Ökonomische Analyse des Rechts I Economic Analysis of Law Orlin Yalnazov Precedent and Statute Lawmaking in the Courts versus Lawmaking in Parliament Ökonomische Analyse des Rechts I Economic Analysis of Law Reihe herausgegeben von S Voigt, Hamburg, Germany L Franzoni, Bologna, Italy G Ringe, Hamburg, Germany E Reznichenko, Rotterdam, The Netherlands M Faure, Rotterdam, The Netherlands Die ökonomische Analyse des Rechts untersucht Rechtsnormen auf ihre gesellschaftlichen Folgewirkungen und bedient sich dabei des methodischen Instrumentariums der Wirtschaftswissenschaften Sie ist ein interdisziplinäres Forschungsgebiet, in dem sowohl Rechtswissenschaftler als auch Wirtschaftswissenschaftler tätig sind und das zu wesentlichen neuen Erkenntnissen über Funktion und Wirkungen von Rechtsnormen geführt hat Die Schriftenreihe enthält Monographien zu verschiedenen Rechtsgebieten und Rechtsentwicklungen Die Buchreihe wird als Fortsetzung der Reihe Ökonomische Analyse des Rechts geführt The economic analysis of law examines legal norms drawing on the economic approach The analysis does not only include the consequences of legal norms but also the determinants of their emergence It is an interdisciplinary research program in which both lawyers as well as economists are active Over the last half century, some of its contributions have lead to important insights regarding the emergence, the functioning, as well as the effects of legal norms This series is a forum for contributions to the economic analysis of law broadly conceived The book series is a continuation of the series Economic Analysis of Law Weitere Bände in der Reihe http://www.springer.com/series/16196 Orlin Yalnazov Precedent and Statute Lawmaking in the Courts versus Lawmaking in Parliament Orlin Yalnazov Kingston upon Hull, United Kingdom Dissertation Universität Hamburg, Germany, 2018 ISSN 2524-7360 ISSN 2524-7379 (electronic) Ökonomische Analyse des Rechts | Economic Analysis of Law ISBN 978-3-658-24385-2 (eBook) ISBN 978-3-658-24384-5 https://doi.org/10.1007/978-3-658-24385-2 Library of Congress Control Number: 2018961141 Springer Gabler © Springer Fachmedien Wiesbaden GmbH, part of Springer Nature 2018 This work is subject to copyright All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed The use of general descriptive names, registered names, trademarks, service marks, etc in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations This Springer Gabler imprint is published by the registered company Springer Fachmedien Wiesbaden GmbH part of Springer Nature The registered company address is: Abraham-Lincoln-Str 46, 65189 Wiesbaden, Germany Acknowledgements First and foremost, I would like to thank my PhD supervisors, Michael Faure, Florian Faust, and Elena Reznichenko, for steering me through the inumerable academic, logopaedic, and operatic peripeties that accompanied the writing of this book I also want to thank Marianne Breijer de-Mann, without whose help I would not have defended in this decade, and Lukas Böker, whom I hope to join for lunch again one day Many thanks to Anita Wilke and Carina Berg for their work on the manuscript I have friends Thanks to Ahmed for the cooking, to Akiva for черв, to Bernoldus for the business lunches, to Bryan for Rock & Wrestling, to ChihChing (Amy!!!) for her bottomless generosity, to Cintia and Malta for sheltering me from Yukako in Hamburg and from the elements in Russia, to Comrade Blaustein for Euxine Law & Economics and the Blaustein Paradox, to Comrade Strządała and assorted family members for their Silesian hospitality, to Damiano for TAXI!!!, to Eka for her tzar-free Orthodoxy, to Giugiu for her patience and expertise in all matters pesto, to Joé for becoming the first German to circumnavigate Maksuda by bussage without oxygen and for my Jericholaan residence, to Nan (Nancy!!!) for the Chinese lava brandy, and to Salvini for her silken chat and golden shoes Благодаря и на Мая, понеже имам сметка Благодаря също на Колчо Краля от Добрич, чичо Кольо, всички други кръчмари, Ачо, Анито от Петлешев, Владимир II, Пламена (!), Жоро Пилето, Любо, Атана, Пламен Птицата, Явчо, Христосчо, Арис и други знайни и незнайни, които много отдавна съм надрастнал Пачинка! На последно място, благодаря на майка си и баща си, най-много разбира се за парите, но отчасти и за доброто настроение Table of Contents Introduction 1.1 Certainty 1.2 Information 1.3 Technology 1.4 Method 10 1.5 Relevance 12 1.6 Structure 14 Literature Review 19 2.1 The Efficiency of the Common Law Hypothesis 19 2.2 Rules versus Standards 34 2.3 Information under Precedent and Statute 42 2.4 Discussion 45 2.5 Conclusion 49 Two Types of Legal Uncertainty 51 3.1 Legal Uncertainty, Legal Theory, and Law-and-Economics 51 3.2 Applicative and Hierarchic Uncertainty 55 3.3 An Example 63 3.4 The Relationship between Applicative and Hierarchic Indeterminacy 69 3.5 A Second Example 76 3.6 Conclusion 84 VIII Table of Contents Economics of the Fact-Law Distinction 87 4.1 Definitions 88 4.2 Bifurcation in a Pure Rationalist System 94 4.3 Bifurcation in a Pure Subjectivist System 99 4.4 Bifurcation in a Mixed System 102 4.5 Implications 105 4.6 Conclusion 109 Fact, Law, and Legal Change 111 5.1 Introduction 111 5.2 Fact and Law 114 5.3 A Model of Legal Judgments 122 5.4 The Mechanism of Legal Change 133 5.5 Implications 141 5.6 Conclusion 143 Remoteness in Contract – An Example 145 6.1 Remoteness 145 6.2 The Judgment in The Achilleas 149 6.3 From Hadley v Baxendale to The Achilleas 152 6.4 Implications 163 6.5 Conclusion 165 Table of Contents IX Metarules versus Metastandards 167 7.1 Introduction 167 7.2 Definitions 170 7.3 Precedent 181 7.4 Common Law Metastandards: Two Examples 188 7.5 Statute 194 7.6 Precedent versus Statute 199 7.7 International Law 205 7.8 Conclusion 212 Information, Precedent, and Statute 215 8.1 Introduction 215 8.2 The Basic Model 218 8.3 Refinements 236 8.4 Applications 255 8.5 Conclusion 264 Precedent in the Civil and Common Law 267 9.1 Preliminary Matters 268 9.2 Precedent in France, Italy, Germany, and England 277 9.3 Comparison 286 9.4 Analysis 292 9.5 Conclusion 302 X 10 Table of Contents Conclusion 305 10.1 Lawmaking as Production 305 10.2 The Choice between Precedent and Statute 309 10.3 Applications 314 10.4 Ending 329 Bibliography 331 ... Bände in der Reihe http://www.springer.com/series/16196 Orlin Yalnazov Precedent and Statute Lawmaking in the Courts versus Lawmaking in Parliament Orlin Yalnazov Kingston upon Hull, United Kingdom... further I conceptualise law as an information product, and lawmaking as an exercise in production Lawmaking has inputs and outputs, and technology is used to transform one into the other The input... in the beginning is whether we should have laws made in parliaments or in courts Evidently, if courts exhibit a systematic tendency to produce certain laws and parliaments to produce uncertain