respect. First, in certain cases, accomplishing the purpose of government involvement — securing reasonable access to religious services — entails government intervention in religious activities. Second, more extensive regulation can be justified when involvement of the public authority intensifies the harm that the relevant religious practice imposes on other interests. These and related arguments are illustrated through a case-study — the Israeli experience of almost six decades of intensive involvement of a democratic state in supplying religious services.

What kind of remedies should be available for those enjoined by a wrong preliminary injunction? Assuming that the remedy should be designed to minimize the irreparable harm from a wrong preliminary injunction, two considerations should be taken into account: first, from an ex-ante perspective, the remedy can increase the likelihood that a preliminary injunction is issued only when it is expected to induce irreparable social harms that are lower than those expected if it is not issued; second, from an ex-post perspective, the remedy can contribute to the minimization of the irreparable social harms inflicted when a preliminary injunction was issued. This Article demonstrates that these considerations lead to two central conclusions: (1) it is desirable to award the remedy of restitution, which requires the moving-party to disgorge the benefits obtained at the expense of the defendant by the wrong preliminary injunction; (2) it is unjustified to require the moving-party to compensate the defendant for all harms inflicted due to the wrong preliminary injunction. The analysis also calls for a revision of the definition of irreparable harms. It shows that a deadweight-loss suffered by one party is socially irreparable even if this party's private loss can be cured by a remedy after trial. The available remedies - both when the plaintiff prevails and a preliminary injunction was not issued, and when a wrong preliminary injunction was issued but the defendant prevails - determine only what undeserved-wealth-transfers should be regarded as relevant irreparable social costs. From a broader perspective, the analysis enriches our understanding of restitutionary remedies. In addition to internalizing positive benefits and deterring wrongful conducts, the remedy of disgorgement of profits can also serve to remove improper motives to engage in an overall socially desirable behavior. In the current context, establishing an expansive duty to disgorge profits derived from unsuccessful litigation can mitigate the threat of frivolous suits, without jeopardizing the main instrument available to encourage disputants to turn to the judicial system - the grant of immunity from tortious liability. The case of remedies for wrong preliminary injunctions can thus demonstrate that restitution can serve as a middle ground between the ideal, which drives us to confer rights and liberties, and reality, which forces us to be minded of their misuse.

Richard Posner has recently reviewed, in The New Republic, Aharon Barak's book, The Judge in a Democracy. Posner criticizes Barak for both his theoretical argument and for what Posner portrays as Barak's legacy as the President of Israel's Supreme Court. Posner accuses Barak for acting as "a legal buccaneer," and describes his approach as "usurpative." Posner crowns Barak, in the very title of his review, as no less than an "Enlightened Despot." In this response I claim that Posner's critique lacks a proper understanding of the legal situation in Israel, it misrepresents Barak's activities as a judge, and fails to contend properly with Barak's doctrine which it purports to reject.

Economic analysis of contract law offers an influential argument against imposing a duty to disclose information and in support of guaranteeing reimbursement (break-up fees) for pre-contractual investments in acquiring information. According to the conventional wisdom, a negotiating party invests resources in information gathering on the basis of its expectation to extract the contractual surplus that the investment may generate. As a result, it is arguably essential to protect the investing party's ability to benefit from its investment in gathering information. Such protection can be provided either by allowing non-disclosure of relevant information that was discovered through a deliberate effort, or by strengthening its bargaining position through break-up fees. This article presents a revised theory, which substantially narrows the economic case against disclosure duties and in support of break-up fees. This paper's basic insight is that a negotiating party invests resources in acquiring information not only — and often not even primarily — to strengthen her bargaining position vis-a-vis her counterpart, but rather to achieve an advantage vis-a-vis her competitors (e.g., other traders who are interested in the same contract). A trader that acquires private information about the transaction's actual value can adjust her offer to reflect this information, and will thus have a greater likelihood of winning valuable contracts. Assuming that parties receive some benefit from contracting according to the price that reflects the transaction's actual value, a negotiating party has a competitive incentive to acquire information even if she knows ex-ante that her price offer will fully reflect her ex-post private information. Accordingly, forcing a negotiating party to disclose private information to her counterpart would not necessarily impede the ex-ante incentive to invest in acquiring such information. The upshot of this argument is that the mind-set of the existing literature, which argues against imposing a duty to disclose deliberately acquired private information and in favor of reimbursement provisions, cannot be substantiated without a careful inquiry into competition-based motivations to gather information.

This article challenges the plausibility of one of the cornerstones of the law and economics literature — the prospect of under-investment in precontractual reliance (PCR). It shows that a negotiating party may well be motivated to invest in PCR not only through her expectation to extract the benefits that the investment yields (Added-Value Motivation), but also through the effect of the investment on her position vis-a-vis her competitors (Competition-Based Motivation). It further demonstrates that the Competition-Based Motivation is frequently sufficient to induce optimal PCR, even without appropriate contractual provisions or legal intervention. Following this analysis several normative implications are suggested, key of which is the argument that legal intervention, which is aimed at encouraging PCR, is generally unwarranted. However, the discussion does not yield an unrestricted support of laissez-faire policy, of avoiding regulating the bargaining process. It shows that efficiency considerations may justify legal intervention that aims mainly to prevent over-investment in PCR. Specifically, legal intervention may be required to deter one side from illegitimately exploiting the competition between his potential contracting partners and to achieve optimal allocation of transferable PCR.