Transcript Judges Consistency & Analysis

Judges’ consistency
& the role of
predictive analysis
Benito ARRUÑADA
Pompeu Fabra University
Workshop on “Law & Economics for European Law”
EALE & University of Luxembourg
Luxembourg, November 10, 2006
Judges’ consistency
requires
predictive analysis
Benito ARRUÑADA
Pompeu Fabra University
Workshop on “Law & Economics for European Law”
EALE & University of Luxembourg
Luxembourg, November 10, 2006
Uncontroversial claim
Judges need good analysis
to use their discretion well
1. Which analysis is “good”?
Testable analyses are able to
predict human behavior
▪ Only predictive ability makes possible to
▪
compare & choose between alternative
analyses, identifying the best analysis
Two consequences:
♦ The ‘economic’ adjective is misleading
•
Even wrong: e.g., evolutionary biology explains more for
adoption and crime on children (Owen Jones works)
♦ Doubts on the value of legal positivism, in essence
taxonomy:
•
•
•
Systematic analysis
Analogy
Authority
Doubts on legal positivism
▪ Does not predict behavior  not testable, dogmatic
▪ Useful to guide judges fitting cases into the law 
Enough for judges applying ‘good’ law (robot
judges)—But
♦ How to produce good law? (admittedly a question
relevant for law-makers , not for robot judges)
•
•
19th century relied on analysis: Law & Econ—e.g., property law
20th century? E.g., car dealers, payment delays
(Arruñada et al, JLEO, 2001, 03; JLE 05; RLE 05))
▪ Less adequate the greater the discretion of judges
♦ Greater in the Common Law
•
judges traditionally decide according to rules of equity and nature
of circumstances
♦ But increasing in many Civil Law jurisdictions
2. Why do judges need
predictive analyses?
Judges need predictive analysis
▪ To achieve any of two possible standards when
exercising their discretion:
♦ Not only ‘socially desirable’ or ‘efficient’ decisions
♦ But merely decisions consistent with the judge’s
objectives
The compassionate judge
▪ Worried for the poor, this judge uses her
▪
discretion to favor a poor party (e.g., a tenant)
Is her decision consistent with her objectives?
♦ Obvious: Little “predictive analysis” necessary to know
that a poor party is now richer
♦ Not so: She cared for the poor, not for a poor
▪ She needs predictive analyses to ascertain
systemic consequences: those for the millions of
poor in society (i.e., no flats for rent)
3. Generalizing the argument
Necessary conditions for markets*
▪ Efficient definition of the exchange
♦ Freedom of contract ex ante (contracting)
♦ Use of new information ex post (fulfillment)
▪ Enforcement
♦ Property rights
♦ Contractual agreements
* i.e. using a broad concept of ‘market,’ so
that it includes implicit human exchanges
How judges enable markets
▪ Efficient definition of the exchange
♦ PROTECT
♦ EXPLOIT
Freedom of contract ex ante
New information ex post
♦ DEFINE &
PROTECT
♦ EXECUTE
Property rights
Contractual agreements
▪ Enforcement
Examples of judicial failures
▪ Defining the exchange
♦ Wrongly ‘improving’ on freedom of contract
•
Hindsight biases in an uncertain exchange
♦ Jurisdictional failure: ad nutum (“at will”)
termination of car dealers (or even workers)
▪ Enforcement failures
♦ mortgages in Brazil, Lima, etc
Dominant feature of judicial failures:
inconsistency b/w goals & means
▪ An idea of “justice” for the case, for an
individual in a class, within a contract
♦ Useful for judicial decisions with a mere taxonomic
function within given law
▪ But insufficient for rulemaking judicial activity
because it forgets about systemic
consequences
♦ Because it precludes the same idea of justice
(whatever good) for the whole class of individuals,
especially through potential contracts that become
nonviable
Conclusion
▪ The use of analyses predicting human
behavior in a comparable manner is essential
for judges to the extent that they enjoy
discretion and they want to use it sensibly—
‘sensibly’ meaning consistently with their
objectives, whatever these may be.
Judges’ consistency requires
predictive analyses
Thank you for your attention