Thursday, 23 August 2007

Blogs are changing legal scholarship

I just came across a nice paper on blogs:

Brown , J. Robert Robert, "Blogs, Law School Rankings, and" (July 26, 2007), U Denver Legal Studies Research Paper No. 07-33; available at
Abstract: Blogs are changing legal scholarship. Although not a substitute for the detailed, often intricately researched analysis contained in law reviews and other scholarly publications, they fill an important gap in the scholarly continuum. Blog posts can generate ideas and discussion that can be transformed into more a systematic and thorough paper or scholarly article. At the same time, blogs provide a forum for testing ideas once they are published in more traditional venues. While over time, a blog presence will likely become de rigueur for top scholars and law reviews, top tier schools as a group have not yet targeted blogs as a necessary component of scholarly activity. In the short term, therefore, blogs provide unique opportunities for faculty and law schools outside the top tier to enhance their reputational rankings. Blogs can enhance reputation by allowing faculty to route around some of the biases in law review placements and SSRN rankings that favor those at the top tier schools. Blogs also represent a cost effective mechanism for advertising scholarly activity. The paper discusses the evidence that blogs enhance reputation and surveys the way that scholars at law schools outside the top tier are already harnessing blogs to enhance their reputations. The paper also discusses what it takes to create a successful blog, from the search for content to the benefits of advertising. The paper finishes with a brief history of The Race to the Bottom, a corporate governance blog.

The Good University Guide (UK)

Just published (see here):

The overall top ten are: (1) Cambridge; (2) Oxford; (3) Imperial College; (4) LSE; (5) St. Andrews; (6) UCL; (7) Bristol; (8) Warwick; (9) Bath; (10) Durham … [(16) Edinburgh]

The top ten in law are: (1) Cambridge; (2) Aberdeen; (3) UCL; (4) Oxford; (5) LSE; (6) Edinburgh; (7) Durham; (8) Hull; (9) Nottingham; (10) King’s College London

EU Reform Treaty: Draft Text now available

The text is now available here

Financial Market Harmonisation: No “Sunset” after the EU Reform Treaty?

Since the Lamfalussy Report the harmonisation of EU securities, banking, and insurance law is based on the procedure that first level directives or regulations often empower the Commission to enact more details in second level directives or regulations. However, the European Parliament usually only agrees to this delegation if the first level measures contain a “sunset clause”, which states that the powers of the Commission at the second level are limited to four years (e.g., Directive 2003/6/EC, art. 17(4); Directive 2003/71/EC, art. 24; Directive 2004/109/EC, art. 23).
Now, however, we will soon have the new EU Reform Treaty (see the previous post). According to this Treaty there will be the right to revoke the delegation to the Commission (likewise Art. I-36(2) of the failed EU Constitution). This will make it unnecessary to use “sunset clauses”. It is an open question whether this will foster or hinder legal harmonisation of financial markets? On the one hand, the Parliament (and the Council) will in theory be able to revoke delegations any time. On the other hand, they may be reluctant to do it practice, and therefore the delegations to the Commission may become more permanent (for better or for worse).

The EU Reform Treaty: Second Comment

Sorry, I just realised that I made a mistake. In contrast to my previous post there won’t be a referendum on the new treaty in Denmark. As explained in the Financial Times (see here):
“But the text includes technical tweaks specifically aimed at avoiding a referendum in Denmark, which would hold a public vote if the country’s justice ministry detected a transfer of sovereignty to Brussels. The changes include a stipulation that the EU could sign up to the European Convention of Human Rights only if all 27 states agreed and the move were ratified by all national parliaments. Anders Fogh Rasmussen, the Danish prime minister, insisted his country had not negotiated with the aim of avoiding a referendum. A Danish spokesman said: “It is too early to say whether we will have one. A decision can only be taken once we see the final result.” Denmark caused panic when it voted down the Union’s Maastricht treaty in 1992, but its population is now one of the most pro-European in the club with 66 per cent saying that EU membership is a good thing. However, senior EU officials say that if Denmark concluded a referendum were unnecessary, that would ease the pressure for other countries to have a similar vote”.

Report on One Share One Vote Principle

The EU Commission has just published a very detailed (216 pages) but also very interesting new report (available here). The full title is “external study on proportionality between capital and control in EU listed companies”, which was carried out by Institutional Shareholder Services Europe (ISS Europe), the European Corporate Governance Institute (ECGI) and the law firm Shearman & Sterling LLP. In particular, this study provides many tables and pictures such as this one (click to enlarge):

The EU Reform Treaty: First Comment

After difficult negotiations – to put it mildly – the European Council has just agreed on an EU Reform Treaty. According to the Presidency Conclusions (which are published here):

…. “the European Council agrees to convene an Intergovernmental Conference and invites the Presidency without delay to take the necessary steps in accordance with Article 48 of the TUE, with the objective of opening the IGC before the end of July as soon as the legal requirements have been met” (para 10). “The IGC will carry out its work in accordance with the mandate set out in Annex I to these conclusions. The European Council invites the incoming Presidency to draw up a draft Treaty text in line with the terms of the mandate and to submit this to the IGC as soon as it opens. The IGC will complete its work as quickly as possible, and in any case before the end of 2007, so as to allow for sufficient time to ratify the resulting Treaty before the European Parliament elections in June 2009” (para 11).

So, if this process is successful (i.e., if all Member States agree – n.b. that at least there will be referenda in Denmark and Ireland), we will have new EU Treaty in a few years time.

How will the final Treaty look like? Well, it won’t be a “constitution”! However, according to para. 1 of the Annex the Presidency Conclusions the starting point is the “2004 IGC”, which is actually the failed EU constitution (available here or here). Then, in a second step one has to consider the various amendments indicated in the Presidency Conclusions.

Many of the controversial points would be worth discussing, for instance, the decision not to have a Union Minister for Foreign Affairs (para. 3), the unhappy compromise on voting rights (para. 13), the legal personality of Union (para. 16), and the Protocol on competition (page 24 footnote 16).

However, being a private lawyer, I’d just like to indicate a few less controversial point where private law turns up in the Presidency Conclusions, namely:

  • para. 28: “In the interest of European citizens rapid agreement is needed on the Regulations on the applicable law relating to contractual obligations (Rome I), on jurisdiction and applicable law in matrimonial matters (Rome III) and on maintenance obligations”.
  • para. 29. “The Council is requested to continue its work on evaluating the consistency and coherence of the provisions of contract law in Community law, including consumer contract law”.
  • page 28: modification of Article III-269(3) of the 2004 IGC with respect to international family law.

The parts of Article III-269 (Judicial Cooperation in Civil Matters) which remain the same as under the EU constitution are:

“1. The Union shall develop judicial cooperation in civil matters having cross-border implications, based on the principle of mutual recognition of judgments and decisions in extrajudicial cases. Such cooperation may include the adoption of measures for the approximation of the laws and regulations of the Member States.
2. For the purposes of paragraph 1, European laws or framework laws shall establish measures, particularly when necessary for the proper functioning of the internal market, aimed at ensuring:
(a) the mutual recognition and enforcement between Member States of judgments and decisions in extrajudicial cases;
(b) the cross-border service of judicial and extrajudicial documents;
(c) the compatibility of the rules applicable in the Member States concerning conflict of laws and of jurisdiction;
(d) cooperation in the taking of evidence;
(e) effective access to justice;
(f) the elimination of obstacles to the proper functioning of civil proceedings, if necessary by promoting the compatibility of the rules on civil procedure applicable in the Member States;
(g) the development of alternative methods of dispute settlement; (h) support for the training of the judiciary and judicial staff.

The John Brandrick Case: How Should Damages Be Calculated?

As summarised in The Times:

“When doctors broke the news to John Brandrick that he was dying of cancer, he resolved to live as if there were no tomorrow. He quit his job, stopped paying the mortgage, enjoyed slap-up meals with his partner night after night and spent a fortune on hotels. He splashed out on his family, took impromptu day trips and gave his clothes away to charity. He even arranged his own funeral. Then, after a year of the high life, Mr Brandrick’s symptoms began to disappear. The hospital informed him that, actually, he was not suffering from terminal pancreatic cancer but nonfatal pancreatitis. The 62-year-old grandfather from Newquay, Cornwall, was ecstatic. Then reality dawned on him. Having blown his life savings on what were supposed to be his final months, he will now be forced to sell his £300,000 house….”

If we assume there was a breach of contract, how should damages be calculated:
(1) nothing, because he got something in return (e.g., accommodations in hotels)?
(2) exactly the money which he spent, because he only did this because he had been wrongly informed about his health?
(3) a hypothetical calculation which would compare his “happiness” in the last year (with the diagnosis that he was to die + the “happiness” he received from spending his money) with the situation in which he would not have been told that he was to die in the first place -> probably a large amount of money.

Under German law I would use a concept called “Vorteilsausgleich” – but I’d be looking forward for any comments how this would (or will) be solved elsewhere.

New Consumer Credit Directive …… now likely!

In 1997 a green paper of the Commission (COM (97) 309) started the discussion about a new consumer credit directive. After various consultations and proposals, disagreements between the Commission and the European Parliament (see generally here) it now appears to be likely that we will indeed have a new consumer credit directive. It has been reported that:
“EU ministers have clinched a deal on more consumer-friendly rules for providing credit and personal loans following years of disputes over the issue, hoping to motivate European borrowers to shop around across borders for better interest rates and other contract conditions. The competitiveness council - representing the member states - agreed on Monday (21 May) on a compromise put forward by the German EU presidency which streamlines regulations for loans of up to €100,000.”
Now, it’s just necessary that the Council and the European Parliament will accept this compromise. Then, Member States will have two years time to implement the Directive so that perhaps in 2010 - 13 years after the start of the discussions - harmonisation will take place…. .. For further developments see here

New Books on UK Company Law

The Companies Act 2006 has brought major changes to UK company law (or rather it will be; for the implementation of this Act see here). Publishers have reacted quickly. The first books are:
- Blackstone's Guide to the Companies Act, 2007 - with a great customer review at Amazon :-)
- The Law Society, Companies Act 2006: A Guide to the New Law, 2007.
- Linklaters, ICSA Companies Act 2006 Handbook, 2007
- Hannigan & Prentice (eds.), The Companies Act 2006 – Commentary, 2007

Forthcoming are the new editions of:
Mayson, French & Ryan on Company Law, August 2007
Sealy and Worthington, Cases and Materials in Company Law, September 2007
Hicks and Goo, Cases and Materials on Company Law, September 2007

Empirical Study on Corporate Governance in Europe

Heidrick & Struggles just published a very interesting report (available here) on corporate governance practices in the EU, for instance, board composition, disclosure, and directors’ remuneration. For an example see the picture here (at least the Spanish rank surprises me):

How Should Securities Law Be Enforced?

There is an interesting discussion emerging how securities law should be enforced. The starting point was an article by La Porta et al (for my critique see here). Now, Jackson & Roe and Coffee have just written two interesting papers on the same topic:
  • Howell E. Jackson & Mark J. Roe, Public Enforcement of Securities Laws: Preliminary Evidence, January 16, 2007, available at
  • John C. Coffee, "Law and the Market: The Impact of Enforcement" (March 7, 2007). Columbia Law and Economics Working Paper No. 304 Available at SSRN:

I find the Jackson & Roe paper more convincing. In particular, this concerns the common law/civil law divide. Without much hesitation Coffee accepts the usefulness of this distinction. Against this speaks, however, that according to comparative scholars the notion of legal families has at best a didactic function (for more details see here). Furthermore,legal families do not really help in understanding the differences and similarities in the regulation of financial markets. Correctly, Jackson & Roe state that “legal origins originated long before financial markets were well-developed and many intervening events could have affected, and surely did affect, preferences”.

Guardian University Guide 2008 (UK)

Just published (see here):

The overall top ten are: (1) Oxford, (2) Cambridge, (3) Imperial College, (4) St. Andrews, (5) UCL, (6) LSE, (7) Edinburgh, (8) Warwick, (9) Loughborough, (10) Bath

The top ten in law are: (1) Oxford, (2) Cambridge, (3) LSE, (4) King’s College London, (5) UCL, (6) Warwick, (7) SOAS, (8) Edinburgh, (9) Birmingham, (10) Aberdeen

The Importance of Blogs

I just came across a few – rather diverse – indicators on the importance of blogs:

(1) Three recent papers at ssrn:
Ohm, Paul, "Do Blogs Influence Ssrn Downloads? Empirically Testing the Volokh and Slashdot Effects" (April 14, 2007). Available at SSRN:
Kerr, Orin S., "Blogs and the Legal Academy" (April 14, 2006). GWU Law School Public Law Research Paper No. 203 Available at SSRN:
Litvak, Kate, "Blog as a Bugged Water Cooler" (April 27, 2006). U of Texas Law, Public Law Research Paper No. 96 Available at SSRN:

(2) The recent series of Dilbert cartoons (so far my favourite is this one) J

(3) Once again a google trends picture: This time I searched for “blog”:

Free Advice from Big Law Firms

OK. It’s not really personal advice. But it’s quite useful what some of the big law firms publish about recent developments in commercial law; see, e.g., Freshfields (in particular, on EU and UK securities law), Linklaters (in particular, some useful information about the UK Companies Act 2006), and Baker & McKenzie (Doing Business Guides about various countries). Perhaps, a more complete list would be useful…. So, please send me any further links.

The European Company (SE): Now a Success?

Many people were sceptical about the practical usefulness of the European Company (Societas Europaea, SE), which came into force 2 1/2 years ago. Now, however, this may change. Recently, there has been an increasing number of SEs (see the list here). Other companies may also follow. For instance, Porsche (see news here), BASF (see news here), and possibly even Daimler-(Chrysler?) (see news here, in German). And the SE may also lead to a more general change of legal culture (see my paper at ssrn).

New US Rules on Deregistration – New US Law School Ranking

Two brief pieces of news from the US:
- The Sarbanes Oxley Act made it less attractive for foreign companies to be listed in the US. However, delisting and deregistration was quite burdensome. But this has been made easier now (for a summary see here)
- The new US News ranking on the best US Law Schools has just been published (see here). For alternative rankings see here.

Real Estate Investment Trusts (REITS) in the UK and Germany

In the United Kingdom the legislation laying out the rules for REITs came into effect in January 2007. Last week, the German Bundesrat also approved legislation on REITS, which will be retroactive as of January 2007. The purpose of these new laws is said to be “to encourage investment in property by a wider range of investors and to promote liquidity in the property market”, “to boost institutional investment in private rented housing and open up investment in residential and commercial property to ordinary people, who will have the chance to take a direct stake in high-profile developments without a substantial capital outlay” and to establish “property investment vehicles that are aimed at enabling tax efficient investment in a professionally managed portfolio of real property”.
The laws itself and further links can be found here (UK) and here (Germany).

EU Payment Services Directive

Last week the Economic and Financial Affairs Council (ECOFIN) agreed on a compromise proposal for a new Directive on Payment Services in the Internal Market. If the Parliament does not oppose it (which is unlikely), Member States will have to spend some efforts implementing this directive, because including the recitals it has 122 pages. Details cannot be explained here. Thus, just a few sentences from the self-promotion of Commission:
The aim of the Directive is “to make cross-border payments within the EU – by credit card, debit card, electronic bank transfer, direct debit or any other means – as easy, cheap and secure as domestic payments within one Member State, and to provide the necessary legal foundation to make the Single Euro Payments Area (SEPA) possible. It will greatly reinforce the rights and protection of all the users of payment services (consumers, retailers, SMEs...)”.… “This is a good compromise and contributes to the twin objectives of market opening and consumer protection. Easy and quick cross-border payments will bring massive savings to the EU economy and real, practical benefits to consumers”.… “Currently each Member State has its own rules on payments, and the annual cost of making payments between these fragmented systems is 2-3% of GDP. Service providers are effectively blocked from competing and offering their services throughout the EU. Removal of these barriers could save the EU economy upwards of €28 billion per year overall”…

Let’s hope it will…

New SSRN Papers

Just a short post about three recent papers, available at SSRN:

Dirk A. Zetzsche, An Ethical Theory of Corporate Governance History, available at “The present Anglo-American system of corporate control is said to be a random result of market forces, the strong influence of which resulted from a weak state, and undefined principles in the state's economic policy until the 1930s. In contrast, in Continental Europe, strong states with a tendency to interfere with market forces were established. …. this paper posits that religious foundations provide a sound explanation for the developmental path of corporate governance in Anglo-America and Continental Europe”.

J. W. Verret, Dr. Jones and the Raiders of Lost Capital: Hedge Fund Regulation, Part II, available at (MMS: a discussion about the US law on hedge funds – the great title derives from the fact that “Dr. Alfred Winslow Jones is generally credited with forming the first actively managed general investment partnership, a hedge fund, to evade SEC regulation and achieve full portfolio versatility and flexibility in 1949”).

Mathias M. Siems, Legal Originality, available at “For outsiders it is often difficult to understand what academic lawyers are doing. This is different from other academic fields. For instance, people can more easily imagine the tasks of academic physicians, archaeologists or philosophers, namely, for instance, finding cures for diseases, excavating ancient artefacts, and answering the question of the meaning of life. With academic lawyers the problem is not, however, that outsiders do not understand exactly what ‘the law’ is, because people usually can imagine what judges and solicitors are doing. Rather it is not obvious how a specific academic approach to law looks like. This article identifies four ways of ‘being original’ in legal research. The perhaps most common approach is to deal with ‘micro-legal questions’. Many legal academics also pursue research in ‘macro-legal questions’. Less common but growing is the importance of ‘scientific legal research’ and research in ‘non-legal topics’.”

Report of Corporate Governance Forum

The Corporate Governance Forum, an advisory body initiated by the EU Commission, has just published its Annual Report 2006. Some its points (with my comments) are:

  • “Comply or explain principle” (for an explanation see here) should become mandatory requirement of EU company law (MMS: first one should empirically examine its effectiveness in the Member States which already have it).
  • Recommendations for the Shareholder Rights Directive, which now will indeed become reality (MMS: in my view this is unfortunate: see already the previous post here).
  • Role of voting agencies should be scrutinised because of possible conflicts of interests (MMS: OK, but my first reaction would be that voting agencies appear to be pretty useful to overcome the “rational apathy” of investors).

The Growing Density of EU Securities Law

The EU has just adopted a new Directive 2007/14/EC “laying down detailed rules for the implementation of certain provisions of Directive 2004/109/EC on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market”.
As indicated in the title, the main aim of this “Lamfalussy II Directive” (for the Lamfalussy process see link) is to implement the Transparency Directive 2004/109/EC. Furthermore it is linked to other European regulations and directives, namely:

  • The Prospectus Regulation (EC) No 809/2004 (Directive 2007/14/EC, arts. 3(1), 18)
  • The International Account Standards Regulation (EC) No 1606/2002 (Directive 2007/14/EC, art. 1(17))
  • The Directive 78/660/EEC on the definition of related parties transactions (Directive 2007/14/EC, art. 4(2))
  • The Market in Financial Instruments Directive 2004/39/EC (Directive 2007/14/EC, art. 11).

The result of this whole process is that in the EU securities law is getting increasingly European (I would say that now it’s perhaps more than 80 % European).

Do German Lawyers Care About the Scottish Legal System?

A few weeks ago this blog calculated how often in an American law journal (namely, the Harvard Law Review) Scotland is mentioned. Now, I have made a similar calculation using the major German law journal NJW (searching for the terms “Schottland” and “schottisch”). Likewise the US result, in the last few years there has been a slight increase in hits.

Implementation of EU Takeover Directive: A Failure?

The Takeover Directive leaves Member States a lot of discretion and even enables them to opt-out of the provisions on takeover defences. This was called “an unhappy compromise” (Hanson), “an embarrassment for the EU” (Ferran), or even “not worth written the paper it was written on it” (Bolkestein). Now, the EU Commission has published a very interesting report on the implementation of the takeover directive. This report confirms some of the criticism. For instance, it states:
“A large number of Member States have shown strong reluctance to lift takeover barriers. The new board neutrality regime may even result in the emergence of new obstacles on the market of corporate control. The number of Member States implementing the Directive in a seemingly protectionist way is unexpectedly large”.

European Company and Financial Services Law

Just a brief reference: The Joint Brussels Office of the Law Societies of England and Wales, Scotland and Northern Ireland monthly publishes a document about (1) proposals in the pipeline, (2) in progress, and (3) to be implemented. For everyone who is interested in EU company and financial services law this is of great help (given the fact that the EU Commission’s webpage is far from perfect). See e.g. the February 2007 issue.

European Directive on Shareholder Voting Rights

UK company lawyers have just to “digest” the new Companies Act 2006. However, the next reform is likely to come soon. On 29 January 2007, the Committee on Legal Affairs of the European Parliament has approved the plans for a Directive on Shareholder Voting Rights (see no. 21 of the link which supplements the original proposal).
Elsewhere I have argued that this Directive is neither necessary nor useful - but now we have to confront the reality: Presumably, the Directive will not lead to major changes of the new Companies Act. With respect to online general meetings (article 8) and the right to ask questions at the general meeting (article 9), some changes are, however, to be expected.

Do American Lawyers Care About the Scottish Legal System?

As a proxy for American lawyers I looked at articles published in the Harvard Law Review (for the simple reason that its full text is available in Westlaw from 1949). As a proxy for Scotland I searched for “Scotland, Scottish, Scots, Edinburgh, or Glasgow” (further "Scotland-specific terms" such as Nessie, Sean Connery, or kilt did not lead to a higher score :-). The result is that from 1970 till 1995 the interest in Scotland dropped. However, in the last years there has been a slight increase in hits. A proper analysis would have to look at the context in which “Scotland” has been mentioned in the articles. However, perhaps one can still make an educated guess: The decreasing importance until the mid 90s could be a result of the general phenomenon that comparative law has become less important in the US. And the recent increase in interest could be a result of the Scottish devolution.Annex: 1950-4: 20 hits; 1955-9: 15 hits; 1960-4: 25 hits; 1965-9: 23 hits; 1970-4: 9 hits; 1975-9: 7 hits; 1980-4: 9 hits; 1985-9: 12 hits; 1990-4: 7 hits; 1995-9: 13 hits; 2000-4: 15 hits: 2005/6: 7 hits (projection for 2005-9: 17.5 hits)

Google Trends: Corporate v. Company Law

Is legal English becoming more and more “Americanized”? A not really “scientific” method to test it is Google trends. For instance, one may wonder whether the US-term “corporate law” (RED) is gradually becoming more important than the UK term “company law” (BLUE). The interesting result is that this appears not to be the case.

Breach of new Regulation without Penalties?

On 1 January 2007 the Regulation (EC) No 1781/2006 of the European Parliament and of the Council on information on the payer accompanying transfers of funds came into force. This regulation requires “payment service providers” (i.e. usually banks) to ensure that transfers of funds are accompanied by complete information on the payer (name, address and account number). As explained in the recitals, the purpose of this Regulation is to prevent terrorist financing and other flows of dirty money as well as to protect the integrity of the financial system as a whole.

As Regulations are directly applicable, it appears to be that banks and other services providers have to comply with the Regulation immediately. However, Article 15 states that Member States shall lay down penalties until 15 December 2007. This is in line with the new Money Laundering Directive which has to be implemented until 15 December 2007. However, it remains puzzling what kind of consequences (if any) breaches of the Regulations will have until mid December?