Sunday, 12 October 2014

Comparative Law Seminar and Book Launch

Monday 20 October 2014, 6-7pm, followed by drinks reception

Institute of Advanced Legal Studies, 17 Russell Square, London

Speakers and Discussants: Professor Mathias Siems (Durham); Professor David Nelken (KCL); Dr Jacco Bomhoff (LSE);  Dr Maria-Federica Moscati (SOAS); Chair: Professor Helen Xanthaki (IALS)

Description: Professor Mathias Siems will introduce the key arguments of his new book Comparative Law (CUP 2014) and discuss the arguments with a distinguished panel of comparative legal scholars.

Please register at here.

Saturday, 4 October 2014

European Law & Economics at the Crossroads?

Some brief reflections on three conferences that I attended in September – and on the direction that 'law & economics' (L&E) may take in Europe.
   The first one was the Inaugural conference of the World Interdisciplinary Network for Institutional Research (WINIR) in Greenwich; thus, actually, not explicitly about L&E; yet, a number of papers were on L&E (broadly understood), and some of the participants also took part in the two events mentioned below. Possibly, it may also be suggested that such thinking about 'institutions', incorporating (if appropriate) further disciplines such as political science, history etc, may be preferable to a (potentially) narrow L&E focus.
   Second, the Annual Conference of the European Association of Law and Economics (EALE), this year in Aix-en-Provence, is the mainstream L&E event in Europe. It's always very pleasant: meeting old friends and acquaintances, usually in a nice location. But, reflecting on L&E in Europe, it may be a bit unsatisfactory that only a minority (perhaps 25%) of the participants are legal scholars, thus showing that L&E at European law schools is at best a niche. Interestingly, some of the most popular EALE sessions were the ones on behavioural and experimental L&E, possibly also pointing towards the need of L&E to broaden its appeal.
   The third event was a workshop on Economics and the Law in Europe at Dauphine and Nanterre universities in Paris. Here, the focus was on the intellectual history of L&E. Lawyers were in the minority, but the economists too were not 'typical' economists, but mainly economic historian and socio-economists (eg, my paper was the only one that had a quantitative dimension). Again, therefore it became apparent at this event that L&E is not to be understood in a narrow way. Paradoxically, in this respect, it may be an advantage for L&E in Europe to be less popular than in the US, since it may make European L&E scholarship more willing to look beyond its usual boundaries.

Sunday, 28 September 2014

How important is it to be close to London? (aka as ‘The Big Retford Puzzle’)

Tomorrow morning I'll again travel from London to Durham - and may wonder again about the puzzle indicated in the title of this post. What's it about? 
  It is meant to refer to two signs at Retford station that advertise 'Offices to Let'. Both indicate that Leeds is 1h away, but the one on the left says that it is 1h15 to London, while the one on the right says that it is 1h40...
  How can this be possible? I think one can assume that in general it'd be good to be close to London. Checking the train timetable it’s actually 1h30. So, perhaps the person on the left, trying to be smart, understated the time a bit; maybe thinking that he (she) could always argue that he's referring to the mere duration of the journey to the border of Greater London. But then, what is the explanation for the sign on the right hand-side? Why not 'collude' and just say the same as the person on the left?
  I don't have an answer for it but perhaps he or she is just honest! (assuming that it may take ten minutes or so to get to the train station in Retford)

Thursday, 11 September 2014

Has legislation become less readable?

A while ago I came across the various readability indicators (overviews eg here and here). A popular one is the Gunning Fog Index which is mainly based on the length of words and sentences. It gives you a number: the higher the value, the less readable the text. It is said that a value of 12 is the threshold where a text gets beyond 'near-universal understanding' and requires a 'level of a U.S. high school senior (ca 18 years old)'.
  Now let’s test the question posed in the title for UK legislation. I randomly took three acts from 100 years ago (1 2 3 ) and three from this year (1 2 3), copied the text of these acts (if necessary limited to ten pages; omitting the table of contents), and pasted it to a Gunning Fog website.
  The result: the 100-year old laws had the values 13.75, 15.65 and 10.75 while the current ones had 21.45, 19.77 and 19.42. Thus, the answer is a clear 'yes'.
  Btw: how does my writing compare to it? I quickly calculated it for three of my recent academic articles: the values are 16.79, 16.06, 17.53: thus, fortunately, my writing is more readable than contemporary UK legislation. And for this blog, it's even just 12.44, thus close to the magic number 12 where I’d have 'near-universal understanding'.

Wednesday, 3 September 2014

My conference schedule for September (and in the coming academic year?)

  Then, useful to keep track of some of the major conferences for 2015 (with deadlines often in the next few months): I contemplate to submit papers for the Law & Society conference in Seattle, the SLSA annual conference in Warwick, the annual conference of the Society for the Advancement of Socio-Economics in London, and the next annual conference of the International Society for New Institutional Economics presumably at Harvard.

Saturday, 2 August 2014

Summer (blogging) break

Ok, this cartoon isn't really about a summer break – and here in the UK we don't have the strict division between tenured and untenured staff anyway. So, whatever I do in the next month or so, blogging will resume in September.

Monday, 28 July 2014

‘Civilising’ the UK Companies Act?

It's good to see the publication of Schall (ed.) on the UK Companies Act 2006 (with me contributing two chapters).
  This is a German-language 'Commentary', ie an annotated guide to the Companies Act written in a 'civil law style'. This is meant to say that it discusses each section of the Act but a bit differently than the 'common law style' annotated guides. The latter books tend to be 'only' a useful resource that collects the relevant case law. But a civil law commentary has a more ambitious aim to conceptualise the law, also trying to explore topics that have not yet been the subject of case law.
  How successful have we been? Or, more fundamentally, is it really possible to treat the UK Companies Act as akin to a civil law code – and therefore to make it the subject of such a Commentary? I think we'll leave this for the readers to judge.
  PS: it may seem a bit unusual to write this book in German. But in today's EU businesses can choose the legal form of any of the Member States anyway – thus, it's not really that different from a book on Delaware corporate law written by legal scholars from New York (etc).

Monday, 21 July 2014

Hobby Lobby: a view from Europe (mainly from a German corporate law perspective)

The US Supreme Court decision in Hobby Lobby has received a lot of attention in US blawgs (see eg here and here). Based on the Religious Freedom Restoration Act (RFRA), it allowed ‘closely held for-profit corporations to be exempt from a law its owners religiously object to’, namely ‘a regulation adopted by the US Department of Health and Human Services (HHS) requiring employers to cover certain contraceptives for their female employees’ (as summarised here).
   This blog post aims to go through some of its core statements focussing on the corporate aspects of the decision, with some rough comparative reflections from a European (mainly German) perspective. So:
pp. 18, 20: ‘[Congress] included corporations within RFRA’s definition of “persons…. The term “person” sometimes encompasses artificial persons (as the Dictionary Act instructs), and it sometimes is limited to natural persons. But no conceivable definition of the term includes natural persons and nonprofit corporations, but not for-profit corporations’.
In general, most other legal systems would agree that the term ‘person’ would usually refer to both natural and legal persons. However, it may also depend on the specific law in question. In Germany a common phrase is that of the ‘Relativit├Ąt der Rechtsbegriffe’ meaning that legal terms (‘Rechtsbegriffe’) are ‘relative’, ie they may have completely different meanings in different areas of law. Thus, it would not be impossible that a particular law excludes for-profit corporations. Also note that the German constitution specifically states in Art 19(3) that humans rights also ‘also apply to domestic artificial persons [ie legal persons] to the extent that the nature of such rights permits’; thus, here too it depends.
pp. 22-23: ‘Some lower court judges have suggested that RFRA does not protect for-profit corporations because the purpose of such corporations is simply to make money. This argument flies in the face of modern corporate law. “Each American jurisdiction today either expressly or by implication authorizes corporations to be formed under its general corporation act for any lawful purpose or business”…  So long as its owners agree, a for-profit corporation may take costly pollution-control and energy-conservation measures that go beyond what the law requires.’
That’s also the case in Europe: the articles of association can specify any legal purpose of the company. Even more so, there is the well known discussion (eg see Ch 5 II of my Convergence book) to what extent stakeholder and other non-economic interests can, or even need to be, considered, in particular, as far as public companies are concerned. This leads to:
pp. 29-31: ‘… HHS has not pointed to any example of a publicly traded corporation asserting RFRA rights, and numerous practical restraints would likely prevent that from occurring. For example, the idea that unrelated shareholders—including institutional investors with their own set of stakeholders—would agree to run a corporation under the same religious beliefs seems improbable. .. The companies in the cases before us are closely held corporations, each owned and controlled by members of a single family, and no one has disputed the sincerity of their religious beliefs…. The owners of closely held corporations may—and sometimes do— disagree about the conduct of business. ... State corporate law provides a ready means for resolving any conflicts by, for example, dictating how a corporation can establish its governing structure….’
These statements, making a distinction between public and closed companies, are somehow puzzling. Following-up from the previous comment, it may be said that non-economic considerations are even more relevant for public than for closed companies because the greater economic power of the former companies has to go hand in hand with a greater sense of responsibility for non-economic considerations (at least that’s the European perspective). Since the final sentence of the quote refers to means of how corporate law can solve conflicts, it also seems to me that this could, in principle, equally work for public companies.
   But some parts of Hobby Lobby also very much focus on the shareholders of the close corporation. The quoted paragraph refers to their interests as the ‘owners’ of the corporation. Thus, what we really have here may be (as US scholars discussed) a ‘reverse veil piercing’. Veil piercing also exists in other countries (see eg ch 6 in Siems & Cabrelli), but it is really the rare exception in all countries (as far as I’m aware); thus why allow ‘reverse veil piercing’ here? In this respect, it is interesting to quote an earlier statement of the decision:
p. 18: A corporation is simply a form of organization used by human beings to achieve desired ends. An established body of law specifies the rights and obligations of the people (including shareholders, officers, and employees) who are associated with a corporation in one way or another. When rights, whether constitutional or statutory, are extended to corporations, the purpose is to protect the rights of these people.’
Here, from a comparative perspective, the problem is that no country (as far as I’m aware) just defines a company as ‘human beings achieving desired ends’. Such a definition would be too wide as it would also embrace many other organisations (associations, clubs, partnerships etc). Rather, in Europe, it’s usually debated whether the company is an institution, fiction or real person (cf my Convergence book p. 47) in order to explain why companies are distinct ‘persons’.
   A possible way to support the argumentation in Hobby Lobby may be that, in order to protect shareholders, the German Constitutional Court (BVerfG) has referred to the constitutional protection of private property in a number of occasions; eg, as a way of assessing the introduction of co-determination, ie its inherent reduction of shareholder participation rights. Or to put it more generally, this ‘German’ reasoning says that the protection of shareholders is not only a matter of company law but that there are also individual constitutional rights that shareholders may have.

Monday, 14 July 2014

Is it good to have an international team (eg, in the World Cup)?

A recent UK newspaper article had the title "English footballers all too rarely venture abroad but the national team as well as the players would benefit from wider horizons". It explained that the English World Cup team of 2014 only had one player who did not play in England – as contrasted with the World Cup teams of most other countries. Apparently, such isolation can be a problem – and one may be tempted draw a similar conclusion for other fields (eg, academia).
  But what do the actual data tell us? Of course, it'd not be a valid test to simply count the number of players abroad and correlate those with the World Cup performance since the former data may only reflect the size of the country, the quality of its national league, political factors etc (eg, compare France v Belgium; North v South Korea)
  Thus, the following tries to control for the country in question by way of examining the 24 countries that took part in both the World Cup 2010 and 2014. It compares the change in performance of countries in the both World Cups (total points, data from here and here) with the change in foreign-based players for each country (data from here and here). This leads to the following:

In short, there isn't a significant correlation. For Spain in particular the effect of having more foreign-based player (from 3 to 10) seems to be a negative one (of course they won the cup in 2010). For Germany (from 0 to 7) and France (from 12 to 15), however, there seems to be a positive relationship. For England, things are fairly flat (from 0 to 1 foreign-based player; with mixed success in both years).
  Further notes: in some of the countries the causal relationship may be a bit messy, eg, the Spanish change may be due to the fact that Spain won in 2010 and its players could get lucrative jobs in top leagues abroad in the subsequent years. Interestingly, there is also an overall trend because the majority of countries have more foreign-based players than four years ago (see figure; average rise of 1.54).

PS: for something similar (though with data from football clubs) see here (and the actual paper here).