Legal

Reasoning
Christopher Enright
 Legal Reasoning
Christopher Enright

www.legalskills.com.au
 Maitland Press
making law simple
A nation which ever ceases to cherish the memory of Sir Thomas More will not only
have mislaid its measure of human greatness but it will have forgotten an important
lesson that with so much blood and tears, it has ever struggled to learn. For More was
the victim as he was indeed the exponent of the stubborn illusion that any human
institution possesses a monopoly of truth or the power to impose its dogmas upon all
who are subject to its man-made authority.
ST Bindoff (1952) Tudor England Penguin: London p 153

My reason, the physician to my love, Angry that his prescriptions are not kept.
William Shakespeare Sonnet 147

Maitland Press
4 Dianella Court
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2304
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Copyright
This publication is copyright ©
2011 Maitland Press

ISBN 9780987071361 (ebook: pdf)

National Library of Australia “Cataloguing in Publication” Entry

Author: Enright, Christopher, 1947-
Title: Legal reasoning [electronic resource] / Christopher Enright
Edition: 1st ed.
ISBN 9780987071361 (ebook: pdf)
Notes: Includes bibliographical references and index
Subjects: Law - methodology Dewey Number: 340.11
Preface

What This Book is About

This book is a successor to an earlier book of the author, Legal Technique. Legal
Technique performed two tasks - it described techniques or methods for working with
law and it sought to show the reasoning that justified those methods as the best. On
reflection the author decided that the two tasks demanded two books.

This book, Legal Reasoning, is both a companion to and an underpinning of the

author’s book Legal Method. Legal Method, as the title professes, describes methods or
techniques for working with law. Legal Reasoning seeks to justify the techniques
proposed in Legal Method by demonstrating that they are based on sound reasoning.

In approaching the task, the author has worked from the ground up. This entails starting
with first principles and working through to a logical understanding of what the tasks
for working with legal materials entail. This logical understanding is the science on
which the technology, constituted by legal method or legal skills, is constructed.

While this book can stand on its own as a work of philosophy, its motivation did not
derive from any purely intellectual consideration (although the writing of it was a time
of great joy). Of course it may assist in debate on the questions it covers, even by
throwing up errors that push others towards truth. However, the motive that initiated the
writing was to further the author’s crusade for legal method to be taken seriously. At
present lawyers work with legal materials with a low level of skills gleaned by
immersion or osmosis but not by direct instruction. Law schools either do not teach the
skills or teach ways of performing skills that just do not work. Until lawyer start to take
skills seriously, law schools will function well below optimum and their graduates will
similarly perform sub-optimally when they work with law. This lack of direct
instruction in skills is the reason that so many legal textbooks are difficult to read, as
are many judgments from the top of the hierarchy of courts down. It is also a likely
reason that cases in court are so beset with cost and delay.

While this book and its companion, Legal Method, broadly cover the field, the author
will be publishing some additional texts to flesh out some of the basic techniques
needed for working with law. The next two publications - Legal Writing and Proof of
Facts are due to be published later in 2011.

Giving Thanks
In any major endeavour one is always heavily in debt. In my case the emotional
creditors include a family who has given me so much love and colleagues who have
given me so much support. I also have to thank my nephew Stephen for his assistance
with and input into the chapter on probability and the part dealing with chaos theory.

v
 vi Preface

There is also a major intellectual liability that I can only acknowledge since I do not
have the means to discharge it. The spirit of this inquiry came directly from Professor
Fred D’Agostino, then my lecturer in philosophy at the University of New England and
now Director of Studies in the Faculty of Arts at the University of Queensland. My
attending Professor Fred D’Agostino’s classes was a direct fulfillment of the prophecy
that when the pupil is ready the teacher will appear. He guided me in the method or way
of thinking that characterises this book. As with most great teachers, his spirit endures
even long after his precise words have been mislaid. Needless to say, any errors or
shortcomings in my reasoning in this book reflect the times when I was not paying full
attention in his lectures.

Finally I have to thank by friend Terry O’Donohue who read the manuscript for me
several times. His painstaking comments on this manuscript saved me from much grief.

Footnotes and Commentaries

This book uses a two-part system for notes, footnotes and commentaries. Broadly but
not absolutely, footnotes provide citations for sources, while commentaries provide
further reading for, and add-ons to, the discussion that is already in the text.

Commentaries
Most but not all chapters have a final section entitled ‘Commentary’. Each specific
commentary under this heading is linked to a footnote. Each of these commentaries has
a heading. The heading takes the form ‘Commentary’/chapter number/commentary
number/‘Footnote’/Footnote number. To illustrate, ‘Commentary 12.5 Footnote 14’
means that this is commentary number 5 for Chapter 12 and that it links to both
Footnote 14 and to the part of the text that footnote 14 serves.

Commentaries contain additional reading and comments on the subject matter in hand.
And in cases where a citation for the text is long and cumbersome, the citation may be
moved to a commentary.

Footnotes
Generally citations for the text are put in a footnote. If, however, the citation is long
and cumbersome, as noted above, it may be moved to a commentary.

Where a footnote is served by a commentary the footnote will indicate this by stating
the number of the commentary. For example ‘Commentary 12.5’ in a footnotes
indicates that there is information relevant to this part of the book located in
Commentary number 5 for Chapter 12.

Christopher Enright

6 June 2011
Armidale
Contents

Preface ........................................................................................................................ v
Labels ....................................................................................................................... xiv
Table of Legislation ............................................................................................. xviii
Table of Cases ......................................................................................................... xxi

Part 1 Introduction
Chapter 1 Outline ...................................................................................................... 1
Purpose of this Book .................................................................................................. 1
Legal Tasks ................................................................................................................. 1
Legal Reasoning ......................................................................................................... 2
Legal Method ........................................................................................................... 12
Summary .................................................................................................................. 13
Commentary............................................................................................................. 13

Part 2 Rationality
2.1: Introduction
Chapter 2 Rationality .............................................................................................. 14
Introduction ............................................................................................................. 14
Thinking Rationally ................................................................................................. 15
Thinking Irrationally .............................................................................................. 15
Commentary............................................................................................................. 17
2.2: Structuring Law Chapter 3 Structuring
Legal Rules ................................................................................................................ 18
Introduction ............................................................................................................. 18
Structure: Legal Rules ............................................................................................ 18
Structure: Relationships Between Legal Rules ..................................................... 25
Commentary............................................................................................................. 26

2.3: Logical Reasoning Chapter 4 Logical

Reasoning .................................................................................................................. 28
Introduction ............................................................................................................. 28
Deduction .................................................................................................................. 28
Induction................................................................................................................... 29
Abduction ................................................................................................................. 30
Analogy ..................................................................................................................... 30
Probability ................................................................................................................ 31
Comparison .............................................................................................................. 31
Chapter 5 Deduction ............................................................................................... 35
Introduction ............................................................................................................. 35
Nature ....................................................................................................................... 35
Applying Law ........................................................................................................... 38

vii
 vill Contents
Interpreting Law .............................................................................................. 43
Ascertaining Values ........................................................................................ 49
Ascertaining Causal Laws ............................................................................... 49
Proving Facts ................................................................................................... 49
Commentary .................................................................................................... 54
Chapter 6 Induction .................................................................................... 56
Introduction ..................................................................................................... 56
Nature .............................................................................................................. 56
Ascertaining Values ........................................................................................ 59
Ascertaining Causal Laws ............................................................................... 62
Proving Facts ................................................................................................... 63
Proving Facts: Patterns of Behaviour.............................................................. 64
Proving Facts: Individual Behaviour .............................................................. 65
Proving Facts: General Behaviour .................................................................. 67
Common Errors ............................................................................................... 71
Commentary .................................................................................................... 71
Chapter 7 Abduction .................................................................................. 73
Introduction ..................................................................................................... 73
Nature .............................................................................................................. 73
Uses ................................................................................................................. 74
Commentary .................................................................................................... 76
Chapter 8 Analogy...................................................................................... 78
Introduction ..................................................................................................... 78
Nature .............................................................................................................. 78
Making Common Law .................................................................................... 80
Commentary .................................................................................................... 86
Chapter 9 Probability ................................................................................. 90
Introduction ..................................................................................................... 90
Measuring Probability ..................................................................................... 95
Applying Probability ....................................................................................... 96
Assigning Probability ...................................................................................... 98
Deriving Probability ....................................................................................... 101
Fallacies in Probability................................................................................... 109
Commentary ................................................................................................... 111
2.4: Policy
2.4.1 Introduction
Chapter 10 Policy ...................................................................................... 113
Introduction .................................................................................................... 113
Levels of Policy.............................................................................................. 117
Basis of Policy................................................................................................ 119
Nature of Policy ............................................................................................. 120
 Contents ix

Model for Policy............................................................................................ 123

Derivatives of Policy ..................................................................................... 129
Commentary .................................................................................................. 129
2.4.2 Net Benefit
Chapter 11 Nature of Net Benefit ......................................................... 131
Introduction ................................................................................................... 131
Net Benefit Rule ............................................................................................ 131
Changeover Costs and Benefits .................................................................... 136
Operating Costs and Benefits ........................................................................ 142
Illustration ..................................................................................................... 144
Commentary .................................................................................................. 144
Chapter 12 Measurement of Net Benefit............................................. 147
Introduction ................................................................................................... 147
Methods of Measurement .............................................................................. 148
Problems of Measurement ............................................................................. 150
Attempts to Alleviate Problems .................................................................... 151
Conclusion ..................................................................................................... 154
Commentary .................................................................................................. 155
2.4.3 Components of Policy: Cause and Effects Chapter
13 Cause 157
Introduction ................................................................................................... 157
Determinism .................................................................................................. 158
Science .......................................................................................................... 160
Nature of Causation ....................................................................................... 166
Commentary .................................................................................................. 171
Chapter 14 Cause: Explanatory Theories ............................................ 174
Introduction ................................................................................................... 175
1. General Theories of Behaviour ................................................................ 174
2. Theories of Complex Behaviour ............................................................. 177
Complex Systems .......................................................................................... 177
Chaos Theory ................................................................................................ 188
Catastrophe Theory ....................................................................................... 191
Adaptive Behaviour....................................................................................... 192
System Accidents .......................................................................................... 194
Internal Conflict ............................................................................................ 197
3. Theories of Legal Compliance ................................................................ 200
Commentary .................................................................................................. 216
Chapter 15 Cause: Responding to Uncertainty .................................. 221
Introduction ................................................................................................... 221
Expected Value ............................................................................................. 221
Review of Legislation ................................................................................... 223
 x Contents
Review of Judicial Decisions ........................................................................ 229
Disjointed Incrementalism ............................................................................ 230
Precautionary Principle ................................................................................. 232
Defensive Design .......................................................................................... 234
Commentary .................................................................................................. 234
Chapter 16 Effects ......................................................................................... 236
Introduction ................................................................................................... 236
Continuation of Effects ................................................................................. 240
Operation of Effects ...................................................................................... 240
Function of Effects ........................................................................................ 246
Prediction of Effects...................................................................................... 250
Commentary .................................................................................................. 253
2.4.4 Components of Policy: Values Chapter 17
Values 256
Introduction ................................................................................................... 256
Nature of Values ........................................................................................... 256
Use of Values ................................................................................................ 257
Outline .......................................................................................................... 259
Commentary .................................................................................................. 259
Chapter 18 Classification of Values ............................................................... 260
Introduction ................................................................................................... 260
Deontological and Teleological Values ........................................................ 260
Absolute and Relative Values ....................................................................... 263
Commentary .................................................................................................. 266
Chapter 19 Choice of Values ......................................................................... 270
Introduction ................................................................................................... 270
Unity of Values ............................................................................................. 271
Diversity of Value s ...................................................................................... 278
Compromise View ........................................................................................ 283
Choice of Values ........................................................................................... 295
Commentary .................................................................................................. 295
2.4.5 Social Choice
Chapter 20 Social Choice ............................................................................... 300
Introduction ................................................................................................... 300
Making Law .................................................................................................. 301
Interpreting Law ............................................................................................ 303
Commentary .................................................................................................. 304
Chapter 21 Social Choice: Making Law ........................................................ 305
Introduction ................................................................................................... 305
Direct Democracy ......................................................................................... 306
Representative Democracy ........................................................................... 307
 Contents xi

Deliberative Democracy ............................................................................... 317

Social Democracy ......................................................................................... 317
Conclusion .................................................................................................... 317
Commentary .................................................................................................. 319
Chapter 22 Social Choice: Interpreting Law ................................................. 322
Introduction ................................................................................................... 322
1. Legislative Legitimacy ............................................................................ 323
2. Metademocracy ....................................................................................... 330
Deference ...................................................................................................... 331
Reconstructionism ........................................................................................ 332
Pragmatism.................................................................................................... 334
Disciplinarianism .......................................................................................... 338
3. Judicial Legitimacy ................................................................................. 341
4. Legislative Legitimacy Reinterpreted .................................................... 341
Commentary .................................................................................................. 351
2.4.6 Derivatives of Policy Chapter 23
Precedent 359
Introduction ................................................................................................... 359
1. Nature of Precedent ................................................................................. 359
Preserving Rules ........................................................................................... 364
Preserving Policy .......................................................................................... 365
Preserving Adaptability and Continuity........................................................ 366
2. Overruling Precedent ............................................................................... 369
Commentary .................................................................................................. 372
Chapter 24 Rules ........................................................................................... 375
Introduction ................................................................................................... 375
Identifying Meanings .................................................................................... 376
Promoting Meanings ..................................................................................... 378
Commentary .................................................................................................. 379
2.5: Analysing Ambiguity Chapter 25 Analysing
Ambiguity ....................................................................................................... 381
Introduction ................................................................................................... 381
1. Ambiguity ................................................................................................ 382
Identifying Meanings .................................................................................... 382
Classification of Ambiguity .......................................................................... 384
Scope of Ambiguity ...................................................................................... 387
Prevalence of Ambiguity .............................................................................. 390
Relevanc e of Ambiguity .............................................................................. 391
2. Limits to Interpretation ............................................................................ 392
General Limits: Language............................................................................. 392
Specific Limits: Ambiguity........................................................................... 396
Commentary .................................................................................................. 397
 xil Contents
2.6: Observing Facts
Chapter 26 Observing Facts ......................................................... 402
Introduction ................................................................................................... 402
Observation by a Witness ............................................................................. 404
Observation by Equipment ........................................................................... 405
Observation by an Institution ........................................................................ 405
Observation by the Court .............................................................................. 406
Commentary .................................................................................................. 408
Part 3 Irrationality Chapter 27
Irrationality .................................................................................... 410
Introduction ................................................................................................... 410
Psychology .................................................................................................... 411
Sociology ...................................................................................................... 419
Economics ..................................................................................................... 422
Philosophy..................................................................................................... 425
Situational Factors......................................................................................... 427
Commentary .................................................................................................. 428
Part 4 Method
4.1: Introduction
Chapter 28 Legal Method ............................................................. 433
Introduction ................................................................................................... 433
Absence of Method ....................................................................................... 433
Need for Method ........................................................................................... 437
Nature of Method .......................................................................................... 439
Commentary .................................................................................................. 442
4.2: Organising Law
Chapter 29 Model for Organising Law ........................................ 445
Introduction ................................................................................................... 445
Macro Analysis ............................................................................................. 445
Micro Analysis .............................................................................................. 445
Commentary .................................................................................................. 447
4.3: Forming Law
Chapter 30 Model for Forming Law ............................................ 449
Introduction ................................................................................................... 449
Step 1: Options .............................................................................................. 452
Step 2: Reasons ............................................................................................. 456
Step 3: Decision ............................................................................................ 466
Justification of the Model ............................................................................. 468
Application of the Model .............................................................................. 469
Commentary .................................................................................................. 469
 Contents xiii

4.4: Using Law

Chapter 31 Model for Using Law ......................................................... 471
Introduction ................................................................................................... 471
1. Legal Position .......................................................................................... 471
2. Syllogism ................................................................................................. 472
Major Premise ............................................................................................... 473
Minor Premise ............................................................................................... 474
Conclusion ..................................................................................................... 479
3. Model ....................................................................................................... 480
Structure of the Model .................................................................................. 480
Uses of the Model ......................................................................................... 484
Commentary .................................................................................................. 484

Part 5 Summary Chapter 32 Summary

........................................................................................................................ 486
Introduction ................................................................................................... 486
1. Rationality and Irrationality ..................................................................... 486
2. Methods of Reasoning ............................................................................. 487
Logical Reasoning ......................................................................................... 487
Policy............................................................................................................. 489
Analysing Ambiguity .................................................................................... 489
Observing Facts ............................................................................................. 489
3. Tasks with Law ........................................................................................ 489
Structuring Law ............................................................................................. 490
Forming Law ................................................................................................. 491
Using Law ..................................................................................................... 499
Commentary .................................................................................................. 502

Bibliography .............................................................................................. 505

Index ............................................................................................................ 535
Labels
Introduction
Discussion in this text explains legal method by reference to models. Sometimes discussion
refers to any item such as a statute or a meaning of an ambiguous provision. On other
occasions, though, it refers to a collection, list, range or set of items. Here the labelling system
is explained for the benefit of readers. The explanation sets out the general use of labels. It is
possible that there may be variations for special cases. Where this happens the text will
indicate that it is a special case or it will be obvious from the context.

General Form
Labels
To designate an item in an abstract way the label or name of the item commences with a
capital letter. Major examples are Element, Statute and Meaning.

Numbers
Abstracted items in a set, range, list or collection are numbered. For example, the elements of
a legal rule are labelled Element 1, Element 2, Element 3 and so on. These numbers are ways
of identifying elements and distinguishing one from another. They are generally not intended
to create any list according to preferences or values.

Capital Letters
Where an item is illustrative of some possibility it is designated with a capital letter, for
example Meaning X. A second such item could be designated with some other letter, for
example, Meaning Y.

Special Devices
Range of Items
A range, set, collection or list of items is conveniently designated by the first and last member
linked with a hyphen. For example, where a legal rule has four elements the list or range of
elements can be designated as Elements 1-4.

Use ofn’
In a particular instance there will be a specific number of items in a set. For example a
particular legal rule might be composed of five elements so that the range of elements would
be designated as Elements 1-5. In contrast to this there is the case of a general model that tries
to represent all cases of a set. Obviously the number of items in the set will vary from case to
case. This is catered for the by designating the last item in the list by using the standard
mathematical designation ‘n’. This means, for example, that the list or range of elements of
any legal rule can be represented as Elements 1-n.

Use of ‘0 ’
There is a special case with options where one of the options is to do nothing and leave things
as they are. This occurs, using the obvious example, with the proposed making of a statute
where one option is just not to enact a statute. In this case the option is labelled with the
symbol for nought, namely ‘0’. Thus the option not to enact a statute is designated as Statute 0.
Statute 0 represents the option for a legislature not to enact a statute on a topic whereas
Statutes 1, 2, 3 etc are options for different versions of statutes on the topic.

xiv
 Labels xv

Use of !‘and !’
In some places the text refers to one thing being the equivalent of another, or in plain language
‘matching’. For example, legislation is enacted to achieve a desired effect and if it is achieved
the desired effect matches the actual effect. In diagrams this relationship is represented by =
which is the standard mathematical notation for equivalence. However, there is an alternative,
namely that in practice the best actual effect is not the equivalent of the desired effect but is an
approximation. This is indicated by the ‘approximately equal to’ symbol (!).

Two or More Versions of an Item

If there are two or more versions of an item they are distinguished by additional letters or
numbers as the case requires. For example:
(1) If Element 2 has two meanings, the versions of Element 2 can be designated Element
2A and Element 2B.
(2) If there are two versions of Fact 2 in a case, one propounded by the plaintiff and the
other put forward by the defendant they can be designated ‘P’ and ‘D’ to signify the plaintiff’s
and the defendant’s versions. Thus the two versions are Fact 2P and Fact 2D.

Subdivisions of an Item
Subdivisions of an item can be designated with a numbering system that invokes the form but
not the meaning of decimal points. Thus if Element 2 has three sub-elements, they can be
designated Element 2.1, Element 2.2, and Element 2.3. This process can keep going. Thus, if
Element 2.2 has two subdivisions they can be designated Element 2.2.1 and Element 2.2.2.

Corresponding Items
Sometimes there are sets with corresponding items. This can occur for a number of reasons:
(1) For making and interpreting law, items correspond because of causation. Each version
of a statute on a subject and each meaning of an ambiguous provision will cause an effect (if
the statute is enacted or the meaning is declared by a court to be legally correct).
(2) In the model for using law, elements and facts correspond because each element
delineates a category of facts so that in a particular case the element is satisfied by a fact that
falls within that category.
(3) In the model for proving facts (which is contained within the model for using law) facts
and evidence correspond because each fact is proved or potentially provable by a piece of
evidence.

Corresponding items are labelled with the same number. To illustrate this:
(1) Statutes and meanings causing effects. Statute 0 causes Effect 0, Statute 1 causes Effect
1, Statute 2 causes Effect 2 and so on. Meaning 1 causes Effect 1, Meaning 2 causes Effect 2
and so on. Similarly, Statute X (or Meaning X) causes Effect X while Statute Y (or Meaning
Y) causes Effect Y.
(2) Facts satisfying elements. Fact 1 is the label given to a fact that fits within or satisfies
Element 1, Fact 2 is the label given to a fact that fits within or satisfies Element 2 and so on.
(3) Evidence proving facts. Evidence 1 is the label given to evidence that might prove or
has proved Fact 1, Evidence 2 is the label given to evidence that might prove or has proved
Fact 2, and so on.

Labels of correspondence can also be used to make collective statements. For example,
Statutes 0-n cause Effects 0-n, and Evidence 1-n proves Facts 1-n. These collective
 xvi Labels

statements are to be construed according to the maxim reddendo singula singulis. Literally this
says that each is rendered on their own. In plainer language, the items are to be taken
singularly so that each item in the first list is paired with the corresponding item in the second
list.

Tables
As has been stated a list of items can be designated by reference to the first and last item. For
example, the meanings of any ambiguous provision can be designated as Meanings 1-n. Lists
such as these are often represented in a table. For example, Meanings 1-n can be represented in

Meanings _____
Meaning 1
Meaning 2
Meaning n
Figure 1 Meanings
a table in the following way:

In this presentation it is not strictly necessary to include Meaning 2. Indeed, it is actually

redundant, when n = 2. However, it usefully emphasises the sense of a list that sets out the
range of options or possibilities. This is why an item numbered ‘2’ is included in all similar
lists.

Diagrams
Tables can be amalgamated to become a diagram. A diagram has two or more columns.
Generally a column has a heading. In discussion the book refers to columns by their number
from the left hand side - Column 1, Column 2 and so on - even though the column label and
number are not displayed in the diagram.

To illustrate the use of a diagram, the meanings of an ambiguous provision and the effect that
each would cause if declared legally correct by a court are set out in the diagram below, being
Figure 2. In this diagram Column 1 shows the meanings and Column 3 shows the effect that
each meaning causes. Column 2 contains an arrow pointing from Column 1 to Column 3
indicating that each meaning in Column 1 causes the corresponding effect in Column 3:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 2 Meanings and Effects

Probability
A number of symbols are used for probability:
P(A) = probability that event A
occurs P(B) = probability that event B
occurs
P(AuB) = probability that event A or event B occurs (A union B)
P(AnB) = probability that event A and event B both occur (A intersection B)
P(A') = probability that event A does not occur
P(A | B) = probability that event A occurs given that event B has occurred already (conditional
probability)
P(B | A) = probability that event B occurs given that event A has occurred already (conditional
probability)
 Labels xvii

P(B | A') = probability that event B occurs given that event A has not occurred already
(conditional probability)
^ (the empty set) = an impossible event S (the sample
space) = an event that is certain to occur
Table of Legislation

Australian Capital Territory

Interpretation Act 1967
s11A ................................................................................................................................ 352
s11B ................................................................................................................................ 353
Legislation Act 2001
s138 ................................................................................................................................. 352
s139 ................................................................................................................................. 353

Canada
British North America Act 1867 ....................................................................................... 349
Canadian Charter of Rights and Freedoms
s7 ..................................................................................................................................... 334
Constitution Act 1867
s24 ................................................................................................................................... 349
Narcotics Control Act 1970 .............................................................................................. 329

Commonwealth
Acts Interpretation Act 1901
s15AA ..................................................................................................................... 328-329,352
s15AB ..............................................................................................353, 387, 389, 398, 401
Australian Law Reform Commission Act 1996 ................................................................ 218
Broadcasting Services Act 1992 ...................................................................................... 266
Commonwealth of Australia Constitution Act (1900) ..................................................... 298,320
s9 .................................................................................................................................... 298,320
Constitution ................................................................................ 288, 297-299, 320, 355, 399
s116 ................................................................................................................................. 263
s128 ......................................................................................................... 288, 298, 299, 320

European Economic Community

Convention for the Protection of Biodiversity ........................................................... 230-231

New South Wales

Community Protection Act 1994 ................................................................................. 25, 27
Interpretation Act 1987
s5(4) ................................................................................................................................ 379
s33 .................................................................................................................................. 352
s34 ................................................................................................................................... 353
Jury Act 1977
s68A ................................................................................................................................ 408
Protection of the Environment Administration Act 1991
s6(2) ......................................................................................................................... 230-231
Subordinate Legislation Act 1989 ............................................................ 144, 146, 155-156
s3(1) ................................................................................................................................ 146
s5(1) ................................................................................................. 144, 146, 155-156, 469
Schedule 2 .................................................................................. 142, 146, 155-156, 452,
469

xviii
 Table of Legislation XIX

Norfolk Island
Interpretation Act
s9 ..................................................................................................................................... 379
s10C ................................................................................................................................ 352
s10D ................................................................................................................................ 353

Northern Territory
Interpretation Act
s62A ................................................................................................................................ 352
s62B ................................................................................................................................ 353

Queensland
Acts Interpretation Act 1954
s14A ................................................................................................................................ 352
s14B ................................................................................................................................ 353
Evidence Act 1977
s118 ................................................................................................................................... 84
s119 ................................................................................................................................... 84
Legislative Standards Act 1992 s4(1) ............................................................................... 286

South Australia
Acts Interpretation Act 1915
s21 ................................................................................................................................... 352
s22 ................................................................................................................................... 352
s22(2) .............................................................................................................................. 352

Tasmania
Acts Interpretation Act 1931
s8A .................................................................................................................................. 352
s8B .................................................................................................................................. 353

United Kingdom
6 & 7 William IV c 37 (1836) ........................................................................................... 347
Australia Act 1986 ........................................................................................................... 320
Bill of Rights 1688 ............................................................................................................ 242
British North America Act 1867 ....................................................................................... 349
Fatal Accidents Act 1846 (Lord Campbells Act) ......................................................... 88, 89
Commonwealth of Australia Constitution Act (1900) ..................................................... 298,320
s9 .................................................................................................................................... 298,320
Law Commission Act 1965 ............................................................................................... 218
Magna Carta 1215 ............................................................................................................. 242
Merchant Shipping Act 1995 ........................................................................................... 357
Slavery Abolition Act 1833............................................................................................... 315
Statute of Frauds 1677 (29 Car 2 c 3) .......................................................................... 86, 485

United Nations
Universal Declaration of Human Rights (1948) ........................................................ 276, 459
 XX Table of Legislation
United States
American Immigration and Nationality Act 1952 (US)
s212(a)(4)................................................................................................................. 348-349
Civil Rights Act 1964 (US)
s703(a)(1)........................................................................................................................ 345
Declaration of Independence ............................................................................................. 275
Elizabeth Morgan Act ......................................................................................................... 25
Endangered Species Act of 1973 ............................................................................... 250-251
Federal Rules of Evidence (US)
Rule 702 ...................................................................................................................... 51-52
National Motor Vehicle Theft Act 1919
s3 ..................................................................................................................................... 356
National Prohibition Act 1919 (Volstead Act) .................................................................. 252
Palm Sunday Compromise .................................................................................................. 25

Victoria
Interpretation of Legislation Act 1984
s4(2) ................................................................................................................................ 379
s35 ........................................................................................................................... 352, 353

Western Australia
Interpretation Act 1984
s8 ..................................................................................................................................... 352
s18 ................................................................................................................................... 352
s19 ................................................................................................................................... 353
 Table of Cases
Abbreviations
Cases

Abbreviations
Ad. Steam. Co Adelaide Steamship Co
DPP Director of Public Prosecutions
FCT Federal Commissioner of Taxation
GMLAS General Mutual Life Assurance Society
NSW New South Wales
VVA Vietnam Veteran’s Association

Cases
Adelaide Steamship Co v Spavins (1998) 81 FCR 360 .................................................... 83
Admiralty Commissioners v SS Valverda [1938] AC 173 ..................................... 142, 146
Aerated Bread Company, The v Gregg (1873) 8 LRQB 355 .......................................... 347
Agbaba v Witter (1977) 14 ALR 187 .............................................................................. 405
Alcatel v Commissioner of Patents (1996) 138 ALR 504............................................... 286
Allen v Flood [1898] AC 1 ............................................................................................. 417
Amalgamated Society of Engineers v Ad. Steam. Co (1920) 28 CLR 1291... 327, 393, 394
American Dairy Queen v Blue Rio (1981) 37 ALR 613 ................................................. 350
Archer v Howell (1992) 7 WAR 33 ............................................................... 139, 338, 367
Armory v Delamirie (1772) 5 Stra 505; 93 ER 664 ........................................................ 443
Attorney General v Butterworth [1963] 1 QB 696 ............................................................ 72
Attorney General v Deans and Canons of Windsor (1860) 8 HLC 369; 11 ER 472 ...... 372
Attorney General v Heineman Publishing (1987) 10 NSWLR 86 .................................. 285
Attorney General v Prince Ernest Augustus of Hanover [1957] AC 436 ............... 398, 401
Attorney General v Quin (1990) 93 ALR 1 ..................................................................... 61
Australasian Temperance and GMLA Society v Howe (1922) 21 CLR 290 ................... 46,
........................................................................................................................................... 399
Australian Capital Television v Commonwealth (1992) 177 CLR 106 ......................... 269,
........................................................................................................................................... 298
Australian Safeway Stores v Zaluzna (1987) 162 CLR 479 ............................................ 72
Australian Telecommunications Commission v Parsons (1985) 59 ALR 535 ............... 286
Avel v Attorney General (1987) 11 NSWLR 126 ..................................................... 47, 393
Babaniaris v Lutony Fashions (1987) 71 ALR 225................................................. 145, 347
Baker v Boulton (1808) 1 Camp 493; 170 ER 1033 ............................................. 85,88, 89
Barratt v Howard (2000) 170 ALR 529 .......................................................................... 350
Barrett v Thurling [1984] 2 NSWLR 683 ...................................................................... 347
Baylis v Bishop of London [1913] 1 Ch 127 .................................................................... 72
BC Motor Vehicle Act, Re [1985] 2 SCR 486 ................................................................ 334
Bell v Australian Securities Commission (1991) 103 ALR 689 ..................................... 350
Bennett & Wood v Orange City Council [1967] 1 NSWLR 502 ................................... 146
Bermingham v Corrective Services Commission (1988) 15 NSWLR 292 ..................... 389
Bolton, Re; Ex parte Beane (1987) 162 CLR 514, 70 ALR 225 ............................. 350, 357
Bonham's Case (1610) 8 Co Rep 107a, 114a CP ........................................................... 355

1. Engineers' Case

21
 xxii Table of Cases
Boston v WS Bagshaw [1966] 1 WLR 1135 .................................................................. 408
Bourke v State Bank of New South Wales (1988) 85ALR 61, 22 FCR 378 .................. 277
Bourne v Keane [1919] AC 815 ..................................................................................... 145
Bowman v Secular Society [1917] AC 406 .................................................................... 145
Bowtell v Goldsborough Mort & Co (1996) 3 CLR 444 ................................................ 398
Boys v Chaplin [1968] 2 QB 1 ................................................................................ 141, 143
Bracy v Gramley 520 US 899 (1997) ............................................................................. 416
Braschi v Stahl Associates 543 NE 2d 49 (NY 1989.............................. 130, 338, 348, 354
Brennan v Comcare (1994) 50 FCR 555; 122 ALR 615 ................................................ 395
Briginshaw v Briginshaw (1938) 60 CLR 336 ................................................ 111-112, 172
Brisbane City Council v Attorney General (1978) 19 ALR 681 .................................... 408
Broome v Cassell & Co [1972] UKHL 3; [1972] AC 1027 ............................................. 84
Brown v Classification Review Board (1998) 154 ALR 67 ........................................... 350
Brownlee v The Queen (2001) 180 ALR 301 ................................................................... 46
Bryan v Maloney (1995) 182 CLR 609 ..................................................................... 85, 87
Buckley v Bennett Design & Constructions (1978) 19 ALR 257 ................................. 145
Burnie Port Authority v General Jones (1994) 179 CLR 520 ..................................... 71-72
Butchers' Co v Crescent City 111 US 746 (1884) .......................................................... 299
Calvins Case (1609) 7 Co Rep 1a .............................................................................. 60, 276
Caminetti v US 242 US 470 (1917) ................................................................................ 400
Centronics Systems v Nintendo (1992) 111 ALR 13 ..................................................... 286
Chappell and Co v Associated Radio Co of Australia [1925] VLR 350 ........................ 356
Chaudary v Minister for Immigration (1994) 121 ALR 315 ................................... 285, 286
Chevron Inc v Natural Resources Defense Council 467 US 837 (1984)........................ 332
Christie v Permean, Wright Co Ltd (1904) 1 CLR 693 .................................................. 350
CIC Insurance Ltd v Bankstown Football Club Ltd 141 ALR 618 ......................... 398, 401
Clayton v Heffron (1960) 105 CLR 214 ......................................................................... 313
Clutha Developments v Barry (1989) 18 NSWLR 86 .................................................... 146
Coco v R (1994) 120 ALR 415 ....................................................................................... 350
Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91 ........................................................ 85
Committee of Direction of Fruit Marketing v Collins (1925) 36 CLR 410.................... 350
Commonwealth v Progress Advertising and Press Agency (1909) 10 CLR 457 ........... 350
Commonwealth v Verwayen (1990) 170 CLR 394 .......................................................... 72
Commonwealth v Welosky 276 Mass 398 (1931 .......................................................... 357
Companhia de Seguros Imperio v Heath (REBX) [2001] 1 WLR 112 ............................ 88
Connecticut National Bank v Germain 112 Sct 1146 (1992) ......................................... 399
Connor v Sankey [1976] 2 NSWLR 570 ........................................................ 142, 143, 336
Cooper Brookes v FCT (1981) 147 CLR 297; 35 ALR 151.................................... 285, 286
Corkery v Carpenter [1951] 1 KB 102 ....................................................348, 383, 394, 395
Coulthard v Disco Mix Club Ltd [2000] 1 WLR 707 ....................................................... 88
Crowley v Lewis 239 NY 264 (1925)............................................................................ 139
Daniels v White [1938] 4 All ER 258 ......................................................................... 9, 54
Daubert v Merrell Dow Pharmaceuticals 509 US 579, 113 SCt 2786 (1992) .................. 52
David Securities v Commonwealth Bank (1992) 175 CLR 353...........................72, 85, 87
Davies v Deverell (1992) 1 Tas R 214............................................................................ 396
Derbyshire County Council v Times Newspapers [1993] AC 534................................. 277
Devries v Australian National Railways Commission (1993) 177 CLR 472 ................. 112
Dietrich v The Queen (1992) 177 CLR 292; 109 ALR 385 ....................265, 268, 277, 285
Director of Public Prosecutions v Fowler (1984) 55 ALR 175 ...................................... 286
 Table of Cases xxiii
Donoghue v Stevenson [1932] AC 562 ................. 59, 72, 82, 273-274, 276, 286, 295, 360
Dornan v Riordan (1990) 95 ALR 451 ............................................................................ 14
DPC Estates v Grey and Consul Development [1974] 1 NSWLR 443 ..................... 83, 88
Dr Bonham's Case (1610) 8 Co Rep 107a, 114a CP ...................................................... 355
Dred Scott v Sandford, 60 US (19 How) 393 (1857) ..................................................... 315
Duport Steels v Sirs [1980] 1 WLR 142, [1980] 1 All ER 529 ...................................... 389
Dyke v Walford (1848) 5 Moo PCC; 13 ER 557............................................................ 444
Edwards v Attorney General [1930] AC 124 ................................................................. 349
Emmens v Pottle (1885) 16 QBD 354 ............................................................................ 272
Esso Australia Resources v FCT [1999] HCA 67; (1999) 201 CLR 49 ................... 86, 88
Evda Nominees v Victoria (1984) 154 CLR 311.................................................... 137, 368
Fairfax v FCT (1965) 114 CLR 1 ................................................................................... 244
Farah Constructions v Say-Dee [2007] HCA 22, (2007) 230 CLR 89 ...................... 83, 88
Farrell v Alexander [1976] 2 All ER 721 ....................................................................... 141
FCT v Chubb (1995) 128 ALR 489 ......................................................................... 165, 494
FCT v Trustees of Lisa Marie Walsh (1983) 48 ALR 253 ...................................... 394, 395
Fergusson v Union Steamship Co (1884) 10 VLR (L) 279 ............................................ 350
Fisher v Prince (1762) 3 Burr 1363 .................................................................................. 61
Fitzgerald v FJ Leonhardt Pty Ltd (1997) 189 CLR 215 .................................................. 86
Foreditch v United States (2003) ...................................................................................... 25
Fothergill v Monarch Airlines Ltd [1981] AC 251 ........................................................ 352
Frye v United States 54 App DC 46; 293 F 1013 (DC Cir) (1923) .................................... 5
Gallagher v Durack (1982) 44 ALR 477 ........................................................................ 268
Geelong Harbour Trust v Gibbs Bright (1974) 129 CLR 576 ........................................ 145
Gladstone v Armstrong [1908] VLR 454 ....................................................................... 350
Graham v Ninness (1986) 65 ALR 331 ......................................................................... 286
Gray v Motor Accident Commission [1998] HCA 70 .................................... 85, 85, 86, 88
Grey v Pearson (1857) 6 HLC 61 ................................................................................... 389
Hamdi v Rumsfeld 542 US 507 (2004) .......................................................................... 267
Harnett v Fisher [1927] 1 KB 402; [1927] AC 573 ................................................... 61, 296
Harrisburg, The 119 US 199; 7 SCt 140; 30 Led (1886) .................................................. 85
Hatzimanolis v ANI Corporation (1992) 173 CLR 473 ................................................... 72
Hayes v Cable (1961) 78 WN (NSW) 735 ..................................................................... 350
Heydon's Case (1584) 3 Co Rep 7a ......................................... 284, 297, 327-328, 340, 352
Higgins v O’Dea [1962] WAR 140 ................................................................................ 400
Hill v Aldershot Corporation [1933] 1 KB 259 ...................................... 201, 282, 416, 417
Hilton v FCT (1992) 110 ALR 167 ................................................................................ 286
HL Bolton v TJ Graham [1957] 1 QB 159 ..................................................................... 406
House v The King (1936) 55 CLR 499 .......................................................................... 110
Isherwood v Butler Pollinow (1986) 6 NSWLR 363..................................................... 398,401
IW v City of Perth (1997) 146 ALR 696 ....................................................................... 390,399
Jackson v Delaware 170 Atl 22 (1933) ........................................................................... 235
James B Beam Distilling Co v Georgia 501 US 529 (1991) ......................................... 140
Jegatheeswaran v Minister for Immigration [2001] FCA 865 (9 July 2001) ................ 166
John v FCT (1989) 89 ATC 4101 ........................................................... 136, 140, 142, 143
Johnson v Southern Pacific Co 117 Fed 462 (CCA 8th ed 1902) ............................ 356-357
Johnson v Southern Pacific Co 196 US (1904) .............................................. 348, 356-357
Jones v Commonwealth (1987) 61 ALJR 348; 71 ALR 497 .......................................... 139
Jones v Randall (1774) 1 Cowp 17 ................................................................................... 60
 xxiv Table of Cases
Jones v Wrotham Park Estates [1980] AC 74 ................................................................. 401
JW Hampton v United States 276 US 394 (1928) .......................................................... 242
Kable v DPP (1996) 189 CLR 51 ............................................................................. 25, 27
Kingston v Keprose (1987) 11 NSWLR 404 .......................................... 139, 323, 338, 367
Kioa v West (1985) 159 CLR 550, 62 ALR 321 ........................................................... 349
Knox v Gye (1872) LR 5 HL 656 ..................................................................................... 88
Knuller v DPP [1972] 2 All ER 898 ................................................................................. 60
KP Welding Construction v Herbert (1995) 102 NTR 20 .............................................. 397
Lake Macquarie Shire Council v Aberdare County Council (1970) 123 CLR 327 ........ 356
Lebanese Moslem Association v Minister for Immigration (1986) 11 FCR 543 ........... 276
Lennard's Carrying v Asiatic Petroleum [1915] AC 705 ........................................ 300, 405
Leon v Casey [1932] 2 KB 488 ...................................................................................... 278
Lie v Refugee Review Tribunal ...................................................................................... 443
Lincoln College Case (1595) 3 Co Rep 586 ................................................................... 352
Liversidge v Anderson [1941] AC 207 ........................................................................... 267
London and North Eastern Railway Co v Berriman [1946] AC 278 .............................. 400
Louth v Diprose (1992) 175 CLR 621 .............................................................................. 72
Luke v Inland Revenue Commissioners [1963] AC 557 ................................................ 399
M-T v M-T [1949] P 331 ................................................................................................ 146
Mabo v Queensland (No 2) (1992) 175 CLR 1 ...................................................... 269, 469
Mackenzie v The Queen (1996) 190 CLR 348 ............................................................... 403
Magor and St Mellons v Newport Corporation [1951] All ER 839 ............................... 400
Maguire v Makaronis [1997] HCA 23 ............................................................................ 868
Marbury v Madison (1803) 1 Cranch 137, 5 US 877 ....................................................... 61
Mashpee Tribe v New Seabury Corp 592 F 2d 575 (1st Cir), 444 US 866 (1979) ........ 353
Mashpee Tribe v Town of Mashpee 447 F Supp 940 (D Mass 1978) ............................ 353
Mason, Re [1928] Ch 385 ..................................................................................... 141, 143
Maunsell v Olins [1975] AC 373 .................................................................................... 400
Maynard v O'Brien (1991) 78 NTR 16 ........................................................................... 352
McBoyle v United States 283 US 25 (1931)........................................................... 348, 356
McCarty v Pheasant Run 826 F 2d 1554 (7th Cir, 1987) .............................................. 112
McCawley v The King (1918) 26 CLR 9, 24 ALR 413 ................................................. 396
McCrae v Coulton (1986) 7 NSWLR 644 ...................................................................... 350
McFarlane v Tayside Health Board [2000] 2 AC 59 .............................................. 275, 469
McLoughlin v O’Brian [1983] 1 AC 410 ......................................................................... 87
McManus v Scott-Charlton (1996) 140 ALR 625 .......................................................... 285
Melbourne Corporation v Barry (1922) 31 CLR 174 ..................................................... 358
Metal Manufacturers v Lewis (1988) 13 ACLR 357 ............................................. 337, 462
Metropolitan Properties v Lannon [1969] 1 QB 577 ..................................................... 249
Miller v Commonwealth (1904) 1 CLR 668 ........................................................... 398, 400
Mills v Meeking (1990) 91 ALR 16 ....................................................... 352, 389, 398, 400
Minister for Immigration v Guo (1996) 144 ALR 567 ..................................................... 95
Minister for Immigration v Petrovski (1998) 154 ALR 606 ........................................... 286
Minister for Immigration v Sciascia (1991) 103 ALR 307 ............................................. 350
Minister for Immigration v Teoh (1995) 183 CLR 273; 128 ALR 353 .................. 276, 285
Mirehouse v Rennell (1833) 1 Cl & F 527 ...................... 82, 139, 142, 139, 338, 367, 368
Mistretta v United States 488 US 361 (1989) ................................................................ 339
Mobasa v Nikic (1987) 47 NTR 48 .................................................................................. 14
Moragne v States Marine Lines Inc 398 US 375 (1970) .................................................. 85
 Table of Cases xxv
Morrison v Olson 487 US 654 (1988) ............................................................................ 339
Mourani v Jeldi Manufacturing (1983) 57 ALJR 825 .................................................... 403
Mudginberri Station v Langhorne (1985) 68 ALR 613 .................................................. 350
Muin v Refugee Review Tribunal [2002] HCA 30 ........................................................ 443
National Bank of Greece v Metliss [1958] AC 509........................................................ 286
Neat Holdings v Karajan Holdings (1992) 67 ALJR 170 ............................................... 166
Nelson v Nelson (1995) 184 CLR 538 ............................................................................ 86
New South Wales Bar Association v Muirhead (1988) 14 NSWLR 173 ......................... 54
Newbury v Bristol Tramways and Carriage Co (1912) 107 LT 801 ............................. 403
Newcastle City Council v GIO (1997) 149 ALR 623............................................. 286, 401
Nicol v Chant (1909) 7 CLR 569 .................................................................................... 398
Nixon v Administrator of General Services 433 US 425 (1977) ................................... 146
Nkambul v R [1950] AC 379 .......................................................................................... 142
Northern Sandblasting v Harris (1997) 188 CLR 313 ...................................................... 71
Northern Securities Co v United States 193 US 197 ................................................ 15, 146
O’Brien v Gillies (1990) 69 NTR 1 ................................................................................ 350
Oceanic Sunline Shipping v Fay (1988) 165 CLR 197 .................................................... 81
O’Connell v Reg (1844) 11 Cl & Fin 155 ...................................................................... 145
O’Reilly, Re ; Ex parte Bayford Wholesale (1983) 181 CLR 557 ................................. 451
Onassis v Vergoittis [1968] 2 Lloyds Rep 403 ............................................................... 430
Onus v Alcoa (1981) 149 CLR 27 .................................................................................. 469
Ormond Investment v Betts [1922] All ER Rep 709 ...................................................... 384
Ostime v Australian Mutual Provident Society [1969] AC 459 ..................................... 369
O'Sullivan v Farrer (1989) 89 ALR 71 .......................................................................... 378
Otis Elevators v Zitis (1986) 5 NSWLR 171 .................................................................. 408
Overseas Tankship v Morts Dock and Engineering Co2 [1961] AC 388 .............. 169, 173
Overseas Tankship v Miller Steamship3 [1967] 1 AC 617 ..................................... 169, 173
Palsgraf v Long Island Railroad Co 162 NE 99 (NY 1928) ............................................... 3
Pambula District Hospital v Herriman (1988) 14 NSWLR 387 ..................................... 352
Paragon Finance plc v DB Thakerar & Co [1999] 1 All ER 400 ..................................... 88
Paragon Properties v Magna Investments (1972) 24 DLR (3d) 156 ................................ 84
Parker v British Airways Board [1982] 1 QB 1004 ....................................................... 443
Pearce v Gardner [1897] 1 QB 688 ................................................................................ 275
Peninsula Group v Registrar-General (1996) 136 FLR 8 ............................................... 397
People v Collins, 438 P2d 33 (Cal 1968)..................................................................... 70-71
Perka v The Queen [1984] 2 SCR 232 ........................................................................... 329
Peters v The Queen [1998] HCA 7; (1998) 192 CLR 493 ............................................... 85
Phosphate Co-op v Environment Protection Authority (1977) 18 ALR 210 ................. 396
Pilmer v Duke Group Ltd [2001] HCA 31 ....................................................80,83, 84, 139
Planned Parenthood v Casey 505 US 833 (1992) .......................................................... 137
Prior v Sherwood (1906) 3 CLR 1054 ............................................................................ 377
Proctor v Jetway Aviation [1984] 1 NSWLR 166 .................................................. 137, 368
Project Blue Sky v ABA (1998) 153 ALR 490 ............................................... 286,393, 399
Pyneboard v Trade Practices Commission (1983) 45 ALR 609 ..................................... 358
Queensland v Commonwealth (1977) 139 CLR 585...................................................... 390
Quinn v Leathem [1901] 1 AC 495 ................................................................................ 417

2. Wagon Mound (No 1)

3. Wagon Mound (No 2)
 xxvi Table of Cases
R v Carroll (2002) 77 ALJR 157 ............................................................................ 271, 279
R v Goodwin [2005] EWCA Crim 3184 ........................................................................ 357
R v Delaval (1763) 3 Burr 1434 ....................................................................................... 60
R v Ireland [1988] AC 147 ............................................................................................. 356
R v L (1994) 122 ALR 464 ............................................................................................. 387
R v Mason [1928] Ch 385.............................................................................................. 141
R v Morton (1873) LR 2 CCR 22 ................................................................................... 478
R v Smith [1974] 2 NSWLR 586........................................................................... 116, 384
R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256 ............................................ 249
R v Taylor [1950] 2 KB 368 ................................................................................... 142, 143
R v The Judge of the City of London Court [1892] 1 QB 273 ....................................... 395
R v Trade Practices Tribunal; Ex parte Tasmanian Breweries (1970) 123 CLR 361 ...... 54
R v Watson; Ex parte Armstrong (1976) 136 CLR 248 ................................................ 249
R v Wilkes (1770) 4 Burr 2527; 98 ER 327 ................................................................... 267
R v Wooler (1817) 6 M&S 366 ...................................................................................... 408
R v Young (1999) 46NSWLR 681 ................................................................. 390, 395, 397
Rankin v Baldi [1985] 1 NSWLR 274 .................................................................. 141, 143
Rasul v Bush 542 US 466 (2004) ................................................................................... 267
Repatriation Commission v Kohn (1989) 87 ALR 111 ......................................... 393, 399
Repatriation Commission v VVA (2000) 171 ALR 523 .........................384, 385, 387, 398
Richardson v FCT (1997) 150 ALR 167 ........................................................................ 286
Robinson Bros v Houghton Assessment Committee [1937] 2 KB 445 .......................... 146
Robinson v Continental Insurance Co [1915] 1 KB 155 ................................................ 286
Roe v Wade 410 US 113 (1973) ...................................................................... 167-168, 252
Rose v Abbey Orchard Property Investments [87] Aust Torts Reports ^80-121 ........... 112
Rowlands, Re [1963] 1 Ch 1 ........................................................................................... 400
Rylands v Fletcher (1868) LR 3 HL 330 .......................................................................... 72
Sarasawati v R (1991) 100 ALR 193 .............................................................................. 401
Sargood Brothers v Commonwealth (1910) 11 CLR 258 ...................................... 350, 358
Schlup v Delo 513 US 298 (1995) .................................................................................. 233
Scruttons v Midland Silicone [1962] 1 AC 446 ............................................................ 141
Sharp v Wakefield (1888) 22 QBD 239 ......................................................................... 347
Shaw v DPP [1962] AC 562 ..................................................................................... 60, 296
Shearer, Re (1891) 12 LR (NSW) 24 ............................................................................. 350
Shire of Arapiles v Board of Land and Works (1904) 1 CLR 679 ................................. 396
Smith v Allwright (1944) 321 US 649.................................................................... 366, 373
Smith v United States 53 113 SCt 2050, 2061 (1993) ............................................ 383, 388
Smoker v Pharmacy Restructuring Authority (1994) 36 ALD 1 .................................... 347
Somerset v Stewart4 (1772) Lofft 1; 20 Howell's State Trials 79, 98 ER 499........ 267, 315
Sonzinsky v United States 300 US 506 (1937)............................................................... 244
Starkman v Delhi Court Ltd (1961) 28 DLR (2d) 269 ..................................................... 84
State Government Insurance Commission v Trigwell (1979) 142 CLR 617 ................... 61
State Superannuation Board v FCT (1988) 82 ALR 63 .................................................. 408
Sutherland Shire Council v Heyman (1985) 60 ALR 1 .................................................... 87
Sussex Peerage Case (1844) 1 Cl & F 85; 8 ER 1034 .................................................... 496
Tackiack v Commissioner of Australian Federal Police (1995) 131 ALR 319 .............. 350
Taff Vale Railway v Amalgamated Society of Railway Servants5 [1901] AC 426 ....... 417

4. Somerset's Case
 Table of Cases xxvii
Tassell v Hayes (1987) 71 ALR 480............................................................................... 350
Telstra Corporation v Hornsby Shire Council [2006] NSWLEC 133 ............................ 235
Tenax v Steamship Co v The Brimnes [1974] Int Com LR 05/23, [1975] QB 929 ....69-70
Trethowan v Peden (1930) 31 SR (NSW) 183 ............................................................... 313
Trevisan v FCT (1991) 101 ALR 26............................................................................... 395
Trident v McNiece (1988) 80 ALR 574 ........................................................................ 143
Tumahole Bereng v R [1949] 1 AC 253 ......................................................................... 143
United States v Carolene Products 304 US 144 ............................................................. 333
United States v Carroll Towing 159 F 2d 169, (2nd Cir, 1947) .................................... 112
United States Fidelity and Guarantee Co v Jadranska 683 F 2d 1022 (7th Cir, 1982)... 112
United States v Sanchez 340 US 42, 44 (1950) .............................................................. 244
United Steel Workers v Weber (1979) 443 US 193 ............................................... 345, 464
Vacher v London Society of Compositors [1913] AC 107....................................... 46, 393
Valentini v Canali (1890) 24 QBD 166 .......................................................................... 286
Van der Meer v The Queen (1988) ALR 10 ................................................................... 233
Victor v Nebraska 511 US 1 (1994) 14 ............................................................................ 76
Wacal Development Realty Development Pty Ltd (1978) 20 ALR 621 ........ 398, 400-401
Wagon Mound, The1
Wallis v Smith (1882) 21 Ch D 243 .............................................................................. 145
Ward v James [1966] 1 QB 273 ...................................................................................... 403
Warnink v Townend [1979] AC 731 ................................................................................ 82
Waverley Borough Council v Fletcher 4 All ER 75 ....................................................... 443
White v John Warwick [1953] 1 WLR 1285 ................................................................. 340
Whiteley v Chappell (1868-1869) 4 LQRB 147 ............................................................. 400
Willis v Baddely [1892] 2 QB 324 ........................................................................... 61, 296
Wilson v Commissioner of Stamp Duties (1988) 13 NSWLR 77 ................................. 356
Wilson v Glossop (1888) 20 QBD 354 ................................................................... 276, 286
Wilson v Minister for Aboriginal Affairs (1996) 189 CLR 1 ................................. 282, 416
Winship, Re 397 US 358 (1970) ............................................................................... 76, 235
X v Minister for Immigration (1999) 164 ALR 583 ......................................................... 80
Young v Bristol Aeroplane Co [1944] 1 KB 718 ........................................................... 141

5.
6.
Taff Vale Railway Case
See Overseas Tankship v Morts Dock and Engineering Co and Overseas Tankship v Miller Steamship.
Chapter 1 Outline
Purpose of this Book Legal Tasks Legal Reasoning Legal Method
Summary Commentary

Law is reason free from passion.2 3

Purpose of this Book

This book analyses the major tasks that lawyers perform in a common law system.
Common law legal systems are so called because common law, which is law made by
courts in the course of deciding a case, was originally the main type of law in the
system. Over the centuries, the position changed as statute law was enacted by
legislatures such as a congress or parliament in an ever-increasing volume. To some
extent this ousted common law but to a considerable extent it also established new
territory to be ruled by law. But despite this change in composition, the systems are still
popularly known as common law systems.

In the self designated job of analysing the major tasks that lawyers perform in a
common law system the author seeks to identify the reasoning processes that should
inform those tasks. This analysis procures at least two advantages. One advantage is the
sheer thrill of discovery. A practical advantage also accrues because the analysis lays a
foundation for devising methods to perform those tasks. Clearly these methods are
directly applicable to common law legal systems. However, since all legal systems
perform the same fundamental task it is feasible that some of the methods might extend
to other legal systems, even if they required some adaptation for that purpose.

In identifying the reasoning processes that should be used in working with law the text
is addressing governments and lawyers. It is prescriptive and not descriptive. It is
enjoining ways to reason by saying in effect to those who work with law: ‘If you wish to
act rationally and honestly when working with law, this is the way to proceed’.

Legal Tasks
Introduction
In any legal system there are two primary sets of tasks. These are:
(1) Forming Law. Forming law consists of making law and interpreting law.
Legislatures make statute law, courts make common law and courts also interpret
common law and statute law.
1
.

Aristotle Politics Book 3

3
 2 Chapter 1 Outline
(2) Using Law. Lawyers use law for their clients in litigation and transactions.
Litigation involves taking a case to court. Transactions involve a process such as making
a will or forming a company.

Forming Law
Forming law is the collective label used in this text for the two functions involved in
bringing law into existence:
(1) Making Law. One consists of the basic task of making law, which can either be
statute law or common law.
(2) Interpreting Law. The other involves completing the task of making law by
interpreting law. Interpreting a law effectively writes into the text of a law the official
legal meaning of some provision in the law. It determines that the provision is to be
interpreted in one way rather than another.

Using Law
Once law has been formed, people use it in two situations. They use law when they
perform legal transactions (such as making a will or buying and selling land). They use
law when they engage in litigation where they are suing or being sued by another
person.

Legal Reasoning
Introduction
[T]hat noble and most sovereign reason1 Each of the two major
tasks in the legal system, forming law and using law, requires its own form of reasoning.
Forming law involves purposive action, which utilises policy. Reasoning with policy
rests on two core processes, causation (which in this book is generally shorthand for
predicting causation) and evaluation. Using law in its overall operation involves
syllogistic reasoning. Within this overall operation other forms of reasoning are used
based on cognitive science, induction, deduction and abduction.

Forming Law
Every state is a community of some kind, and every community is established with a view to some
good; for mankind always act in order to obtain that which they think good. But, if all communities
aim at some good, the state or political community, which is the highest of all, and which embraces
all the rest, aims at good in a greater degree than any other, and at the highest good .3
Introduction
This analysis of forming law is directed towards developing a method or model to be
used by a government which acts rationally and honestly when forming law by making
or interpreting it. This analysis comprises five basic propositions. Although these
propositions are described here by reference to a legislature enacting statutes, they
would also apply to other activities. They would apply, with appropriate
modification,
2
. William Shakespeare Hamlet
3 III.i.159 Aristotle Politics Book 1
.
 Chapter 1 Outline 3
to a court as it makes common law and to a court that is interpreting common law or
statute law.

Proposition 1: Actions Cause Consequences

When a person or body takes an action the action commonly causes some
consequences. In the extreme case it sets in motion a series of events where each event
is caused and determined by the preceding one. Or it creates a network of interconnected
causes and effects.

In other words, each consequence is likely to lead to more consequences. In the result,
an action is likely to be part of, and to start or to continue, one or more chains or
networks of consequences. These consequences vary in their characteristics. They can
last for a short term or a long term, they can operate over a narrow area or a wide area,
and they can concern a wide array of matters be they financial, political, emotional,
psychological, physical or something else.

Unpredictable Chain of Consequences

A chain of consequences can be unpredictable. The Palsgraf Case, which is a leading
case from the United States on causation in the tort of negligence, is a good illustration
of unpredictability.4 As a good storyteller should, we will start with the facts.

First, there is the setting. On 24 August 1924 a Long Island Railroad train had stopped
at Queen’s Jamaica Station. It then started to move out of the station. A male passenger
whose identity was never revealed was carrying a package 15 inches long and wrapped
in newspaper. It contained fireworks but there was nothing on the packaging or
appearance of the package to indicate this.

Next, there are the events. The passenger hurried along the platform in an attempt to
board the now moving train. The passenger appeared to be falling. Two employees of
the railroad company rendered assistance. One was on the train and the other was on the
platform. The guard on the train attempted to pull the passenger into the car while the
guard on the platform attempted to push him into the car from behind. These attempts to
assist the passenger caused the package the passenger was holding to fall on the rails.
When the package hit the rails the fireworks in it exploded. Then the explosion caused
some scales at the other end of the platform to fall over. This happened either because of
the shock of the explosion or because a panicking bystander upset the scales. The falling
scales injured Mrs Helen Palsgraf who was standing on the platform after buying a
ticket to go to Rockaway Beach.

Mrs Palsgraf sued the Long Island Railroad. Mrs Palsgraf lost her case. The relevant
legal rule required that her injury was reasonably foreseeable. This was not so, the court
found, since the chain of causation leading from the actions of the guards in helping the
passenger to the falling of the scales was so long and so unlikely.

4 Palsgraf v Long Island Railroad Co 162 NE 99 (NY 1928)

 4 Chapter 1 Outline
Complex Chain of Consequences
Causation can also be complex. On 28 June 1914 in Sarajevo a Bosnian revolutionary,
Gavrilo Princip, assassinated the Austrian archduke, Franz Ferdinand and his wife
Sophie, Duchess of Hohenberg. This assassination precipitated, and in that sense caused,
the four years of carnage that was known as World War I, and that began in July 1914.
This event, however, was simply the trigger that set off declarations of war. While the
actual causes of the war are complicated and are still debated, one of the basic
contributions consisted of unresolved tensions among the European powers which had
led to a complex web of treaties involving mutual support in times of aggression. In
outline, that is how the assassination of two people, one husband and one wife, led to the
slaughter of millions.

Proposition 2: Actions Possess Intrinsic and Consequential Value

There is a saying that if you give a person a fish you feed them for a day, while if you
teach them how to fish you feed them for life. This is a colourful illustration of the
proposition that an action potentially has two types of value or worth, intrinsic value and
consequential value. An action’s intrinsic value is its value as it stands alone, regardless
of what it leads to. An action’s consequential value is measured by the values of all the
consequences that it causes in whole or in part.

Proposition 3: Law Mostly Possesses Consequential Value

Handsome is as handsome does.5
A law passed by legislators in the dead of night that is concealed from everyone is a
piece of paper that has little significance. This is the basis for the proposition that a law
as written, before it has caused any consequences, has little intrinsic value. It is just a
piece of paper. To use the popular phrase, it is all talk and no action.

To ensure that this proposition is fully understood, assume that a law as written contains
a manifestly unjust even morally horrendous rule. A biblical example is the law
providing for the Massacre of the Innocents, an episode of mass infanticide by the King
of Judea, Herod the Great. The story is told in the Gospel of St Matthew. 6 King Herod
feared a loss of his kingship because of a prophecy revealed to him by the Jewish priests
that a new King of the Jews would be born in Bethlehem. In consequence he ordered the
execution of all young male children in the village of Bethlehem. This, according to St
Matthew, lead to Jesus’ family fleeing to Egypt and staying there until after Herod’s
death. However, historical evidence for this massacre is slight or non-existent.
Consequently it is now regarded as conveying only allegorical truth.

But to take this law as an example, most people who read it would be shocked in the
extreme by its content. Surely this is proof that a law can have significant intrinsic
consequences? The answer to this objection is as follows. The ordering of the killing of
innocent children is morally repugnant in the extreme, but the order on its own lacks
5
.
6
.

Commentary 1.1
St Matthew 2:16-18
 Chapter 1 Outline 5
significance. That said, when people read the law they experience strong revulsion.
This, however, is a consequence of the law (just as any subsequent killing of innocent
children would be a consequence), not a measure of its intrinsic value.

It is appreciated that this distinction may seem artificial. Moreover, I am not denying
that laws can be morally judged by how they are written. What I am arguing is that the
most fruitful way to assess a law is by its consequences not by its content. Of course its
content is likely to be one of the major determinants of its consequence. However, from
the perspective of social engineering rather than abstract moralising (which I stress is a
worthy activity) the important things are the consequences of a law.

Now that we have established that the major importance of law consists of the
consequences that it brings, it is necessary to explain something about these
consequences. By creating these consequences or effects, law changes the world
because it brings about outcomes of effects. These effects are of two kinds, direct or
indirect.

Direct Effects
Every law that a legislature enacts causes a direct effect. There are three obvious direct
effects:
(1) Statute Books. The statute enters the statute books.
(2) Available for Use. The statute is then available for use. When used it can impose
legal consequences on those who come within its ambit.
(3) Actually Used. In some cases, perhaps many, the law will be successfully
invoked. It this case it will actually impose those consequences on people. For example,
a law that establishes a stock market and a mechanism for people to sell stock (or shares
as they are also called) enables people to sell stocks and to do so easily. This effect is in
all likelihood the purpose for which the law was enacted or at least one of several
purposes.

Indirect Effects
Most laws will cause some indirect effects as well. Indirect effects are many and varied.
They can happen in numerous ways, they may be intertwined with other social
phenomena and they may happen some time, even some considerable time, after the law
is enacted. They can also be highly unpredictable. These indirect effects may be part of
the intended purpose of the law. Or they may be unintended or unanticipated
consequences. They include the effects that a law has on those who read it.

We can illustrate indirect effect from the example above of the law that establishes a
mechanism for people to sell stock. While the direct effect of the law is to provide a
simple mechanism for buying and selling shares, there is an obvious indirect effect (and
there may also be some that are not so obvious). This law is likely to encourage people
to invest in stock because they now have an assurance of resale: if they have

7 The distinction between direct and indirect effects is not strict.

.
 6 Chapter 1 Outline
purchased stock, then at a later time for any reason they wish to sell their stock to obtain
cash, there is a ready mechanism for doing so. Without this assurance many would be
deterred from investing because of a fear that if they needed to disinvest and cash in the
stock, they could not be sure of doing so quickly and conveniently.

Proposition 4: Best is Best

So far we have established that law causes consequences and that the main value of a
law lies in the consequences that it determines. If this is the case it indicates a rationale
for making law that incorporates a measure of the value of law.

This rationale may be captured in a simple proposition. Since the main function of law
is to change the world, the only one good reason to make a new law or change an
established law is to better society’s position. If the law does not make society better off
then it should not be made. So the first point is simple: no improvement no law.

However, when a government is contemplating enacting a statute on some subject it

usually has a choice because there is more than one version of the law that will seem to
be a solution to a problem or a procurer of some desired social benefit. Each version of
the statute, it is believed, will deliver at least some of the outcomes that the government
desires. However, each statute will deliver it in different degrees, perhaps in different
kinds and with differences in the types and extent of the costs incurred. All of this
means that the government has a choice.

Since a government has a choice when it is contemplating enacting a law on a subject it

is important to ascertain the basis on which this choice should be made. Now it is
axiomatic that it is rational to want the best and irrational to want anything less.
Therefore a rational and honest government when faced with a choice of possible
version of a statute should choose the one that is predicted to cause the best outcome or
effect. In other words the best law is the law that delivers the best outcome. This
conclusion, it is worth stressing, rests on two axioms. It is rational to want the best
outcome from change. It is irrational to want anything less.

Proposition 5: Net Benefit Measures Best

If the best law causes the best effect, how should lawmakers and judges determine
which effect is best? The best effect is judged by a cost benefit analysis that determines
net benefit. The best effect is the outcome that yields the highest net benefit.

What then, is net benefit? Net benefit is constituted by total benefits that a law brings
less the total costs that the law incurs. While the more usual use of net benefit confines it
to benefits and costs that can be expressed in money’s worth, the analysis here is all-
inclusive. It encompasses any type of benefits and costs regardless of their nature.
Consequently it includes costs and benefits that are economic, financial, physical,
emotional, spiritual, ethical, aesthetic and social. But to stress the point, net benefit is
not confined to the costs and benefits just listed - all costs and benefits are included.
 Chapter 1 Outline 7
Issues
In principle the process based on the net benefit rule is the way to go. In practice,
however, there are problems in the two major processes that are involved in determining
which law or meaning of a law yields the highest net benefit. These processes are
causation and evaluation.

Causation
A legislature typically has a number of ways in which it can legislate on a topic. Each
version of the proposed statute will be beneficial but in a different way; for example
there will be differences in the type and degree of benefits and costs. Obviously to
appraise each version of the statute to determine the best it is necessary for legislators to
do their best to predict the outcome or effect (meaning a raft or cluster of effects) that
the proposed version will cause.

For convenience this book uses the word ‘causation’ as a label for the task of predicting
the bundle of effects that any version of a statute will cause when enacted. When
interpreting law it refers to predicting the effect that any interpretation of law will cause
if declared by a court to be the legally correct meaning of the provision in question.

Unfortunately, because the science of legislative behaviour is not fully developed and
understood there is no certainty in the task of causation. However, to make the best
possible prediction, there are three requirements. (i) It is necessary to be familiar with
the various types of effects that a statute or meaning can cause. 7 (ii) It is necessary to
understand the social science concerning causation in general and the science of
legislative causation in particular, which is also referred to as legislative impact
analysis.8 (iii) It is necessary to understand how to take into account the uncertainty
involved in predicting causation.9

Evaluation
Evaluation underpins the measurement of the net benefit of the options before a
legislature or court. There are two problem areas here:
(1) Values. There is a problem in determining the values to be deployed in the
process of measurement. Given that law is a social product the ideal is to use values that
represent as accurately as possible the values of society - the problem lies in achieving
this in practice.10 11
(2) Measurement. The items constituting net benefit are not always capable of being
measured. And even if an item can be measured it may not be measured in a way
that enables it to be compared and computed with some other item. This is the problem
12
of incommensurability.

7 Chapter 16 Effects
8 Chapter 13-15
9 Chapter 13-15
10 Chapters 17-22
11 Chapter 12 Measurement of Net Benefit
 8 Chapter 1 Outline
Using Law
Introduction
Every legal rule changes the world. This function of a legal rule is fundamental to the
analysis. It is relevant to using law because it dictates the structure of a rule. A rule must
be formed in such a way that it can apply to facts. When rules are formed in these ways
they can be used in litigation and transactions.

Changing the World

As the preceding analysis argued, law changes the world. In a rational society the whole
purpose of law is to change the world for the better as the legislators have judge it.

As already noted, law changes the world by both direct and indirect means. A legal rule
changes the world by direct means because the law applies or potentially applies to part
of the world. This function of a legal rule dictates that a legal rule possesses a definite
structure, which will now be explained. A legal rule changes the world by indirect
means when there are derivative consequences from the existence and operation of the
law. These can be hard to predict, they can spread out in many directions, they can
consist of a chain reaction or a network of effects and they can continue for some time
even after the legal rule has been repealed.

Structure of a Legal Rule

In order that a legal rule can operate to change the world directly it must have three
characteristics:
(1) Determine the Application of the Rule. The rule must identify or determine the
part of the world to which the rule applies. To this end a legal rule contains elements.
Each element describes a class or category of facts. For convenience, in this book
elements are labelled Element 1, Element 2 and so on. This means that the elements of
13
any legal rule can be collectively described as Elements 1-n. For convenience in this
book the facts to which a rule applies are labelled Fact 1, Fact 2 and so on. The facts can
be collectively described as Facts 1-n. To illustrate the relationship of elements and
facts, Element 1 applies to Fact 1, or as lawyers also put it, Fact 1 satisfies Element 1.
(2) Determine How the Rule Changes the World. The rule must state how it changes
the world. It does this by designating the legal consequences that it brings when the rule
applies to a set of facts. This part of the rule is labelled Consequences.
(3) Command that the Consequences Apply. The rule must command that those
consequences apply when the delineated type of facts occur. A legislature accomplishes
this by framing a legal rule as a conditional statement. This wraps up the elements and
consequences in a command. It says, shortly stated, if facts of the kind designated by the
elements occur, the legal consequences stated in the rule apply to those facts. 12

12 The letter 'n' is used in its standard mathematical designation to refer to the last item on
the list.
 Chapter 1 Outline 9
Application of a Legal Rule
In the analysis of a legal rule above we indicated that a legal rule needed to be
formulated as a conditional statement in order to apply to facts and to command
compliance. The mechanism by which it performs this function is a deductive process
based on a syllogism.13
A syllogism is a form of deductive reasoning. It comprises a major premise, a minor
premise and a conclusion. Its nature is that if the major and minor premises are true in
fact and are framed in the right way, the conclusion logically follows. 14 While this is
more fully explained later it will round of the explanation to take a brief look here.

First let us illustrate a syllogism in a case where we assume, for the illustration, that
Daffy is a Duck:
Components Relationships
Major Premise All ducks are birds.
Minor Premise Daffy is a Duck.
Conclusion Therefore Daffy is a bird.
Figure 1.1 Illustration of a Syllogism

Now that the general nature of a syllogism has been illustrated, let us now illustrate the
syllogism for applying law to facts. This syllogism can be set out in a diagram in the
following way:
Components Relationships
Major Premise Facts that fall within the categories designated by Elements 1-n cause
Consequence X.
Minor Premise Facts 1-n in this case fall within the categories designated by Elements
1-n.
Conclusion Facts 1-n cause Consequence X.
Figure 1.2 Syllogism for Applying Law to Facts

In plain language when Elements 1-n are satisfied in a case by the right facts, labelled
Facts 1-n, the legal rule imposes consequences on those facts and the parties involved
with them.

Using Law in Litigation

Nature of Litigation
Law is used in litigation, where one party sues another using some legal rule that creates
a cause of action. Like other legal rules, this cause of action consists of Elements 1-n
and Consequences wrapped in a conditional statement. When facts in a case satisfy
Elements 1-n, the cause of action applies to those facts. The facts to which Elements 1-n
apply are, as already stated, designated as Facts 1-n.

13 MacCormick (1978) pp 19-32, citing Daniels v White [1938] 4 All ER 258 as an

illustration.
14 Chapter 5 Deduction
 10 Chapter 1 Outline
There are two major tasks in litigation, namely, applying law to facts and proving facts.
These will now be explained.

Applying Law to Facts

One of two major tasks in litigation consists of applying law to facts. As noted and
explained above, the process of applying law to facts is a syllogism based on the method
of reasoning called deduction.
Issues
Litigation involves a dispute over one or more of thee types of issues. These issues
concern law, facts and discretions.

Issues of Fact
In an actual trial of a case, Facts 1-n need to be proved. The evidence that might be used
to prove Fact 1 can be labelled Evidence 1, the evidence that might be used to prove
Fact 2 can be labelled Evidence 2, and so on. Collectively Evidence 1-n is the evidence
that might prove Facts 1-n.

In litigation facts can be difficult to prove because the evidence may be flimsy and the
other side produces contrary evidence. Several means are used to prove facts. Some of
these are relatively uncontentious. These means of proof are, broadly stated, as follows:
(1) Human Observation. Humans can observe facts with any of their five senses,
namely sight, hearing, touch, taste and smell. Once a person has observed facts they can
give evidence of those facts in court. The accuracy of this observation is assessed in two
ways. It is directly assessed by cognitive science or some common assumptions that pass
for cognitive science regardless of their validity. It is indirectly assessed by the form of
reasoning known as induction. This is explained below.
(2) Induction. Induction rests on the common observation that behaviour often has
patterns based on custom or good sense. For example if X, Y and Z commonly occur
together and the court is satisfied that X and Z happened, it may find by induction (or
inference as courts are wont to call it) from X and Z that Y also happened. Or if a
witness gives evidence of P and Q happening and P and Q are not likely to occur
together, it lessens the credibility of the evidence.
(3) Deduction. Facts can be found by reference to science and technology. In an
obvious case, a clock can tell the time or a security camera can record events. In the best
case the underlying logic is deductive. In some cases, though, it may be qualified
deduction. The science may be uncertain. Or the science may depend on an observation
of some fact and that observation is questionable.
(4) Deeming Provisions. Some rules of law deem facts to be legally true. These
deeming rules apply in the following case.
(a) Agreement. Parties to the case can agree on some facts.
(b) Admissions. One party admits that certain facts are true.
(c) Presumptions. There are some common law presumptions that certain facts
are true or are true in certain circumstances.
(d) Statute. A statute can deem certain facts as true.
 Chapter 1 Outline 11
(e) Judicial Notice. A court can take judicial notice of facts that everyone knows
to be true (for example Christmas Day falls on 25 December).

In theory, courts could insist that facts must be shown to be absolutely true to be proved
for the purposes of a case. This, however, would be unrealistic. Instead courts adopt an
abductive approach and require that facts be proved according to some stipulated level
of probability. This is described in law as the standard of proof. Two common standards
are the preponderance of evidence or balance of probabilities that involves proof that is
51% probable and the standard of proof for criminal cases which is proof beyond
reasonable doubt (for which there is no agreed numerical measure).

Issues of Law
An issue of law arises when the parties dispute how a part of a legal rule should be
interpreted. Courts resolve this issue by reasoning based on policy in order to find the
best outcome. 15 16

Issues of Discretion
Sometimes a legal rule authorises a decision maker to exercise a discretion. A decision
maker should resolve this by reasoning based on policy in order to find the best
17
outcome.

Using Law in Transactions

Law is used in transactions. Examples of a transaction are making a will, forming a
company and transferring land. There are two major tasks in a transaction. One consists
of applying law to facts, while the other consists of establishing facts.

Applying Law to Facts

Applying law to facts is a task in transactions, and also a task in litigation. As explained
and illustrated above in the context of litigation, the process of applying law to facts is a
syllogism based on the method of reasoning labelled deduction.

Establishing Facts
Parties to a transaction need to establish the necessary facts. In this task there is both a
similarity and a contrast between litigation and transactions. The similarity is that each
operation involves establishing facts. The contrast lies in the means of establishing facts.
In litigation parties seek to prove past facts by evidence. In a transaction parties
establish facts in present time by creating them. They create facts by following legally
designated processes.

Here is an example. A required fact for a transfer of land might be that a vendor hands
a signed transfer form for the land to the purchaser. To create this fact, the vendor
prepares the transfer form (or uses a ready made form), fills in the detail of the land that
is to be sold, signs the form then hands it to the purchaser. To emphasise the point,

15 See Chapter 10 Policy

16 See Chapter 10 Policy
 12 Chapter 1 Outline
as this illustration shows, in a transaction parties control the processes by which facts
are established. This is why transactions possess a high degree of certainty, in contrast to
litigation which has a high degree of uncertainty about proof of facts.

Models
The propositions enunciated above enable us to develop a model for using law, which
incorporates two specific models, which are as follows:
(1) A model for litigation.
(2) A model for transactions.17

Irrationality
Ideally the part of the world inhabited by law would always function in a rational way.
Clearly, though, that is not the case. This is why Part 3 of this book considers various
illustrations of and explanations for irrationality. 18 19

Legal Method
Legal reasoning is an interesting study in its own right. It also has a practical benefit. It
is possible to build on our understanding of legal reasoning to create methods for
working with law that achieve three goals. These methods are effective because they do
what needs to be done. These methods are efficient because they incur minimum costs.
These methods are ethical since they rest on accepted values.

The relationship between legal reasoning and legal method bears a strong analogy with
science and technology. Legal reasoning furnishes the science that explains how law
should work if it is to be rational. Legal method builds on this to devise ways of working
with law that impound this rationality in a technology based on models.

Devising ways of working with law that make the legal system effective, efficient and
ethical is worthwhile in itself. However, it also confers an additional advantage. It
enables law to lay a solid claim to be legitimate.

This is the reason that this book also focuses on legal method. Parts 2 and 3 lay the
groundwork by explaining and distinguishing between what is rational and what is not
rational. Specifically Part 2 provides an account of the reasoning processes that should
underlie working with law, while Part 3 ventilates various possible illustrations of and
causes of irrationality.

Part 4 then draws on the ways of thinking rationally explained in Part 2 to devise
rational methods for working with law. These methods are embedded in models. These
methods are outlined in Part 4. They are explained in some greater detail in the
20
companion volume to this text, Legal Method.

17 Chapter 31 Model for Using Law

18 Chapter 27 Irrationality
19 Christopher Enright Legal Method
 Chapter 1 Outline 13
Summary
Readers may benefit from a summary of legal reasoning. The advantage of a summary
is that it highlights both the key concepts and the relationships between them. Since this
subject is hard wrought there may be an advantage in reading a summary before
commencing the rest of the book or just reading a part of it. If during the course of
reading the reader is overcome by detail it may settle the structure to read the summary.
Finally, when a reader has finished the book reading a summary is a way of refreshing
and recapping. To further any and all of these purposes the last chapter is a summary of
the entirety of legal reasoning as covered in this book.

Commentary
Commentary 1.1 Footnote 5
The proverb ‘handsome is as handsome does’ means that good deeds are more
important than good looks. The saying was parodied in the movie Forrest Gump in the
line, ‘Stupid is as stupid does’. The first recorded use of the proverb is found in
Geoffrey Chaucer’s ‘The Wife of Bath’s Tale’ in his Canterbury Tales (c. 1387).
Chapter 2 Rationality
Introduction Thinking Rationally Thinking Irrationally
Commentary

[L]aw is dedicated to the rational solution of social conflicts}

Introduction
The heart has its reasons that reason knows nothing of20 21 22 There are
several good reasons for finding out what it means to think rationally in any sphere of
activity including law. First, like any philosophical enterprise, it is worth doing for its
own sake. This is why the mind is the favoured plaything of any child of the
Enlightenment.

Second, it is a matter of values. Rationality is highly regarded by any civilised society.

Homo sapiens, the thinking human, is distinguished from other animals in their ability
to behave rationally. Therefore in public life, including fields such as law 23 and law
reform,24 humans aspire to rational decision-making. Consequently, society will judge
decisions of legislatures and courts according to how rational they are.25 26

One of the clearest indications of this is the phraseology that lawyers use to describe a
judgment of a court. They refer to the core part of it as the ‘reasons’ for the decision.
This reflects a desire that a decision is ‘based on reason’, and that can only be seen if
the decision maker states their reasons. It is regarded as an elementary principle of
fairness that judges and other adjudicative decision makers do this.

As it happens, there are other good advantages for the formal display of rationality in
publishing reasons for decisions. These include the fact that a person affected by a
decision, even if the decision is unfavourable, is likely to have much greater confidence
that the decision was made fairly and properly if they receive reasons. 27 They also
include the belief that reasons may enhance public debate on a decision, and enhance
public confidence in the administrative process (which, noticeably, are goals also based
on rationality).28

20 Fleming (1977) p v
21 Blaise Pascal Pensees (1670) iv 277
22 See, for example, Bromberger (1986) and Suchman (1997).
23 See Lloyd (1964), Bray (1979) and Parker (1993).
24 See Sawer (1970 and Woodman (1975).
25 See Suchman (1997), Rubin (1991 and Schaffer (2001).
26 Mobasa v Nikic (1987) 47 NTR 48, 50
27 Dornan v Riordan (1990) 95 ALR 451,457
28 Dornan v Riordan (1990) 95 ALR 451,457

14
 Chapter 2 Rationality 15
Third, by thinking rationally we can devise proper techniques for working with law.
These deliver a major functional advantage since the techniques enable those who work
with law to do so efficiently and effectively. This is a significant advantage to common
law legal systems because currently there is a strange and substantial lack of such
techniques, with a consequent loss of efficiency and effectiveness. 29

Part 4 of this book shows how it is possible to devise rational methods or techniques
for working with law. Generally the steps in these techniques follow one another in a
logical sequence. In many cases, though, actually carrying out the steps calls for skill
and judgment rather than just following set procedures. In this case the fact that the
techniques have been systematically devised brings an advantage provided that lawyers
have been taught the rationale for, or logic behind, the techniques. The point is that
understanding how law works and why the step is necessary enhances the skill and
judgment that are needed for performing the step. Further, the circumstances in which
these techniques are performed can vary or change, so in this case knowing the
underlying logic means that lawyers can more easily adapt their technique to new
circumstances when required.

Thinking Rationally
There was only one catch and that was Catch 22, which specified that a concern for one’s own
safety in the face of dangers that were real and immediate was the process of a rational mind. Orr
[a bomber pilot] was crazy and could be grounded. All he had to do was ask; and as soon as he
did, he would no longer be crazy and would have to fly more missions. Orr would be crazy to fly
more missions and sane if he didn't, but if he was sane he had to fly them. If he flew them he was
crazy and didn't have to; but if he didn't want to he was sane and had to. Yossarian was moved
very deeply by the absolute simplicity of this clause of Catch-22 and let out a respectful whistle.30 31
32

In proposing to rationalise law, this book draws on a workable although potentially

12
difficult distinction between rationality and irrationality. Rational decision-making is
detached and intellectual. Irrational decision making, by contrast, is personal and
13
based on feelings. This distinction between rational and irrational echoes a number of
opposites or contrasts - cognitive and affective functions, information and sensation,
intellect and emotion, sense and sensibility, idealism and pragmatism, reason and 33

rhetoric, head and heart, and left brain and right brain.

These concepts correlate to some extent with two aspects of humankind. One aspect is
represented by homo sapiens, the rational human who thinks and plans ahead; the other
aspect by homo sentiens, the feeling or emotional human. However, decision makers
34

29 Chapter 28 Legal Method

30 Joseph Heller Catch-22 (1961) Chapter 5
31 See McCrone (1993).
32 In Northern Securities Co v United States 193 US 197, 400-401 (1904) Justice Oliver
Wendell Holmes commented how an extraneous but noteworthy factor in a case both 'appeals
to the feelings and distorts the judgment'.
33 Naffire, Wundersitz and Gale (1991)
34 Commentary 2.1.
 Chapter 2 Rationality 16
who act rationally rather than irrationally still have emotions. They differ from
 17 Chapter 2 Rationality
irrational decision makers in that they are able to control their emotions by possessing
what Daniel Goleman labels emotional intelligence, which is measured by EQ that
refers to emotional quotient. 35 36

The distinction between rationality and irrationality is reflected in two major and
contrasting theories of human behaviour. Behaviourism treats humans as rational
animals who calculate their self interest, in particular the likely pleasure or pain which
will ensue, before making a decision. In economics this is homo economicus, the
economic human who behaves rationally, calculating gains and losses when deciding
17
to produce and purchase goods. Contrasted with behaviourism is Sigmund Freud’s
view of human behaviour. According to Freud, in the first instance before civilising
influences cut in, behaviour is irrational, driven by inner native urges of Thanatos, the
death instinct, and Eros, the life instinct.

This distinction is reflected in a comment in Jane Austen’s novel Emma. One of the
characters, Mr John Knightley, says of another character Mr Elton: ‘With men he can
be rational and unaffected, but when he has ladies to please, every feature works’. It is
37

also impounded in the clever word play of Mary Wollstonecraft in her treatise on the
rights of woman where she said: ‘A king is always a king - and a woman always a
woman: his authority and her sex ever stand between them and rational converse’. 38

Thinking Irrationally
The experience of the irrationality of the world has been the driving force of all religious
revolution39 40 41 42 43 44
In some ways, irrationality is defined negatively and residually so that irrational means
of working with law consist of methods that are not rational. Nevertheless, it is
possible to explain and illustrate irrationality by identifying factors that cause
21
decision-making to be irrational. These are many and varied and include factors that
22
are personal, political, ideological, social and cultural. To illustrate this, scholars
adopting a socio-economic approach recognise that individual choices are shaped not
23
only rationally ‘by calculation of advantage’ but also irrationally by other factors
24
such as ‘emotions [and] social bonds’.
25
Various explanations for irrationality are canvassed in later discussion, but one

35 Goleman (1996). Commentary 2.2.

36 See Bensusan-Butt (1977).
37 Jane Austen Emma Chapter 13
38 Mary Wollstonecraft A Vindication of the Rights of Woman (1792) Chapter 3
39 Max Weber
40 Chapter 27 Irrationality
41 Fogg (1992) and Easterbrook (1994)
42 Galanter (1997) p 386, citing Ashford (1997)
43 Galanter (1997) p 386, citing Ashford (1997)
44 Chapter 27 Irrationality
example here will be useful, namely policy making. In principle policy can be used
rationally if legislators carefully identify and assess all options before choosing the

1.
2.

18
 Chapter 2 Rationality 19
best. In practice, however, policy can emerge from irrational sources, such as the play
of ‘social and political forces’, which are ‘manifested in and through institutions and
,
26 processes
.

Indeed, so much is this the case that Ellen Beerworth inclines towards the view that in
practice policy making for statutes is often not performed rationally. Instead, irrational
forces such as politics (for example the mood of the electorate or pressure from
27
interest groups to whom a government is beholden) and ideology (an a priori
commitment to ways of thinking and acting) overwhelm and displace scientific
28
reasoning.

Commentary
Commentary 2.1 Footnote 15
This distinction between rational and irrational appears in Max Weber’s analysis of
human action - see Elwell (1996):
(1) Action can be rational either as zweckrational or wertrational. Zweckrational action
is ‘technocratic thinking’ where rational means are deployed to achieve an instrumental
goal such as buying a house, finding a marriage partner or obtaining a university
degree. Wertrational is using rational means to pursue symbolic or value based
outcomes such as finding spiritual salvation or achieving intellectual fulfilment.
(2) Action can also be either affective action or traditional action, which correspond to
the category of irrational action postulated by the author. Affective action is action
driven by emotion, while traditional action is acting according to custom. In this same
mode, discussion of irrationality in Chapter 27 includes explanation of how human
action can be driven by emotions, culture or social bonds and to this extent eschews
rationality.

Commentary 2.2 Footnote 16

The measure of a person’s emotional intelligence is referred to as their EQ (emotional
quotient) to highlight the point that emotional intelligence is another measure of ability
that stands alongside IQ, intelligence quotient. Note, however, the argument from
Lehrer (2009) that rational decision making requires an emotional input because the
best decisions blend feeling and reason.

26. Simeon (1976) p 566

27. See Marsh (1983) and Woods (1978).
28. Beerworth (1980) pp 68-70

1.
2.

20
 Chapter 2 Rationality 21

Chapter 3
Structuring Legal Rules
Introduction
Structure: Legal Rules
Structure: Relationships between Legal
Rules Commentary

Introduction
Law consists of legal rules. This chapter explains the two ways of analysing legal rules.
These involve an internal or micro analysis that considers the structure of a rule, and an
external or macro analysis that considers the relation that a rule has to some other legal
rules on the same subject.

These rules may be based either in common law or statute. In the discussion it is
generally assumed that the rule is based in statute since most rules are. However, what
is said about a statutory rule generally applies to common law either directly or with
some obvious modification.

Structure: Legal Rules

Introduction
Each legal rule changes part of the world, either for better or for worse. It can do this in
several ways, but the most direct means by which it affects change is through legal
regulation where it attaches legal consequences to humans. To accomplish this, of
necessity a legal rule is constructed as a conditional statement that incorporates the two
components of the rule, the elements that determines its scope and the consequences
that determine its legal effect.45

This natural structure for law provides the template for organising each legal rule.
Organising legal rules is an essential part of the process of using law in litigation and
transactions, and also has benefits for the tasks of reading, writing and learning law.

Elements
Identifying the Scope of a Rule
A specific law or a legal rule has to delineate and attach itself to the part of the world
that it wants to regulate. It has to mark out the events, happenings, incidents or
transactions that it wants to affect. Lawyers call these facts. A rule, therefore, has to
designate a class or category of facts as the target of its regulation.

The types of facts that a legal rule regulates are delineated by the elements of the rule.
Each element of a rule represents a required fact. It describes a specific class or type of

Commentary 3.1.
Commentary 3.2.
 Chapter 3 Structuring Legal Rules 22

3
fact being the facts that it seeks to regulate. In this way the elements of a particular law
taken together mark out the catchment area of the law - this constitutes the territory that
the law will rule.

To illustrate how an element operates let us consider one of the elements of the tort of
trespass to land namely ‘land’. ‘Land’ is a category of facts because there are instances,
indeed numerous instances, of pieces of land in a legal jurisdiction.

Since each element functions in this way, taken together the elements define the
composite or overall class of facts to which a rule applies. In other words, the overall
class of facts to which a rule applies is simply an aggregation of all of the subclasses or
specific classes of facts delineated by the elements of the rule.

Labelling Elements
In the model deployed here, in accordance with a standard labelling system, elements
are labelled ‘Element’ and numbered 1, 2 3 and so on. The last element in the list is
designated ‘n’ in accordance with the standard mathematical usage. The sole purpose of
the numbers is to differentiate one element from another - they do not represent values
or preferences.

On this system of labelling and numbering the elements of a rule consists of Element 1,
Element 2 and so on to the last element on the list, Element n. Thus the range of
elements in any rules consists of Elements 1-n.

Labelling Facts
For convenience, facts that fit within elements are labelled in a corresponding way to
elements themselves. Thus Fact X is the label given to a fact that falls within the
category of facts delineated by Element X. So, Facts 1-n correspond with Elements 1-
n. This means that we can describe the application of facts in a collective way by
saying that Elements 1-n apply to Facts 1-n, or that Facts 1-n satisfy Elements 1-n.

Sub-elements
An element may be divided and subdivided into two or more levels of sub-elements.
For example Element 2 may have three sub-elements, which can be labelled Element
2.1, Element 2.2 and Element 2.3. If Element 2.2 was subdivided into four subelements
they would be labelled Element 2.2.1, Element 2.2.2, Element 2.2.3 and Element 2.2.4.

Application to Facts
A legal rule applies to a set of facts where the set contains facts that fall within the
categories of facts delineated by each of the elements. Lawyers often describe the
relationship by saying that the fact ‘satisfies’ the element or that the element ‘applies’
to the facts.

3. Commentary 3.3.
 Chapter 3 Structuring Legal Rules 23

Consequences
Having defined the types of facts to which it applies, a legal rule has to specify the
means by which it will regulate these facts (after all this is the basic reason that a
legislature will have enacted it). In this analysis the part of the rule which regulates
facts is labelled Consequences. (Strictly this should be written Consequences 1-n but
this extended form is necessary only when attention is directed to the details of
consequences, which is not the case here.)

So, when a legal rule applies to a set of facts it brings consequences to the parties
involved. Consequences are whatever the rule specifies. In tort law, for example, a
person who wrongs another person can be ordered to pay a sum of money, called
damages, to compensate that person for their loss. There are also some other remedies
such as restitution and injunction, which are used for special circumstances. In criminal
law the remedy consists of punishment, where the standard forms are a fine or
imprisonment. There are variations on imprisonment such as a weekend detention,
community service, suspended sentence, probation and parole.

Conditional Statements
Introduction
The third component or characteristic of a legal rule is really its fundamental nature. A
legal rule operates as a conditional statement (which is also referred to just as a
conditional or as a hypothetical statement). This statement wraps up, joins and
impounds both elements and consequences and by this means imposes the
consequences on the parties.46 Thus, in a legal rule Elements and Consequences are
joined by or within a conditional statement.

This conditional statement takes the following form: ‘When Elements 1-n are satisfied
by the right facts, Consequences apply’. On our labelling system the ‘right facts’ for
convenience are labelled Facts 1-n. Consequently the conditional statement can be
framed in this way: ‘When Elements 1-n are satisfied by Facts 1-n, Consequences
a
pply’.
It is a matter of necessity that a legal rule is constructed as a conditional statement.
Subject to minor exceptions the formal purpose of a legal rule is to bring legal effects
when certain types of facts occur. Elements depict the type of facts. Consequences
define the legal effects. Then the conditional statement provides that when the facts
depicted by the elements occur, the consequences delineated in the rule apply. 47 It is the
command component of a legal rule.

Nature of Conditional Statements

A conditional statement is a statement based on ‘if or ‘when’ (and the two are
interchangeable for these purposes). Thus a conditional statement takes the form: ‘If X

46 Twining and Miers (1999) pp 131-134

47 Commentary 3.4.
 24 Chapter 3 Structuring Legal Rules

then Y’. In other words, and putting this in an expanded form: ‘If X happens (or is true)
then Y happens (or follows or is true)’. The first part, ‘if X happens’ is called the
antecedent or protasis. It prescribes the conditions for the consequence, Y, to happen.
The second part, ‘Y happens’ (that is Y follows or is true) is labelled the consequent or
the apodosis.48 49

While it is obvious that a statement in the form ‘If X then Y’ is a conditional statement,
a conditional statement may take other forms because what count is substance not form.
Two other forms are worth noting:
(1) One such other form consists of an expression of a causal relationship. It takes the
form: ‘X causes Y’ meaning in this context that X always causes Y. This statement can
be written in conditional form by saying that ‘if X happens, Y follows’. This, however,
has no obvious application to law.
(2) A rule that is expressed as a command in the form ‘you must’ or ‘you must not’ is
also a conditional statement. In the legal context, this form is essentially a conditional
statement since it can be transcribed into conditional form without loss of meaning.
Thus ‘you must do X’ becomes ‘if you fail to do X you commit an offence,’ just as
‘you must not do Y’ becomes ‘if you do Y you commit an offence’.

In a legal rule, the conditional statement links the elements and the consequences and
in this way imposes the consequences on the relevant parties. To bring this about, the
conditional statement takes the following form: ‘If the facts of the case fall within the
overall category of facts defined by the elements, the consequences designated by the
rule apply to those facts’.

To appreciate the rationale for a legal rule being a conditional statement, consider again
its purpose. It is trying to delineate certain facts, or the right facts, and to attach legal
consequences to those facts. Thus the rule is saying to the world: ‘If the right facts
occur, these consequences apply’.

Application of a Legal Rule to Facts

There is a good reason that most legal rules, including those that are the foundation of
litigation and transactions, are formulated as conditional statements. It is only if a rule
has this form that it can apply to facts. When the rule does apply to facts, the process is
deductive logic in the form of a syllogism. This is illustrated briefly below and
explained in a later chapter.50

While it is generally true that legal rules apply to facts there are some exceptions,
although their scope is not wide. These exceptions occur in constitutional law and
administrative law because some parts of these branches of law apply to other laws
instead of facts. This is illustrated by the doctrine of ultra vires. This means outside of

48 Commentary 3.5.
49 While most legal rules contain both elements and consequences there is an exception -
this is discussed below.
50 Chapter 5 Deduction
 Chapter 3 Structuring Legal Rules 25

or beyond power. It is a basic principle of common law legal systems that a

government or government agency can only do what it is empowered to do. There are
two major aspects:
(1) A statute can be outside the power of a legislature. Such a statute is not valid.
This part of constitutional law applies to statutes to determine whether they are valid or
invalid.
(2) Ultra vires will invalidate the exercise of a delegated legislative power or of an
executive power that is made outside the letter or spirit of the enabling statute. This part
of constitutional law applies to delegated legislation and administrative decisions.51

Exception
While most legal rules contain both elements and consequences there is an exception,
although it is not germane to the overall argument. Some rules impose consequences
but possess no elements. This happens when a rule establishes something such as a
body corporate. For example s5 of a statute may say: ‘Section 5 creates a corporation
named the Overseas Wheat Corporation’. When a legal rule takes this form, it is an
unconditional not a conditional statement.

Syllogism
That a legal rule is a conditional statement brings an inevitable additional consequence
- application of a legal rule to facts constitutes a syllogism for which the conditional
statement constitutes the major premise. While this is more fully explained later, it is
worth making brief comment here to consolidate the reader’s understanding of
conditional statements.52

To illustrate the relationship of a conditional statement and a syllogism, consider the

conditional statement: ‘If a person does X, Y will happen’. A conditional statement in
this form is the major premise of a syllogism where the rest of the syllogism is simply
unfolding the logic impounded in the major premise. Thus, this conditional statement is
the basis of a syllogism in the following form:
Major Premise If a person does X, Y will happen
Minor Premise A person does X
Consequences Therefore Y happens
Figure 3.1 Syllogism

To explain how application of law to facts consists of a syllogism, assume that we are
using our standard method of labelling. There is a legal rule whose elements are
labelled Elements 1-n and whose consequences are labelled Consequences. Facts that
fall within the elements (called the material, essential or relevant facts) can be labelled
in a corresponding way to their elements. Thus Fact 1 is the label for a fact that falls
within (and thus satisfies) Element 1, Fact 2 is the label for a fact that falls within
Element 2 and so on. Collectively, Facts 1-n fit within Elements 1-n. In these

51 Commentary 3.6.
52 Chapter 31 Model for Using Law
 Chapter 3 Structuring Legal Rules 26

circumstances the syllogism takes the following form, which features the conditional
statement constituted by the rule as the major premise:
Major Premise If facts fall within the categories designated by Elements 1-n they cause
Consequences.
Minor Premise The material facts in this case, Facts 1-n, fall within the categories
designated by Elements 1-n.11
Consequences Therefore Facts 1-n cause Consequences.
Figure 3.2 Syllogism _ for Applying Law to Facts

Diagrams
A highly useful way to portray the structure of a legal rule as a conditional statement
involves setting it out in a diagram. In the diagram portraying a legal rule as a
conditional statement:
(1) Elements are designated as Element 1, Element 2 and so on. The range of
elements consists of Elements 1-n.
(2) Consequences are designated in a similar way as Consequence 1, Consequence 2
and so on. The range of elements consists of Consequences 1-n.
This conditional statement can be represented by a diagram that takes the following

Elements ___________________________________
Element 1 _______________________________
Element 2 _______________________________
Element n
! __________________________________________
Consequences _______________________________
Consequence 1 __________________________
Consequence 2 __________________________
Consequence n __________________________
Figure 3.3 Legal Rule as a Conditional
Statement
form:

This diagram displays the three components of a legal rule in the following way:
(1) Elements. The top part of the diagram lists the elements, Elements 1-n.
(2) Consequences. The bottom part of the diagram lists the consequences provided
by the legal rule, Consequences 1-n.
(3) Conditional Statement. Between the elements and the consequences lies an
arrow indicating that when the elements are satisfied, the consequences follow. Thus
the arrow represents causation, in that satisfying the elements cause Consequences. As
we have noted, a conditional statement is also, in this context, a statement of causation.
Thus, the statement ‘Elements 1-n cause Consequences’ can also be expressed in the
form ‘If Elements 1-n are satisfied, Consequences follow’. While the arrow is included
in this diagram to emphasise that a rule is a conditional statement in this book it is
generally omitted in other contexts.

11. Commentary 3.7.

 Chapter 3 Structuring Legal Rules 27
Rule of Law
Introduction
Common law jurisprudence extols the rule of law under which all persons are equal
before the law. Or, putting this in a refined way, people in a similar position should be
treated in a similar way by the law. This means that when elements delineate categories
of facts to which a rule applies, they should not improperly discriminate.
Consequently, for the most part elements of a legal rule should describe facts in
12
general or categorical terms. It therefore goes strongly against this notion of equality
before the law if one person is singled out for special treatment, particularly where it is
strongly punitive or rewarding. A classic illustration of this from legal history consists
of the Act of attainder.

Act of Attainder
An Act of attainder is an Act of parliament declaring a person or an identifiable group
of persons guilty of some crime, and determining their punishment; thus they were
13

convicted and punished without benefit of a trial in a court of law. Once convicted, the
person was said to be attainted of the particular crime. When attainder was used it was
typically invoked for political reasons to secure either or both of two outcomes. (i) It
was used to attack and usually execute an opponent. (ii) In cases of treason it was used
to confiscate the property of the person attainted including any title they possessed
which could then be used by the Crown or granted to a supporter of the Crown. This was
possible because forfeiture of property and rank was one of the penalties for treason. In
a number of cases people were attainted posthumously for the very purpose of
confiscting their property by dispossessing their heirs of it. The last Act of Attainder in
the United Kingdom was in 1798 posthumously against Lord Edward FitzGerald for
leading the Irish Rebellion of 1798.

Justice According to Law

Acts of attainder are objectionable in that they violate a fundamental principle of justice
which is part of the rule of law. This consists of the universality that all laws should
possess to ensure the equality of all before the law. For this reason, some constitutions
forbid attainder. They can do this specifically and directly. For example, the United
States Constitution in Article 1 Section 9 explicitly forbids Congress to pass any bills of
attainder, (at the same time it outlaws legistlation that would have retrospective
operation, which it calls ex post fact laws). Section 9 provides as follows: ‘No Bill of
Attainder or ex post facto Law will be passed’. A constitution can also prohibit attainder
on the basis that it violates separation of powers since it entails a legislative body
performing a judicial task.53 54 55

Latter Day Illustrations

There have been several latter day uses or would-be uses of attainder. Some illustrations
are as follows:

53 Stark (2004)
54 Commentary 3.8.
55 Commentary 3.9.
 28 Chapter 3 Structuring Legal Rules
(1) During World War II the British War Cabinet discussed how it would punish
leading Nazis if they were captured. Cabinet papers released on 1 January 2006 reveal
that the then Prime Minister Winston Churchill had advocated a policy of summary
execution authorised by an Act of attainder. He was, however, dissuaded from this by
pressure from the United States later in the war.
(2) In 2003 the United States Congress passed the Elizabeth Morgan Act as a rider to a
major transportation bill. It was held unconstitutional as an attainder in Foreditch v
United States (2003).
(3) On 21 March 2005 Congress passed an Act formally known as the Act for the
relief of the parents of Theresa Marie Schiavo. It was named the Palm Sunday
Compromise by the majority leader in the House of Representatives Tom DeLay, and is
now popularly referred to by this name. Arguably this was an act of attainder.
(4) In 1994 the New South Wales parliament passed the Community Protection Act
1994 to authorise a six month preventative detention order against one Gregory Kable.
However, this Act was held to be invalid by the High Court of Australia.56

Structure: Relationships Between Legal Rules

Introduction
Legal rules frequently do not operate in isolation. Instead they are in some way
connected to other rules. The major cases are where the rules are part of the same area of
law, be it a designated or established area such as criminal law or contract, or an area of
law created by some major statute on a subject. Macro analysis of legal rules comprises
the task of identifying these relationships.

There are two types of relationship between provisions - there can be a formal
relationship or a functional relationship. For both of these, the skill, such as it is,
consists of looking at the area of law and determining whether relationships are formal
or functional (or possibly a mixture), then identifying the nature of those relationships.
While this advice is meagre, generally if you look you will find.

Formal Relationships
Contract law is the major example from common law of formal relationships. This vast
body of law is essentially performing one task. It is defining the circumstances when
one party can sue another party for breach of contract. 57 In other words the whole area is
one gigantic legal rule made up of numerous elements and sub-elements. This,
obviously, is the essence of a formal relationship that underpins an area of law.

Functional Relationships
It is hard to make a general statement about functional relationships because they take
many forms. But to repeat the general advice, if you look for the relationships you will
surely find them. There is, however, one special case of functional relationships that is
worth mentioning because it is both prevalent and useful. Where a rule authorises an

56 Kable v Director of Public Prosecutions (1996) 189 CLR 51

57 Commentary 3.10.
 Chapter 3 Structuring Legal Rules 29
adjudicative decision there are four types of law involved. Action provisions, as they are
labelled here, create the law that authorises the decision. Where a court makes the
decision, this law is referred to as a cause of action or criminal offence. Action
provisions contain two specific types of provision, substantive and remedial. Substantive
provisions set out the elements of a cause of action. Substantive provisions set out the
elements of, and therefore define, the wrong for which the plaintiff can sue. Remedial
provisions indicate the consequences that follow when the elements of the cause of
action are satisfied. To do this they define the remedy that seeks to right the wrong.

The other three provisions - establishment, jurisdictional and procedural provisions - are
ancillary because they provide for hearing the cause of action. Institutional provisions
establish the court, tribunal or office of the official who hears and decides the case.
Jurisdictional provisions authorise the court, tribunal or official to hear the case.
Procedural provisions set down the rules for bringing and hearing the case.

Advantages of Macro Analysis

Macro structure gives the overall framework and purpose of an area of law. It brings a
significant advantage to lawyers and law students. It gives a perspective on law that
makes it easier to understand and to work with. Generally a lawyer or law student
should do it when they first enter an area of law. The idea is to find the general gist,
enough to stop you getting lost. As you become more experienced in the area any
undiscovered part of the macro structure will typically become apparent.

Commentary
Commentary 3.1 Footnote 1
While lawyers are familiar with the notion that a cause of action, be it criminal or civil,
can be divided into elements and consequences, the importance of this concept has not
been fully emphasised. Nor have its analytical foundations and potential uses been fully
developed.

Commentary 3.2 Footnote 2

While the general proposition is that legal rules provide consequences for facts, some
rules - in constitutional law and administrative law - provide consequences for other
laws.

Commentary 3.3 Footnote 3

It is, however, possible for a provision in a statute to apply to a specific person or body
or situation as distinct from applying in a more general way, as is the more usual
situation:
(1) An obvious example is a provision that establishes a body where the provision is
in the form: ‘This section now establishes a corporation named the Schools
Commission’.
(2) Another example, but less common, is an Act of Attainder. This is discussd in
this Chapter in the divison entitled ‘Rule of Law’.
 30 Chapter 3 Structuring Legal Rules
Commentary 3.4 Footnote 5
While lawyers are familiar with the notion that a cause of action, be it criminal or civil,
can be divided into elements and consequences, the importance of this concept has not
been fully emphasised. Nor have its analytical foundations and potential uses been fully
developed.

Commentary 3.5 Footnote 6

To clarify the terminology let us link it to elements and consequences:
(1) Elements. Elements are the protasis or antecedent of the conditional statement.
(2) Consequences. Consequences are the apodosis or consequent.

Commentary 3.6 Footnote 9

Ultra vires is Latin meaning beyond power. It contrasts with intra vires, which means
within power. Ultra vires operates in two major spheres where a government or
government institution or agency takes action that is beyond power. Its effect is to make
the legislation or action invalid and thus of no legal effect:
(1) When a government makes legislation such as a statute or delegated legislation.
(2) When a government takes administrative action.

Commentary 3.7 Footnote 11

This method of labelling elements as Elements 1-n is incorporated into the model for
using law, which is explained in Chapter 31 Model for Using Law.

Commentary 3.8 Footnote 13

Manweller (2002) argues that legislatively furnished reparation packages might
constitute an Act of attainder.

Commentary 3.9 Footnote 14

An example of a legislature attempting to exercise judicial power is the Community
Protection Act 1994 (NSW). However, part of this statute was held to be constitutionally
invalid in Kable v Director of Public Prosecutions (1996) 189 CLR 51.

Commentary 3.10 Footnote 16

For the most part contract law is defining the circumstances when one party can sue
another party for breach of contract. This said, contract law does contain some other
causes of action but these are ancillary to the main task. Two prominent examples are
the action for rescission and the action for rectification.
Chapter 4 Logical
Reasoning
Introduction
Deduction
Induction
Abduction
Analogy
Probability
Comparison

But the age of chivalry is gone. That of sophisters, economists, and calculators has
succeeded.1

Introduction
2
Sir, I have found you an argument; but I am not obliged to find you an understanding.
Logical reasoning is generally taken to include four specific types of reasoning,
deduction, induction, abduction and analogy. This book also includes probability on the
list as a special case, since it is an important part of legal reasoning. Probability
combines deduction and abduction.

This chapter provides an outline of these five methods of reasoning and their use. It then
compares them to highlight the major differences between them. All of this is a prelude
to more detailed discussion of the forms of reasoning in the next five chapters.

Deduction
Nature of Deduction
Deduction involves a form of argument known as a syllogism. It consists of a major
premise, a minor premise and the conclusion that follows from the two premises. To
illustrate deductive reasoning, assume that Rule R says ‘A always causes B’. This can be
the major premise of an argument. The syllogism then asserts in the minor premise that
the condition for the operation of the rule has occurred. In our example the condition is
the presence or happening of A. Then the conclusion pronounces the consequences of
the rule namely that ‘B occurs’. This can be set out in a table in the following form:

Components Relationships
Major Premise Rule R says A always causes B
Minor Premise A occurs
Conclusion Therefore B occurs
Figure 4.1 Form of Deduction

1 Edmund Burke Reflections on the Revolution in France

. (1790) Dr Samuel Johnson
2
.
31
 32 Chapter 4 Logical Reasoning
Operation of Deduction
In working with law the operation of deduction needs to be considered in five
circumstances:
(1) Applying Law to Facts. This is clearly a process based on deduction. This is
linked to the fact that legal rules are generally conditional statements which form the
major premise of the syllogism.
(2) Interpreting Law. Interpreting a legal rule appears to be based on a syllogism
when the law is interpreted by simple application of a precedent or of the policy
underlying the statute in which the legal rule appears. However, the process is
syllogistic only because the interpreter accepts the precedent or policy as correct and
binding.
(3) Ascertaining Values. Deduction cannot prove the existence or authority of values.
Nevertheless, natural law scholars proclaimed that there was a universal code of conduct
for all humans that could be ascertained by pure reason.
(4) Ascertaining Causal Laws. Causal law are established as plausibly correct by use
of deduction within the process that is labelled the hypothetico-deductive model.
(5) Proving Facts. Deduction is used to prove facts when scientific analysis is used.
One fact is observed and scientific analysis enables additional facts to be proved based
on the observed fact.

Induction
3
If the world were a logical place, men would ride side saddle.
Nature of Induction
Induction is a form of generalisation. If all crows that one sees are black one might
formulate the rule that all crows are in fact black. The reasoning is not watertight but has
some strength. Induction can be set out as follows:
Premise In all observed instances A causes B.
Conclusion There is a rule, Rule R, which says: ‘A causes B’.
Figure 4.2 Form of Induction

Operation of Induction
In working with law the operation of induction needs to be considered in three
circumstances:
(1) Ascertaining Values. Induction cannot be used for establishing the existence or
authority of values although, as noted above, natural law scholars proclaimed that there
was a universal code of conduct for all humans which could be ascertained by pure
reason. However, induction provides some justification for using a value that applies to
one case in a second case that bears some similarity to the first.
(2) Ascertaining Causal Laws. Induction, along with deduction, plays a part in
establishing the plausible existence of a causal law. Put simply, if the supposed causal
law works every time, it is likely that the supposed law exists. This is an inductive form
of reasoning.

3 Rita Mae Brown (b 1944)

.
 Chapter 4 Logical Reasoning 33
(3) Proving Facts. Induction is used in court to prove facts. There it is often referred
to as inference. Inductive reasoning in proving facts is based on the notion that
particular individuals and the world in general exhibit patterns of behaviour. To
illustrate this, assume that there is a pattern of behaviour that involves X, Y and Z
occurring together. Assume that in a case it is clear that X and Z have occurred.
Inductive reasoning argues that Y is also likely to have occurred since X, Y and Z
commonly go together.

Abduction
Nature of Abduction
Abduction seeks explanations for events. Let us assume that B has occurred. Assume
also that there are four identifiable possible explanations (or hypotheses) for the
occurrence of B, namely X causes B, Y causes B, Z causes B and A causes B.
Investigation suggests that the most plausible explanation is that A causes B.
Observation B has occurred
Explanation There is a rule, Rule R, that says ‘A causes B’.
Strength of Explanation No other explanation explains B as well as Rule R.
Conclusion Therefore, Rule R that ‘A causes B’ is probably correct.
Figure 4.3 Form of Abduction

Operation of Abduction
Abduction is used in two tasks.
(1) Proving Facts. Proving facts is essentially abductive. A court is not required to
prove a fact by showing that it is absolutely true. Instead it only has to show that it
satisfies some stipulated probability, which lawyers refer to as the standard of proof.
Since the required probability is greater than 50% proving facts by reference to the legal
standard of proof always has an abductive component. Where the standard of proof is
51%, as it is for proof on the preponderance of evidence or balance of probability, the
reasoning is entirely abductive.
(2) Ascertaining a Causal Law. Abductive reasoning can be used in ascertaining a
causal law. In the early stages of scientific investigation of causal laws of behaviour
abduction might suggest a good working hypothesis that can be tested by
experimentation.

Analogy
Reasoning by analogy is used when there are two items, X and Y, that a similar in some
way. Analogy involves arguing from the known similarities between two things, X and
Y, to the existence of further similarities between them. That is, one thing is inferred to
be similar to another thing in a certain respect, on the basis of the known similarity
between the things in other respects.

This can be expressed in a diagram. This diagram portrays the three components of an
argument based on analogy. These are Premise 1, Premise 2 and Conclusion. This is the
diagram:
 34 Chapter 4 Logical Reasoning
Premise 1 Rule R says: ‘X has attribute A’.
Premise 2 X is similar to Y
Conclusion Rule R now says: ‘Both X and Y have attribute A’.
Figure 4.4 Form of Analogy

Probability
Introduction
Probability performs two functions. One is a descriptive function while the other is a
derivative function.

Descriptive Function
Probability describes how certain we are about the truth of something. For example,
when we require reassurance about something we ask: ‘Are you 100% sure?’ If we
choose to bet on a horse race the bookmaker will give us odds based on probability.
Odds of nine to one mean that the horse as nine chances of losing compared to one
chance of winning. In other words it has a 10% chance of winning.

Derivative Function
Probability has a derivative function. When one or more probabilities are known and
quantified further probabilities can be derived by rules based on deduction. For example,
if there is a 60% chance that an event will happen we can use the complementarity rule
to devise the probability that the event will not happen. The probability of an event not
happening is the complement of the probability that it will happen. In the example the
probability of the event not happening is (100-60)% namely 40%.

To give another example, assume that the probability of our winning a guessing
competition is 1 in 10, namely 10%. Assume that the probability of our football team
winning a difficult match is 2 in 10 namely 20%. Given that these events are
independent the probability of two happy outcomes - our winning the guessing
competition and our team winning the match - is derived by the multiplication rule.

The multiplication rule says that we multiply all the relevant probabilities of
independent events to determine the probability that each will occur. Doing this in the
example means multiplying 1/10 by 2/10 (1/10 x 2/10). This gives us 2/100, which of
course is 2%.

Comparison
Introduction
It is useful to compare four core forms of logical reasoning namely deduction,
induction, abduction and analogy. This will lay good foundations for more detailed
study in the next four chapters. To compare these means of reasoning, the book deploys
two items, events A and B and Rule R
 Chapter 4 Logical Reasoning 35
(1) Events A and B. The two events labelled A and B appear in Rule R. The essence
of the four forms of logical reasoning namely deduction, induction, abduction and
analogy, is expressed in the relationshhip betwee A and B.
(2) Rule R. Rule R says that A possesses attribute B or that A causes B, meaning in
this context that A always causes B. So, where where A occurs B will also occur. The
form and function of Rule R varies according to the method of reasoning that it is
illustrating.

Deduction
Deduction works in the following way. There is a rule R that says ‘A causes B’. In this
instance A has occurred. Thefore, rule R asserts, B has also occurred. In other words,
deduction is the process of using the rule (R) to derive the consequences (B) from what
is known to have occurred (A).

In deductive reasoning when a premise says that ‘A causes B’ it is assumed that this is a
rule. However, to emphasise the relationship between the various forms of reasoning the
syllogism can be set out with the rule, Rule R in the example, written into the major
premise:
Components Relationships
Major Premise Rule R says ‘A causes B’.
Minor Premise A occurs.
Conclusion Therefore B occurs.
Figure 4.5 Form of Deduction

It is clear from this diagram what deduction does to Rule R. Deduction is the way in
which Rule R operates. It shows Rule R at work.

Induction
With induction, there are numerous observations made. Each observation invovles A
causing B. Induction reasons to the existence of the Rule R, proclaiming that A always
causes B. In other words, induction involves observing the operation of the rule then
deriving its existence.

Where the rule whose existence is established by induction is Rule R, the induction
takes the following form:
Premise In all observed instances A causes B.
Conclusion There is a rule, Rule R, that says ‘A causes B’.
Figure 4.6 Form of Induction

This diagram makes clear the relationships between induction and Rule R. Induction
establishes the existence of Rule R and establishes the likelihood that Rule R is correct
without conclusively demonstrating that it is correct. Obviously if Rule R is accepted as
correct one can use it in deductive reasoning. In this case the deductive part of the
reasoning will be perfectly logical.
 36 Chapter 4 Logical Reasoning
There is, however, a major qualification to this account of induction. The point is this.
The overall validity of any conclusion reached by this reasoning is questionable. This
means that there is uncertainty about the status of Rule R. There is a chance, even a
good chance that is true. But at the same time there is a chance it is not true because it
may be wrong completely or wrong in part.

Abduction
With abduction, one observes the occurrence of B. Abduction searches for explanation
and finds that the most preferable explanation is that there is a rule, Rule R, which says
that A causes B. Thus abduction works in reverse to deduction. Deduction proclaims the
Rule, R, that A causes B. It then asserts that if A has occurred, B will also occur.
Abduction observes B, then derives the existence of the Rule R asserting that A causes
B. In other words, abduction is the process of explaining how things came to be as they
are.

To emphasise this, abduction can be explained by a diagram that specifically refers to

Rule R:
Observation B has occurred
Explanation A causes B
Strength of Explanation No other explanation explains B as well as Rule R that
says ‘A causes B’.
Conclusion Therefore, Rule R that says ‘A causes B’ is probably
correct.
Figure 4.7 Form of Abduction

This diagram makes clear the relationships between abduction and Rule R. Abduction
is like induction in that it establishes the likelihood that Rule R is correct without
conclusively demonstrating that it is correct.

Analogy
Analogy involves arguing from the known similarities between two things, X and Y, to
the existence of further similarities between them. With analogy, Rule R determines the
attributes or properties of X and Y. It says, for example, ‘X has attribute A’. Here is the
illustration:
Premise 1 Rule R says: ‘X has attribute A’.
Premise 2 X is similar to Y
Conclusion Rule R says: ‘Both X and Y have attribute A’.
Figure 4.8 Form of Analogy

Depicting analogy in this form with Rule R reveals clearly reveals two things:
(1) It reveals the effect of arguing by analogy. The essence of analogy is that it
expands the scope of Rule R.
(2) It reveals a neat contrast with abduction, which establishes the existence of Rule
R.
 Chapter 4 Logical Reasoning 37
Summary
This analysis of and comparison between the various forms of reasoning involves the
following:
(1) There are two events, A and B.
(2) There is a rule, Rule R. Rule R says A causes B. Thus, where there is A there
will be B.

Each of the various forms of reasoning is doing something with Rule R. What each
form of reasoning does with Rule R can be summarised in the following table:
Rule R A causes B

Form of Reasoning Effect on Rule R

Deduction Deduction illustrates the operation of Rule R.
Induction (1) Induction establishes the existence of Rule R.
(2) Induction establishes the likelihood that Rule R is correct
without conclusively demonstrating that it is correct.
Abduction Abduction establishes the existence of Rule R.
Abduction shows some probability that Rule R is correct.
Analogy Analogy expands the scope of Rule R.
Figure 4.9 Summary of Logical Reasoning
Chapter 5
Deduction
Introduction
Nature
Applying Law
Interpreting Law
Ascertaining Values
Ascertaining Causal Laws
Proving Facts
Commentary

There are more things in heaven and earth, Horatio, than are dreamt of in your
philosophy}

Introduction
Deduction is a form of reasoning based on a syllogism. Deduction is used or allegedly
used in several tasks in or connection with law. First, the task of applying law to facts is
unquestionably deductive.

Second, according to one line of reasoning deduction is used in forming law. There are
three aspects to this:
(1) Interpreting Law. According to one view, interpreting law is based on a
syllogism.
(2) Ascertaining Values. There is some argument that ‘reason,’ which could include
deduction, is a means of ascertaining values that are deployed in the policy process.
(3) Causal Laws. The process of verifying or establishing the causal laws that are
used in the policy process relies in part on syllogistic reasoning.

Third, deductive reasoning is used in fact finding where the court relies on scientific
evidence.

Nature
How often have I said to you that when you have eliminated the impossible, whatever remains,
however improbable, must be the truth.
Introduction
A syllogism is a form of argument in which a conclusion logically follows from two
propositions or premises. A syllogism, however, does not discover new truths. Instead,
it merely exposes, in the conclusion, a truth that is inherent in two other propositions, 58
59 60

58 William Shakespeare Hamlet v I 4 166

59 Kirby (1991) p 2. Commentary 5.1.
60 Arthur Conan Doyle A Study in Scarlet

38
 Chapter 5 Deduction 39
the major and minor premises, which are themselves known to be true.4 It may,
however, reveal a conclusion of which people were not conscious or which is not
readily apparent from viewing the premises on the surface. This can happen, for
example, in complex mathematical reasoning.

Syllogisms take a number of forms. These include the following:

(1) Propositional logic.
(2) Logic of relations.
(3) Predicate logic.

Propositional Logic
A common form of the syllogism based on propositional logic is known as modus
ponens. This is an abbreviation of modus ponendo ponens and means a mode or method
that affirms by affirming. It is often abbreviated to MP. This syllogism involves whole
sentences or clauses.

Modus ponens is the form taken by the syllogism for applying law to facts. As
indicated in earlier discussion, the major premise of this syllogism is a conditional
statement, which is the form of most legal rules. This syllogism takes the following
form:
Components Relationships
Major Premise If P occurs then Q occurs
Minor Premise P occurs
Conclusion Therefore Q occurs
Figure 5.1 Syllogism: Propositional Logic - Modus Ponens

Logic of Relations
A second form of syllogism expounds the relations or logic between propositions. It is
illustrated by the following syllogism, which is based on the transitivity of stable
preferences:
Components Relationships
Major Premise John prefers football to cricket.
Minor Premise John prefers cricket to tennis.
Conclusion Therefore John prefers football to tennis.
Figure 5.2 Syllogism: Logic of Relations

Predicate Logic
A third form of syllogism involves predicate logic. This labels derives from the fact
that this form of the syllogism manipulates subject and predicates. This is the form that
the alleged syllogism for interpreting law takes. This syllogism can involve relations
between classes of things. In this case it can be represented in a diagram that shows that
takes the following form:

5. Commentary 5.3.
 40 Chapter 5 Deduction
Components Relationships
Major Premise Class Q includes Class P
Minor Premise Class P includes Class R
Conclusion Therefore Class Q includes Class R
Figure 5.3 Syllogism: Predicate Logic A

Alternatively, the express reference to classes can be omitted and substituted by the
verb ‘to be’. This makes the syllogism in the following form:
Components Relationships
Major Premise All P are Q
Minor Premise All R are P
Conclusion Therefore all R are Q
Figure 5.4 Syllogism: Predicate Logic B

Soundness of a Syllogism
While it probably seems intuitive from discussion so far that a syllogism yields a
conclusion that is true, it is necessary to explain this further. An argument in a
syllogism is sound if two conditions are satisfied. First, both the major premise and the
minor premise are true in fact. Second, the relationship between the truth of the two
premises and the conclusion is logically valid.5

Let us now illustrate this where we assume that Daffy is a Duck. To do this we will
consider a number of syllogisms that are conveniently numbered Syllogism 1,
Syllogism 2 and so on. Syllogism 1 says as follows:
Syllogism 1
Major Premise All ducks are birds
Minor Premise Daffy is a Duck
Conclusion Therefore Daffy is a bird
Figure 5.5 Syllogism: Sound Form

Clearly Syllogism 1 is sound. Both premises are true in fact and the reasoning process
is valid.

Major Premise
To understand the requirement that the major premise needs to be true, consider
Syllogism 2. It also involves ducks in general, a duck named Daffy and a rabbit (who is
not named):
Syllogism 2
Major Premise All ducks are rabbits
Minor Premise Daffy is a duck
Conclusion Therefore the Daffy is a rabbit
Figure 5.6 Syllogism: False Major Premise

4. Commentary 5.2.
 41 Chapter 5 Deduction
Here the two key points are the following:
(1) Conclusion. The conclusion logically flows from premises.
(2) Major Premise. However, the major premise, that all ducks are rabbits, is not
true.
Consequently the conclusion is not necessarily true.

Minor Premise
To understand the requirement that the minor premise needs to be true, consider the
following example:
Syllogism 3
Major Premise All ducks are birds
Minor Premise A rabbit is a duck
Conclusion Therefore a rabbit is a bird
Figure 5.7 Syllogism: False Minor Premise

Here the two key points are the following:

(1) Conclusion. The conclusion logically flows from the premises.
(2) However, the minor premise is not true in fact because a rabbit is not a duck.
Consequently the conclusion is not necessarily true.

Conclusion
To examine the requirement that the two premises, if true, must inevitably and
logically lead to a conclusion that is true, consider the following illustration. For the
sake of illustration we assume the minor premise, Daffy is a bird, is true:
Syllogism 4
Major Premise All ducks are birds
Minor Premise Daffy is a bird
Conclusion Therefore Daffy is a duck
Figure 5.8 Syllogism: Illogical Reasoning

Here the premises are true in fact but the conclusion does not logically flow from the
premises. Of course, the conclusion may still be true in fact, but the point is that it
cannot be proved to be true from the premises.

Applying Law
Introduction
Applying law to facts is a deductive process based on a syllogism.6 This is a syllogism
based on propositional logic and involves a conditional statement. To illustrate this
syllogism we will use our standard labelling system where:
(1) Elements the elements of a legal rule are labelled Elements 1-n.
(2) Facts. Facts and the facts that fit within those elements are labelled Facts 1-n.
The syllogism can then be set out in a diagram in the following way:

6. Sir Neil MacCormick (1978) pp 19-32. Commentary 5.4.

 42 Chapter 5 Deduction
Components Relationships
Major Premise Facts that fall within the categories designated by Elements 1-n cause
Consequences.
Minor Premise The material facts in this case, Facts 1-n, fall within the categories
designated by Elements 1-n.
Conclusion Facts 1-n cause Consequences.
Figure 5.9 Syllogism _ for Applying Law to Facts A

This syllogism can also be set out in a different diagram. This diagram is taken from
the model for using law, which is where the syllogism operates. So portraying the
syllogism in this way is something of an introduction to that model, which is discussed
later. This diagram takes the following form:
1 Major Premise 2 Minor Premise 3 Conclusion
Elements Facts
Element 1 Fact 1
Element 2 Fact 2
Element n Fact n

Consequences Consequences
Figure 5.10 Syllogism for Applying Law to Facts B

Column 1: Major Premise

Column 1 sets out the rule as a conditional statement that also constitutes the major
premise of the syllogism: ‘If facts fall within the categories designated by Elements 1-
n they cause Consequences’.

Column 2: Major Premise

The minor premise of the syllogism provides as follows: ‘The facts in this case, Facts
1-n, fall within the categories designated by Elements 1-n’. In the diagram, the minor
premise is represented by the horizontal arrow at the head of Column 2. This links
Column 1 (Elements 1-n) and Column 3 (Facts 1-n). The arrow indicates that the facts
in Column 3 fit the elements in Column 1. That is Fact 1 fits within (and thus satisfies)
the category of facts delineated by Element 1, Fact 2 fits within the category of facts
delineated by Element 2, and so on. Overall, the arrow portrays the proposition that
Facts 1-n in Column 3 fall within the categories delineated by Elements 1-n in Column
1 and thus satisfy Elements 1-n.

Column 2: Conclusion
Column 3 displays the conclusion. Since the rule applies to Facts 1-n the Consequences
designated by the rule apply to those facts. Column 3 lists Facts 1-n. Beneath Facts 1-n
is located an arrow leading to the row containing ‘Consequences.’ This is how the
diagram portrays the conclusion to the syllogism, namely: ‘Facts 1-n cause
Consequences’.

7 Chapter 31 Model for Using Law

.
 Chapter 5 Deduction 43
Explanation
To explain how this syllogism works we consider its components in turn - major
premise, minor premise and conclusion.

Major Premise
The major premise of the syllogism is represented by the legal rule in Column 1. It
takes the following form: ‘Facts that fall within the categories of facts designated by
Elements 1-n cause Consequences’. This, as previous discussion showed, comprises a
conditional statement, which constitutes the standard structure for a legal rule.61

A legal rule is true, and thus capable of forming a syllogism that is sound, when it
represents a correct statement of the law. This happens when two requirements are met.
First, the rule itself is correctly formulated. Second, where it is necessary to interpret the
rule before applying it, the rule has been correctly interpreted.

Minor Premise
The minor premise is represented by the relationship between Elements 1-n and the
facts of a case (meaning the material facts). It takes this form: ‘The facts of this case,
Facts 1-n, fall within the categories designated by Elements 1-n’.

Now for this premise to be true, two requirements must be satisfied.

First, it is implicit in this statement that Facts 1-n are not just alleged but are actually
true. Determining this in litigation is a matter of proof of facts from evidence, based on
observation (drawing on cognitive science), induction deduction and deeming
provisions.62 In a transaction, however, processes create the relevant facts.63

Second, as the premise specifically requires, Facts 1-n must fit or fall within the
categories designated by Elements 1-n. How this happens rests on the nature of an
element. An element delineates a category of facts. Thus, in abstract form, Fact X is the
label given to a fact that satisfies Element X. Fact X will satisfy Element X when it falls
within the class of facts that Element X delineates.

Whether a fact falls within the class of facts delineated by an element in many cases is
determined by simple inspection. It will be obvious to the naked eye that the fact does
or does not fit within the category. The quick test for whether a fact does fall within a
designated category is by labels. Element X delineates a category of facts that bear the
label X. If a fact can unquestionably bear this label, it fits within the category. If the fact
cannot unquestionably bear this label, it does not fit within the category.

While in most cases this is clear, in some cases it is not so clear. In these cases it cannot
be unquestionably and unhesitatingly said that the fact fits the category. This

61 Commentary 5.5.
62 Commentary 5.6
63 Chapter 31 Model for Using Law
 44 Chapter 5 Deduction
occurs because there is some doubt about the scope of the label applied to the facts
delineated by the element. Questions of this kind involve legal interpretation of the
element.64 65 66 However, once this particular element in the legal rule has been
interpreted, the doubt is resolved. It should then be clear whether the fact does or does
not satisfy the element.

Conclusion
Column 3 represents the conclusion of this syllogism. The conclusion takes this form:
‘Facts 1-n cause Consequences’.

Illustration
To illustrate the syllogism, we will use the tort of trespass to land. This provides that a
defendant commits trespass when they intentionally interfere with land in possession of
the plaintiff without the plaintiff’s permission and in the absence of a defence. The
consequences are damages, and an injunction to refrain from future trespasses.

Elements of Trespass to Land

Trespass to land can be represented in a diagram. This diagram shows the following:
(1) Elements. It shows Elements 1-6.
(2) Consequences. It shows Consequences 1-2.
(3) Conditional Statement. It shows the conditional statement expressed as an arrow
linking elements and consequences.
This is the diagram:
Elements
Element 1 Land There is land.
Element 2 Possession The plaintiff possesses the land.12
Element 3 Interference The defendant interferes with the land.
Element 4 Intention “ 13
Element 5 Permission The
The defendant interferes with
defendant interferes with the
the land
land intentionally.
without the permission of
the plaintiff.
Element 6 Defences There is no defence available to the defendant.

Consequences
Consequence 1 Plaintiff can obtain damages against the defendant.
Consequence 2 Plaintiff may obtain an injunction against the defendant to
restrain future trespasses.
Figure 5.11 Elements and Consequences of the Tort of Trespass to Land

64 Chapters 30 Model for Forming Law

65 Strictly this component is that the plaintiff has a right to possession but it makes the
illustration simpler to refer just to actual possession.
66 In Australian law trespass can be committed negligently as well as intentionally. For the
sake of simplicity we ignore this extension of the rule.
 Chapter 5 Deduction 45
Facts of a Hypothetical Case
Assume that in a case the facts are as follows: ‘Jack has walked onto a field called
Whiteacre and picked an apple from the apple tree. Jill owns and uses Whiteacre. Jill
has not said or done anything to indicate that Jack could walk on her land. Shortly
before doing this Jack had said to a neighbour; ‘I am going to fix Jill and show her how
mean I can be.’’ For the illustration it is assumed that these facts are proved and that
there are no defences available.

Major Premise
In the legal version of the syllogism the major premise is a legal rule. In abstract form it
says: ‘All facts in the categories designated by Elements 1-n cause Consequences’. A
legal rule is true, and thus capable of forming a syllogism that is sound when it
represents a correct statement of the law. The statement truly states the law and, if it has
been interpreted, it has been correctly interpreted.

In the case of trespass to land it says that where there is land, the plaintiff possesses it,
the defendant interferes with it, the interference is intentional, the defendant interferes
without permission and there are no defences, there is trespass so that the defendant is
liable for damages and possibly liable to be injuncted. This is a true statement of the
legal rule. In the simple case used here as an example no issues of interpretation arise.

Minor Premise
In applying law to facts, the minor premise has two requirements:
(1) Truth of Facts. One requirement is implicit - the facts are true.
(2) Facts fit Elements. One requirement is explicit - the facts fit the elements.

Facts Fit Elements

The explicit requirement for the minor premise is that the facts fit the elements. That is,
Facts 1-n fall within the categories designated by Elements 1-n. This statement will be
true when Fact 1 falls within the category designated by Element 1, Fact 2 within the
category designated by Element 2, and so on, finishing with Fact n falling within the
category designated by Element n.

In our example, the facts fit within the categories of facts designated by the tort of
trespass because each fact is a specific instance of one of the categories of facts in the
elements of the legal rule (which of course is part of the major premise). This is shown
by the following table:
Facts Law: Trespass to Land
Fact 1 Element 1 Land
There is a field called Whiteacre. Element 1 is satisfied because a field such as
Whiteacre is land.
 46 Chapter 5 Deduction
Fact 2
Jill owns and uses Whiteacre.
Fact 3
Jacks walks onto the field and picks an
apple from the apple tree.
Fact 4
Shortly before doing walking onto the
field and picking the apple from the apple
tree Jack had said to a neighbour; ‘I am
going to fix Jill and show her how mean I
can be.’
Fact 5
Jill has not said or done anything to
indicate that Jack could walk on her land.
Element 2 Possession
Element 2 is satisfied because Jill possesses
land when she owns and uses it.
Element 3 Interference
Element 3 is satisfied because walking onto
land constitutes interference.
Element 4 Intention
Elements 4 appears to be satisfied because
this pronouncement of Jack’s strongly
suggests that the interference with Jill’s land
was intentional.
Element 5 Permission
Element 5 is satisfied because Jill has not
given Jack permission to walk onto her land.

Fact 6 Element 6 Defences

There are no facts on which Jack could Element 6 is satisfied because there is no
base a defence. defence in law available to Jack.
Figure 5.12 Application of Law to Facts

Facts Are True

In application of law to facts the implicit requirement of the minor premise is that the
facts of the particular case are true. Facts are true in a legal sense when they have been
properly proved to the satisfaction of a court. For this illustration it is assumed that the
facts have been so proved.

Conclusion
With law the structure of the syllogism is such that the conclusion logically flows from
the premises. The structure of the reasoning is represented in abstract in the following
way: ‘A causes B; A has occurred therefore B has occurred.’ If facts in categories
designated by Elements 1-n cause Consequences and Facts 1-n fall into these categories,
then the conclusion is that Facts 1-n cause Consequences.

In the example the facts are ‘Jack has walked onto a field called Whiteacre. Jill owns
and uses Whiteacre. Jill has not said or done anything to indicate that Jack could walk
on her land. Shortly before doing this Jack had said to a neighbour; ‘I am going to fix
Jill and show her what I can do.’’ The consequences of these facts are that Jack is liable
in trespass for damages and possibly liable to be injuncted to restrain future trespass.

Interpreting Law
Introduction
Interpreting law is purposive action since it is action taken to achieve an outcome.
Consequently, it is rationally performed when done by reference to the net benefit rule.
 Chapter 5 Deduction 47
This entails making the interpretation that causes the best effect or outcome, which is
the effect possessing the highest net benefit. In principle this is the one and only correct
answer.67 In practice, however, there may be debate as to which effect fits within the
category of being the best outcome.

Some jurists, however, provide an alternative and conflicting explanation of the process
of interpreting law. This view of interpretation rests on a combination of two
assumptions - there is only one right answer and there is a mechanical and objective
process that is a sure fire method of finding the right answer.

First, a legal text contains a unique and predetermined ‘right answer’ to any legal
problem of interpretation that may arise.68 This means there is no other legitimate
answer.

Second, the task of the judge is to ascertain this unique and predetermined answer,
which they arrive at by a process that is essentially mechanical and objective. 69 70 To
emphasise the point, in principle (like reasoning with policy) and in practice (unlike
reasoning with policy) there is always one indisputably right answer to any question of
. . 17
interpretation.

How do courts find this one and only correct meaning of the ambiguous provision?
They engage in ‘logical reasoning’71 because interpreting law is a process of ‘strict logic
and high technique,’72 based on ‘deduction’.73 74 75 It was with this in mind that Sir
Owen Dixon urged judges to make ‘close adherence to legal reasoning’ because there
21
is no room for doubt or dissent.

In this way law is interpreted objectively and impartially according to established

standards. On this basis, judges reason in a deductive manner. Consequently, the
outcome is always entirely predictable.

This approach has loud echoes of natural law. Judges who avidly pursue this approach
are sometimes described as literalists or strict constructionists; and the approach that
they adopt is referred to as formalism. Or, in the ringing words of Sir Owen Dixon, a
Chief Justice of the High Court of Australia, it entails a ‘strict and complete legalism’.
The key concept underlying formalism or legalism is that reasoning is a matter of
22
applying rules, not a matter of judicial choice.

67 Chapter 10 Policy
68 Kirby (2003) in Sheard (2003) p 44 and Duncanson(1987-89)
69 To illustrate this approach, Bennion (1980B) entitles his text The Science of
Interpretation.
70 Commentary 5.7.
71 Mason (2003) in Sheard (2003) p 4
72 Dixon (1956) p 469, although conceding at p 472 that this was an overstatement
73 Kitto (1992) p 794
74 Swearing in of Sir Owen Dixon as Chief Justice (1952) 85 CLR xi, xiii
75 Commentary 5.8.
 48 Chapter 5 Deduction
Discussion later in this text argues that this view is not logically tenable. Nevertheless
the notion that law is impartial and objective is alluring. Courts desire to infuse justice
23
with impartiality. In their desire to infuse justice with the additional good qualities of
due process, fairness, and objectivity, courts sometimes claim that they engage in
‘value-free adjudication’; in consequence ‘the public believes fervently that these
concepts, which together constitute a set of procedures believed to be impartial, can
achieve their goals of stability, predictability, equal protection, and the reign of
24
justice’. This explains why the ideology resident in some common law legal systems
25
will not easily tolerate an open and formal acceptance of free choice by judges.

As demonstrated in later discussion, this ideology is incorrect because the notion of

adjudication being totally objective and value free is a myth. Myths, however, may still
serve several social functions, some worth and some not so worthy:
(1) Dealing with Difficulties. They are a way of dealing with difficult things such as
the inexplicable, the unpalatable, the inconvenient or the inconclusive.
(2) Satisfying Deep Needs. They may partly satisfy some deep psychic or primeval
need which (inconveniently) will not easily subject itself to empirical observation.
(3) Aspirations Not Achievements. They may describe the truth of our aspirations
rather than our achievements.
(4) Potential for Manipulation. They also have great potential for manipulation in
both law and politics.

Syllogism
To analyse the argument that interpreting law is rationally and objectively based on the
process of deduction it is necessary to identify the form that the relevant syllogism
would take. It is a syllogism involving propositional logic. It takes the following form,
which involves Rule X as the answer to the question of interpretation that is now before
the court:
Major Premise Rule X provides a specific and correct answer for cases of
interpretation in Category Y.
Minor Premise This particular case falls into Category Y.
Conclusion Therefore, Rule X applies in this case and so provides a specific and
correct answer.
Figure 5.13 Syllogism _ for Interpreting Law

Clearly, this syllogism depends on the content of Rule X. If Rule X provides one, and
only one, identifiable correct answer to the question of interpretation, the process is
syllogistic. There are in fact four possibilities for Rule X:
(1) Rule X is an objective rule of interpretation.
(2) Rule X is a word having a fixed literal meaning. This word has only one single
meaning and has no shades of meaning. 76 77 78

76 See Lucke (1982).

77 Schanck (1992) pp2567-2568, citing Richard Posner (1990)
78 Posner (1990)
 Chapter 5 Deduction 49
(3) Rule X is a rule that requires a court to interpret law by reference to policy that
has already been formed (referred to here as preformed policy).
(4) Rule X is a rule that requires a court to interpret law by reference to a precedent
that has already interpreted the law.

As the discussion will now show, the first two possibilities for Rule X - as an objective
rule of interpretation or as a fixed literal meaning of a provision - cannot be sustained as
the basis for interpretation as a syllogism. The third and fourth possibilities appear to be
syllogistic but are so only in a qualified way.

Possibility 1. Objective Rules of Interpretation

One view says that the task of interpretation is a purely ‘legal analysis’ based on rules
of statutory construction that can be mechanically applied. As Sir Garfield
79 80 81 82 83 84 85 86

Barwick explained the position, there are ‘quite distinct and understandable rules by
which
27
courts interpret statutory provisions’.

This assertion would be true if the rules of statutory interpretation were capable always
of giving a specific and uncontentious answer to any ambiguity. This, however, is not
the case because the rules of statutory interpretation are for the most part guidelines to
help interpretation persuasively, not rigid laws to determine it conclusively. There
may, of course, be occasions where they are an apt fit, but as Lord Steyn has neatly put
28
it, ‘interpretation does not generally depend on application of rules’.

Possibility 2. Literal Meanings

Courts sometimes refer to the literal rule of interpretation. As conventionally
understood, this rule is based on the assumption that words have one single meaning
29
that lawyers can ascertain by objective means. In consequence, a statute has ‘to be
27 3

1
construed according to the grammatical and ordinary sense’ or the ‘natural sense’
32
of the actual words employed in the Act. Read the words in their plain, natural or literal
sense, see what they mean and there is the answer to any question of
33
interpretation. By proceeding in this way, it seems, the game is virtually over before it
has started.

This formulation of the literal rule certainly would make interpretation a deductive

79 Brownlee v The Queen (2001)180 ALR 301, 333 per Kirby J

80 Commentary 5.9.
81 Steyn (2002) p 2
82 Kirby (2003) in Sheard (2003) p 45
83 Australasian Temperance and General Mutual Life Assurance Society v Howe (1922) 21
CLR 290, 302
84 Vacher v London Society of Compositors [1913] AC 107, 149
85 Australasian Temperance and General Mutual Life Assurance Society v Howe (1922) 21
CLR 290, 302
86 Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127 per Kirby P
 50 Chapter 5 Deduction
process. If resorting to the plain meaning of words will resolve the ambiguity, the
syllogism for interpretation works. However, just by flipping through an English
 Chapter 5 Deduction 51
dictionary, it can be seen that this is not the case. Most words have more than one
meaning, and even one use of a word can have shades of meaning; moreover, there are
other forms of ambiguity besides lexical ambiguity. Consequently, there is not
87 88

necessarily and inevitably one simple, literal meaning for each word.

An obvious consequence follows. The literal rule of interpretation cannot be the basis
of a syllogism for interpreting law because it does not yield an objective indisputable
answer to questions of interpretation.

This analysis indicates that the common formulation of the literal rule, described above,
is untenable and in fact meaningless. Therefore it needs either to be abolished or
reformulated. In fact, later discussion demonstrates that the only proper purpose that the
literal rule can achieve comes when it is reformulated. In this revised form it limits the
scope of interpretation by providing as follows: a court cannot adopt an
35

interpretation that is not reasonably open to it from the words of the statute.

Possibility 3. Preformed Policy

Preformed policy refers to policy that has already been formed. In this context it is
formed by the legislature and applied by the courts.

There is an argument that interpreting law is syllogistic if a court interprets law by

reference to a preformed policy. Typically it is the policy of the legislature that
originally made the legal rule that is now before the court.

To expand this, assume that a legislature has enacted Statute X. When it enacted Statute
X the legislature intended the statute to achieve Effect X. When a court comes to
89

interpret Statute X one interpretive option is to interpret the statute that will advance the
achievement of Effect X. In other words, the court interprets Statute X in the manner
that the legislature would want it to be interpreted.

Broadly, for purposes here, there are two possible reasons for a court to interpret in this
way. First, it may do so of its own accord. In this case it does not seem possible to
mount an argument that the process of interpretation is truly syllogistic because the
court chooses this meaning when other choices are open to it.

Second, the court may interpret law by reference to the underlying policy because some
rule (labelled a policy direction) requires that it do so. There are several possible
versions of a rule such as this:
(1) Common Law. One can mount an argument that when interpreting common law
there is a duty implied by good sense that a court should ordinarily proceed in this way.
An exception to this rule is that the policy behind the rule is now socially inapplicable
because of changed social circumstances.

87 Christopher Enright Legal Method Chapter 14 Classifying Meanings

88 Chapter 30 Model for Forming Law
89 This concept is explained in Chapter 30 Model for Forming Law.
 52 Chapter 5 Deduction
(2) For interpreting statute law there is a common law rule, the mischief rule, which
directs or at least encourages court to interpret statutes by reference to their
37
underlying policy. And in some jurisdictions, such as Australia, there are statutory
38
provisions that unequivocally make this approach mandatory.

Superficially, where there is a binding rule that requires law to be interpreted by

preformed policy, the claim that interpreting by preformed policy constitutes a
syllogism seems correct. However, viewed from another perspective, interpreting law in
this way does not constitute a perfect syllogism. Instead, the court is adopting and
transmitting a choice that was made earlier in the legislative process when the common
law was made or the statute was enacted. The legislature chose to pursue Effect X. To
this end it enacted Statute X. Hence when the court interprets Statute X in the manner
best calculated to achieve Effect X, the interpretation is ultimately based on a choice.
This was the choice that the legislature made to pursue Effect X by enacting Statute X.

Thus, viewed through a wide angle lens that brings into view the making of the statute
in question and the policy underlying this statute, the real effect of the policy direction
is not to remove the element of choice from the interpretation of a statute. Instead it is to
allocate the right to make the choice for interpreting law to the legislature while at the
same time denying that choice to the court. This is done by imposing a duty on courts to
abide by legislative policy when interpreting the law.

By this means the statute is actually interpreted by reference to a real choice. It is just
that the choice can be obscured because it is made up the line by the legislature when
the statute is first made. As explained in later discussion, every policy that underlies a
statute impounds two choices, the prediction as to which effect the statute will cause
and the choice of the values that were deployed in judging this effect to be the best that
39
the legislature could achieve. Subsequently the choices that the legislature has made in
this regard are transmitted to, and imposed on, the court by the relevant legal direction
to interpret laws by reference to their underlying policy. In outward form this is
syllogistic, but it is qualified by the fact that that the statute is built on the two choices
identified above.

Possibility 4. Precedent
Assume that a court is interpreting law by reference to a precedent. This precedent is
clearly on the issue and is binding on the court. If the court interprets the law by
reference to this precedent, on the surface the reasoning is syllogistic. The precedent
provides an apparently clear, simple and incontestable answer to the question of how
the law should be interpreted. However, as with interpreting law by reference to
preformed policy, the view changes dramatically when looked at with greater breadth.
While in the short terms the court is applying the precedent, the precedent itself is 90 91 92

90 Christopher Enright Legal Method Chapter 9 Model for Forming Law

91 Christopher Enright Legal Method Chapter 16 Policy
92 Chapter 10 Policy
 Chapter 5 Deduction 53
based on a choice. Consequently, on this wider view, the process is not syllogistic since
it entails two choices. One is the choice of the rule that constitutes the precedent. The
other is the choice of the rule of stare decisis that makes the precedent binding.
Consequently, seen in its full light, reasoning by reference to precedent is not truly
syllogistic, only apparently so. Or, it is syllogistic but in a qualified way.

Ascertaining Values
One argument for the natural law view that human conduct should be regulated by a
comprehensive and eternal set of values is that these values can be known by reason,
one form of which is deduction. This argument is considered and rejected in discussion
of choice of values.93

Ascertaining Causal Laws

Making and interpreting law involve causation, which relies on causal laws. A law and
an interpretation of a law cause effects.94 95 Natural science, and often social science,
ascertains and attempts to prove the existence of causal laws by a process called the
hypothetico-deductive model, which, as the label indicates, includes the process of
deduction. However, the process also relies on induction. How these two sources of
reasoning are used in establishing, even if tentatively, the truth of causal laws is
42
explained in the later discussion of induction. This is how deduction plays a part in
making and interpreting law. As the outline indicates, it does not operate on its own but
as part of a model that also incorporates induction.

Proving Facts
Introduction
Pure technological observation allows humans to observe things and occurrences that
they could not observe with their unaided senses. In contrast to this, scientific
observation in the full sense of the term allows them to observe something by causation.
Chemical testing is a good example. A scientist will add chemical X to something, a
reaction will occur, the reaction can be observed and if positive, it indicates the
presence of substance Y. The core of this process is deduction based on scientific rules.
However, while there may be certainty in principle there can be uncertainty in practice
so it is necessary to blend deduction with probability to cater for and articulate the
uncertainty. This uncertainty arises because sometimes it is not possible to be sure that
both of the premises are true.

Reasoning
Introduction
Scientific evidence is usually paired with evidence based on one or more actual
observations. It can also involve one or more testings or other laboratory processes.
This is why there are two processes involved, deduction and probability. These

93 Chapter 19 Choice of Values

94 Chapters 13-15 and Chapter 30 Model for Forming Law
95 Chapter 6 Induction
 54 Chapter 5 Deduction
become intertwined, and generally the more complex the operation the more they
become intertwined.

Deduction
Deduction is involved in the operation of scientific rules. In the simple case, X is the
sole cause of Y. So, if a forensic scientist detects the presence of Y they can give expert
evidence that X occurred beforehand. In pure form this reasoning is deductive. The
syllogism takes the following form:
Major Premise X is the sole cause of Y
Minor Premise Y has occurred
Conclusion Therefore X occurred prior to Y
Figure 5.14 Deduction _ for Inference Based on Causation

Sometimes, though, there is doubt about the components or underpinnings of the

syllogism. There may be doubt as to whether Y has occurred, there may be doubt about
universal validity of the proposed scientific rule that X is the sole cause of Y or there
may be doubt about the absolute reliability of the testing procedure used. In this case the
syllogism can still be invoked. However, it yields only probable truth because of these
doubts. Nevertheless, it is still a road worth travelling because probable truth is better
than no truth at all.

Probability
While scientists aim for procedures and testing processes that are perfect they cannot
always achieve this in principle or in practice. For example, some testing procedures
regularly give a false positive (identifying the presence of X when it is really absent) or
a false negative (identifying the absence of X when it is really present). In these cases
the tests do not give absolute truth but a probability of truth.

To illustrate this, assume the following:

(1) Scientific evidence is based on an observed fact, OF.
(2) There is a proposed scientific rule, SR.
(3) There is a testing procedure, TP.

If the validity of each of the three processes is independent then the probability of a true
result, TR is calculated in the following way. It is the multiple of the probabilities that
each of these three tasks yields the truth. These individual probabilities are set out in the
following table. As indicated above, the three tasks are designated OF, SR and TP,
while the table uses the letter ‘P’ to indicate probability:
Probabilities Symbols
Probability that the observed fact is true P(OF)
Probability that the proposed scientific rule is correct P(SR)
Probability that the testing procedure is reliable P(TP)
Figure 5.15 Probabilities_ for Scientific Testing
 Chapter 5 Deduction 55
Given these individual probabilities, the probability of a true result, P(TR) is given by
the following formula: P(TR) = P (OF) x P(SR) x P(TP)

As is obvious, in real life the combination of these items may be more complex than is
the case in the example here. However the preceding analysis indicates the essential
character of the reasoning, which is a combination of deductive certainty and
probabilistic uncertainty.

Admissibility of Scientific Evidence

Introduction
Common law legal systems admit scientific evidence when there is sufficient certainty
that the evidence will be based on good science. Clearly any legal system needs to
devise rules to determine when alleged scientific evidence is admissible and the reliance
that can be placed on that evidence. Illustrative of some of the attempts to formulate this
rule are two stages of development of such a rule in the United States.

At common law the operative rule was formulated in the case of Frye v United States96
There, Associate Justice Van Orsdell posed the question: When does it occur that ‘a
scientific principle or discovery crosses the line between the experimental and
demonstrable stages’ (the demonstrable stage being the stage when one can
authoritatively demonstrate something to be true)? Potentially the point is ‘difficult to
define’. However, in the words of his Honour ‘[s]omewhere in this twilight zone the
evidential force of the principle must be recognized, and while courts will go a long
way in admitting expert testimony deduced from well-recognized scientific principle of
discovery, the thing from which the deduction is made must be sufficiently established
to have gained general acceptance in the particular field in which it belongs’.

Shortly stated, the test is ‘general acceptance’ in the relevant field. However, mounting
problems with expert evidence have caused a rethink of this approach. And in any
event, the Frye test was replaced for federal cases by statutory provisions in the Federal
Rules of Evidence.

Rule 702 is one of the principal provisions in the Federal Rules of Evidence. Rule 702
applies where ‘scientific, technical, or other specialized knowledge will assist the trier
of fact to understand the evidence or to determine a fact in issue’. In this case, evidence
may be given by ‘a witness qualified as an expert by knowledge, skill, experience,
training, or education’. This evidence may be given ‘in the form of an opinion or
otherwise’.

Scientific evidence can be given only when four requirements are satisfied. Three of
these are stipulated in Rule 702. The fourth requirement, namely absence of bias,
derives from common law.

96 Frye v United States 54 App DC 46; 293 F 1013 (DC Cir) (1923)
 56 Chapter 5 Deduction
Requirement 1: Sufficient Basis
Requirement (1), from Rule 702, says: ‘[T]he testimony [must be] based upon
sufficient facts or data’. The justification for this is self evident.

Requirement 2: Reliable Principles and Methods

Requirement (2), from Rule 702, stipulates that ‘the testimony [must be] the product of
reliable principles and methods’. Requirement (2) is significant because it does not
totally defer to outside experts. Instead it permits the tribunal to scrutinise the principles
and methods used to determine that they are ‘reliable’. Under the Daubert test, there
must be an independent judicial assessment of the reliability of the evidence.97

Reliability invokes a number of requirements or criteria for determining reliability.

(1) Testing. Is the theory testable and has it been tested?
(2) Peer Review. Has the theory been peer reviewed? If so, what are the results?
Peer reviewing usually reduces the chances of error in the theory.
(3) Report of Error Rate. The reliability and error rate must be reported. However,
one hundred percent reliability and zero error are not required.
(4) Acceptance. What is the extent of general acceptance by the scientific
community?

Requirement 3: Reliable Application of Principle and Methods

Requirement (3), from Rule 702, says ‘[T]he witness [must have] applied the principles
and methods reliably to the facts of the case’. In other words (i) the scientific examiner
has applied the required procedures to the letter and (ii) the procedure has not been
contaminated in any way.

Requirement 4: Absence of Bias

Common law requires absence of bias in making a decision. Where parties can seek
their own experts and shop for a hire gun to give them the opinion that they seek, they
introduce bias. A way to eliminate this source of bias in all jurisdictions is for each
court to have its own panel of experts. This becomes an antidote to the likely
subjectivity of the hired gun expert that the adversarial system promotes. For this, a
party hires an expert whom they know will give an opinion favourable to their case.

Problems with Scientific Evidence

Introduction
Superficially, the notion that perfect science delivers perfect truth has some merit.
However, apart from the uncertainties already mentioned there are problems. First, even
if one can claim that science is inherently impartial, so that if we knew enough or if
tests are good enough science would yield perfect results, in practice much science does
not work in this way. Its techniques stop short of objective technological conclusion and
incorporate human judgment and interpretation of the scientific

44
.

Daubert v Merrell Dow Pharmaceuticals 509 US 579, 113 SCt 2786 (1992)
 Chapter 5 Deduction 57
evidence. Second, in practice, science is the work of humans, and human error,
accidental or intentional, is an ever-present possibility. So much is it the case that
scientific evidence can fall well short of perfect that misuse of science, by one means or
another, has been a frequent cause of major injustices.

Problems in Practice
Problems in practice with scientific evidence are severe as Dr Tom O'Connor asserts
and illustrates: ‘The misuse of scientific evidence is a serious problem. Even the FBI
laboratory is under suspicion. In West Virginia, a serologist falsified test results in
hundreds of cases over a ten-year period, sentencing hundreds of defendants to lengthy
prison terms. In Texas, a pathologist faked autopsy results, resulting in as many as 20
death penalty verdicts. A police chemist elsewhere falsified reports and sent hundreds of
innocent people away to jail on rape charges. Most misuse of scientific evidence is pro-
prosecution. ’98

It is likely that many factors are at work here - an adversarial system that endorses and
rewards partisanship, professional advancement through forensic success, laziness,
bribery, socialisation or a mindset or a circumstance that bends a person towards one
side of a case (prosecution, plaintiff or defence), social pressure, blackmail, stress,
carelessness, inadequate training, and inadequate resources.

There are also some specific practices. Lawyers will shop around in a pool of experts
for the right expert opinion (the one who gives evidence favourable to their case). The
willing expert who wants the fee is a gun for hire. They will write the opinion according
to the needs of the lawyers who hire them, even without a word being spoken. And even
without a base desire for the fee there can be unconscious bias. Moreover, there is
typically a large disparity in resources between the prosecution and most defendants
that severely inhibits a defendant’s ability to challenge unreliable prosecution expert
testimony.

Problems in Principle
The notion of the accuracy of scientific evidence rests on a number of assumptions
based on examination of the relevant material. Any time that these assumptions are not
met the resulting conclusion is to that extent equivocal. Some examples are as follows:
(1) It is assumed that the material that has been subjected to scientific analysis is the
right material (for example, it is actual material from the crime scene).
(2) It assumes that the material is in its original state, or if it is not, that science has
an adequate means for making appropriate allowances.
(3) It assumes that the finding, for example that Y was caused by X, is scientifically
valid, whereas there may in fact be other possible causes of Y.
(4) It assumes that the equipment used was working properly.
(5) It assumes that testing procedure possesses perfect certainty. In fact, some testing
merely gives a statistical probability or plausibility. Even if this evidence of

45
.

Dr. Tom O'Connor faculty.ncwc.edu/toconnor/425/425lect02.htm

 58 Chapter 5 Deduction
plausibility can be utilised, it assumes that correct statistical techniques and reasoning
have been deployed. Correct statistical procedures include requirements such as samples
not being biased and key results not being based on outliers.

Commentary
Commentary 5.1 Footnote 2
Kirby (1991) p 2 was published in revised form as Kirby (1995B). See also Kirby
(1990) p 697, citing R v Trade Practices Tribunal; Ex parte Tasmanian Breweries
(1970) 123 CLR 361, 374-375; New South Wales Bar Association v Muirhead (1988)
14 NSWLR 173, 197.

Commentary 5.2 Footnote 4

As John Locke (1690) said in his Essay Concerning Human Understanding Book IV,
Chapter XVII: ‘Syllogism does not discover ideas, or their connections. Syllogism
comes after knowledge, and then a man has little need of it’.

Commentary 5.3 Footnote 5

The soundness of a syllogism is explained in the following way in Antony Flew (1984)
A Dictionary of Philosophy, under ‘Syllogism’: ‘If the argument is indeed valid, it is so
in virtue of the fact that it would not be possible to assert the premise and to deny the
conclusion without contradicting oneself.

Commentary 5.4 Footnote 6

Sir Neil MacCormick (1978) pp 19-32 cites Daniels v White [1938] 4 All ER 258 as an
illustration of a case where a court used deductive reasoning.

Commentary 5.5 Footnote 8

(1) As the discussion in Chapter 3 Structuring Legal Rules revealed, a legal rule is a
conditional statement. That this is the case becomes clearer when the rule is restated in a
way which does not alter its meaning but reveals its conditional nature: ‘If the facts of
the case fall within the overall category of facts defined by the elements, the
consequences described by the rule apply to those facts’.
(2) The further point is that a conditional statement comprises the major premise of a
syllogism, the syllogism for applying law to facts. This has to be the case because the
application of law to facts is essentially a deductive process based on a syllogism.

Commentary 5.6 Footnote 9

Chapter 31 Model for Using Law provides the background in depicting the model for
using law. Induction is discussed in Chapter 6 Induction. Relevant further reading is as
follows:
(1) For an outline of the function of litigation where fact-finding occurs see
Christopher Enright Legal Method Chapter 22 Model for Litigation.
(2) For an overall account of proof of facts see Christopher Enright Proof of Facts.
(3) For discussion of observation for proof of facts see Chapter 26 Observing Facts.
 Chapter 5 Deduction 59
Commentary 5.7 Footnote 17
Judges sometimes speak of a ‘right answer’. For example, in Kitto (1992) p 796, Sir
Frank Kitto a fellow High Court judge of Sir Owen Dixon refers to Dixon’s skill in
‘diving swiftly and unerringly to the very bottom of a complex problem and coming up
just as surely with the right answer’. In Kitto (1992) pp 790-791 Sir Frank Kitto also
describes Sir Owen Dixon referring to a case being ‘decided rightly’.

Commentary 5.8 Footnote 22

Reading
For academic discussion of formalism see McBarnet and Whelan (1991).

‘Strict and Complete Legalism ’

Sir Owen Dixon used the phrase ‘strict and complete legalism’ in his speech on
becoming Chief Justice, reported in (1952) 85 CLR xiv. For an elaboration of this
approach see Dawson and Nicholls (1985-86) and Dixon (1956). An excellent summary
of this view is found in Horrigan (1995) pp 293-294. There was a disparaging comment
made by a critic about one distinguished judge who was a strict constructionist. The
critic said that the person was considered a great judge only because he could read a
dictionary.

Examples
Here are some examples of the view that legal interpretation is relatively cut and dried.
(1) Peter Durack QC. Peter Durack QC was Australian Attorney General from 1977-
1983. In Durack (1995) he argued that the requirements for appointment that his
(Liberal) government looked for included that the person was an ‘adherent to
established legal doctrine, deciding cases according to legal principles’. To do this they
needed a ‘capacity for objective legal judgment’.
(2) Ian Callinan QC. In an interview on ABC television, on 18 December 1997, Ian
Callinan QC commenting on the announcement of his appointment as a justice of the
High Court of Australia (reported in the The Sydney Morning Herald of 19 December
1997) said ‘I think that it is important that the High Court decide cases in an orthodox
way, and I hope I do that’.
(3) See Fiocco (1980).

Commentary 5.9 Footnote 27

Sir Garfield Barwick’s assertion that there are ‘quite distinct and understandable rules
by which courts interpret statutory provisions’ was said as his retirement speech - see
Retirement of Sir Garfield Barwick as Chief Justice (1981) 148 CLR v, ix. This book
argues that there are no such rules. The closest fit comes from what are commonly
called rules, maxims or canons of interpretation. Their operation is analysed in Chapter
24 Rules. Chapter 24 argues that these are for the most part guidelines or possibilities
and not hard and fast rules.
Chapter 6
Induction
Introduction
Nature
Ascertaining Values
Ascertaining Causal Laws
Proving Facts
Proving Facts: Patterns of Behaviour
Proving Facts: Individual Behaviour
Proving Facts: General Behaviour
Common Errors Commentary

The real test of legitimacy [of what judges do] lies in the process. So long as judges
continue to accept the constraints inherent in the judicial method, working from the
base line of existing principle, and solving new problems, or re-evaluating old
solutions, consistently with principles, then they can provide an effective answer to a
criticism that they are trespassing into a field which belongs to parliaments}

Introduction
Induction (also called inductive reasoning or inductive logic) involves formulating a
generalisation based on particular cases. Lawyers use induction to extend a rule which
applies in one case, and the value on which it is based, to another case that bears some
similarity to the first case. Lawyers also use induction to prove facts based on recurring
patterns of individual or social behaviour. Social scientists use induction to ascertain
and justify causal laws.

Nature
Introduction
In deductive reasoning, the premises of an argument both support and ensure the
conclusion. This is possible because deduction reasons from the general to the
particular. Induction, by contrast, is a weaker form of reasoning since the premises of an
argument support the conclusion but do not ensure it. This is because induction reasons
from the particular to the general. Inductive reasoning is deductively invalid. But while
not binding it can still be cogent since it is a plausible form of inference. It is also
creative. Whereas deduction recycles a proposition that is already known and accepted,
induction establishes a novel proposition.
Induction can be used for ascribing general properties or general relations to things
based not on total observation of the thing, but a limited number of observations. In
other words, induction involves using particular rules, events and things to formulate a

1. Murray Gleeson CJ in The Sydney Morning Herald 5 April 1999, reporting a speech by His
Honour to the Sydney Institute

60
 Chapter 6 Induction 61
general rule or conclusion. For example, we observe the sun rising day after day. We
can use this observation to obtain by an induction a law that the sun rises everyday - it
does so now and is likely, even very likely, to do so in the future. In abstract form, if A1
is X, A2 is X and A3 is X, we can argue that it is possible that each instance of A is a
species of X. That is X includes the entire range constituted by A1-n.

Popular Illustrations
Proverbs, idioms and popular sayings can incorporate or allude to inductive reasoning
in various ways. Many are directly based on induction because they express a common
observation as a proposition that is universally true. Some examples are the following.
‘A man is known by the company he keeps (which is also expressed in the proverb that
birds of a feather flock together).’ ‘You cannot teach an old dog new tricks.’ ‘A rolling
stone gathers no moss.’ ‘A stitch in time saves nine.’ ‘Action speaks louder than
words.’ ‘Appearances are deceptive.’ ‘Better the devil you know than the devil you do
not know.’ ‘Boys will be boys.’ ‘Every dog has his day.’

Some paired proverbs present two contrasting forms of inductive reasoning that could
apply to a case. ‘Look before you leap’ should give way in some cases to the advice that
‘he who hesitates is lost’. ‘All things come to him who sits and waits’ contrast with
‘none but the brave deserves the fair’.

Some proverbs address the mechanism of induction. (a) At least three proverbs warn
against using inductive reasoning with insufficient observation. ‘All that glistens is not
gold.’ ‘One swallow does not make a summer.’ ‘Do not judge a book by its cover.’ (b)
The proverb ‘there is safety in numbers’ gives good advice about reasoning with
induction. The more observation one makes the more likely it is that the conclusion is
true.

Finally, some proverbs incorporate a stricter form of reasoning than induction, namely
deduction. A good example is: ‘Ask no questions and hear no lies.’

Strength of Induction
Induction may be strong or weak. The stongest case is where numerous different
observations have been made of something, and in all observed instances it has a certain
property. Induction reasons that it is true or it is likely that the thing will have the
property in all unobserved instances as well. In formal terms this can be written as:
Premise In all observed instances X has property Y.
Conclusion In all instances X has property Y.
Figure 6.1 Illustration of Induction

Bird life provides two contrasting examples where this reasoning provides a correct
answer in one instance but not in the other. First, the crow:
Premise In all observed instances crows are black
Conclusion All crows are black.
Figure 6.2 Illustration of Induction
 62 Chapter 6 Induction
Now for swans. Here is an induction for them:
Premise In all observed instances swans are white.
Conclusion All swans are white.
Figure 6.3 Illustration of Induction

In the case of the crow the conclusion is correct. In the case of the swan, the conclusion
is true for European swans. Australia, however, has the black swan so the conclusion is
not universally true. Black and white reasoning has its limits.

The weak form of induction is based on excessively limited observation, which can
easily happen when observing oneself. ‘I always have a cup of tea first thing in the
morning so obviously everyone else does do’. Here, the good sense of starting the day
with a cup of tea does not carry over into good reasoning.

David Hume (1711-1776) made the pertinent comment that most of us live our lives
based on induction. Food has always nourished us in the past so we assume that it will
do so in the futre. As Hume pointedly commented, someone who insisted on sound
deductive justifications for everything would starve to death.

To emphasise the point, in contrast to deduction which reasons from the general to the
particular, induction reasons from the particular to the general. Induction, therefore,
does not constitute a watertight argument in the way that deduction functions, so it does
not satisfy requirements of abstract intellectual stringency. Its conclusions are merely
possible, and at best probable. Nevertheless, induction is a useful means of reasoning in
the real world. Indeed, this very weakness of induction confers an advantage which is
lacking with deduction in that it discovers new relationships. In fact, many laws of
science are based on induction. Deduction, by contrast, will only reveal relationships
that are already known or knowable.

Induction has this capacity to discover new truths because it involves reaching
conclusions by inference about unobserved things on the basis of what has been
observed. These inferences have three settings:
(1) Across Time: Past to Present. They may consist of inferences about the past from
present evidence as happens in archaeology and history.
(2) Across Time: Present to Future. They may constitute inferences from present
time to future time - the sun rose today and will rise tomorrow.
(3) Across Space. They may include inferences across space rather than time. In
cosmology conclusions about the whole universe are drawn from what we are able to
observe from within our own galaxy; in the social sciences an inference of a general law
applicable everywhere is made from observations in particular places.

Use
In law induction is used in three tasks:
(1) Ascertaining values to be used in common law.
(2) Ascertaining causal laws.
(3) Proving facts.
 Chapter 6 Induction 63
Ascertaining Values
Introduction
Induction is used in legal reasoning to ascertain values mainly for creation,
modification, extension or interpretation of a common law rule. 99 The common form of
induction involves reasoning from the particular to the general. It takes the following
form:
Premise In all observed instances X has property Y.
Conclusion In all instances X has property Y.
Figure 6.4 Generalisation

There are at least two possibilities for this type of reasoning.

(1) One can argue from certain instances of a wrong that receives redress to a
general rule that covers the instances so far encountered as well as additional instances.
(2) One can argue from specific areas of law concerned with wrongs, namely tort
and criminal law, to a general moral prohibition on wrong doing.

Arguing from Instances of Redress to a General Rule

One use of induction is to argue from instances of legal redress for certain instances
where a wrong is redressed to a general concept of the wrong. A good illustration is
found in Donoghue v Stevenson, the landmark case that laid down the tort of negligence
based on a general duty of care in English common law. In arguing that there should be
such a duty of care, Lord Atkin made the distinction between an underlying general
legal principle and specific statements of law emanating from it: ‘I content myself with
pointing out that in English law there must be, and is, some general conception of
relations giving rise to a duty of care, of which particular cases found in books are but
instances’.100 In other words, particular instances of cases of negligence bespoke the
existence of a general rule about negligence. This is so because ‘the duty which is
common to all the cases where liability is established must logically be based upon
some element common to the cases where it is found to exist’.101 As Justice McHugh
expressed it, the process involves the ‘rationalisation of existing principle with a view to
bringing more unity and symmetry to the general law,’ as particular rules are gathered
under an ‘overarching principle’.102

Arguing from General Rules to a General Prohibition on Wrongs

The second possibility seeks to paint a legal picture on a bigger canvas. If courts can
reason from particular instances of a type of wrong to a general concept of that wrong,
can they also reason from the existence of specific areas of law concerned with wrongs,
namely tort and criminal law, to a general moral prohibition on wrong doing? If this is
possible, courts have some justification for creating new torts and crimes as the need
arises. Indeed, this is exactly what the House of Lords did, although amidst

99 Moore (1991)
100 Donoghue v Stevenson [1932]AC 562, 580
101 Donoghue v Stevenson [l932]AC 562, 580
102 McHugh (1999) p 41. Commentary 6.1.
 64 Chapter 6 Induction
major controversy, in the case of Shaw v DPP, which created a new common law
offence of conspiring to corrupt public morals103

In Shaw v the Lords created the new common law offence of conspiring to corrupt
public morals when the following facts came before it.104 Shaw had published an
illustrated directory of prostitutes, which indicated to readers both how they could
contact each prostitute and the services that each would perform. For this, Shaw was
convicted of the alleged, and until then unknown, common law offence of conspiring to
corrupt public morals. In upholding the conviction, four of the Law Lords held that
courts have a residual power to superintend offences which are prejudicial to the public
welfare (with Lord Reid in a notable dissent on this point). The majority built their
argument upon the notion, put forward by Lord Mansfield almost 200 years earlier, that
the courts are ‘guardians of public morals’ and that they ought to restrain and punish
‘whatever is contra bonos mores et decorum’ (contrary to public morals and
decency).105 Viscount Simonds echoed this in his speech. Citing Lord Mansfield,
Viscount Simonds asserted that ‘there is in this court a residual power, where no statute
has yet intervened to supersede the common law, to superintend those offences which
are prejudicial to the public welfare’. He later went on, pointing out first that the
vigilance of parliament now ensures in most cases that criminal offences are created
when the need arises. Nevertheless, his Lordship argued, ‘gaps remain and will always
remain since no one can foresee every way in which the wickedness of man may disrupt
the order of society’. Thus he was able to assert: ‘In the sphere of criminal law, I
entertain no doubt that there remains in the courts of law a residual power to enforce the
supreme and fundamental purpose of the law, to conserve not only the safety and order
but also the moral welfare of the state, and that it is their duty to guard it against attacks
which may be the more insidious because they are novel and unprepared for’.106

Declaratory Theory
This method of drawing on established values to create what appeared to be new rules
by the process of analogy has been labelled the declaratory theory of law.107 It is the
explanation put forward by natural law adherents to explain how, despite an appearance
of courts making new rules, they were not really doing so. They were just declaring pre-
existing rules.

This theory most readily applied to law dealing with rights and wrongs such as tort,
contract, criminal law and property, as distinct from vast tracts and layers of new law in
regulatory statutes. This is the case because the moral basis of a law is easily identified
in these areas of law. For example, a criminal law forbids a person to do X because
doing X is wrong. In other words creating a rule from an underlying moral principle is a
reflexive act. The law forbids what is wrong and commands what is right. On this basis
a moral principle underpins every legal rule so that the rule comprises a command to
enforce that moral principle.

103 Shaw v DPP [1962] AC 562

104 Shaw v DPP [1962] AC 562
105 Jones v Randall (1774) 1 Cowp 17, 39 and R v Delaval (1763) 3 Burr 1434, 1438-1439
106 Commentary 6.2.
107 See Krygier and Glass (1995).
 Chapter 6 Induction 65
The declaratory theory explained this process in the following way. When a court
makes a precedent it states a rule for the first time. To make the rule it can, on a wide
view, make the rule by invoking any value. But according to the narrower dictates of
natural law, valid legal rules need to be based on a comprehensive set of moral
standards, which must underlie and are incorporated into human law. These moral
standards can be ascertained by reason. Specifically in these cases, reason entails
delving into established legal rules and ascertaining by induction or analogy the moral
standard which should apply to the case in question, perhaps with appropriate
modification for the changed circumstances.

Deploying this standard, the court would make what appeared to be a new rule. In truth,
however, it was merely giving legal expression to a moral value that had always been
part of the human condition and for that reason part of the legal order.

This shows how natural law deals with objections that arise when law changes. If law is
universal and unchanging, say the objectors, judges should not ‘make new law if there
are cases not provided for’.108 The answer is this. When a court states a rule of law for
the first time there appears to be a new rule, but there is not really a new rule. Because
reason indicates which underlying moral standard applies in a case and how the
standard is implemented as a rule, the rule has always existed. 109 What appears as a new
rule is merely the first articulation of a rule that was always part of this underlying
natural order110 - it is the ‘enduring aspects of previous reasoning’111 and in this way has
always been part of common law.112 This is why it is named the declaratory theory -
judges should not and do not make new law,113 they merely declare what the law is and
what the law has always been.114 Hence, a judge sits merely ‘to administer the law;’115
to engage in ‘renovation’ of the law as distinct from ‘innovation;’116 and to follow ‘the
spirit of cases [which] make law’ and ‘not [merely] the letter of particular
precedents’.117

Stephen R Covey describes this same idea in a management text, The Seven Habits of
Highly Effective People. In so doing Covey distinguishes principles from practices:
‘While practices are situationally specific, principles are deep, fundamental truths which
have universal application’. Principles have universal application because they ‘apply to
individuals, to marriages, to families, to private and public organisations of every kind’.
When ‘these truths are internalised into habits,’ he says, ‘they empower people to create
a wide variety of practices to deal with different situations’.118

108 Harnett v Fisher [1927] 1 KB 402, 424, [1927] AC 573. Commentary 6.3.
109 Willis v Baddely [1892] 2 QB 324, 326. Commentary 6.4.
110 Commentary 6.5.
111 Walker (2002) p 13.
112 Commentary 6.6.
113 State Government Insurance Commission v Trigwell (1979) 142 CLR 617
114 Marbury v Madison (1803) 1 Cranch 137, 177, 5 US 877, 111, cited with approval in
Attorney General v Quin (1990) 93 ALR 1, 25 per Brennan J.
115 Harnett v Fisher [1927] 1 KB 402, 424, [1927] AC 573
116 Calvins Case (1609) 7 Co Rep 1a, 27a, per Coke CJ
117 Fisher v Prince (1762) 3 Burr 1363, 1364, per Lord Mansfield
118 Covey (1998) p 35
 66 Chapter 6 Induction
Thus the real issue surrounding the declaratory theory is not whether the law of the land
actually changes, but rather the basis of change. According to the simple positivist view,
law changes because the judges make new law as they choose. According to the
declaratory theory the law changes in its letter as part of civil law, but the underlying
moral code that underpins the law and says what law should and should not be does not
change. What is change on the surface is really the first articulation of a legal rule that
draws on and reflects this underlying moral code. The moral code itself has not changed
and has always been there and always will be there.119

Limitations
Once a value is accepted and deployed in one area of life, induction is a useful way of
identifying other areas where the value might plausibly apply. By this means induction
can make the legal system more systematic. Induction, however, has major limitations
with regard to values. This has two parts:
(1) Inability to Prove General Values. Induction cannot prove or demonstrate that
there is a set of universal values that applies to all human behaviour for all time.
(2) Inability to Prove Specific Values. Induction cannot prove the existence of or
justify a specific established or accepted value.120

Ascertaining Causal Laws

Introduction
Making and interpreting law involve causation. A law and an interpretation of a law
cause effects.121 When a legislature or a court makes or interprets law it has to try to
predict as best it can the effect that each possible version of the law and each meaning
of the ambiguous provision will cause. This prediction is based on causal laws.

Natural science, and often social science, ascertain and attempt to prove the existence
of causal laws by a process called the hypothetico-deductive model, which as the label
indicates, includes the process of deduction. It also involves induction.
The hypothetico-deductive model proceeds in the following way. Scientists observe
phenomena then devise a plausible and testable theory to explain the phenomena. To
test the truth of the theory, they use deduction. They assume that the theory is true then
derive specific laws, labelled at this juncture hypotheses, which flow from this
assumption. This is a deduction in either of two forms, one of which is a proper
syllogism while the other is merely induction.

Deduction
The proper form of the syllogism is as follows: ‘If Theory X is true, then Y will happen
when we do X. Y does not happen when we do X. Therefore Theory X is not true’. This
process is called falsification or disconfirmation. This is truly deductive.

119 There is some discussion of this moral code and its basis in Chapter 19 Choice of
Values.
120 There is discussed in Chapter 19 Choice of Values.
121 Chapter 13 Cause and Chapter 30 Model for Forming Law
 Chapter 6 Induction 67
Induction
The other form, induction, is thus. ‘If Theory X is true, then Y will happen when we do
X. Y happens when we do X. Therefore Theory X might be true’. This is not a pure
syllogism, although it is sometime treated as such. Strictly, this process provides
support for a causal law, without definitively establishing it. Realistically, if countless
experiments support a causal law, and it is successfully implemented in social or
therapeutic practice, it is as good as true to some extent at least, even if later research
may refine the scope and basis of the causal law.

In fact, the reasoning is based on induction. Repeated observation of an apparent cause

and effect relationship without exception or qualification is one basis of induction. This
is encapsulated in the following diagram:
Premise In all observed instances X has property Y.
Conclusion In all instances X has property Y.
Figure 6.5 Induction _ for Establishing a Causal Law

Induction that makes a case for a causal law starts with observations. Bit by bit the truth
of a theory or causal law is inferred from observations that are consistent with it. While
the accumulation of evidence will increasingly lend support to the existence of a causal
law, it cannot conclusively prove it because there is always the possibility of a
disconfirming instance. But even though the reasoning is not watertight it gains more
and more strength if two things happen:
(1) No instance is observed that disconfirms the supposed causal law.
(2) Persistent observation uncovers more and more confirming instances.

Proving Facts
Induction is used to prove facts in litigation. Induction is based on recurring patterns of
behaviour. These patterns may apply to an individual or they may apply to behaviour
generally. To illustrate how induction can prove facts, assume that there is a common
pattern of behaviour in which Facts A, B and C occur together and in sequence. Assume
now that a court has found that Fact A and Fact C have happened. In this case there is
an argument based on induction that Fact B has also occurred after Fact A and before
Fact C.

There is a famous literary example of inductive reasoning in one of Sir Arthur Conan
Doyle’s fictional short stories about his detective Sherlock Holmes. The story is entitled
‘Silver Blaze’. Silver Blaze was the name of a champion racehorse. It was kept at the
King's Pyland stables in the country in Dartmoor, which were near the large house of
the horse’s owner, Colonel Ross. On the night before an important race Silver Blaze
mysteriously disappears. At the same time, the horse’s trainer, John Straker, is found
dead, apparently murdered. After Sherlock Holmes conducts his investigation he has the
following exchange with a Scotland Yard detective Inspector Gregory:

Gregory: ‘Is there any other point to which you would wish to draw my attention?’
Holmes: ‘To the curious incident of the dog in the night-time’.
 68 Chapter 6 Induction
Gregory: ‘The dog did nothing in the night-time’.
Holmes: ‘That was the curious incident’.

Holmes was reasoning inductively. Commonly a dog will bark at a stranger, especially
in the nighttime. However, when a dog does not bark in the presence of a human the
likely explanation is that the dog is familiar with the person. This was the case here. The
person who took away the horse was the trainer John Straker.

Proving Facts: Patterns of Behaviour

To even a casual observer, humans and the world they inhabit do not function in a
totally random way. Instead in a significant amount of activity they exhibit patterns of
behaviour that recur. Some patterns of behaviour apply generally, although not
necessarily to all people at all times. Other patterns apply to a particular individual.
Patterns of behaviour may occur because of some custom or social practice. They can
also occur because they represent a rational way of doing things.

In a contested case in court it commonly happens that some of the facts that constitute a
pattern are established by some means. Then a party will seek to establish the missing
facts by reference to some alleged pattern by a process that is popularly called joining
the dots. The reasoning says that the most plausible account of the events is that they
happened according to a common pattern. This pattern describes how people commonly
behave and how events commonly happen.

In formal terms the reasoning process of filling in the gaps by joining the dots is called
induction or inductive reasoning. Courts commonly refer to it as inference. In
discussion of proving facts these terms are used interchangeably.

To illustrate inference in abstract form, assume that the pattern involves three facts,
Fact A, Fact B and Fact C. On an occasion Facts A and C may be established by direct
evidence that is credible. Fact B might then be established by inference from Facts A
and C. Put broadly, the reasoning proceeds on the basis that in ordinary circumstances
at least, Facts A, B and C occur together. When Facts A and C occur and there is a gap
in the facts the most plausible possibility is that Fact B has also occurred. Essentially
the argument is that any other fact would make the events pointless and disconnected
unless, perhaps, there were some special circumstances.

Now let us illustrate inference with a factual example. Assume that there is a robbery at
the North West Bank from which the robber took $65,000. Assume that the police
found John counting a pile of bank notes on his kitchen table one hour after the robbery,
and the notes totalled $65,000. These items taken together create some inference that
John committed the robbery.

What is the basis of this inference? It is rare for people to have vast sums of cash in
their physical possession. Therefore a highly plausible explanation is that John had the
$65,000 in his possession because he committed the bank robbery. Since he did not
know at the time of the robbery how much money he was taking, it was necessary to
 Chapter 6 Induction 69
count it after the robbery. Moreover, John had in his possession exactly the amount of
money that was stolen.

Inductive reasoning or inference is not foolproof. Therefore it is appropriate to assess

its strength when invoked for proof of facts. There are several factors - whether the
pattern is the common way things occur or just one of two or more possibilities, how
well the pattern fits the circumstances before the court and any special factors in these
circumstances that might weigh for or against the pattern being inductively applied to
the case.

Proving Facts: Individual Behaviour

Introduction
Patterns of behaviour may apply to an individual. This is recognised in psychology in
the field of personality and individual differences. It is also recognised in the law of
evidence in the use of evidence of disposition, character, tendency and similar facts.

Tendency Towards Behaviour

Introduction
Sometimes there may be good reason for arguing that a person did something because
they had some disposition to do it. This disposition arises from a number of sources
although they all have a similar ring and arguably share at least a substantial degree of
overlap. One illustration of this is that the various terms deployed in this area are not
strictly defined either in meaning or in relation to the permissible circumstances where
they can be used.

There is a logical argument that evidence of a tendency towards behaviour has some
and even considerable probative value. Some of the sources from which a tendency
might be discerned operate a priori. They are based on an analysis of the person and
predict from that how they might behave in the future or have behaved in the past. Two
prominent forms of personal tendency are personality and character.

Other sources are based on demonstrated behaviour. These are given a variety of labels
although there is considerable overlap in their reach. Two common expressions used -
similar facts and coincidence - focus directly on the observed behaviour. This person
has done a thing in the past and now there is the possibility that they have done it again.
There is a coincidence in that the facts of the present and past cases (which may be one
or more) are similar. Looking back (a posteriori) it suggests that the person has a
tendency towards that behaviour which is variously called a habit, a propensity or a
disposition. It can become the basis of proof. Old habits die hard or do not die at all, or
at least these are the notions that seek to justify this induction.

This tendency to behave in a certain way can become the basis of proof by reasoning in
the following way. The person has done something in the past and now they are doing it
again. The key factors in this reasoning process are the number of occurrences of the
behaviour and the degree of similarity between the occurrences. The strongest case in
practical terms involves a significant number of like events in the past and a
 70 Chapter 6 Induction
strong degree of similarity between all the past events, and between these past events
and the event now under scrutiny by the court. It is as if the person has branded their
handiwork.

Personality
Underlying the concept of personality in psychology is a threefold proposition of Henry
Murray. Every man is in certain respects (a) like all other men, (b) like some other men,
and (c) like no other men.122 This neatly captures the paradox of the similarity in
humankind and the differences between individuals. The field of personality or
individual differences seeks to explain how each person is both like other persons and
like not like other persons.

Similarities arise so that each person is like some other people because they share traits
or dispositions (for example they are sociable or optimistic). There are also differences
between individuals. Each individual is unique and different from all others in that they
have different traits, they have those traits in different amounts or they combine the
traits in different ways.

While there is no agreed definition of the field of personality there is a good working
description. It is the study of the pattern of characteristics, feelings, thoughts and
behaviours of the individual that persist over time and situations and distinguish one
person from another. Since these traits or characteristics for personality persist over
time, there is stability in their behaviour. Since they persist over situations there is
consistency in their behaviour.

Character
Personality focuses on behavioural disposition. Character, by contrast, is concerned
with a person’s moral strength or value system, which dictates or shapes their capacity
to do right or wrong. It is concerned with the values that underlie their actions. In the
context of legal cases the relevant values concern the commission of legal wrongs. Is
the person of upright character such that they would be most unlikely to do wrong, or is
the person of fallen character so that they are liable to do bad things?

Repetition of Behaviour
In many cases the evidence of the disposition of a person to behave in a certain way is
based on previous repetitions of the particular behaviour. Putting it simply, they have
behaved in a certain way in the past so there is some assumption that they will continue
to behave in that way now and in the future. In the popular phrase, the person will
behave in a way this it true to form. Or to quote the proverb, old habits die hard.

Test
In a practical sense the likelihood of behaviour being repeated depends on two factors.
One is a quantitative measure - the number of times the person has engaged in the
behaviour already. The other is a qualitative measure - the similarity in substance and
detail between the instances when the behaviour was exhibited. The greater are these

122 Murray (1938)

 Chapter 6 Induction 71
two measures, the more the person has marked the behaviour as their own. These
measures constitute the hallmark of their behaviour.

Rules of Evidence
In some fields, of which human resources management is prominent, principles of
psychology are deployed. One major use is to help select the best candidate for a
position in a firm where concepts of personality and character are heavily involved. By
contrast the law of evidence has been reluctant to allow this sort of evidence. Especially
in criminal law, there is a strong notion that proof should rest on the best evidence,
which is generally observational evidence. Moreover, to admit evidence in a criminal
trial that the accused has done something similar before or has bad character risks a
conviction based on prejudice.

For these and other reasons common law has allowed courts only restricted access to
evidence of tendency (which legally also goes under a variety of other labels such as
similar facts, disposition and character). The common law rules themselves are hazy
anyway and can vary between jurisdictions. Further variations between jurisdictions are
created by the fact that in various jurisdictions some or all of the relevant rules have
been put on a statutory footing.

Proving Facts: General Behaviour

Introduction
Society at large also displays patterns of behaviour since there are generally observed
ways for how people normally go about their business, about how things occur and for
how the world works. These concepts of how things work - generally, normally or often
- are essentially statements of probability. There are two forms of probability -
subjective probability, which is based on some form of observation and objective
probability that applies in the special case where all outcomes are equally likely.

Subjective Probability
Subjective probability can be determined just by observation. Sometimes, however, it
can be based on calculations applied to observed data.

Observation
Sometimes patterns of behaviour that courts deploy in finding facts are based on
scientific observation and research. Some good illustrations are the statistics used by
actuaries for the purposes of writing life insurance policies and the epidemiological data
used by health workers for planning purposes. On other occasions these patterns of
behaviour are not scientifically grounded in this way. They can be based on such things
as common sense, common observation and popular understanding. In these cases a
court can only do its best. However, the non-scientific enterprise allows some erroneous
processes such as illogical reasoning, selective observation, and even illicit stereotypes
or prejudice to operate. This is one of the major ways in which courts can make
substantially erroneous findings of fact (with a consequent injustice) by allowing this
form of irrationality to affect the outcome of a case.123

123 Chapter 27 Irrationality

 72 Chapter 6 Induction
Calculation
In some cases after the initial probability is established additional observation refines
the probability. This can be illustrated from the data in the worked example found in
discussion of probability.124 First, assume that in a country the probability that any
person has ‘lurgi’ (a fictitious disease) is 5%. Thus if we select a person at random the
best estimate we now have is that the person has a 0.05 probability of having lurgi.
Assume now that someone develops a diagnostic test for lurgi, but it is not completely
accurate. If the person has the disease the evidence clearly shows that the probability of
the test indicating the presence of the disease is 0.90. If the person actually does not
have the disease the probability that the test indicates that the disease is present is 0.15.

Assume now that a person X is selected at random and the diagnostic test is performed.
The test indicates that the disease is present. What is the probability that the person
actually has the disease? Bayes Theorem, which is explained in later discussion of
probability, enables us to work out the answer to this question.125

Objective Probability
Introduction
Inference can be based on classical probability, which is also referred to as objective
probability, a priori probability or the frequentist view of probability. It is properly used
only in a situation where events happen randomly so that every outcome is equally
likely.

Nature of Classical Probability

Classical probability is used in ‘cases where there is a finite number of possible
outcomes each of which is assumed to be equally probable’.126 Classic examples are the
probability of drawing a specific card out of a pack of 52 cards (1/52), or the probability
that a specific number will come up on the throw of a dice (1/6).

Thus for the throw of a dice we would say that the outcome, X, has six versions, X1,
X2, X3, X4, X5 and X6. Each of these versions of X represents the ways of throwing
the dice so that the corresponding number comes up. Thus X3 represents ways of
throwing the dice that cause the number ‘3’ to come up. Our knowledge of X is that, on
an ordinary throw of the dice, each version of X is equally probable. Thus there is a one
in six chance that the dice will be thrown to cause the number ‘3’ to come up. Putting
this in plain language, in these situations classical probability is our best guess. There is
a simple reason for this. If we resort to the method of classical probability we will be
right more often than if we deploy any other means. So, classical probability is not
infallible but used in the right way it yields the best outcome.

On a few occasions courts have used classical probability to help them find the facts of
the case. On occasions courts have rejected classical probability. The book will now
consider two cases where courts used it in making their decision.

124 Chapter 9 Probability

125 Chapter 9 Probability
126 Robertson and Vignaux(1993) p 459
 Chapter 6 Induction 73
Illustration 1: The Brimnes Case
In Tenax Steamship Co v The Brimnes the court had to consider two relevant events,
giving notice and payment of money - the issue was which had occurred first:127
(1) Notice. Notice was given in a 30-minute period between 17.30 and 18.00 hours.
(2) Payment. Payment was made in a 60-minute period between 17.37 and 18.37
hours.

There was no direct evidence as to when either event happened within the possible
periods. There was also no indirect evidence suggesting that any one particular time was
more likely than any other. In the relevant periods according to Lord Justice Cairns
there was ‘no preference for any particular moment’.128

Given this the court relied upon classical probability. It assumed that the two events,
giving notice and payment of money, were equally likely to have happened at any time
within the relevant periods. (This, though, is the challengeable assumption in the case
that may cast doubts on the propriety of resorting to classical probability).

To commence, we can set out the details of the time periods for notice and payment in
the following table:
Period 1 Period 2 Period 3
17.30-17.37 17.37-18.00 18.00-18.37
Notice Notice Notice -
Payment - Payment Payment
Figure 6.6 Time Periods _ for Payment and Notice

Calculation of the probability that payment was made before notice was given involved
taking two preliminary steps:
Step (1) For payment to occur before the notice, both payment and notice had to be in
the period of overlap, that is, 17.37-18.00. This was a period of 23 minutes. Reasoning
for this proposition goes as follows.
(a) The period for payment begins at the start of the period of overlap. Before
this time there can be no payment so payment cannot be before the notice.
(b) The period for notice expires at the end of the period of overlap. After that
time notice cannot have been given, so in this case also payment cannot be made before
the notice.
(c) It follows that for payment to be before notice both notice and payment must
be in the 23 minute period between 18.37 and 18.00.
Step (2) In half the cases where notice and payment occur in the 23 minute period of
overlap notice will be before payment; in the other half notice will be after payment.

These steps lead to the calculations set out below to determine the probability of
payment being before notice. These are arranged under three headings, probabilities,
calculation and conclusion.

127 Tenax v Steamship Co v The Brimnes [1974] Int Com LR 05/23, [1975] QB 929
128 Tenax v Steamship Co v The Brimnes [1974] Int Com LR 05/23 [116] per Lord Justice
Cairns
 74 Chapter 6 Induction
Probabilities
Relevant probabilities are as follows:
Notice is given in the 23 minute period 23/30
Payment is made in the 23 minute period 23/60
Both notice and payment are in this period (23/30)x(23/60)
Half these cases payment will be before notice 1/2

Calculation
The probability that payment is made before notice is given is one half the probability
that both notice and payment are in the 23 minute period. The formula is:
(23/30) x (23/60) x (1/2) = 529/3600
= 0.147 (approximately)
= 14.7% (approximately)

Conclusion
The probability that payment is given before notice is approximately 14.7%.
Comment
The reasoning in this case is open to criticism. In the case there was lack of direct
evidence. This is not the equivalent of all outcomes being equally likely which is the
precondition for classical probability.

Illustration 2: Collins Case

In People v Collins two assailants knocked down and robbed an elderly lady in Los
Angeles.129 Bystanders said the assailants were a caucasian female with blond hair tied
in a ponytail and a black male with a beard and moustache. They escaped in a yellow
motor car. The two defendants in the case fell within these broad descriptions.
However, the victim but could not conclusively identify them as the assailants. In an
attempt to prove their guilt, the prosecutor used a mathematics professor to estimate the
probability that this couple could or could not be the guilty party. At first instance both
defendants were convicted. On appeal, the conviction was overturned. The court
criticised the way in which probability had been used, because it failed to take into
account the probable dependencies between the characteristics, for example, bearded
men commonly sport moustaches. Other criticism by academics was that it was an
example of the prosecutor’s fallacy.130 However, there has also been some academic
support for the decision.131 Obviously though, the key question is whether the
inferences based on probability are sufficient for the prosecution to prove its case
beyond all reasonable doubt.

Common Errors
Introduction
Two common errors with induction consist of hasty generalisation and biased sample.

129 People v Collins, 438 P2d 33 (Cal 1968)

130 Finkelstein and Fairley (1970) and Kreith (1976)
131 Tribe (1971)
 Chapter 6 Induction 75
These need to be explained. In practice both can be, and often will be, avoided by
repeated observations made in varieties of circumstances.

Hasty Generalisation
Hasty generalisation is known by a variety of other labels - fallacy of insufficient
statistics, fallacy of insufficient sample, fallacy of the lonely fact, the law of small
numbers, hasty induction, and secundum quid?5 Hasty generalisation constitutes the
logical fallacy of reaching an inductive generalisation based on too little evidence. This
error is capture in the proverb formlated by Aristotle (384 BC-322 BC) and cited in
earlier discussion: ‘One swallow does not make a summer’. In the popular phrase it
involves leaping to a conclusion.

Biased Sample
A biased sample is one that is falsely taken to be typical of a population from which it
is drawn. This error can occur because the means of obtaining the sample attract one
particular type more than another. For example, phone-in polls on radio are susceptible
to this error because the respondents are self-selected. People who care most about an
issue are more likely to respond than others.

A famous example of this error occrurred in 1936, in the early days of opinion polling.
The American Literary Digest magazine performed a random telephone poll of 2
million people asking them their voting preferences in the forthcoming election. They
got it wrong because their sample was biased. At the time, only some households had
telephones, and telephone owners were not a good sample of the electorate as a
whole.132 133

Commentary
Commentary 6.1 Footnote 5
Integrating Specific Rules into the Tort of Negligence
In McHugh (1999) p 41 Justice McHugh cites three examples where the High Court of
Australia abolished some specific stand alone rules of liability by integrating them into
the general law of negligence. In Northern Sandblasting v Harris (1997) 188 CLR 313
the court did this with the liability of landlords, in Burnie Port Authority v General
Jones (1994) 179 CLR 520 the court so integrated the well established rule imposed on
adjoining landholders by Rylands v Fletcher (1868) LR 3 HL 330, and in Australian
Safeway Stores v Zaluzna (1987) 162 CLR 479 the court integrated the specific rules
determining occupier’s liability.

Gathering Disparate Rules Under an Overarching Principle

The gathering of particular and even disparate rules under an ‘overarching principle’
occurred in relation to the following legal doctrines:
(1) Estoppel in Commonwealth v Verwayen (1990) 170 CLR 394.
(2) Unconscionability in Louth v Diprose (1992) 175 CLR 621.

132 Commentary 6.7.

133 In contrast, a poll of only 50,000 citizens selected by George Gallup's organisation
successfully predicted the result, leading to the popularity of the Gallup poll.
 76 Chapter 6 Induction
(3) Unjust enrichment in David Securities v Commonwealth Bank of Australia
(1992) 175 CLR 353.
(4) Determination of the scope of the phrase ‘the course of employment’ in
Hatzimanolis v ANI Corporation (1992) 173 CLR 473.

Commentary 6.2 Footnote 9

(1) Citation. The citation for this passage from Viscount Simonds is Shaw v DPP
[1962] AC 220, 268-269, [1961] 2 All ER 446, 452-453 per Viscount Simonds.
(2) Abolition of the Offence. The offence of conspiracy to corrupt public morals was
judicially abolished in 1972 in Knuller v DPP [1972] 2 All ER 898.

Commentary 6.3 Footnote 11

In Baylis v Bishop of London [1913] 1 Ch 127, 137 Farwell LJ said this about the
creation of new common law rules: ‘It is in my opinion impossible for us now to create
any new doctrine of the common law’. By contrast Lord Denning said in Attorney
General v Butterworth [1963] 1 QB 696, 719 ‘that there is no authority to be found in
the books, but if this be so all I can say is that the sooner we make one the better’.

Commentary 6.4 Footnote 12

As noted above, the declaratory theory most easily applies to legal rules dealing with
rights as in tort, contract, criminal law and property.

Commentary 6.5 Footnote 13

The law was said to rest in gremio judicium, in the bosom of the judges. As illustrations
of this response, see Willis v Baddeley [1892] 2 QB 324, 326 per Lord Esher MR, and
Harnett v Fisher [1927] 1 KB 402, 424 per Lord Scrutton LJ.

Commentary 6.6 Footnote 15

To illustrate the eternal nature of values that natural law proposed, consider Donoghue
v Stevenson [1932] AC 562, 580 where the House of Lords, led by Lord Atkin, created
the tort of negligence. To do this he drew on the moral precept ‘that you are to love your
neighbour’; this becomes in law that ‘you must not injure your neighbour’. (This
quotation not only shows judicial consideration of the moral basis of negligence, it also
shows that this basis has limits. Otherwise all departures from the moral code would be
treated as tortious.)

Commentary 6.7 Footnote 35

The expression secundum quid is Latin for ‘according to something’. It is an
abbreviation for the maxim in which it is used ‘a dicto simpliciter ad dictum secundum
quid'. Literally this means ‘from a saying [taken too] simply to a saying according to
what [it really is]’ that is, according to its truth as holding only under special provisos.
In plainer language, one simple observation becomes a universal truth. This fallacy
occurs when a general proposition is used as the premise for an argument without
conceding the restrictions and qualifications that govern it; the point is that these
restrictions and qualifications potentially invalidate the argument.
Chapter 7
Abduction
Introduction
Nature
Uses
Commentary

Introduction
Charles Sanders Peirce (1839-1914), the distinguished American philosopher,
introduced abduction into modern logic. Abduction is also called abductive reasoning or
retroduction. It is the process of reasoning that seeks to find the best explanation for an
event. Abduction is used in a number of fields, some of the main ones being artificial
intelligence, fault diagnosis, belief revision, and automated planning. Our interest here
is with belief revisions since this is involved in proving facts in a court.

Nature
Introduction
Abduction starts with a collection of data such as a set of facts (or events, or an
observation or a given). This data will be unexpected or anomalous, such that accepted
explanations for it are lacking. Abduction then seeks to do two things. First, it generates
hypotheses or explanations134 135 136 for the facts or events. In some cases the
explanation is known so abduction is not required. For example, after it rains, the grass
becomes wet; therefore when the grass is wet an explanation is that there has been rain.
But where there is no established explanation abduction can assist. It seeks out or
guesses possible explanations. This is how abduction can be a source of discovery in
behavioural and physical science - by providing novel explanations. Abduction, it is
worth noting, is the only logical process that does this. It does this by a mixture of
inference and creativity.

Second, it determines the plausibility of each proposed explanation. By this means

abduction identifies the best explanation for the facts. Since no other explanation
accounts for the facts as well as the best, the best explanation is most probably correct.

Formal Statement
In formal terms abduction can be set out in a diagram that shows the four ingredients -
the observation, the explanation (as to what caused the thing that was observed), the
strength of the explanation and the best conclusion that one can draw. Here now is this
diagram:137

134 Commentary 7.1.

135 Commentary 7.2.
136 Commentary 7.3.
137 Commentary 7.4.
77
 78 Chapter 7 Abduction
Observation B has occurred
Explanation ‘A causes B’ is an explanation for the occurrence of B.
Strength of Explanation No other explanation explains the occurrence as well as
‘A causes B’.
Conclusion Therefore, ‘A causes B’ is probably correct.
Figure 7.1 Form of Abduction

Strength of the Argument

The strength of the argument from abduction rests on two matters. First, ‘A causes B’ is
an explanation for B. Second, ‘A causes B’ is the best available explanation for B
occurring. Clearly this second part of the reasoning depends on those who propound the
argument having made a competent and diligent search for all possible explanations. A
less than diligent or competent search leaves open the possibility that there is a better
undiscovered explanation. By contrast, a diligent or competent search substantially
lowers the possibility.

Ordering explanations according to how good they are is not an inherently precise
undertaking. Therefore, the claim that ‘A causes B’ is true is made stronger if it is
substantially and demonstrably superior to the next best alternative; if it is not, the claim
for the next best and perhaps other alternatives strengthens.

Tautology?
Abduction is almost if not actually tautological. The reason for taking the most
plausible or probable explanation is that as the situation is judged it has the most chance
of being right.

Uses
Abduction can potentially be used in any activity where it is necessary to find, even if
tentatively, a causal explanation or law. There are two uses in working with law:
(i) Fact finding - proof of facts - by a court is based on abductive reasoning.
(ii) Making and intepreting law rest on causal explanations as to the effects that a law
or an interpretation of a law might cause. Abduction can be used to uncover these causal
laws.

Proving Facts
In the ideal world, a court would seek to demonstrate that facts it finds are absolutely
true. Unfortunately this is not possible. Certainly in some cases it may be
overwhelmingly clear that facts are true, but in many cases there is some room for
doubt. Given this, common law legal systems do not insist on proof to the extent of
100% certain. Instead they adopt a style of reasoning that is fundamentally
probabilistic.138 There are two aspects to this:
(1) Abductive reasoning
(2) The precautionary principle, which is a principl of policy making that seeks to
avoid causing major, irreversible or irreparable harm when it can be avoided.
5
.

Commentary 7.5.
 Chapter 7 Abduction 79
Abductive Reasoning
In both civil and criminal cases courts require a certainty of at least 51% (and of course
in civil cases this is all that is required). This is based on abductive reasoning. Faced
with lack of certainty in fact finding, courts take the most plausible view of the facts.
The version of facts which is legally the ‘true’ version is the version that is most
probable. Any stanard of proof of 51%, or higher mus logically be the most probable.

Precautionary Principle
Since 51% is the minimum percentage to ensure that a version of facts is most probable
51% is all that is necessary for the purposes of abduction. In other words, 51% is pure
abduction. However, in some cases, most noticeably criminal trials, the standard of
proof is higher than 51%. In these circumstances of a standard of proof greater than
51%, the excess percentage needs some other justification. This can be found in the
precautionary principle. This is a special means of coping with uncertainty and it is
discussed in that context.139 140

Causal Laws
When making or interpreting law the first step involves identifying all of the options.
These are discussed later but an outline here will explain the significance of abduction
to the task of identifying the options.

When a legislature is contemplating enacting a statute on a subject it is faced with an

array of possible versions of the desired statute. Each will potentially cause different
effects which include both direct and indirect effects. If the range of possible statutes is
represented as Statutes 0-n the range of possible effects that these statutes cause consists
of Effects 0-n.141 These can be set out in a table in the following way:
Statutes Effects
Statute 0 Effect 0
Statute 1 Effect 1
Statute 2 Effect 2
Statute n Effect n
Figure 7.2 Statutes and Effects

In a similar manner the options for interpreting law, Meanings 1-n which cause Effects
1-n, can be represented in a table:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 7.3 Meanings and Effects

139 Chapter 15 Cause: Responding to Uncertainty

140 Chapter 30 Model for Forming Law
141 Commentary 7.6.
 80 Chapter 7 Abduction
In both cases there is causation:
(1) Statutes 0-n are predicted to cause Effects 0-n.
(2) Meanings 1-n are predicted to cause Effects 1-n.

It is, however, difficult to research how statutes and interpretation of statutes cause
effects.142 Therefore, in default of a full scientific investigation, abduction is a worthy
substitute even if second best.

This is the great benefit of abduction. It can provisionally establish a causal law that
explains how and why a statute or meaning causes an effect. It establishes this law on
the basis that it furnishes the most plausible explanation as to how and why the relevant
events occur.

Commentary
Commentary 7.1 Footnote 1
Sometimes, but only rarely, the expression ‘explanatory conclusions’ is used instead of
‘explanations’ to describe this part of the abductive process.

Commentary 7.2 Footnote 2

To illustrate the nature of abduction, John Josephson describes abduction as inference
to the best explanation. See ‘Inductive Inference in Reasoning and Perception’ at
www.cse.ohio-state.edu/lair/ Projects/Abduction/abduction.html.

Commentary 7.3 Footnote 3

Abduction involves two steps:
Task 1. Generation of hypotheses to explain facts or events.
Task 2. Determining the plausibility of each proposed explanation in order to see which
is best.

Sometimes the term abduction is used just to mean Task 1, generation of hypotheses or
explanations. However, its more common meaning, especially in philosophy and
computing, is to cover both, Task 1 and Task 2.

Commentary 7.4 Footnote 4

Figure 7.1 is adapted from the model described by John Josephson in ‘Inductive
Inference in Reasoning and Perception’. This is found on a website devoted to
abduction - www.cse.ohio-state.edu/lair/ Projects/Abduction/abduction.html

Commentary 7.5 Footnote 5

There are cases that have discussed the probabilistic nature of abduction:
(1) Victor v Nebraska 511 US 1 (1994) 14, 22 per O’Connor J. Ginsburg J
concurred at p 25 although Blackmun J dissented at p 36.
(2) Re Winship 397 US 358, 370 (1970) per Harlan J.

142 Chapters 13-15

 Chapter 7 Abduction 81
Commentary 7.6 Footnote 8
Figure 7.2 describes in abstract form a model that sets out the options before a
legislature that is about to enact a statute on a subject. In this model portrayed in Figure
7.1 Statute 0 is the option not to enact a statute. Effect 0 is the effect that not enacting a
statute will cause (and continue). Statute n is the last statute on the list, so ‘n’ is used
here in its standard mathematical sense.
Chapter 8
Analogy
Introduction
Nature
Making Common Law
Commentary

Introduction
Analogy derives from the classical Greek word avaloyia (analogia). In its original
usage this meant proportionality, especially in the mathematical sense. For this reason it
was sometimes translated to Latin as proportio. By this means analogy came to refer to
an identity of relation between any two ordered pairs, whether of mathematical nature
or not. Immanuel Kant (1724-1804) in his text Critique of Judgment held to this notion,
arguing that there can be exactly the same relation between two completely different
objects.143 144 Analogy involves reasoning from like to like. If items are alike in one way
they may be alike in another way. Analogy is used in making common law.

Nature
Analogy in modern usage is an inference from one particular to another. Thus, the
premises and conclusion with analogy involve particulars. Analogy involves a case- by-
case extension of a rule or relationship, reasoning from the particular to the
particular.145

Form
In formal terms analogical reasoning involves argument from known similarities
between two things to the existence of further similarities. That is, one thing is inferred
to be similar to another thing in a certain respect, on the basis of the known similarity
between the things in other respects. This can be expressed in a diagram:
Premise 1 X has attribute A
Premise 2 X is similar to Y
Conclusion Y has attribute A
Figure 8.1 Analogy
Strength
In general, the more X is like Y, or the more X is like Y with regard to the relevant
characteristics, the stronger the argument. Hence, the strength of the conclusion
depends on the relevance and number of similarities between X and Y. 146 As Sir
Edmund Coke expressed it the similarities need to be ‘natural resemblances - that is to
say real, substantial, and immersed in nature; not merely casual or superficial, much

143 Commentary 8.1.

144 Commentary 8.2.
145 Twining and Miers (1999) pp 351-358
146 Commentary 8.3.

82
 Chapter 8 Analogy 83
less superstitious or exceptional’.147 In other words, the natural resemblances need to be
close enough to make the reasoning good enough.

John Stuart Mill proposed a comprehensive scheme for comparing two items with a
view to formulating an analogy. In the explored regions of the items it is necessary to
identify and measure similarities and differences. What counts is ‘the extent of
ascertainable resemblances’ compared with ‘the amount of ascertained difference’. The
extent of these areas of explored differences must be compared with ‘the extent of
unexplored region of unascertained properties’.148 One can also add that the nature of
the similarities and differences need to be examined as well.

Sometimes analogy has to stand on its own because it is the best reasoning tool
available. However, where one is dealing with sciences where further inquiry and
experimentation is possible the use of analogy is limited. It is ‘a mere guidepost
[although a very useful one], pointing out the direction in which more rigorous
investigations should be prosecuted’. These further investigations involve the use of the
hypothetico-deductive experimental method.

Relation to Induction
Induction commences with an entity that is labelled X. Whenever someone observes X,
X has property A. Therefore, in all instances X has property A. By this reasoning
process induction has established that all instances of X have a common property A.
This is set out in a table in the following way:
Premise In all observed instances X has property A.
Conclusion In all instances X has property A.
Figure 8.2 Illustration of Induction

Abduction observes the similarity between X and Y. There are two premises and a
conclusion:
(1) Premise 1. X has property A.
(2) Premise 2. X and Y are similar.
(3) Conclusion. Y has property A. This means that both X and Y have property A.
This is set out in the following diagram:
Premise 1 X has property A
Premise 2 X is similar to Y
Conclusion Both X and Y have property A
Figure 8.3 Analogy and Induction

This analysis reveals how induction and analogy are linked. Induction is able to
establish that all instances of X have a common property. Analogy is able to argue
5
.
5.
7.

Sir Edmund Coke Nov. Org II 27

Mill (1843) Book III, Chapter
XX Mill (1843) p 365
 84 Chapter 8 Analogy
from this that when Y is similar to X, all instances of Y have this common property as
well. In this way analogy is a means of extending the reach of inductive reasoning.

Illustration
Analogy or some similar type of reasoning is commonly used in ordinary communication.
Some examples consist of comparisons such as metaphors and similes, allegories and
common place phrases such as ‘so on and so forth’, ‘and the like’ and ‘as if. These
incorporate analogical reasoning.

A poignant historical illustration comes from the song The Battle Hymn of the Republic.
The lines ‘As he died to make men holy, Let us die to make men free’ are pure analogy.149
Another example is the saying of Confucius: ‘I was angry because I had no shoes then I
met a man who had no feet’.

Some proverbs involve analogy in one way or another. (i) There is a hint of analogy in
the proverb: ‘The first time it is a favour, the second time it is a right’ because repetition
echoes the notion of law as a general rule. (ii) The proverb ‘if you are in for a penny, you
should be in for a pound’ is explicitly analogical. (iii) Two proverbs are based on
eschewing analogical reasoning. One is ‘penny wise, pound foolish’. The other is ‘two is
company, three is a crowd’. This false form of analogy, based on the notion that more is
better, involves the fallacy of composition. The corrective attitude is expressed in another
popular saying, namely the paradoxical aphorism ‘more is less’.

Making Common Law

Reasoning by Analogy
Clearly analogy is appropriate in law for reasoning on a case-by-case basis, which is the
way common law functions, in contrast to introducing sweeping change. This happens in
the following manner.

When deciding a case under common law, ideally a court can find and apply a prior case
that has dealt with the same issue as is now before it.150 Such a case was said to be in pari
materia, that is, on the same facts. If there was such a case, the court could apply it
deductively. This case governs situation X, situation X is now before us so this case
applies. This is precedent in pure form. It is a deductive form of reasoning.

However, it was always possible that the court would be faced with a precedent that
appeared partly relevant but did not fall squarely on the facts of the case before it. It was
similar but not identical to the facts before the court. In the technical phrase the case was
in consimili casu (in a similar style) to the precedent. Here the court has a choice between
two options.

149 Julia W Howe The Battle Hymn of the Republic (1861). Commentary 8.4.
150 Courts, it might be noted, have sometimes reasoned by analogy from statute - see
Gunasekara (1993).
 Chapter 8 Analogy 85
First, the court could disregard the precedent (and hence the value underlying it) as
inapplicable. In this case the court has to make a new rule.

Second, the court could delve into the precedent to detect an underlying value and
apply this to the case before it. This in fact was a common way of proceeding as courts
adapted old precedents to new situations. Reason, as the common lawyers saw it,
151

provided a unified system of values, not a random collection of rules. Therefore

152 153 154

when faced with a new situation a court could find the relevant value by looking at a
rule which operated in similar circumstances to the circumstances now before it. When
the court found this rule, it dug behind the rule to extract the underlying value or moral
reasoning (as distinct from the bare text of the legal rule) and used this, perhaps with
appropriate modification for the different circumstances, to formulate a rule for the case
before it. In this way, when a case arose that did not exactly fit a rule, or for which there
was no rule provided, there could be a mechanism for constructing a rule.

This invoked the maxim in consimili casu, consimile debet esse remedium meaning
12
that similar remedies should apply in similar cases. In other words, the ‘interests
recognised by the existing body of principles are similar to, but not identical with, the
13
interests now before the court’. Consequently the court extended the established rule to
the new but similar case. As Bracton expressed it, the court proceeded from similar
facts to similar rules, that is, similibus ad similia.155

This process was possible because cases were not mere ‘precedent’ but enshrined a
‘[moral] principle’. In this sense, as natural law doctrine proclaimed, common law
156

principles were ‘simply awaiting discovery’. By this means, common law rules
157

‘judicially evolved’ in such a way that they ‘contain[ed] within themselves their fair
logical result’ so that legal rules had their own inner logic. This gave common law
158 159

rules an ‘inherent capacity for extension by logical processes’ and analogy was the
160 161 162

required form of logic.

All this created an ‘evolutionary process’ that brought common law principles into 20 21
existence. Cases built up a rule bit by bit. Values on which rules were based were

151 Commentary 8.5.

152 Of course, if this assumption is true, the real nature of the reasoning process is
deduction.
153 Commentary 8.6.
154 McHugh (1999) p 41
155 Bracton on the Laws and Customs of England (Thorne edition) Vol II, p 21
156 Allen (1964) p 307
157 Mason (2003) in Sheard (2003) p 1
158 Dicey (1908) p 364, cited by Kitto (1992) p 794. See also X v Minister for Immigration
(1999) 164 ALR 583 and Rubin (1996).
159 Oceanic Sunline Shipping v Fay (1988) 165 CLR 197, 252 per Deane J. As His Honour
pointed out at p 252 this explains why 'common law is used as a source of argument'.
160 Kitto (1992) p 794
161 Kitto (1992) p 794
162 Commentary 8.7.
 86 Chapter 8 Analogy
22
‘latent in the law’ and courts invoke them. Judges made a rule for a new situation by
23
extrapolation or ‘analogy’ with decided cases. By proceeding in this way a court was
not using a ‘novel’ principle, but instead a principle that was ‘consonant with the
24
whole doctrine of law and justice’. Courts, in other words, sought to ‘find the law’
25
not ‘to manufacture it’.

Illustrations
When courts argue by analogy they can proceed in either of two ways. The court can
refer directly to the values involved. Or the court can refer to rules that impound or are
based on values.

Arguing from Values

A hypothetical legal illustration based directly on values would be arguing against
cruelty to animals. If we consider that it is wrong to inflict unnecessary pain on a
human, it is also wrong to inflict it upon an animal on the basis that they can also feel
pain.

A real life illustration occurred in Donoghue v Stevenson where the House of Lords
argued from a moral rule to a legal rule in establishing the tort of negligence. In arguing
that there should be a general tort of negligence Lord Atkin said that the ‘[moral] rule
that you are to love your neighbour becomes in law, you must not injure your
neighbour’. 163 164 165 166 167 168 169 170

Arguing from Rules

In the most obvious case, courts use analogy based on rules by arguing from one judge
made rule (common law or equity) to another. In the current age, however, where
statute law dominates a court can argue from statute to a judge made rule because
27
statutes reflect the popular will. As Justice Kirby put the position, ‘[A]ll equitable and
legal principles must today operate in a universe dominated by the star of statute.
It would be surprising if the gravitational pull of statute, felt everywhere else in the
28
law, did not penetrate into the expression and re-expression of non-statutory rules’. The
spirit behind using statutes in this way was stated by Lord Diplock in Warnink:
essentially when parliament enacts legislation it is taken to express its views as to
29
‘what the public interest demands in a particular field of law’. This view becomes
clearer when it is reflected in a ‘steady trend in legislation’ over a period of years. In
these circumstances ‘development of the common law in that part of the same field

163 Webber (1995) p 9.

164 Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J. Commentary 8.8.
165 Allen (1964) p 307
166 Allen (1964) p 308
167 Donoghue v Stevenson [1932] AC 562, 580
168 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [170] per Kirby J. Commentary 8.9.
169 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [170]. Commentary 8.10.
170 Warnink v Townend [1979] AC 731, 743
 Chapter 8 Analogy 87
which has been left to it ought to proceed upon a parallel rather than a diverging
course’. In Adelaide Steamship the court put the position in even stronger terms by
 88 Chapter 8 Analogy
asserting that a statute had ‘created an entirely new setting to which the common law
must now adapt itself’.171

Fiduciary Relationships
The High Court of Australia invoked analogical reasoning to determine whether a
relationship was fiduciary in reasoning from established categories of relationships
31
that were inherently fiduciary to new cases. Reasoning in this way the court
172 173 174

decided that the relationships between a firm of accountants and a client, and between a
32
medical practitioner and their patient, were not inherently fiduciary.

Confidential Information
Some background in trust law is necessary to explain the use of analogy in the case of
confidential information. It is clear law that a trustee is in a fiduciary relationship as
regards a beneficiary of the trust. It is also clear that if a trustee uses trust property in a
manner that is in breach of their obligations as trustee, they are liable to the beneficiary
for any loss.

In Farah Constructions the dispute concerned the misuse of confidential information

by a fiduciary. There were two possible arguments that would impose liability on the
33
misuser. First, confidential information constituted property. The court rejected this
argument. Second, the person who misused the information was in an analogous
175

position to a trustee so the court should create a remedy similar to breach of trust as a
way of compensating the victim. This argument was rejected also.
176 177

Contributory Negligence and Contributing Fault

Courts have reasoned by analogy when considering the application of contributory
negligence to equitable remedies. Contributory negligence had been developed as a
common law defence to the tort of negligence. In its initial common law form the
doctrine was an absolute defence to negligence. However, in most jurisdictions
legislation has now reduced contributory negligence to the status of partial defence by
providing for apportionment. A plaintiff’s damages are reduced to the extent that their
negligence contributed to their injury. So, if a plaintiff contributed by 25% to their
injury their damages would consists of 75% (100%-25%) of their loss.

Given that common law had invoked the concept of contributory negligence the court
had to consider whether by analogy it applied to equitable remedies, where it was

171 Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360, 373

172 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [136]
173 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [121-123]
174 There was support for this the view by Jacobs P in DPC Estates Pty Ltd v Grey and
Consul Development Pty Ltd [1974] 1 NSWLR 443, 460.
175 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22, [120], (2007) 230 CLR
89
176 Commentary 8.11.
177 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 [120], [195], (2007) 230
CLR 89
 Chapter 8 Analogy 89
37
labelled ‘contributing fault’. The court held that in the case of an action for breach of
duty by a trustee or other fiduciary this innovation was unacceptable. One of the major
stopping points in applying contributing fault was that the comparison that underlay the
reasoning process did not hold up sufficiently. Negligence is founded on a duty to take
reasonable care for all others when we can see that failure to do so is likely to cause
harm. In contrast a fiduciary relationship involves more. The person in whom the trust
and confidence is reposed has a duty ‘of undivided and unremitting loyalty’ as they
represent the interests of the beneficiary who reposes the trust.178 179 Because the
beneficiary reposes this trust and confidence, the relationship is at arm’s length.
Whereas negligence and contributory negligence function on the basis that both
plaintiff and defendant are expected to take reasonable care for the plaintiff’s safety,
fiduciary and trust relationships, as their labels respectively imply, involve the would be
plaintiff putting themselves in the care of the trustee or fiduciary. Consequently, there is
no basis in equity for the notion that ‘a beneficiary is bound to protect himself against
his fiduciary’.180 Given this, there is no rational basis for inventing in the law of equity
a concept of contributing fault by analogy with the common law doctrine of
contributory negligence. 181

Legal Professional Privilege

Sections 118 and 119 of the Evidence Act 1977 (Qld) established a dominant purpose
test for claims of legal professional privilege. A client of a lawyer can object
successfully to an attempt by a person to adduce in evidence a document or a
communication if the dominant purpose for which the document or communication was
prepared or made was to provide the client with professional legal advice (s118) or
legal services (s119). A party argued to the court that in Queensland, at least, the
common law rules for legal professional privilege should be modified to incorporate the
statutory definitions of privilege in the Evidence Act. The High Court rejected the
argument on the basis that to change the common law for the whole of Australia it
needed widespread if not Australia wide legislative endorsement of the statutory rule
that was to be adopted as the common law rule. 182

Miscellaneous Examples
Here are some further examples of analogy:
(1) Exemplary Damages. In England and Canada claims for exemplary damages do
183 184

not need to be pleaded. In relation to this, the High Court of Australia said that ‘by
analogy’ the same rules should apply to ‘aggravated damages’ because these also fall

178 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, par 167 per Kirby J
179 Gummow (1989) 57, 86 (footnotes omitted). Commentary 8.12.
180 Handley (1992) 113, 127. This was cited by Justice Kirby in Pilmer v Duke Group Ltd
(In Liq) [2001] HCA 31 par [172].
181 Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31 167, 169, 171, (2001) 207 CLR 165
182 Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67 [25];
(1999) 201 CLR 49
183 Broome v Cassell & Co [1972] UKHL 3; [1972] AC 1027, 1083
184 Starkman v Delhi Court Ltd (1961) 28 DLR (2d) 269, 274; Paragon Properties Ltd v
Magna Envestments Ltd (1972) 24 DLR (3d) 156, 163-164
 90 Chapter 8 Analogy
within a claim for compensatory damages that is expressed in general terms.185
Moreover, there is some kinship between exemplary damages and aggravated damages’
since each represents a payment over and above ordinary damages.
(2) Restitution. The old law was that a court would award restitution for a mistake of
fact but not a mistake of law. In David Securities the court extended the principles of
restitution so that it applied beyond cases of mistake of fact to circumstances where
there has been a mistake of law.186
(3) Liability of a Builder. In Bryan the court extended a house builder’s liability for an
economic loss arising from inadequate footings so that it covered not just the initial
purchaser of the house, but subsequent purchasers as well.187 188
(4) Criminal Conspiracy. The common law of criminal conspiracy was developed or
47
derived from statutes enacted in the 13 th century.
(5) Adoption of Procedures. This involves the case where three things occur - (a) a suit
in equity corresponds with an action at law; (b) there are statutory procedures for the
action at law; and (c) there are no procedures laid down for the equity suit. In these
circumstances the court of equity should adopt the statutory rule as its own rule of
procedure.189
(6) Statutes of Limitations. This is arguably a special case of adoption of procedures.
Commonly each jurisdiction will enact statutory provisions, typically referred to as
Statutes of Limitations, which impose time limits on the bringing of an action.
Generally these do not apply to equitable remedies. However, some courts have adopted
these time limits by analogy as common law rules that apply to equitable remedies.190
This argument is strongest when the remedy in equity corresponds to the remedy at law
from which it adopts the limitation period.
(7) Action for Wrongful Death. Under English common law, there was no action for
wrongful death by relatives of the deceased.191 192 This was the situation in the United
States at least in relation to maritime law because of a case decided in 1886, The
Harrisburg51 InMoragne in 1970 the United States Supreme Court was dealing with the
question of an action for wrongful death in maritime law. By this time every State of
the Union had enacted a statute creating an action for wrongful death. This State
legislation did not apply to the case in hand. Nevertheless, in the light of this legislation
being enacted in every state the Supreme Court decided that the federal common law
should adapt by analogy to the position established in the various States. On this basis
the court altered the common law so that it provided for wrongful death.193

185 Gray v Motor Accident Commission [1998] HCA 70 [33], [83], [128]-[130]; (1998) 196
CLR 1, 12-13, 27, 45-47
186 David Securities v Commonwealth Bank of Australia (1992) 175 CLR 353. See McHugh
(1999).
187 Bryan v Maloney (1995) 182 CLR 609. See McHugh (1999).
188 Peters v The Queen [1998] HCA 7; (1998) 192 CLR 493, 513-515, per McHugh J
189 Commentary 8.13.
190 Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91, 100, per Dixon J
191 Baker v Boulton (1808) 1 Camp 493; 170 ER 1033. Commentary 8.14.
192 The Harrisburg 119 US 199; 7 SCt 140; 30 Led (1886). The case decided that there was
no wrongful death as part of maritime law.
193 Moragne v States Marine Lines Inc 398 US 375 (1970)
 Chapter 8 Analogy 91
While common law can develop on analogy with statute law it can also develop in
reaction to its limitations. Following are two examples:
(1) Enforcing Unenforceable Contracts. The Statute of Frauds 1677 (UK) (29 Car 2
c3) rendered a number of contracts unenforceable unless they were evidenced in
writing. In response to this over several centuries courts developed the common law
doctrine of part performance, which created common law exceptions to a statutory rule.
These rules allowed specific performance of a contract that on its face the Statute of
Frauds renders unenforceable.194
(2) Enforcing Illegal Statutes. Frequently a statute will make a contact illegal in
some way. For example it may be illegal to make the contract or illegal to perform it in
a certain way. Generally an illegal statute is unenforceable. Courts, however, have
modified this in some circumstances. Generally they will ‘not refuse to enforce rights
arising under a contract or trust merely because the trust or contract is associated with
or in furtherance of a purpose rendered illegal by a statute which applied to the relevant
parties’.195

Commentary
Commentary 8.1 Footnote 1
In the simple case of analogy there is exactly the same relation between two completely
different sets of objects. Interestingly, this simple form of analogy is used in United
States-based Scholastic Aptitude Tests, which include ‘analogy questions’ in the form
‘A is to B as C is to what?’ For example, ‘Hand is to palm as foot is to ___________?’

An interesting observation can be made about this. Most people will intuitively know
the analogy and thus know that the answer to this question is ‘sole.’ However, many
would have difficulty performing the necessary abstraction to describe the common
relationship between hand and palm on the one hand and foot and sole on the other.
There is good scientifc reason for this. Analogy and abstraction are different cognitive
processes, and analogy is often an easier one.

Commentary 8.2 Footnote 2

Although our concern is the use of analogy in legal reasoning, it is worth noting that
analogy plays a significant role in other fields, namely problem solving, decision
making, perception, memory, creativity, emotion, explanation and communication. It
lies behind basic tasks such as the identification of places, objects and people, for
example in face perception and facial recognition systems.

Commentary 8.3 Footnote 4

The text states the proposition that the strength of a conclusion based on reasoning by
analogy depends on the relevance and number of similarities between X and Y. This is

194 Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67, [19];
(1999) 201 CLR 49
195 Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67, [19];
(1999) 201 CLR 49. See, for example, Nelson v Nelson (1995) 184 CLR 538 and Fitzgerald v
FJ Leonhardt Pty Ltd (1997) 189 CLR 215.
 92 Chapter 8 Analogy
echoed in a statement by McHugh (1999) p 45, that a ‘judge who reasons by analogy
has to have an [a priori] theory that explains why the facts of the instant case are
similar or dissimilar to the facts of the precedent cases’.

Commentary 8.4 Footnote 8

The original version of the song The Battle Hymn of the Republic (1861) contained the
lines: ‘As he [Jesus] died to make men holy, Let us die to make men free’. These lines
are pure analogy. Later this line was altered to read: ‘As he died to make men holy, Let
us live [not die] to make men free’.

Commentary 8.5 Footnote 10

In reasoning with common law analogy is a common way of proceeding as courts adapt
older precedents to new situations. In Gray v Motor Accident Commission
[1998] HCA 70, par [81] the High Court of Australia indorsed this method of
reasoning. The court said that until a precedent was ‘displaced by legislation or
overruled’ it ‘must be applied to the same or analogous circumstances’. McHugh
(1999) cites two illustrations of this reasoning. One is David Securities v
Commonwealth Bank of Australia (1992) 175 CLR 353 where the court extended the
principles of restitution beyond cases of mistake of fact to circumstances where there
has been a mistake of law. The other is Bryan v Maloney (1995) 182 CLR 609 where
the court extended a house builder’s liability for an economic loss arising from
inadequate footings so that it covered not just the initial purchaser of the house, but
subsequent purchasers as well.

Commentary 8.6 Footnote 12

Another maxim of similar ilk is de similibus idem est judicium. This says that like cases
should be treated alike in law.

Commentary 8.7 Footnote 21

In Sutherland Shire Council v Heyman (1985) 60 ALR 1, 43-44 Brennan J indorsed
this process of building up a rule bit by bit. His Honour said: ‘It is preferable, in my
view, that the law should develop novel categories of negligence incrementally and by
analogy with established categories’ in preference to formulating some all
encompassing rule and utilising this to decide the case.

Commentary 8.8 Footnote 23

For judicial commentary on judges’ arguing by analogy see McLoughlin v O ’Brian
[1983] 1 AC 410, 429-430 per Lord Scarman. See also Kitto (1992) p 794, Mason in
Sheard (2003) pp 4 and 5, McLachlin in Sheard (2003) p 20 and McHugh (1999). There
is, however, some debate about the value of reasoning by analogy - Sunstein (1993) is
in favour of it while Westen (1982) and Schauer (1991) are against it.

Commentary 8.9 Footnote 27

The text makes the proposition that in the current age, when statute law dominates over
common law, a court can argue from statute to a judge-made rule because statutes
 Chapter 8 Analogy 93
reflect the popular will. This idea was suggested in Pound (1908). See also Atiyah
(1985), which was the text of the Chorley Lecture 1984.

Commentary 8.10 Footnote 28

Justice Michael Kirby argued in Pilmer v Duke Group Ltd [2001] HCA 31, [170] that,
in an age dominated by statute law that was founded on widely accepted values, it was
appropriate to utilise these values in making and interpreting common law by reasoning
by analogy. His Honours cited several cases in support of this proposition - Gray v
Motor Accident Commission [1998] HCA 70; (1998) 196 CLR 1, 12-13 [33], 27 [83],
45-47 [128]-[130]; Esso Australia Resources Ltd v Federal Commissioner of Taxation
[1999] HCA 67; (1999) 201 CLR 49, 61-62 [23], 89-90 [105]. See also Gunasekara
(1993).

Commentary 8.11 Footnote 35

In Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22, [120], (2007) 230
CLR 89 counsel argued that the person who misused information was in an analogous
position to a trustee so the court should create a remedy similar to breach of trust as a
way of compensating the victim. In support of this argument counsel relied on a brief
passage in DPC Estates Pty Ltd v Grey and Consul Development [1974] 1 NSWLR
443, 470 per Hutley JA. This passage tentatively suggested that ‘the position of a third
party obtaining from a fiduciary advantages in the form of information and assistance
should be analogous to that of a third party obtaining property from a fiduciary’. In the
outcome, though, the court rejected this argument.

Commentary 8.12 Footnote 38

Gummow (1989) 57, 86 made a relevant distinction between negligence and breach of
fiduciary duty in response to and rejection of an argument by analogy. Negligence is
founded on a duty to take reasonable care for all others when we can see that failure to
do so is likely to cause harm. In contrast to this, a fiduciary relationship involves more.
The person in whom the trust and confidence is reposed has a duty ‘of undivided and
unremitting loyalty’ as they represent the interests of the beneficiary who reposes the
trust. Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449, 489 referred to this
analysis by Gummow, which was also cited by Justice Kirby in Pilmer v Duke Group
Ltd [2001] HCA 31 [171].

Commentary 8.13 Footnote 48

The text refers to the situation where three things occur:
(1) A suit in equity corresponds with an action at law.
(2) There are statutory procedures for the action at law.
(3) There are no procedures laid down for the equity suit.
In these circumstances the court of equity should adopt the statutory rule as its own rule
of procedure. Cases that support this proposition are Knox v Gye (1872) LR 5 HL 656;
Paragon Finance plc v DB Thakerar [1999] 1 All ER 400, Companhia de Seguros
Imperio v Heath (REBX) Ltd [2001] 1 WLR 112; Coulthard v Disco Mix Club
[2000] 1 WLR 707.
 94 Chapter 8 Analogy
Commentary 8.14 Footnote 50
Under English common law, there was no action for wrongful death by relatives of the
deceased - see Baker v Boulton (1808) 1 Camp 493; 170 ER 1033. This common law
rule was abolished in England by the enactment of a statute, the Fatal Accidents Act
1846. This is commonly called Lord Campbells Act after the promoter of the statute.
Chapter 9 Probability
Introduction Measuring Probability Applying
Probability Assigning Probability Deriving
Probability Fallacies in Probability
Commentary

I feel like a fugitive from the law of averages.1

Introduction
Probability
Probability caters for uncertainty. Probability is widely used in the human sciences
such as management and psychology and also the physical sciences. As Professor Alan
Hajek neatly puts it, ‘[probability is virtually ubiquitous’ since it is used in so many
disciplines of both academic and practical importance. It is, therefore, relevant to any
study of law from the human sciences perspective.

Commonly but loosely people treat probability as referring to the likelihood of an event
occurring. In fact, this is a fallacy, called the mind projection fallacy. It is a fallacy that
probability is ‘a property of objects and processes in the real world’. Probability is a
state of mind, not the state of the world. It is a measure of the strength of our belief that
an event will occur or has occurred.4 There are two aspects to this. One is a descriptive
function. It describes how certain we are about the truth of something. A second
function of probability is derivative. When one or more probabilities are known and
quantified further probabilities can be derived by rules based on deduction.

This chapter uses the standard symbols that are utilised in the mathematics of
probability. These are set out in the preliminary pages to this book under the heading
‘Labels’.

Uses
Introduction
There are two uses of probability which are of fundamental importance to working
with law. One arises in using policy to make law, while the other is located in the task
of finding facts. 196 197 198 199

196 Bill Maudlin Up Front (1946) p 39

197 Alan Hajek 'Interpretations of Probability'
198 Robertson and Vignaux (1993) p 460
199 Robertson and Vignaux (1993) p 462

95
 96 Chapter 9 Probability

Making Law
Probability is deployed in the process of making legislative policy. Any law is
essentially trying to change the future. Consequently as part of the process of making
law it is necessary to know what effects a proposed law is likely to cause. This invokes
probability in two ways.

First, to identify the effects that a law will cause, it is necessary to invoke laws of
behavioural science. These are derived using an experimental process that frequently
relies on statistical inferences. Statistical inferences are based on probability.

Second, even if a causal law suggests that a proposed statute might cause a particular
effect, there may be some uncertainty. Since probability is a means of encapsulating
uncertainty surrounding future events, it can be used to factor this uncertainty into the
tasks of making and interpreting a law.200

Finding Facts
Probability is used by courts in the process of finding facts as a means of coping with
the uncertainty that is so often inherent in the task. Probability is a way of encapsulating
and working with uncertain knowledge.

There are two strands to this uncertainty.

First, in many cases, and arguably in all cases, it is not possible for a decision maker
such as a court to be absolutely convinced as to the truth of past events.

Second, this inherent uncertainty is legally recognised and captured in the rules
depicting the standard of proof (or the standard of truth as it is also called in this
discussion). Thus, for a party to win their case the court does not have to be absolutely
convinced that it is true beyond any doubt whatsoever. Instead a party has to prove their
case according to the level or degree of certainty prescribed by the legal rules for the
standard of proof.

While each jurisdiction can create its own standard of proof by statute, most
jurisdictions use the common law standards:
(1) Civil Case. For a civil case the common law standard of proof requires proof on
the balance of probabilities. This is a standard of 51%.
(2) Criminal Case. For a criminal case the common law standard of proof is proof
beyond all reasonable doubt. This does not translate directly into a percentage as does
the civil standard. However, a reasonable measure would be 99%.

Because these rules reject absolute truth in favour of a defined standard of truth,
probability is fundamental to the task of finding facts. This is why the ‘logical rules for
thinking about facts in legal cases are those of probability’.201
5
.
6.
Commentary 9.1.
Robertson and Vignaux (1993) p 478
 Chapter 9 Probability 97

To explain this more it is necessary outline the task of fact finding. It is explained here
by a model constituted by four steps:
# Step 1. Starting Point
# Step 2. Versions of Truth
# Step 3. Probability of Truth
# Step 4. Stopping Point.202

Step 1. Starting Point: Burden of Proof

A good device for understanding proof of facts is to envisage a scale of proof ranging
from 0% to 100%. For each party, this scale has a starting point that determines where
they are located at the commencement of the case. Under the rules determining the
burden or onus of proof, the initiating party (most obviously a plaintiff or prosecutor)
has the initial onus of adducing evidence to prove their case. Consequently, their
starting point is 0% on the scale. By contrast, the starting point for the responding party
such as a defendant is 100%. In a criminal case they are presumed innocent and in a
civil case they are presumed not liable. Consequently, the initiating party has it all
before them.

Step 2. Versions of Truth

Step 2 involves each party presenting to the court their version of the facts. At the same
time they have to make a case to the court that this version of the facts is true. The
initiating party must at least present a prima facie case whereby they furnish evidence
that is capable of proving each material fact, which is a fact that satisfies an element of
the cause of action. If the initiating party cannot do this they cannot prove their case.

Step 3. Probability of Truth

Step 3 involves the court assessing the probability that each version of facts is true. 203
This sets up Step 4 where the court compares the probability it has assessed in Step 3
with the probability required by the operative standard of proof.

Ideally the court would estimate this probability by giving it a numerical measure.
However, in most undertakings there are often problems in putting a figure on a
probability with any sort of confidence. With fact-finding there are additional problems
because considerations ‘for and against particular findings of fact’ generally involve ‘a
global assessment of a whole complex array of matters’.204 This has led, not
surprisingly, to the view that it is misleading to try to give these probabilities
‘numerical expression’.205

In most cases putting a numerical measure on probability is an estimate at best and

probably no more than a guess. Nevertheless, there are three advantages at least in

202 Commentary 9.2.

203 Commentary 9.3.
204 Hodgson (1995B) p 738
205 Hodgson (1995B) p 738
 98 Chapter 9 Probability

conceiving probability in numerical terms rather than using mere verbal formulas.
These are clarity, comparison and ease of working with probability.206

First, using numbers makes the position much clearer. A probability of 75% is more
telling than being ‘fairly certain’. Referring to numerical probabilities is a simple way
of explaining the uncertainty of fact finding and the reasoning that underlies the task.

Second, it makes for easier comparison. We can see the large gap between a probability
of 95% and 5%, and how little difference there is between a probability of 50% and a
probability of 51%.

Third, and this is the major reason, many of the processes in finding facts involve using
specific probabilities to calculate a further probability and using this further probability
to continue the process. Obviously if probability is not expressed in numbers it is not
possible to do these calculations. Of course it would be possible to apply the logic of
the calculations to verbal expressions of probability, but this would be clumsy,
especially compared to the calculations that perform the process so easily.

Step 4. Finishing Point: Standard of Truth

When Step 3 has been completed, the court has estimated, either in figures or words,
the probability that each version of the fact it true. In Step 4 the party compares this
estimated probability (the finishing point of the prosecutor’s or plaintiff’s case) with the
probability required by the relevant standard of truth.

Lawyers refer to this as the standard of proof. When this is done the outcome is simply
stated. If the party who must meet the standard does so they win the case. If this party
does not meet the standard the other party wins.

Function of Probability
It is common occurrence that we humans are uncertain about something such as the
happening of some event in the future. In these cases probability can be invoked as a
means of catering for this uncertainty. To explain uncertainty, however, it is first
necessary to consider the basis of certainty.

Certainty
Where a person is certain that they know something they believe that it is true with a
probability of 100%. They are certain about the truth when either of two things happen.
They have observed something, such as X or Y, for themselves.

Or, they have observed one thing (about which they are then certain), and they are also
certain about a behavioural law which takes either of two forms:
(1) Another thing will happen in consequence of the first. This can be written in the
form: ‘When X occurs Y will (later) occur’.

206 Commentary 9.4.

 Chapter 9 Probability 99

(2) Another thing has happened to cause the first. This can be written in the form:
‘When Y has occurred X has occurred beforehand because X is the sole cause of Y’.

Uncertainty
In other cases a person is not certain about the truth. Why are they not certain? They
are not certain for either or both of two reasons:
(1) They are not certain about X or Y because they have not observed either of these
for themselves, or they have observed but have not observed them properly.
(2) They are not certain about the truth of a behavioural law which enables them to
say either of two things. (a) When X occurs Y will (later) occur. (b) When Y has
occurred X has occurred beforehand because X is the sole cause of Y.
In these cases when they are not certain about X or Y they believe that X or Y is true
with a probability of something less than 100%, that is, something falling between 0%
and 100%.

This analysis reveals the fundamental point. We cannot predict the future or know the
past with certainty when we do not have perfect information. In the absence of perfect
information it is necessary to resort to probability. If we cannot know something for
certain the next best thing is to know, as a plausible estimate, the chance of it occurring.
For example, X is a disease and we believe, following research, that it will occur in
about 37% of the population.

Using probability is reassuring because it reduces uncertainty. Reducing uncertainty is

an advantage for at least two reasons. First, uncertainty makes most of us anxious.
Second, individuals, institutions and society can make plans for the future. For
example, if a disease will occur in approximately 37% of the population the health
system can allocate resources in advance to treat and prevent it.

A statement of probability may go in either of two directions. It may use an event to

predict the probability of a second future event. This probability is based on the
behavioural law in the form ‘X causes Y’. Probability may also be used to determine
whether a past event might have happened. This can be done, for example, when there
is a causal law in the form ‘X is the sole cause of Y’. When Y is observed to have
happened, this causal law give us a basis for believing that X happened, and happened
at an earlier time.

Uncertainty with Probability

Probability came to prominence in the 17th century to explain games of chance.
However, it was not until 1933 that a major attempt was made to explain it by
postulating axioms on which probability properly should be built. This was done by
Andre Nilolaevich Kolmogorov (1903-1987) in his classical text Foundations of the
Theory of Probability. These axioms put probability on a firm footing.

Notwithstanding this, the philosophical foundations of probability are still subject to

major debate. This uncertainty permeates discussion and literature on probability. Yet
 100 Chapter 9 Probability

for all this, the use of probability in the various sciences continues unabated. It is
commonly used in both the physical and human sciences.

Given the purpose of this text it is not feasible to delve into any of the philosophical
debate on probability. Instead, discussion here is confined to an attempt to explain in a
clear a way as possible from a practical perspective how and why probability is
deployed in scientific inquiry.

Measuring Probability
Introduction
Probability is abbreviated as ‘P’. It ranges between absolute certainty that an event will
occur and absolute certainty that it will not occur. Probability can be measured by
verbal formulas or numerical formulas. Numerical formulas can be decimals,
percentages or fractions.

Verbal Formulas
Probability can be measured, in a rough sense, by verbal formulas. We can and do use
12
phrases such as ‘well founded,’ ‘fairly certain,’ ‘most likely,’ ‘with a strong chance,’
‘reasonably likely,’ ‘beyond all reasonable doubt’ (the standard of proof in criminal
13

cases), ‘glaringly improbable’ and so on, to indicate the strength of our belief.

Numerical Formulas
More commonly, however, probability is measured with numbers. This has two
advantages: numbers can be compared, and numbers can be used to calculate other
related or derived probabilities. There is, however, an underlying disadvantage, because
measuring probability with numbers is not an exact process when the numbers are just
estimates, which is often the case. Hence the mathematical processes used in deriving
and comparing probabilities can convey a false sense of certainty.

Three scales are commonly used when probability is measured with numbers, although
they amount to the same thing. These consist of decimals with a range between nought
and one, percentages with a range between nought and 100, and fractions.

Decimals
Decimals utilise a range between nought (0) and one (1), which is labelled a decimal
measure because it entails using the decimal point. Here are three simple examples:
(1) A probability of 0 means that the event will certainly not occur.
(2) A probability of 1 means that the event will definitely occur.
(3) If the event will occur one (1) time in four (4) it has a probability of 0.25.

Percentages
Probability can be measured by percentages. Here are three simple examples: 207 208

207 Minister for Immigration v Guo (1996) 144 ALR 567, 578
208 Commentary 9.5
 Chapter 9 Probability 101

(1) An event that will certainly occur has a probability of 100%.

(2) An event that will certainly not occur has a probability of 0%.
(3) An event that occurs one time in four has a probability of 25%.

Fractions
Probability can be expressed as a fraction. In some cases there is a practical advantage
in using fractions. Here are two examples:
(1) Horse Racing. For the ordinary punter it makes sense to say, for example, that a
racehorse has a one in four chance of winning. A bookmaker indicates this probability
by quoting the horse at odds of three to one, that is 3-1 (against). This says that the
horse has three chances of losing compared to one chance of winning.
(2) Drawing a Card from a Pack. This example involves the probability of drawing a
card of a particular type from a pack or deck of 52. This probability is 1 in 52, that is,
1/52. This can be expressed as a percentage, that is, 0.9230769, but this is a clumsy
number and is also an imperfect approximation. Moreover, most of us know that a deck
has 52 cards, so fractions with 52 as the base or denominator make immediate sense.

Illustration
To illustrate this, we can show the three means of measuring probability in a table
which portrays the probability of an event which has a one in four chance of occurring:
Percentage Decimal Fraction
Will Occur 25% 0.25 1/4
Will Not Occur 75% 0.75 3/4
Total 100% 1 1
Figure 9.1 Measures of Probability

The total, 100% or 1, represents certainty. It is the sum of the probability that an event
will occur and will not occur. Since an event can only occur or not occur, there is
absolute certainty that there will be one or other outcome. (As we explain later, this is
the complementarity rule.)

Use in Practice
All three measures are used in practice, and in any event, one can be converted to the
other. In this regard, percentage and decimal probabilities, as the table above shows, are
fundamentally the same, except that the denominator of the fraction is 1 for decimals
and 100 for percentages.

Applying Probability
Introduction
Probability, as has been stated, accounts for uncertainty. In fact it covers uncertainty in
at least three areas - how likely is an event to occur, how often will an event occur and
how true is a proposition. Conveniently these areas are separately treated since they
emphasise different applications of probability.
 102 Chapter 9 Probability

Likelihood
Will an event happen or will it not? Probability can answer this question by stating the
likelihood that a particular event will happen or has happened. For example, if a person
tosses a coin there is a 50% chance that the coin will come down heads and 50% chance
that it will come down tails.

Frequency
Probability may be used to state the number of expected occurrences of an event when
an experiment is repeated. For example, if we toss a coin 10,000 times, there will be
something close to 5,000 cases of heads and 5,000 cases of tails. In medicine, for every
1,000 people who take some harmful substance, X, it may be estimated from research
that 565 will become infected with disease Y.

Truth
Probability can be used to describe the degree of confidence that a proposition such as
a behavioural law is true. Sometimes a behavioural law is established by an experiment
where an independent variable is manipulated systematically, and the effect in response
to this on another so-called dependent variable is measured. These changes may be just
a ‘yes’ or a ‘no,’ but they can also consist of measurable responses. In this latter case,
the issue is whether any changes to the dependent variable are due to variations
between samples or are genuine products of changes to the independent variable.

In these circumstances researchers utilise confidence intervals to determine if results

can be accepted as demonstrating the plausibility of the truth of the causal law.
Confidence intervals quantify the degree of certainty with which an experimental
outcome can be believed. Common levels are 90%, 95%, 99% and 99.9%. Confidence
levels determine the probability that the experiment has demonstrated the causal law to
be consistent with the observed data.

Relationship of Likelihood and Frequency

Let us consider the relationship between these two forms, ‘how often’ and ‘how likely’.
‘How often’ can predict ‘how likely,’ and ‘how likely’ can predict ‘how often’.

How Likely Predicting How Often

Probability of ‘how likely’ can be a predictor of ‘how often’. To illustrate, let us return
to the example of the deck of cards. The probability of drawing any particular card (for
example the Ace of Hearts) from a deck of 52 is 1/52. This probability of 1/52 has a
‘physical’ interpretation: it means that we would expect, on average, to draw the Ace of
Hearts once in every 52 times we pulled a card from a shuffled pack. In fact, this
interpretation gives us an easy bridge from ‘how likely’ to ‘how often.’

Assume now that we keep on drawing one card from deck this until we have drawn a
card in this way 52 million times. At this point, utilising the law of large numbers, we
can predict that each card will have been drawn approximately [52,000,000 x (1/52)]
 Chapter 9 Probability 103

times, that is, 1 million times. In other words, we now have a prediction of ‘how often’
based on ‘how likely.’ Thus, if researchers know how likely they can make a good
measure of how often.

This example can be generalised to postulate that ‘how likely’ is a good predictor of
‘how often’ in the long run. The point to using the long run is that freak results, for
example turning up the same card on 10 consecutive occasions, do not greatly distort
the figures because of the large number of occasions on which a card has been drawn.
To illustrate, assume after 52 million draws the Ace of Hearts is then drawn 10 times.
This will have negligible impact on the relative frequency, that is the number of
occasions when the Ace of Hearts has been drawn compared to other cards because 10
is such a small number compared to 1 million.

How Often Predicting How Likely

The probability of ‘how often’ is a predictor of ‘how likely’. Assume that the medical
data for the occurrence of a disease (‘how often’) is that 56% of people who have done
X, for example reached age 70, have contracted disease Y. Jack is now 70. What does
the data say about the likelihood that Jack has disease Y? If we have no better
information on ‘how likely’ than ‘how often,’ our best guess is to use ‘how often’ all
the time. In the long run, that is if we do this consistently and over a reasonable number
of trials, we minimise the extent of errors in our prediction more than if we had
consistently used some other measure. Thus, in the absence of additional information,
our best guess is that Jack’s chance of having disease Y is 56%.

Assigning Probability
Introduction
Aside from any outstanding philosophical issues with the foundations of probability,
there is an issue with how an initial probability is assigned to the happening of an event
or to the truth of (that is, the validity and reliability of) a causal law. Our concern with
the probability of the happening of an event arises because that is the task a court has to
undertake when it find facts. Our concern with the probability that causal or
behavioural law is true arises because a legislature enacting a statute or a court
interpreting a statute or common law rule needs to know this type of probability in
order to perform its task,

Happening of an Event
Introduction
Several means are proposed for determining the probability that some event will
happen. These are single observation, systematic observation and symmetrical
evidence.

Single Observation
Individual
In the real world we all live our lives on this basis that when we observe something we
know that what we have observed is true. As the saying goes, seeing is believing. This
 104 Chapter 9 Probability

is why one reason that a person may believe that they know something is that they have
observed it. They can observe it with any of their five senses, namely sight, sound,
touch, taste and hearing.

To illustrate observation, a person sees X and they know X for certain. X can be many
things, for example the sunset this evening, a tree in the local park or the bowl of fruit
on the kitchen table. In each case the person sees something themselves, and then
knows that what they have seen is true. For example, they know that something is
located in a particular place or that an event has happened. In these cases a person can
easily be 100% satisfied as to the truth of what they saw.

Of course it is always possible that while they ardently believe that something is 100%
true, they are wrong. And it is possible that having seen something they are not quite
sure as to what really happened. So they acknowledge the fallibility of their observation
and say to themselves something like this: ‘I thought I saw a rabbit dash out of the bush
but I could not be sure’.

Court
Just as humans rely on the evidence of their senses so do courts. A court receives in
evidence an account of what a witness has observed. When the witness gives their
evidence to the court the witness may believe that they have observed something
correctly, that they have remembered it accurately and told it truthfully, and the court is
entitled to make up its own mind on these matters. The point is that there is no
guarantee that observational evidence is correct.

When courts scrutinise observational evidence to determine whether or the extent to

which it is true, they resort to two means. One is cognitive science. This directly
scrutinises the evidence. For this the court asks whether the evidence of the witness is
consistent with the capacity of humans to observe events, to remember them and to
recount them in court. The other is induction (which lawyers describe as inference).
Here the court considers whether the evidence of the witness describing events squares
with the way that things usually happen.209

Systematic Observation
Sometimes there is empirical data on the happening of events based on serious and
systematic observation. Examples are data from surveys of weather, disease, life
expectancy, physiological characteristics (such as blood groups), rates of divorce and
the occurrence of motor vehicle accidents. Literally, these observations say something
like this: ‘Of all the marriages in the years 1990-1999, 43% ended in divorce within 10
years’.

This data has been gathered in a scientific method and provides some evidence for
assigning probabilities to the events. The problem is that to use past data to assign

209 Christopher Enright Legal Method Chapter 25 Model for Proving Facts; Christopher
Enright Proof of Facts.
 105 Chapter 9 Probability
probabilities in the present or future - the process of extrapolation - is not fully
scientific, but it is generally the best basis available.

Symmetrical Evidence
If observation is possible we can observe something and therefore know that it is true.
Sometimes, however, proper observation is not possible. This happens in the case of
shuffling a deck of 52 playing cards and drawing one card from the pack when the
cards are face down. If a person could observe what happened to every card as it was
shuffled into the pack and the pack cut, and if they could see which card, for example
the 14th, was being drawn, they could tell you for sure what card it was.

This, however, is not the case so there is uncertainty about our observation. We have
seen the cards shuffled, but we do not fully know what has happened to each card in the
process.

How do we handle this uncertainty? The key to it is that there are many ways in which
the cards can be shuffled, cut and drawn. Since an ordinary human (as distinct from a
card sharp) cannot control the ways in which they shuffle, cut and draw a deck of cards
and since there are no special factors involved which favour one way of doing these
tasks over another, there is a reasonable assumption that each way is equally likely. Put
another way, evidence for the probability of each event or possible outcome is
symmetrically balanced so that each outcome is equally likely. Thus, the probability of
drawing any particular card from a deck of 52 is one in 52, that is, 1/52.

This form of probability was the first to excite curiosity, which it did in the 17th
century. Aristocratic speculation about games of chance such as cards was the initial
motivating force. This led to more serious considerations and much of the early work
was done by correspondence between two major mathematicians, Blaise Pascal (1623-
1662) and Pierre de Fermat (1601-1665).

This version of probability is variously called a priori probability, classical probability

or the frequentist view. It is used in ‘cases where there are a finite number of possible
outcomes each of which is assumed to be equally probable’.15

Gambling with cards and dice which prompted initial interest in probability furnishes
also furnishes excellent illustrations. With a deck of 52 cards, the probability of
drawing a specific card, for example the Queen of Hearts is 1/52. With a six-sided die,
the probability of throwing a specific number, for example a ‘3,’ is 1/6.

Truth of a Causal Law

A legislature or court may invoke a causal or behavioural law when making or
interpreting law. A court may invoke such a law when trying to decide the facts of a
case. In the ideal case such laws would be established to the point of certainty.

15. Robertson and Vignaux (1993) p 459

 106 Chapter 9 Probability

Unfortunately behavioural science does not normally yield absolute certainty about the truth of
a behavioural law. Instead, to put it broadly, it can indicate the probability that it is true based
on the experimental methods used.210

In areas where there is no scientific research at all or insufficient research, the existence of
truth of causal laws is much more speculative. Ideally this uncertainty would be captured and
given a numerical value. Again, behavioural science generally cannot do this. One can merely
find considered assessment of why a particular behavioural law may or may not be true.

Deriving Probability
Introduction
In the previous section we considered methods of estimating the probability that something is
true. Once we have estimated a probability, by whatever method, there are a number of rules of
probability that we can apply to the figure so obtained to derive, calculate or compute further
information about the probability of events. Although the logic behind these computations is
sound (being based on deduction), the results are still no better than the estimates of
probability that we use. So, if an original estimate is unsound, the result of a computation
based on this estimate will also be unsound. Indeed, the computation may magnify the extent
or effect of the error.

Complementarity Rule
In measuring the probability of an event happening we are also measuring the probability that
it will not happen. The probability of an event not happening is easily derived from the
probability of its happening because an event can only happen or not happen. Therefore there
is absolute certainty, that is, a certainty of 100%, that one or other outcome will occur. So, if
the probability of an event happening is 0.3 the probability of it not happening is (1-0.3),
namely 0.7. This is the complementarity rule. In formal terms, if A is an event with probability
P(A), then the probability that A will not occur is [1 - P(A)].

Multiplication Rule
Introduction
Sometimes we are interested in probability where there are two or more independent events.
Events A and B are independent when the happening of one of them has no bearing on the
happening of the other. To illustrate with proof of facts, facts are independent for the purposes
of proof when the truth of Fact A has no bearing on the truth of Fact B. An illustration from
gambling is two successive throws of a dice. No matter what the result of the first throw, it has
no bearing on the second.

If we wish to calculate the probability that two or more independent events will all occur we
use the product or multiplication rule. This involves taking the probability of

210 There is a brief description of some of the methods for establishing causal laws in
Chapters 13-15.
 Chapter 9 Probability 107

each individual event and multiplying them together. We will deal with this in stages,
stating the main rule, then stating some subsidiary rules.

Main Rule
There are three aspects to the main version of the product rule - derivation, statement
and illustration.

Derivation of Rule
Before we formally state this rule we will show how it is derived by using the game of
two-up. This involves throwing two coins into the air together, with a spinning action,
and betting on the outcome, that is, the sides of the coins that face upwards. (In many
countries, the sides of a coin are labelled ‘heads’ and ‘tails’ and we use this
terminology here.)

If we ignore the very remote chance that a coin can land on its edge there are two
possibilities that are taken to be equally likely:
(1) Heads with a probability of 50%.
(2) Tails with a probability of 50%.

Now consider throwing the two coins. There are four outcomes, which are all equally
likely. We can set this out in the following table:
First Coin Second Coin Probability
Heads Heads 25%
Tails Tails 25%
Heads Tails 25%
Tails Heads 25%
100%
Figure 9.2 Derivation of the Multiplication Rule

How did we calculate the probability for each combination? We reasoned in the
following way, using the probability of two tails as an example:
(1) When the first coin is thrown the chances are equal that it will come down heads
or tails, for example the probability of tails is 50%.
(2) Assume now that the first coin is tails, on 50% of occasions the second coin is
also tails. Hence the probability of two tails is 50% of 50%, namely 25%.

Statement of Rule
Having shown how the product or multiplication rule is derived, we can now formally
state the rule:
(1) Application. The rule operates when two or more events are independent.
(2) Probability. The probability that all of the events will occur is equal to the
multiple of the probability of each event. Thus if the events (designating an event by E)
and their probabilities are E1 (A%), E2 (B%) ... En (Q%), the probability of all of them
happening (E1, E2 and En) is A% x B% x ... Q%.
 108 Chapter 9 Probability

In formal terms, the rule can be stated in the following way. If A and B are
independent events, the probability that both A and B occur simultaneously is P(A) x
P(B).

Illustration of Rule
One area in which the product rule is used is the process of finding facts in a court
case. Therefore we will illustrate the rule by showing how it is used to do this. For this
illustration assume that there is a case with the following characteristics:
(1) The case involves a cause of action, which has four elements, Elements 1-4.
(2) Facts which satisfy these elements are Facts 1-4. Thus Fact 1 satisfies Element
1, Fact 2 satisfies Element 2, Fact 3 satisfies Element 3 and Fact 4 satisfies Element 4.
17
(3) We assume that the facts are independent.
(4) We assume that this is a civil action where the standard of proof is proof on the
balance of probabilities, that is, proof to a probability of 51%. Although we assume that
this is a civil action the reasoning applies equally to a criminal action, although we have
to adjust the standard of proof to the criminal standard, namely proof beyond all
reasonable doubt. 211 212

When the court hears the case it finds the probability of truth for each fact. These
findings are set out in the following table:
Fact True False Total
Fact 1 60% 40% 100%
Fact 2 80% 20% 100%
Fact 3 75% 25% 100%
Fact 4 60% 40% 100%
Figure 9.3 Independent Facts

Having found the probability that each specific fact is true or (false), the court now has
to proceed to its main task in finding facts, to determine the probability that all of the
facts are true. (There is a good reasons for doing this in practice - it enables a court to
determine if a plaintiff or prosecutor has sufficiently proved their case). Since the facts
are independent we use the product rule. To calculate this overall probability we
multiply together the probability for each specific fact, (which are Facts 1-4 in the
illustration). This gives us the probability that all of the facts are true:
Probability = P (Fact 1) x P (Fact 2) x P (Fact 3) x P (Fact 4)
= (0.60) x (0.80) x (0.75) x (0.60)
= 0.216
= 21.6%
Figure 9.4 Illustration of the Multiplication Rule

211 Commentary 9.6.

212 Commentary 9.7.
 Chapter 9 Probability 109

This shows us that the probability that the four facts in the plaintiff’s case are true is
21.6%. For the sake of emphasis note how the probability of all four facts being true
(21.6%) is much less than the probability that any one fact taken in isolation is true.

Just to round off the illustration let us explain how a court uses this information to
work out who wins the case and who loses. In a civil case, as we noted above, a
plaintiff must prove their case on the balance of probabilities, that is, to a probability of
51%. Here the probability of the plaintiff’s case is only 21.6%. This is less than the
51%, which the plaintiff requires, so the plaintiff fails to prove their case and loses.

Subsidiary Rules
In the illustration above, the probabilities for Facts 1-4 were respectively 60%, 80%,
75% and 60%. The probability that all four facts, Facts 1-4, were absolutely true is
21.6%. We can use this result to illustrate two subsidiary rules that are of general
application but which also help us to understand more about how probability is used in
fact finding.

Rule 1: Result Lower Than Lowest Individual Score

In using the product rule we multiply a number of specific probabilities together. These
are essentially fractions. Because of this, by multiplying them we obtain a figure which
can never be higher than the lowest individual measure. Where X is a fraction, half of
X is always less than X. (This point, of course, applies to any fraction, not just a half.)
To illustrate from the example above, the overall probability that all facts are true is
21.6% which is still lower, indeed considerably lower, than the lowest individual figure
of 60% (which is the figure for both Fact 1 and Fact 4).

Rule 2: Each Additional Fact Lowers Probability

Each additional fact introduces an additional probability. This additional probability
lowers the value of the final result unless its value is 100%. To illustrate, start with Fact
1 then add the remaining facts one at a time and see what happens. We can set out the
results as follows:
Facts Probability: Probability: Probability:
Additional Fact Overall Reduction in Overall Probability
Fact 1 60% 60% Not applicable
Fact 1-2 80% 48% 20%
Fact 1-3 75% 36% 25%
Fact 1-4 60% 21.6% 40%
Figure 9.5 Independent Facts

We will illustrate the necessary calculations using Facts 1-3:

(1) Overall Probability. The overall probability is given by multiplying together the
probability for the individual facts. This is (60 x 80 x 75)%, namely 36%.
(2) Reduction. There is a reduction from 48% for Facts 1-2, to 36% for Facts 1-3.
This is a [(48-36)/48]% reduction, namely 25%.
 110 Chapter 9 Probability

Explanation of a Paradox
Looking at the individual probabilities on the surface (60%, 80%, 75%, 60%) may
suggest that the plaintiff has more than satisfied the standard of proof of 51%. This,
however, is not the case when the facts are independent (as is the assumption here)
because the probability that all four facts are true is only 21.6%. As Rule 1 says, the
final result when these individual probabilities are multiplied together is lower than,
often considerably lower than, the lowest individual measure.

To illustrate this further, we will construct a hypothetical case using the lowest
individual probability in the example above, namely 60%. Assume that there is just one
other fact and the probability that this fact is true is 80%. In this case the overall
probability is (60 x 80)% namely 48%, which means that the plaintiff fails to make the
necessary standard of 51%. This is an extreme case because there are only two facts
and the second had a high probability. This shows how easy it is to get a figure such as
60% ‘down’ when the probabilities are multiplied together.

Sum Rule
Assume that there are two events, A and B. The sum rule determines either the
probability that event A or event B occurs, or the probability that both occur. There are
two possibilities - that the two events are mutually exclusive (disjoint) or not mutually
exclusive (conjoint).

Mutually Exclusive
If events A and B are mutually exclusive then P(A or B) = P(A) + P(B). As an
illustration, assume that there is a group of 150 students where 30 are freshmen and 60
are sophomores. Find the probability that a student picked from this group at random is
either a freshman or sophomore. In this case the individual probabilities are:
P(freshman) = 30/150 p(sophomore) = 60/150

Therefore, P(freshman or sophomore) = 30/150 + 60/150 = 90/150. In other words 90

of the 150 students are freshmen or sophomores.

Not Mutually Exclusive

If events A and B are not mutually exclusive
then P(A or B) = P(A) + P(B) - P(A and
B)

As an illustration, assume that there is a group of 150 students where 40 are juniors, 50
are female, and 30 are both female and juniors. The task is to find the probability that a
student picked from this group at random is either a junior or female.

Here the individual probabilities are as follows:

P(junior) = 40/150
P(female) =
50/150 P(junior
and female) =
30/150
 Chapter 9 Probability 111

Thus P(junior or female) = 40/150 + 50/150 - 30/150

= 90/150 - 30/150
= 60/150

This makes sense since 90 of the 150 students are juniors or female. The point to
subtracting the percentage of students who are junior and female is to avoid double
counting. When we add 40 juniors to 50 females and get a total of 90, we have over-
counted. The 30 female juniors were counted twice; 90 minus 30 makes 60 students
who are juniors or female.

Bayes Theorem
Introduction
Bayes Theorem was formulated by the Rev Thomas Bayes (c 1702-1761). Thomas
Bayes was born in London in about 1702. He became a Presbyterian minister. As far as
is known, during his lifetime he published two works: Divine Benevolence, or an
Attempt to Prove That the Principal End of the Divine Providence and Government is
the Happiness of His Creatures (1731), and An Introduction to the Doctrine of
Fluxions, and a Defence of the Mathematicians Against the Objections of the Author of
the Analyst (published anonymously in 1736), in which he defended the logical
foundation of Isaac Newton’s calculus against the criticism of George Berkeley, author
of The Analyst. Bayes was elected as a Fellow of the Royal Society in 1742 possibly on
the strength of the Introduction to the Doctrine of Fluxions. Bayes died in Tunbridge
Wells, Kent in 1761. He is buried in Bunhill Fields Cemetery in London where many
Nonconformists are buried. In death, as in life, he was separated from the Church of
England.

The fame of Thomas Bayes rests on a posthumously published masterwork, An Essay

Toward Solving a Problem in the Doctrine of Chances.19 In this he enunciated what is
now known as Bayes Theorem. Bayes Theorem can be deployed in abductive reasoning
in trying to ascertain the best explanation for something. According to one view it can
be deployed in the process of fact finding where there is a lack of direct evidence for
vital facts so that they fall to be ascertained by inference.

Operation of Theorem
To explain Bayes Theorem let us work with a simple example.213 214 It involves ‘lurgi’
(a fictitious disease). Assume that in a country the probability that any person has is 5%.
Thus if:
Aj refers to the event of having the disease A2
refers to the event of not having the disease
then
P(Aj) = 0.5
P(A2) =
0.95

213 Bayes (1764)

214 This example is taken from Mason and Lind (1992) pp 185-186.
 112 Chapter 9 Probability

In the context of Bayes Theorem these probabilities are called prior probabilities
because they are the existing data before additional information is discovered about
these probabilities. Thus if we select a person at random the best estimate we now have
is that the person has a 0.05 probability of having lurgi.

Assume now that someone develops a diagnostic test for lurgi, but it is not completely
accurate. Let B denote the event that the test shows the disease is present. Assume that
if the person has the disease that the evidence clearly shows that the probability of the
test indicating the presence of the disease is 0.90. Assume that if the person actually
does not have the disease but the probability that the test indicates that the disease is
present is 0.15. Using the standard notation these probabilities can be written as
follows:
P(B|Aj) = 0.90 P(B|A2) = 0.15

The point to Bayes Theorem is that it enables us to upgrade the relevant probabilities.
To illustrate, assume that a person X is selected at random and the diagnostic test is
performed. The test indicates that the disease is present. What is the probability that the
person actually has the disease? In symbolic form, we want to know P(Aj|B). This is
called a posterior or revised probability, because it is revised following the discovery of
additional information since the original prior probability was determined. In this case
where there are only two possible events, having the disease (A1) or not having the
disease (A2), the probability is given by the formula:

P(AJB) PCAJxPm)
P(A1)XP(B|A1)+P(A2)XP(B|A2)

In this illustration there were only two events (having the disease (A1) or not having the
disease (A2)) Obviously, it is possible that there can be more than two possible events.
In this case the denominator needs to be adjusted. The formula now becomes:

P(Aj|B) ______________ PCAJxPCBIA,) _______________

P(A1)xP(B|A1) + P(A2)xP(B|A2) + ... + P(An)xP(B|An)

Calculations for the answer to the question are set out in the following table that depicts
the events and the four relevant probabilities:
Events Prior Conditional Joint Posterior
Probability Probability Probability Probability
A1 P(A1) P(B|A1) P (A1 and B) P(AJB)
Disease 0.05 0.90 0.0450 0.0450/.1875 = 0.24
No Disease 0.95 0.15 0.3425 0.1425/.1875 = 0.76
P(B) = 0.1875 Total 1.00
Figure 9.6 Calculation ofProbabilities
 Chapter 9 Probability 113

The final column ‘Posterior Probability’ gives the answer. The probability that X has
the disease is 0.24 or 24%, while the probability that X does not have the disease is 0.76
or 76%

Comment
This example above gives something of the flavour of Bayes’ Theorem. It permits
mathematical calculation of the likelihood of one event given another event. This is how
Bayes’ Theorem enters fact finding. It is relevant when facts are based only on indirect
or circumstantial evidence. For example, given that John is a bank robber, has been in
the area of a bank robbery and owns a pistol looking like the one that the masked robber
used to threaten the bank teller, what is the probability that John was the robber on this
occasion?

Bayes’ Theorem allows this probability to be calculated. However, while the

mathematical calculation involved are precise, they are based on subjective probabilities
fed into the relevant equations. Results from the equations are flawed in that the data
which they use is flawed, being mere estimates. Nevertheless, there is a
benefit in that the equations show how the specific probabilities can be combined to
21
give the overall probability of guilt or innocence.

Expected Value
A bird in the hand is worth two in the bush215 216
To explain how
expected value works, assume that a firm is considering an expansion of its market. It
has two options and manages to calculate that the potential profit for Option 1 is
$250,000 and for Option 2 is $400,000. However, there is no certainty that this profit
will eventuate. In fact, on the information that is available to the firm, there is only a
75% chance of the $250,000 and a 40% chance of the $400,000.

What this firm now needs is a mechanism for taking this uncertainty into account as it
faces a choice to expand or not expand its market. Indeed such a mechanism is needed
in a range of legal and non legal activities which include deciding whether to pass one
statute or another, to litigate or not litigate, to invest in shares or bonds, or to stay where
we are rather than take a new job. Fortunately there is such a mechanism, which is
known as expected value. It enables us to adjust the return for each possibility by
factoring in the uncertainty. We do this by measuring the return as a probable or
expected return rather than by reference simply to the dollar value of the return.
Expected value of an outcome is the probability of the outcome multiplied by the net
value of the outcome.

This can be illustrated from the opening example where the expected values for Option
1 and Option 2 are respectively ($250,000 x 75%) and ($400,000 x 40%). Choosing
between these options can be made by determining the expected values of Options 1
and 2 which are set out in the following table:

215 Commentary 9.8.

216 This is a proverb.
 114 Chapter 9 Probability

Option Profit Probability Expected Value

Option 1 250,000 75% 187,500
Option2 400,000 40% 160,000
Figure 9.7 Expected Values

At the table reveals, the expected value of Option 1 is $187,500 and of Option 2
$160,000. This indicates that Option 1 is a better investment than Option 2.

This example shows how expected value produces a measure of the return for each
outcome which enables us to compare the returns. In turn this enables us to make a
decision because we take the outcome with the best return.

Thus, expected value is a method, involving a calculation, which is used to take into
account uncertainty. By their nature, decisions take their effect in the future and the
future is inherently uncertain.

This is why expected value is used in business to make investment decisions that are
needed when a new project, be it large or small, is contemplated. In law expected value,
or at least the reasoning process that underlies it, can be used for making and
interpreting law. Those making and interpreting law can use expected value to factor in
the possibility that the predicted costs and benefits of a law or an interpretation of a law
may not come about. Expected value can also be deployed in making the decision
whether to litigate. Further, on one analysis the tort of negligence incorporates
23
expected value.

In principle expected value is an extremely useful tool. However, it has two major
limitations. First, the probability that proposed action will incur a cost or return a
benefit can rarely be known precisely. Second, it can be difficult to compute net
24
benefit, because costs and benefits are not always commensurable.217 218 219

Fallacies in Probability
Introduction
Careless thinking about probability can lead to errors. These errors involve arguing
from one established probability to a second probability. These fallacies are of extreme
concern when the second probability involves guilt or innocence. Some common forms
of this fallacious reasoning have been identified and labelled the prosecutor’s
25
fallacy and the defendant’s fallacy.

Prosecutor’s Fallacy
An illustrative version of the prosecutor’s fallacy is as follows. Assume that there is a 1
in 2 million chance of a match of evidence at the crime scene if a defendant is innocent.

217 Commentary 9.9.

218 Chapter 12 Measurement of Net Benefit
219 These were identified and labelled by Thompson and Schumann (1987).
 Chapter 9 Probability 115

Based on this, the prosecutor argues that there is a 1 in 2 million chance of

 116 Chapter 9 Probability

innocence and consequently a 1,999,999 in 2 million (99.99995%) chance of guilt,

which is surely well past the point of proof beyond all reasonable doubt.

But assume further that the crime took place in a city of 10 million people, any of
whom might be the perpetrator. If each person in the city were tested one would expect
five matches with the evidence. On this basis on the possibility of a match taken on its
own there is only a one in five (20%) chance of guilt, which is way below reasonable
doubt.

Defendant’s Fallacy
The defendant’s fallacy can be illustrated from the example used for the prosecutor’s
fallacy. There it was concluded that taking the evidence of a match on its own, there is
only a one in five (20%) chance of guilt. It is, however, a fallacy to use this figure of
20% when there is other circumstantial evidence pointing to the guilt of the defendant.
To state the obvious, each piece of circumstantial evidence for the defendant’s guilt
increases the probability of guilt.

Sally Clark Case

In the United Kingdom there was a famous conviction, of Sally Clark, based on the
prosecutor’s fallacy. In 1998 Sally Clark was accused of killing her first child,
Christopher, at 11 weeks of age and then conceiving a second child, Harry, and killing
him at 8 weeks. For the defence it was argued that both deaths were cases of sudden
infant death syndrome (SIDS). An expert witness testified that the chance of two deaths
in the same family from SIDS was about 1 in 73 million. Sally Clark was convicted of
murder of these two children in 1999. Following her conviction the Royal Statistical
Society issued a press release pointing out two errors of reasoning. 220 First, they
criticised the figure of 1 in 73 million for the frequency of two cases of SIDS in such a
family. The Society said: ‘This approach is, in general, statistically invalid. It would
only be valid if SIDS cases arose independently within families, an assumption that
would need to be justified empirically. Not only was no such empirical justification
provided in the case, but there are very strong a priori reasons for supposing that the
assumption will be false. There may well be unknown genetic or environmental factors
that predispose families to SIDS, so that a second case within the family becomes much
more likely’.

Second, they pointed out that ‘[F]igures such as the 1 in 73 million are very easily
misinterpreted. Some press reports at the time stated that this was the chance that the
deaths of Sally Clark's two children were accidental. This (mis-) interpretation is a
serious error of logic known as the Prosecutor's Fallacy. The jury needs to weigh up two
competing explanations for the babies’ deaths: SIDS or murder. Two deaths by SIDS or
two murders are each quite unlikely, but one has apparently happened in this case. What
matters is the relative likelihood of the deaths under each explanation. It is irrational
just to assess how unlikely they are under just one explanation (in this case

220 Royal Statistical Society (2001)

 Chapter 9 Probability 117

SIDS, according to the evidence as presented)’ and in the process to ignore the
alternative explanation. As the saying goes, one in all in.

Eventually the law caught up with statistics. Sally Clark was freed when the Court of
Appeal quashed her conviction in January 2003. Further medical analysis of the case by
experts highlighted both the difficulty of deriving firm conclusions from post mortems
examinations on infants and the highly equivocal or fragile nature of the pathological
evidence that was used against Sally Clark. Moreover, later consideration of the medical
evidence indicated that the body of the second child to die, Harry, had the infection
staphylococcal aureus, raising a strong possibility that he died from
27
staphylococcal sepsis. After winning the case and being released a journalist said to
Sally Clark ‘So, you finally won’ to which Sally Clark said: ‘There are no winners
here’. Sally Clark died aged 42 years on 16 March 2007. Some of her friends believe
that Sally died of a broken heart.

Commentary
Commentary 9.1 Footnote 5
Chapter 15 Cause: Responding to Uncertainty explains how one way of coping with
uncertainty consists of expected value. Expected value is discussed in Chapter 9
Probability.

Commentary 9.2 Footnote 7

The part of the fact-finding based on observation is discussed in Chapter 26 Observing
Facts. For a basic account how the rules of probability are deployed in fact-finding see
Christopher Enright Proof of Facts.

Commentary 9.3 Footnote 8

Under the common law rules the party who initiates proceedings, such as the plaintiff
or prosecutor, carries the burden or onus of proof. Strictly the court is concerned only
with the probability that their case is true because they are the party who must meet the
standard. There is, however, a good reason for describing this step as requiring the court
to assess the probability of truth for all versions and not just that of the initiating party.
It is difficult for a court to assess the probability of one case on its own because it has
before it two (or more) competing versions of the truth. As the probability of one
version increases, the probability of one or more other versions decreases to
accommodate the increase. This reasoning is formally encapsulated in the
complementarity rule under which the sum of the probabilities for all outcomes must
total 100%. The complementarity rule is discussed later in the chapter.

Commentary 9.4 Footnote 11

The text states the proposition that, in most cases, putting a numerical measure on
probability is an estimate at best and probably no more than a guess. To reinforce this
point, in Briginshaw v Briginshaw (1938) 60 CLR 336, 361-362 the High Court said 221

221 Byard (2004)

 118 Chapter 9 Probability

that there can be ‘indefinite gradations of certainty’ that the facts portrayed by evidence
are true.

Commentary 9.5 Footnote 13

A finding of fact that is glaringly improbable is a ground on which an appellate court
can overturn a finding of fact by a lower court - see House v The King (1936) 55 CLR
499, 505, Devries v Australian National Railways Commission (1993) 177 CLR 472,
479.

Commentary 9.6 Footnote 17

In Hodgson (1995B) pp 746-748, Justice David Hodgson says that in reality facts are
more likely to be dependent than independent. But because both are possible ‘courts
should generally be aware of the underlying mathematical rules’ (p 748). See also Rose
v Abbey Orchard Property Investment [87] Aust Torts Reports ^80-121.

Commentary 9.7 Footnote 18

To avoid confusion, it is worth noting that proof ‘beyond reasonable doubt’ can
potentially be stated as a percentage, but there is no formal designation of what that
percentage is. In principle, in the author’s view, it should be around 99%.

Commentary 9.8 Footnote 21

Computer programs, called Bayesian Belief Networks (BBN), have been designed to
handle the complex interaction of the probabilities of multiple pieces of evidence.

Commentary 9.9 Footnote 23

The text asserts that on one analysis the tort of negligence incorporates expected value.
The supporting cases are United States v Carroll Towing 159 F 2d 169, 173 (2nd Cir,
1947) per Learned Hand J, United States Fidelity and Guarantee Co v Jadranska
Alobodna 683 F 2d 1022 (7th Cir, 1982), McCarry v Pheasant Run 826 F 2d 1554 (7th
Cir, 1987).
Chapter 10
Policy
Introduction Levels
of Policy Basis of
Policy Nature of
Policy Model for
Policy Derivatives of
Policy Commentary

Fundamental remains my belief that the law is neither occult, arcane nor oracular, but
to the contrary dedicated to the rational solution of social conflicts through the legal
process; that because law is only a means not an end, it falls to be adjudged not by any
internal standard peculiar to it as a closed system, but by the degree to which it furthers
relevant social ends; that accordingly legal solutions or ‘rules ’ have to stand the test of
functional adequacy in terms of contemporary values - for short, that there should be a
twentieth-century reason for all rules, judicial or legislative, with any pretence for
survival.222 223

Introduction
The risk is that the present generation of leaders will turn out to be more focused on the mechanics
ofpolitics than the art of government.
Policy
Making and interpreting law are collectively referred to in this book as forming law.
There is much discussion about the nature of these tasks, especially for interpreting law,
as illustrated by the many different fields which jurists invoke when trying to explain
how it functions, such as logic, epistemology, artificial intelligence, reason, institutional
imagination, science, practical reasoning and rhetoric.224 In contrast to this diversity of
explanations, this chapter argues that making and interpreting law constitute purposive
action, which is action taken in order to achieve an outcome or purpose. Now the
rational way to undertake purposive action consists of reasoning with policy because
reasoning with policy incorporates comprehensive rationality. When reasoning with
policy, all options are put up for consideration in order to choose the option which yields
the best possible outcome. This is why policy is the one and only rational method for
making and interpreting law.

Reasoning in this way is also called consequentialist reasoning, because law is made
and interpreted by reference to its consequences. In philosophical discussion it is also
labelled teleological evaluation.225 Often in scholarly analysis of forming law,

222 Fleming (1977) p v

223 Abbott (2009) p 6
224 Commentary 10.1.
225 Chapter 18 Classification of Values

119
 120 Chapter 10 Policy
particularly interpreting law, consequentialist reasoning is regarded as just one of several
approaches to interpretation.226 By contrast, the approach adopted here is that policy based or
consequentialist reasoning is the only rational way to proceed.227

There now follows by way of background an examination of the regulatory choice between
markets and laws that confronts the state. After this, discussion moves to the main point to this
chapter, namely the use of law as a regulatory mechanism. This entails consideration of how
policy is deployed for making and interpreting law. Discussion of policy addresses several
matters: the levels at which policy can operate, the basis of policy, the nature of policy, a model
for using policy and an account of two sources of reasoning that are derivatives of policy,
namely precedent and the so called rules of interpretation.

Against this background the text then considers a special problem, the existence of two
additional methods of interpreting law, namely precedent and the rules of statutory
interpretation. On the surface at least, these seem to be separate stand alone forms of reasoning
which are both alternatives and rivals to policy. On the analysis presented here, however, this
dilemma can be resolved because both of these means of interpretation can be conceived as
derivatives of policy.

Introduction
Regulatory Choice
For regulation of an activity the state faces a basic choice. It can regulate the activity by
legislation or it can leave it alone. If it leaves the activity alone, it is in the hands of private
citizens. If an activity is so left alone and involves production and distribution of goods it will
fall into the regime of market forces. While the market is not a direct concern for legal
reasoning, it requires some attention because for many activities it is a constant alternative to
government intervention both in principle and in political rhetoric.

Market
Were we directed from Washington when to sow and when to reap we would soon want bread. Laws
are backed by force of arms. Markets, by contrast, operate with forces of selfinterest and
scarcity, which drive suppliers to produce as much as they can in pursuit of profits, and drive
purchasers to seek the best deal for their dollar. Market forces are founded on scarcity and self
interest because humans have unlimited wants while the resources to satisfy those wants are
limited.

As the fundament of market forces, scarcity drives both buyers and sellers as it creates the law
of supply and demand. These laws answer the core question in the discipline of economics: how
can society best utilise limited resources in an attempt to satisfy unlimited wants?

5
.
5.
7.
See, for example, Mason (2002) p
34. Commentary 10.2.
Thomas Jefferson
 Chapter 10 Policy 121

Market forces are constituted by the desires of purchasers and sellers to better
themselves as they cope with scarcity. These forces provide incentives for consumers to
buy and for sellers to produce. In a market economy, where they are allowed to operate,
they drive participants to strive for the best position.

Sellers seek to produce at the lowest cost and sell at the best price to make a profit as
they turn goods into dollars. This is the law of supply. Wherever there is demand there
will be a supplier.

Sellers are motivated to produce because they want to maximise their profits. With
maximum profits they maximise their utility (which means benefit, satisfaction or
enjoyment). This law of supply also has an important consequence for the deployment
of resources - because of the constant desire of sellers to better themselves, resources
will gravitate towards their most productive use.

Buyers seek to satisfy their wants in the best way as they turn dollars into goods. This is
the law of demand - the desire of people to acquire goods and to acquire goods in a way
that maximises their utility.

These forces push sellers to produce and consumers to buy. These forces also cancel out
- and thus sales occur - when the wishes of buyers match the wishes of sellers. This is
where sellers want to sell at the price at which buyers want to buy, and they want to sell
as much as buyers want to buy.

In this way market forces determine the price and quantity of goods sold in each
particular market, at the same time ensuring that the process is satisfactory for both
buyers and sellers. Each obtains something that they want and so betters their position
by buying or selling in the market.228

At least this is the situation with a market operating according to the model for perfect
competition. It is also the position which is approximated in other markets which are not
perfectly competitive but are still competitive to a reasonable extent.

As these forces drive the market, they receive coercive force from the state through the
law of property and the law of contract which underpin the market. The state also
provides a law of wrongs - a criminal law and a civil law - to protect the rights accorded
by property and contract law.

Thus the market system organises production and distribution; it operates, to use the
phrase from Adam Smith (1723-1790), like an ‘invisible hand’229 that guides economic
activity. It does this by two complementary means. The market itself organises
production and distribution, determining what is produced, how much is produced and
how much it costs and. Competition drives the market.
8.
9
.
See Hicks (1980).
Adam Smith (1759) IV i 10, Adam Smith (1776) p423
 122 Chapter 10 Policy
Law
All law is politics.230
Markets regulate economic activity. Law, by contrast, is an all purpose regulator since
it can regulate any sphere of activity that it chooses including the production and
distribution of goods (although how well and how effectively it regulates and field is
another question).

Power of the State

Governments of nation states in the 21st century tend to be all powerful. The national
legislature, or in the case of a federation, the combination of central and regional
legislatures, usually has complete or near complete power to legislate. The most
common and justified restriction on this power is a bill of rights which, in the extreme
version, denies altogether the legislature power to legislate in a way that infringes the
rights designated in the bill. While this marks out an area that is a no-go zone for
legislation, it usually leaves vast tracts of human activity unshielded from legislative
action.

Legislature and Courts

Conventional terminology says that legislatures make statutes and courts interpret them.
Closer analysis, however, shows that interpretation is really a form of making law. In
some cases, interpretation involves making law on only a small scale. This occurs when
a court has to resolve the question of which of two or more specific meanings of a
provision is legally correct. A good example is the word ‘offensive’ which is a
homonym and a homograph since it hast two distinct meanings, aggressive and
unpleasant.231 In other cases, though, interpretation involves legislating on a substantial
scale. In the extreme case this occurs when a legislature enacts a provision which
consists of a wide and open term such as ‘just and equitable,’ ‘reasonable,’ or ‘fair and
proper.’ Expressions such as these bend, and grow or contract, according to prevailing
conditions. They authorise a court to take account of the circumstances of the particular
case and the prevailing social circumstances when interpreting the provision. In so
doing, courts legislate as they lay down criteria or guidelines on a substantial scale in
order to fill the huge space that these provisions create. So much is this the case that the
resulting case law appropriately bears the label statutory common law.232

Importance of Policy
Policy is important because it is the only proper method for making and interpreting
law. Law is the supreme social decision maker - it is potentially effective because it is
backed by the state, and it is plentiful because each year there pours forth a torrent of
statutory and delegated legislation made or authorised by the legislature. Thus, policy
making is an important field of social inquiry because it is the reasoning process that
underlies a major source of power and influence in our lives.

230 Gilmore (1977) p 231, n 57

231 R v Smith [1974] NSWLR 576
232 Christoher Enright Legal Method Chapter 2 Law
 Chapter 10 Policy 123

While the fundamental reason that lawyers need to understand policy is because it
should be the guiding light for making and interpreting law, there are two other reasons.
First, the work of some lawyers consists of making, implementing and analysing
policy. Second, policy is one of the major gateways between law as a closed system
and the social sciences. Policy indicates the relationship between law and various social
sciences such as economics, politics and sociology. It is not surprising that in the model
for making policy a number of questions are raised relating to the social sciences. Two
of the questions are: How do we behave (once a law is enacted)? What do we value?
These are two of the most important questions that we, as homo
13
sapiens, can ask about ourselves.

Levels of Policy
Reasoning with policy can occur at any of three levels:
(1) The policy maker seeks a specific outcome.
(2) The policy maker seeks a generic outcome.
(3) The policy maker seeks an overall outcome.
When an actor makes policy they are not necessarily confined to one level because
they can often move between them. It may also be possible to combine elements of two
or three levels.

Level 1: Specific Outcome

In Level 1 the actor is absolutely fixed on an outcome. In the pure and simple case,
they want something that is very specific. So, for example, Sally does not just want a
motor vehicle. Sally wants a motor vehicle of a specific type, brand and age because
Sally wants a red 1980 Buick sedan that has been advertised, with a photograph, in the
newspaper for a price of $7,500.

Where the outcome is inviolably fixed, a rational actor has to determine the best way of
attaining the outcome. If the price of the item is variable, this will include shopping
around for the best price. In Sally’s case, where the price is fixed, it entails working out
the best way to raise the $7,500 purchase price.

Level 2: Generic Outcome

In Level 2 the actor desires a generic outcome. For example, if they are an individual
they may want a means of transport as distinct from specifically yearning for a 1980
Buick sedan. If the actor is a government they may want an effective and efficient
transport system for a city or even for the whole nation. This may rely on one sole or
major means of transport, for example, motor vehicle. Or, as is more likely, the
government can utilise a mixture of several means of transport - road (buses, taxis,
motor vehicles), paths (cycles, horses, pedestrians), rail (trains, trams, light rail), water
(water taxis, small craft, ferries, barges) or air (aeroplanes, helicopters, dirigibles, cable
cars). In other words a government potentially has a wide array of options to choose
from when designing a transport system.

13. For a general discussion of public policy see Simeon (1976).

 124 Chapter 10 Policy

To emphasise and expand this point, there are likely to be several combinations of
methods that will provide a decent transport system. Each of the decent methods, while
being acceptable, will produce benefits and costs of different degrees and different
kinds. Of course the most obvious direct benefit consists of the number of people per
day that the system can move and the speed and comfort with which this happens, but
there may also be other benefits. There are also indirect benefits. Cycling and walking
produce health benefits in terms of fitness and stress release. Some types of transport
such as rail and tram can add colour and life to a city. Some types of transport can have
tourist benefits, for example, rides in cable car or in a ferry along a picturesque
waterway.

Each means will also produce costs. Direct financial cost is the most obvious. There is
also indirect financial cost in that some means of transport, for example motor vehicles,
are a high pollutant bringing increased health costs and loss of productivity. Health costs
also have a personal measure in terms of loss of wellbeing for the persons concerned.
Motor vehicles often also cause a general lowering of the amenity of an area.

In these cases, where the generic outcome can be achieved in a number of ways, the
policy maker has to evaluate each option. They have to identify and measure both
benefits and costs. Following this, they add up benefits, add up costs, then subtract total
costs from total benefits. The resulting figure represents the net benefit of the option,
which conveniently constitutes a single measure of its worth. When the net benefit of
each option has been determined, the rational policy maker will then settle for the option
that yields the highest net benefit.

Level 3: Overall Outcome

Level 3 involves considering an overall outcome composed of a number of generic
outcomes. This involves the macro socio-economic function of government. Voters
demand the full package. For example, they certainly want a good transport system. But
they also want good health care, good education, fair and efficient industrial laws, low
inflation, a high rate of employment and so on.

In this case the government has to balance off improvements in one system against
lessened capability in another. Economists sometimes refer to this as the choice between
guns and butter (or bread and battleships), using the stark difference between spending
on peace and spending on war to symbolise the choice that has to be made. 233 This
choice of robbing Peter to pay Paul constitutes opportunity cost.234 In the face of
scarcity, every decision to deploy resources creates a cost in the other opportunities that
are foregone to make the choice. In measuring opportunity costs economists are
generally concerned only with financial costs. Government policy makers, however, are
concerned with the full array of costs and benefits, whether financial or of some other
kind.

233 Commentary 10.3.

234 Commentary 10.4.
 Chapter 10 Policy 125

Utilisation of Level 2
The study of policy making in this chapter utilises Level 2. This has the major
advantage of providing a relatively simple model that highlights the main concepts
involved in policy making. Ideally we should also study Level 3 which incorporates
Level 2 but has the wider concern of dealing with the entire picture. Unfortunately this
would require a detail of treatment that is beyond the scope of this book.

Basis of Policy
The gains from investing in young children can be quantified and they are large. Every dollar
spent on disadvantaged children in the critical pre-school years, through intensive enrichment
programs, generates a 17% annual return to the child and society. By the time the children are
aged 40, society will be repaid many times over, through reduced crime and welfare payments and
higher tax revenue. Is it economically efficient to make the same investment when the child is age 17
and can’t read or write? No. You’ll pay through the nose.235 236
Introduction
A simple piece of reasoning underpins the use of policy for making and interpreting
law. Making and interpreting law constitute purposive action because law seeks to
change the world. Consequently, the best law or the best interpretation of a law is the
one that achieves the best outcome - this is the outcome that yields the highest net
benefit.

While the more usual use of net benefit confines it to benefits and costs that can be
expressed in money’s worth, this analysis does otherwise. It includes all types of
benefits and costs be they financial or otherwise.

Proposition 1: Changing the World

17
The end which the law will serve will dominate all other considerations.
A rational legislature will not enact a law for its own sake. Instead it enacts a law
because it wants to achieve some purpose or outcome. Law is a ‘means to an end,’ not
an end in itself.237 In this sense law is ‘a social instrument,’238 because it changes
society.

This is why the primary focus for making law should not be the possible content of
particular law. Instead it should be ‘the goal’ or end that this law achieves (although the
content of a law is directly relevant as to how likely a law is to achieve this goal or
end).239

Putting this in the plainest language, law changes the world. Whenever a law is made or
interpreted the world changes in some way. These changes may be singular, on a small
scale and of limited duration, but they may also be manifold, on a large scale and

235 Professor James Heckman, Nobel prize winner for economics in 2000, reported in Horin
(2006)
236 Cardozo (1921) p 66
237 Stone (1936) p 20
238 McHugh (1999) p 42
239 Cardozo (1921) p 102
 126 Chapter 10 Policy

of long term duration. Moreover, change tends to cause more change so that the effects
of a law (and even its interpretation) can continue as a chain reaction, or more likely,
21
multiple chain reactions, which become enmeshed with, and interact with, other social
phenomena.

All of this means that the effects of law can be complex and thus hard to predict
accurately. Therefore, it is possible that a law may not achieve all of its desired effects
or not achieve them fully. It is also possible that a law will cause effects that are
unforeseen. Indeed in the worst case a law causes more harm than good. In some cases
this includes making the problem at which the law was aimed worse rather than better.

But despite these pitfalls, when legislators make a law and when a court interprets a
law, they intend it to have a specific effect. This is why law is categorised as goal
seeking or purposive action.

Proposition 2: Best Outcome

This notion that the only good reason to make law is to change the world leads to a
conclusion about the basis on which law should be made and interpreted. Since making
and interpreting law change the world, they should aim to change the world in the best
possible way. This notion of seeking the best possible way to change the
worlds has been expressed in several ways. In the classic phrase it involves seeking the
22
aequum et bonum (the just and the good). In a simple analysis it entails pursuing the
best ends by the best means. In the most precise and accurate formulation it entails
23
achieving the outcome that yields the highest net benefit.240 241 242

Nature of Policy
Policy is simply shorthand for the [legislature or] judge's attempts to make a decision which will
work out for the best243 244
Introduction
25
Policy entails ‘calculation of advantage’ encompassing both means and ends. In simple
terms, it involves seeking the best ends by the best means.245 Consequently, a rational
decision is one where the actor takes the decision which achieves the best result in terms
of both costs and benefits. They do this by achieving the best possible outcome, which is
the outcome with the highest net benefit. This will change the world in the best possible
way.

This is the great benefit that reasoning with policy incurs. In principle the outcome is as

240 Chapters 13-16

241 Devlin (1979) p 85
242 Faulkes (1985). See also Sunstein (1994) and Mitchell (1990).
243 MacAdam and Pyke (1997) p 285
244 Galanter (1997) p 386, citing Ashford (1997)
245 See Faulkes (1985).
 Chapter 10 Policy 127

successful as human endeavour can make it. It is impossible to do better than this or to
be more rational than this in seeking the best result.
 128 Chapter 10 Policy

Achieving the best possible result in this way involves two major processes:
(1) Causation. A legislature or court has to predict the effects that a law - a statute or
a common law rule - or an interpretation of a statute will cause. To consider this it is
necessary to look at cause and effects.
(2) Evaluation. A legislature or court has to evaluate each of these effects to
determine which is best. That effect is best whose net benefit possesses the highest
value. To consider this it is necessary to examine the nature of values.

Cause and Effect

To reason with policy, it is necessary for a legislature or court to predict the effect that
each law or interpretation of a law will cause. This is sometimes referred to in this text
as causation, which is obviously a form of shorthand. There are three matters to be
considered - the concept of cause, the concept of effect and the uncertainty that resides
in predicting causation.

Cause
Cause is encapsulated and illustrated in the proposition: ‘X causes Y’. In principle, the
notion that one thing causes another is simple. In the case of X and Y, Y happens,
occurs or comes about because X caused it. There is, however, as explained below great
uncertainty in determining causation. In relation to the possibility that X causes Y there
can be uncertainty in relation to either X or Y. We may not be sure whether X has
caused Y, X has caused something else or X has caused nothing. If it demonstrated that
Y has occurred, it may not be certain that X has caused Y or that Y happened for some
other reason.

Effect
Three matters need to be explained concerning effects - the terminology deployed, the
fact that effects often constitute a chain or series and the nature of effects.

Terminology
There are a number of synonyms for ‘effect’ such as purpose, goal, end, end state,
27
object, result, consequence or outcome. In the formal models deployed here the term
‘effect’ is generally used, although in other parts of the discussion some of the other
terms are used according to the circumstances.

Chains and Rafts of Effects

Stating that a statute causes an ‘effect’ is a convenient shorthand in the models deployed
here for all of the specific effects that a statute causes. The point is that a statute
typically causes a large number of effects, which are part of a series or a chain reaction.
Thus Effect X (which is caused by Statute X or Meaning X) is shorthand for Effect X. 1,
Effect X.2, and so on to Effect X.n, the list being Effects X. 1-X.n. Usually these unfold
in one or more chains, networks or rafts of effects, which interact with other social
phenomena as the law operates, is responded to, is monitored by the 246

246 Magat and Schroeder (1984)

 Chapter 10 Policy 129

executive government and is enforced in the courts. Effects can continue for as long as
the statute is in force and even into a time long after it is repealed.

Nature of Effects
An effect is anything that the statute causes, regardless of its nature. Thus it may be
tangible or intangible, symbolic or instrumental, and good or evil. It may be concerned
with matters that are economic or financial but it can also be concerned with matters that
are social, emotional, aesthetic, psychological or symbolic, or that involve liberty.
Indeed, there is no earthly limit to the nature and scope of effects.

This point needs to be emphasised. In financial disciplines such as accounting and

economics the subject of cost benefit analysis will often consist of effects that have a
monetary value. Nevertheless, while the concept of net benefit is derived from these
disciplines, as utilised here the term ‘effect’ extends beyond just monetisable and
commodifiable items to include all effects whether economic, social, emotional,
28
spiritual, symbolic, psychological or of some other kind.

For these reasons, consideration of costs and benefits is not confined to financial costs
and benefits but extends to all types. Nothing is excluded since the process entails a total
evaluation of all effects regardless of their nature. For example, a fairer distribution of
income and behaving compassionately would both constitute effects to be acknowledged
and evaluated.

Uncertainty
Trying to predict the effect that a statute or meaning of a statute will cause is not a very
scientific endeavour, so that there is usually some degree, often a considerable degree,
of guesswork in deciding that Statute X or Meaning X will cause Effect X. As discussed
later, there are several ways of coping with this uncertainty. These include disjointed
incrementalism, expected value and review of legislation and judicial decisions.247 248

Values
Policy entails determining then pursuing the best outcome. Determining the best
outcome involves evaluation. This raises the question of how a legislature or court
should decide the values which should be deployed in the task of making and
interpreting law. Broadly, there are two possibilities. One is the objective view - that
there is a universal and identifiable set of values that should govern all human conduct
including the tasks of making and interpreting law while the other is the subjective view
that those who make decisions decide for themselves which values to invoke. These are
canvassed in later discussion where the conclusion is made that in principle the
subjective view is correct. Consequently there is not complete uniformity of values,
although in fact some or even many values are widely shared within a community.

247 Commentary 10.5.

248 Chapters 13-16
 130 Chapter 10 Policy

Model for Policy

Introduction
Model
There is a model for policy. In its basic form, it applies to both making and interpreting
law.

Steps in the Model

The model for policy consists of three steps:
# Step 1 Options: Identifying the Options
# Step 2: Reasons: Evaluating the Options
# Step 3: Decision: Choosing an Option

Scope of Policy Making

For practical purposes we can note three scales on which policy can be made:
# Rational Approach. The rational approach identifies and weighs all
possibilities,
# Incremental Approach. The incremental approach considers only those
few possibilities that are extensions of, or additions to, existing policy.
# Mixed Scanning. Mixed scanning occupies a middle position between the
rational approach and the incremental approach.

Rational Model
One scale of policy is the rational or synoptic approach based on ‘comprehensive
30
rationality’ where all possibilities are considered, that is, all possible outcome and all
possible means to achieve those outcomes. However, for all of its obvious merits, in
31
practice it is ‘a rarely adopted process’. It is ‘confined to academic institutions, or the
32
occasional royal commission or major inquiry’. But despite is limited use in practice,
discussion here deals with the rational model. Of course in a world where time and
resources are short, and where irrationality is part of humankind, it is unrealistic to think
that this model portrays something that can be fully achieved. That said there are still
major advantages in describing policy by reference to this model. Like many other such
models, it explains the task in full and pure form. It therefore identifies the key forces
and processes that operate with good policy making. Further, although it may not be
fully utilised in practice, all the same it provides a standard to which society can aspire.
While society may never achieve perfection, the model is a reminder that it frequently
has the opportunity for real improvement.

Incremental Model
In the incremental model of policy-making, ‘or glorified ‘muddling through’, decision
makers are very confined in their consideration. As Carney observes, policy makers
cannot look at the full picture, but only part of it; in consequence they commonly 249 250

249 Lindblom (1980)

250 Carney (1991) p 115
 Chapter 10 Policy 131

251

251 Carney (1991) p 115

 132 Chapter 10 Policy

‘consider only the close neighbours of existing policies, rather than more radical
33
replacements’. The incremental model is frequently used in government decision-
making. It is also the policy model that explains making common law. 252 253 254

Mixed Scanning
35
Mixed scanning, occupies a middle position. It is wider than the incremental model but
not as wide as the rational or synoptic approach. Here ‘some pockets of existing policy
may be isolated for sustained [and comprehensive] analysis, while the bulk of the area is
dealt with by the ‘incremental approach’ in order to deal expeditiously with the most
potential issues’. 255 256 257

Location of Policy
In approaching policy for making law in this way we make an assumption that the
relevant policy is squarely located within one statute. Often this will be the case and, in
any event, making this assumption simplifies our explanation. However, it needs to be
pointed out that the full policy may be implemented by two or more statutes, and that
statute law may operate along with other government action to implement a policy. Thus
a statute may constitute anything from the sole or principal policy tool to a mere
ancillary one; it may operate directly and immediately, or remotely and obliquely;
37
and it may be used as a simple tool or it may be part of an intricate social arrangement.

Making Law
You change your laws so fast and without inquiring after results past or present that it is all
38
experiment, seesaw, doctrinaire; a shuttlecock between battledores.
Legislatures make statute law. Courts make common law although discussion largely
focuses on statute law since statutes are made in abundance while courts do not often
make new common law rules. In any event what is said about statute law generally
applies to common law, perhaps with some obvious modifications.

Step 1: Identifying the Options

Options before a legislature consist of all the possible versions of a statute on a topic
and the effect that each will cause. Versions of a statute can be labelled Statute 1, Statute
2, Statute 3 and so on, with the last statute in the range designated, using standard
mathematical notation, as Statute n. A legislature, however, also has the option not to
pass a statute and to leave things as they are; this can be represented by Statute 0. Thus
the complete range of statutes consists of Statutes 0-n.

Now each statute causes an effect. Or to be precise, at this stage each statute is predicted
to cause an identified effect, but it is convenient to abbreviate this to say just

252 Carney (1991) p 115

253 Diver (1981)
254 Etzioni (1967)
255 Carney (1991) p 115
256 Wilson (1974)
257 Florence Nightingale admonition to the English Parliament
 Chapter 10 Policy 133

that a statute ‘causes’ an effect. Thus, using this shorthand, Statute 0 causes Effect 0,
Statute 1 causes Effect 1, Statute 2 causes Effect 2 and so on. (Obviously Effect 0
represents ‘things as they now are’ being the effect that Statute 0 causes.) Collectively,
Statutes 0-n will cause Effects 0-n.

These options can be conveniently set out in a table in the following way:
Statutes Effects
Statute 0 Effect 0
Statute 1 Effect 1
Statute 2 Effect 2
Statute n Effect n
Figure 10.1 Statutes and Effects

Step 2: Evaluating the Options

To evaluate each option a rational legislature first determines the net benefit of each
option. To do this it calculates the net benefit of each effect. The net benefits are
labelled to correspond with the effect that they measure:
# the net benefit of Effect 0 is labelled Net Benefit 0
# the net benefit of Effect 1 is labelled Net Benefit 1, and so on
# collectively, Effects 0-n yield Net Benefits 0-n

The table of options set out above can now be extended in the following way to
incorporate these net benefits:
Statutes Effects Net Benefits
Statute 0 Effect 0 Net Benefit 0
Statute 1 Effect 1 Net Benefit 1
Statute 2 Effect 2 Net Benefit 2
Statute n Effect n Net Benefit n
Figure 10.2 Statutes, Effects and Net Benefits

Step 3: Choosing an Option

In principle, enacting a statute by reference to policy is a simple task and follows from
the reasoning process in Step 2. Having calculated the net benefit of the effect of each
statute, the legislature determines which net benefit possesses the greatest value.
Assume that this is Net Benefit 2. The legislature then identifies the effect that yields
this net benefit. In this example, it is Effect 2 that produces Net Benefit 2. Then the
legislature identifies and enacts the version of the statute that causes this effect. In the
example, Statute 2 causes Net Benefit 2. Consequently, the legislature will enact Statute
2 because this produces the best outcome.

Interpreting Law
In a court case, when a provision in statute law or common law is ambiguous the court
needs to interpret the provision as part of the process of deciding the case. Interpreting
 134 Chapter 10 Policy
law is essentially making law but on a smaller scale. Consequently, reasoning with
policy for interpreting law can be explained by the same basic model as is used for
making law. This discussion focuses on interpretation of statute law; common law is
fluid and amorphous so that interpreting common law tends to merge into amending it.

Step 1: Identifying the Options

Options before a court that has to interpret an ambiguous provision are analogous to
the options for passing a statute. They consist of all the possible meanings of the
provision and the effect that each will cause. These are designated Meaning 1, Meaning
2 and so on, the range consisting of Meanings 1-n. There is, however, no Meaning 0
since a court ordinarily is obliged to interpret an ambiguous provision when it is
necessary to do so to decide a case.

Each Meaning causes an effect. The range of effects consists of Effects 1-n to match
Meanings 1-n. Thus:
# Meaning 1 causes Effect 1
# Meaning 2 causes Effect 2 and so on
# Collectively Meanings 1-n cause Effects 1-n
These options can be conveniently set out in a table in the following way:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 10.3 Meanings and Effects

Step 2: Evaluating the Options

Policy is used as the reasoning process for interpreting law, just as it is deployed for
making law. However, there are at least three types of policy that a court might use
when interpreting statute law.39

First, there is an approach that is feasible if judges are elected. It is called elected
legitimacy of the judiciary or judicial legitimacy. In this case the court exercises its
own value judgment as to the best meaning. It does so on the basis that being elected
gives it a mandate to do so. To spell this out, there is an argument that the voters
elected the judge because they trusted his or her judgment so they wanted him or her to
decide cases in the manner that they thought best. Thus to interpret the provision
rationally, the court calculates the net benefit of each effect by reference to values of its
own choosing.

To explain and illustrate this, assume that the court determines that Net Benefit X
possesses the greatest value. Now Net Benefit X is the net benefit of Effect X which is
the effect caused by Meaning X. Meaning X, therefore, causes the best outcome and is
the meaning that the court should pronounce as legally correct.

39. Chapter 30 Model for Forming Law

 Chapter 10 Policy 135

Second, there is an approach based on the fact that the court is interpreting a statute
enacted by a democratic legislature. This approach is referred to as the legitimacy of
the elected legislature or legislative legitimacy. When a court adopts this approach it
abides by the value judgment of the legislature which enacted the statute. It does this by
interpreting the statute to further the intention of the legislature when it enacted the
statute.

To explain this further, assume that the legislature passed Statute X in order to achieve
Effect X and the court has to interpret Statute X. There are three possible ways in
which the legislature can communicate its intention:
(1) The legislature has somehow indicated that Effect X is the effect that it sought
when enacting this provision. In this case the court should interpret the provision in
manner that will bring about Effect X. This means that it has to choose as the correct
legal meaning of the provision the meaning that causes Effect X. In our system this
meaning is labelled Meaning X.
(2) The legislature has somehow indicated that Meaning X is the meaning that it
intended. In these circumstances also the court has to declare Meaning X to be legally
correct. Then, whatever effect Meaning X will then cause will just happen. It is of no
direct concern to the court.
(3) The legislature indicates both a meaning and an effect. There are two
possibilities here:
(i) As the court judges it, the intended meaning causes the intended effect. In
this case there is no problem and the court declares the intended meaning to be legally
correct.
(ii) As the court judges it, the intended meaning will not cause the intended
effect. In this case the court has a dilemma because it can implement only one aspect of
the legislature’s intention - either the meaning or the effect. If it chooses the intended
meaning the intended effect will not happen, while if it seeks to implement the intended
effect it will have to choose as the legally correct meaning some meaning other than the
one nominated by the legislature. In this case the better course is to seek to implement
the effect because, as has been said several times, rationally conceived, enacting a
statute constitutes purposive action. It is all about achieving some desired state of
affairs.258

Third, there is an approach based on the fact that the court interpreting the statute takes
into account defects in principle and practice with representative democracy. This
approach is referred to as the metademocracy. On this approach, the court treats as the
best meaning the meaning which the legislature would have chosen itself had it been
properly democratic. In doing this, the court is setting itself up as the arbiter of
democracy. It judges what is and is not democratic and decides cases accordingly. In
setting itself as an arbiter of democracy a court can make some claim to legitimacy. It
does so on the basis of an imputed choice. The court is making the very choice that the
electorate would have made if given a proper choice of its own.

258 Commentary 10.6.

 136 Chapter 10 Policy

Step 3: Choosing an Option

This reasoning process in Step 2 identifies the best meaning of the ambiguous
provision. Consequently, the court chooses this meaning as the legally correct meaning
of the provisions and declares it so in its judgment.

Administering Law
Law is administered by the executive arm of government. It seeks to implement the
government’s legislative intentions. Executive government is for the most part
organised as a bureaucracy.

Max Weber (1864-1920) formulated the ideal type of bureaucracy. This was the
259 260

form an organisation would take if it were perfectly and rationally constructed. This
ideal type was aimed at helping the bureaucracy best to achieve its goals. So, for a
government bureaucracy, it was the model for an organisation that would best
administer laws so that each law achieved the purpose for which it was enacted. In
other words, the bureaucracy was a vehicle for purposive action, namely to achieve the
42
goals set by the legislature.

This is the essential point. For Weber ‘bureaucracies are goal-oriented organisations
designed according to rational principles in order to efficiently attain their goals’. 261

In Weber’s view, an ideal-type bureaucracy that seeks effective and efficient

achievement of its goals has the following characteristics:
(1) Hierarchy of Authority. There is a chain of command that has directives flowing
down from superiors to subordinates.
(2) Full Information. Subordinates gather information and deliver it to those higher
up in the hierarchy. Consequently any ensuing decision is an informed decision.
(3) Impersonality. Leadership is not charismatic but rests on impersonal rules. These
promulgate duties, responsibilities and rights, and lay down standardised procedures for
performing required tasks. Leadership is about getting the job done by doing it in the
correct manner. It is not a case of whom you know but what you know.
(4) Specialised Division of Labour. Officers are specialists and therefore highly
productive. Consequently, appointments to these offices are made according to specific
qualifications. This means that officers possess the qualifications and training to
perform their job effectively and efficiently. This is the Merit Principle Part 1.
(5) Promotion Based on Achievement. This means that only the best get to the top.
Only those people capable of making higher-level decisions are appointed to that level.
This is the Merit Principle Part 2.

In general terms, Weber’s proposals make good sense. Sometimes, however, the
legislature does not make the policy in full but enacts a statute that confers
discretionary powers on officials. The idea is that the official is given flexibility to

259 Elwell (1996)

260 Baldwin (1995) p 34 refers to this as the transmission belt theory of administration.
261 Elwell (1996)
 Chapter 10 Policy 137

deal with unforeseen situations and to try to regulate them in a manner that is
consistent with the policy that underlies the legislation.

Derivatives of Policy
The preceding argument has been to the effect that making and interpreting law involve
taking purposive action, with the consequence that the only rational form of reasoning
to be utilised is policy. In practice, however, two other types of reasoning are used for
interpreting law. These consist of precedent and the rules of interpretation. While these
appear different to policy, rationally conceived and properly viewed they can be taken
as derivatives of policy. How this can be done is explained in later discussion.262

Commentary
Commentary 10.1 Footnote 3
The text states that jurists have invoked many different fields when trying to explain
the tasks of making and interpreting law. Some further reading and selective comments
about these fields are as follows:
# Logic. See Allen and Caldwell (1963A), Fernando (1991), Lloyd (1964)
and Bray (1979).
# Epistemology. See Murhpy (1991).
# Artificial Intelligence. See Sussking (1986), and Marhno, Natali, and
Sorci (1986).
# Reason. See Lloyd (1964).
# Institutional Imagination. See Unger (1996).
Science. See Bennion (1980B).
# Practical Reasoning. The Stanford Encylopedia of Philosophy defines
practical reason as ‘the general human capacity for resolving, through reflection, the
question of what one is to do’. For discussion of its application to law see MacCormick
(1983), Eskridge and Frickey (1987), and Nussbaum (1994).
# Rhetoric. Aristotle (1991) The Art of Rhetoric is the classic text on
rhetoric. See also Maher and Evans (1984), Jeff Mason (1989), Nussbaum (1995),
Saunders (1994) and Wald (1995B).

Commentary 10.2 Footnote 6

The term ‘consequentialism’ was coined by GEM Anscombe in her essay ‘Modern
Moral Philosophy’ - see Anscombe (1958).

Commentary 10.3 Footnote 14

The origin of the phrase ‘guns or butter’ is not clear. Two famous early usages came
from Nazi Germany. In a speech on 17 January 1936 Minister of Propaganda Joseph
Goebbels stated: ‘We can do without butter, but, despite all our love of peace, not
without arms. One cannot shoot with butter, but with guns’. Sometime in the summer

262 Chapter 23 Precedent and Chapter 24 Rules

 138 Chapter 10 Policy

of the same year, Hermann Goering echoed this sentiment, but with a lessened love of
peace, when proclaiming: ‘Guns will make us powerful; butter will only make us fat’.

Commentary 10.4 Footnote 15

Opportunity cost impounds the notion that the true cost of something is what you give
up to get it. Opportunity cost is encapsulated in the popular saying used in a fairground:
‘What you lose on the swings you gain on the roundabouts’. It also underlies the
proverb that you cannot have your cake and eat it too.

Commentary 10.5 Footnote 28

For discussion of the limitations of economic analysis on its own when applied to
public policy-making see Arup (1982). The point of course is that economics is
important but it does not provide everything that humans need to survive and thrive.

Commentary 10.6 Footnote 40

There is a good argument in principle that when interpreting a statute a court should
seek to implement the effect that the statute was intended to bring about because, as has
been said several times, rationally conceived, enacting a statute constitutes purposive
action. It is all about achieving some desired state of affairs. An illustrative case is
Braschi v Stahl Associates 543 NE 2d 49 (NY 1989). This is discussed in Chapter 22
Social Choice: Interpreting Law.
Chapter 11 Nature of
Net Benefit
Introduction
Net Benefit Rule
Changeover Costs and Benefits
Operating Costs and Benefits
Illustration
Commentary

1
Desperate times call for desperate
measures.

Introduction
[The leader of the Opposition] waits in the wings with a host of zany plans to sail the ship of state
intervention into unchartered waters, as well as returning to the treacherous shoals of the past .263 264
265
Reasoning processes used in taking purposive action are labelled policy. Policy is
based on the net benefit rule. In simple form, policy entails seeking and implementing
the best option. This consists of the outcome that yields the highest net benefit. While
the more usual use of net benefit confines it to benefits and costs that can be expressed
in money’s worth, the analysis in this book includes any type of benefits and costs. All
relevant costs and benefits must be counted, including but not confined to those that are
economic, financial, physical, emotional, spiritual and social.

This chapter explains the concept of net benefit. To do this it performs three tasks:
(1) It explains the net benefit rule in detail.
(2) It explains the two components of the net benefit rule. These consist of operating
costs and benefits and changeover costs and benefits.
(3) It concludes with an illustration.

Net Benefit Rule

You ’re simply the best, better than all the rest.266
Introduction
A legislature about to make a statute or a court that has to interpret a law is faced with
options. The function of the net benefit rule is to provide a means whereby the
legislature or court can best choose between these options.

Options
If a legislature decides that it wants to legislate on a topic, typically to improve the
current state off affairs or to solve or lessen some problem, it has a number of options.
These options consist of all the possible versions of this statute it could pass. Each

263 Commentary 11.1.

264 Anderson (2004)
265 Faulkes (1985), See also Sunstein (1994) and Mitchell (1990).
266 Tina Turner Simply the Best

139
 140 Chapter 11 Nature of Net Benefit
option will cause an effect and these effects are likely to differ in the kind and degree of
benefits and costs that they cause. Given this, the options for enacting a statute can be
represented in a table in the following way:
Statutes Effects
Statute 0 Effect 0
Statute 1 Effect 1
Statute 2 Effect 2
Statute n Effect n
Figure 11.1 Statutes and Effects

Here the range of possible statutes in Column 1 consists of Statutes 0-n. Statute 0 is the option
not to enact a statute and to leave things as they now are. As the arrow in Column 2 between
Column 1 Statutes and Column 2 Effects indicates, the relationship between statutes and their
effects is causation. Each statute causes an effect so that the range of matching effects for
Statutes 0-n consists of Effects 0-n. To spell this out, Statutes 0-n are predicted to cause Effects
0-n. Obviously Effect 0 represents ‘things as they now are’ being the effect that Statute 0
causes.

Options for interpreting law have a similar structure. They are set out in the following table:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 11.2 Meanings and Effects

Meanings 1-n are predicted to cause Effects 1-n. This set of options is similar to that for
statutes except that there is no Meaning 0 to match Statute 0. This is because a court
interpreting law usually does not have the option to refuse to interpret a statute when the need to
do so arises in a case.

Net Benefit Rule

In plain language, a decision to make or interpret law entails weighing ‘the social and
economic costs and benefits’ of the options before the legislature or court.267 These are weighed
by applying the net benefit rule which is based on a cost benefit analysis - essentially the option
which yields the highest net benefit is the best option and the one which a rational legislature or
court should choose and implement.268

In simple terms the net benefit rule is applied to these options in the following way. The
legislature or court goes through the list of options and determines the net benefit of each effect.
Having done this, it then identifies the highest net benefit and the effect

267 McHugh (1999) p 48

268 McHugh (1999) p 46
 Chapter 11 Nature of Net Benefit 141
that yields this net benefit. Assume that this is Net Benefit X which is the net benefit of
Effect X. The legislature or court then determines which statute or which meaning
causes Effect X, which is labelled Statute X or Meaning X. The legislature then enacts
Statute X or the court then declares Meaning X to be the legally correct meaning of the
ambiguous provision.

There are however some variations for interpreting law. These arise because there is
controversy about how a court should interpret law. There are three approaches labelled
judicial legitimacy, legislative legitimacy and metademocracy:
(1) Judicial Legitimacy. This is the case, discussed above, where the court exercises
its own judgment as to which option is best. A significant justification for this is that the
judges of the court are elected as occurs, for example, in some jurisdictions in the
United States.
(2) Legislative Legitimacy. A court may defer to the judgment of the legislature, in
which case the court identifies the effect that accords or most accords with the effect
that the legislature was trying to achieve when it enacted the statute now before the
court. Strictly, this still involves the net benefit rule except that the legislature that
enacted the statute, not the court that is now interpreting it, determines the effect that
yields the highest net benefit.
(3) Metademocracy. The court may take an approach based on metademocratic
considerations. This happens when the court believes that the statute was not made in a
properly democratic way. Here the court seeks to restore the neglected democracy by
interpreting the statute to mean what it would mean if it had been democratically made.
As with legislative legitimacy the court is still operating according to the net benefit
rule, except that it is substituting metademocratic considerations for both its own
judgment as to the highest net benefit and for the judgment of the legislature in this
respect.

Components of Net Benefit

Broadly described, net benefit consists of total benefits of a law or a meaning minus
total costs. Conveniently, the costs and benefits can be classified as operating costs or
benefits on the one side and changeover costs and benefits on the other. Obviously, to
work with net benefit, it is necessary to examine these components in more detail.

To undertake this task, assume that a government is deciding whether to persist with the
existing law, Statute 0, which causes Effect 0, or to pass a new law. This new law might
be Statute X which causes Effect X, or Statute Y which causes Effect Y.

Operating costs and benefits are the costs and benefits incurred and achieved once a
statute has been enacted and has commenced operation. With rare exception, any statute
that operates incurs costs and yields benefits. There are benefits in having the statute and
costs in maintaining those benefits. In our model, before a statute is enacted Statute 0 is
operating. If Statute 0 is replaced by another statute, for example Statute X, then two
things happen. The operating costs and benefits of Statute 0 (normally) cease. The
operating costs and benefits of Statute X commence.
 142 Chapter 11 Nature of Net Benefit
Changeover costs and benefits occur when there is a change of law. This could be a
change from Statute 0 to Statute X, or from Statute X (once it was enacted) to Statute Y.
Changeover costs and benefits have three components:
(1) Benefits. The major benefit that a statute yields is when it is operating. There
may, however, be some changeover benefits as one statute is dismantled and another
erected. For example, there may be premises and equipment that are no longer needed
and are now freed for other use.
(2) Economic Costs. There are three economic costs - transaction costs, adjustment
costs and predictability costs.
(3) Symbolic Costs. These consist of equality costs, and in the nature of things apply
more to judge made law than to statutes.

These components of net benefit are the same regardless of whether we are considering
a statute made by a legislature, a common law rule made by a court or the interpretation
of a statute or common law rule by a court. However, the extent of these costs and
benefits varies depending on circumstances. For example, a minor amendment to a
statute will typically cause low costs and benefits, whereas a major codification of an
area of law will have far greater costs and benefits. Some of these possibilities are
illustrated in the discussion below.

Restating the Net Benefit Rule

In simple form the net benefit rule requires that society enact the statute that yields the
highest net benefit. However, the forgoing discussion has indicated that the costs and
benefits of a statute are of two kinds, changeover costs and benefits and operating costs
and benefits. In the light of this it is necessary to restate the net benefit rule.

To illustrate this restatement we will refer to a legislature passing a statute, but the
reasoning applies equally to making common law and interpreting law. Assume for the
illustration that the statute currently operating is Statute X. However, doubts about the
efficacy have prompted ideas to repeal Statute X and replace it with a better statute,
which we label Statute Y.

In its simple application the net benefit rule measures the net benefit of a statute as it
operates. As is clear, this net benefit consists of the excess of operating benefits over
operating costs. Now if the government is considering replacing Statute X with Statute
Y, the prime question is whether Statute Y will procure a higher operating net benefit
than Statute X.

However, to change from Statute X to Statute Y there will be changeover costs and
benefits. In the nature of things the costs are likely to exceed the benefits although this is
not inevitable. In other words the net benefit of the changeover will be negative so that
there is a net changeover cost.

In the light of this we can formulate the rule for deciding whether to replace one statute,
Statute X, with another statute, Statute Y. In practical terms a legislature
 Chapter 11 Nature of Net Benefit 143
should make the change only when the gain from enacting Statute Y (that is, the
increase in the net benefit of operating Statute Y instead of Statute X) is greater than the
net changeover costs.

This practical statement of the rule is useful because it incorporates a common reality -
that the second statute will be better than the first in terms of its operating net benefit but
there will be costs in making the change. However, it is necessary to state the rule in its
abstract form. Stated in this way, the rule says that a legislature should not change from
Statute X to Statute Y unless there is some net gain to society taking into account two
things:
(1) The benefits and costs of operating Statute X and Statute Y.
(2) The benefits and costs in changing from Statute X to Statute Y.

Determining Net Benefit

Any effect of a law or interpretation of a law, Effect X, is composed of a number of
specific effects or components that can be conveniently labelled Effects X.1-X.n. Each
of these individual effects will generate costs or benefits. To determine the net benefit of
an effect such as Effect X it is necessary to take a number of steps. These are as follows:
(1) Identify each and every component of the effect.
(2) Determine whether each component is a cost or benefit.
(3) Determine the value of the cost or benefit assuming that it actually is incurred or
gained.
(4) Total the value of all the components that are costs and the value of all the
components that are benefits. This yields the value of total costs and the value of total
benefits.
(5) Subtract the value of total costs from the value of total benefits. This yields the
net benefit of the particular effect. For Effect X this would be labelled effect Net Benefit
X.

Problem of Measurement
The objects of society are of the greatest possible complexity.
In principle the method described above is the way to proceed. To resolve a conflict
between options a decision maker such as a legislature or court chooses the effect whose
net benefit has the highest value. In practice, however, there is a major problem. To total
costs and to total benefits it is necessary to do three things:
(1) Allocate a numerical value to all costs and benefits.
(2) Allocate this value according to a single measure.
(3) For this measure to constitute a ratio scale.269 270
In practice it is generally not possible to do these three things, which represents a major
problem, called the problem of incommensurability. This problem is discussed in the
next chapter.271

269 Edmund Burke (1790) Reflections on the Revolution in France

270 Howell (1997)
271 Chapter 12 Measurement of Net Benefit
 144 Chapter 11 Nature of Net Benefit
Use of Net Benefit
Is the game worth the candle?.272
Not surprisingly, since it is so manifestly rational, the net benefit rule is a standard rule
of decision making, recognised in many disciplines. These include law,273 274 275 public
12
administration, organisational behaviour, economics, finance and cognitive psychology.
For example, McShane and Von Glinow assert that expectancy theory, which is
underpinned by net benefit, ‘offers one of the best models available for
13
predicting work effort and motivation’.

Changeover Costs and Benefits

Foolish consistency is the hobgoblin of little minds, adored by little statesmen.276
Introduction
Changeover costs and benefits are comprised of benefits and costs accruing from a
legislature or court dismantling the old rule - a statute, a common law rule or an
interpretation of one of these - and setting up the new rule. There are two common types
of changeover costs and benefits - economic costs (which are instrumental) and
symbolic costs. There are also liberty costs, but these relate to the special case of
excessive judicial legislation and will not be further considered.277

Benefits
By its nature a changeover from one statutory or judicial rule to another will incur costs.
While there may not necessarily be changeover benefits, they are always possible. For
example, when a legislative scheme is dismantled there may be gains from the sale of
plant or equipment that is no longer needed.

Economic Costs
Introduction
Changeover costs and benefits include three types of economic costs - transaction costs,
adjustment costs and predictability costs.

Transaction Costs
Transaction costs or losses are the costs in changing from one rule to another. Using the
standard labels the proposition is that a legislature incurs transaction costs when
changing from Statute 0 to Statute X.278

Legislature
Transaction costs are the costs of repealing the old statute and making the new one.
Generally speaking, the larger the scope of the statute and the larger its text, the larger

272 This is a proverb, possibly first used by Dr Raphael C Thomas.

273 Evans (2000) p 201
274 McShane and Von Glinow (2000) p78
275 McShane and Von Glinow (2000) p78
276 Ralph Waldo Emerson
277 Commentary 11.2.
278 Landes (1979) p 239; Peters (1996) p2039
 Chapter 11 Nature of Net Benefit 145
are its transaction costs. Transaction costs include any inquiries that preceded the
passing and implementation of the statute, any trials or testing of the processes or
practices which the statute enables, the cost of drafting, the cost of the time of the
legislature in debating and approving and the cost of publishing the statute. Obviously
transaction costs for legislation are higher in a federal than in a unitary system because
legislation covering the same ground that falls within the province of the regions has to
17
be separately enacted by each regional legislature. There is also the cost of judicial
policing of the federal legislative boundaries between central and regional
governments.279 280

Court
Transaction costs for a court are the costs of abrogating the old rule in the precedent and
formulating a new one. These are the costs of the court hearing and deliberating on the
change.

Three types of rules seek to lessen the transaction costs of a court:

(1) Rules of Precedent. The rules of precedent limit the range of courts that can
overrule a prior decision and thus reduce the amount of time courts spend in
reconsidering prior cases. So much is this the case that Thomas S Currier has argued that
if cases were continually decided without guidance from precedent ‘the judicial
workload would be intolerable’.281 282 283
(2) Need for Leave to Appeal. In some jurisdictions there are rules that require a
party to obtain leave to have the court hear an appeal from a lower court. Leave may be
at the discretion of either the court from which or to which the appeal is taken.
(3) Need for Leave to Attack a Precedent. Some courts have a procedural rule that
a party needs the permission of the court in order to argue that a court should change
20
an established precedent.

Adjustment Costs
Adjustment costs are incurred when there has been a change of rule. Adjustment costs
consist of the cost of adjusting from one rule, including a version or interpretation of a
21
rule, to another. People and businesses need to adjust their lives and practices when
there is a change of law. Continuity, by contrast, avoids adjustment costs. Those
affected by the present law stay with it and do not have to adjust their affairs to a new
legal rule.

To illustrate adjustment costs, assume that a court changes a common law rule
regulating insurance. This could make it necessary for insurance companies to rewrite
all of their policies, legal firms acting on behalf of plaintiffs and insurance companies

279 See Hall (1998), Mason, AF (1986)

280 See McConvill and Smith (2001).
281 Currier (1965) pp 235-238
282 For examples see Proctor v Jetway Aviation [1984] 1 NSWLR 166 and Evda Nominees v
Victoria (1984) 154 CLR 311
283 For a more detailed discussion of adjustment costs see Van Alstine (2002).
 146 Chapter 11 Nature of Net Benefit
will need to familiarise themselves with the new framework and provide appropriate
advice on the changes to clients, and claimants (as a class) will need to familiarise
themselves with the limitation or expansion of their ability to seek insurance payouts.
The change may lead to an accompanying rise or decline in levels of litigation, thus
affecting the legal industry, and associated social changeover costs. Indeed it may take
several decisions on the matter in the courts before the full implications of the alteration
are fathomed. The alteration may also have effects on the premium levels and
competitiveness, thereby possibly altering the corporate make-up of the insurance
industry and by this means incurring additional economic changeover costs.

Legislature
Where there is only a minor change to a statute, the adjustment costs tend not to be
large. By contrast, adjustment costs tend to be large when a new legislative scheme is
introduced. These costs include writing textbooks and manuals to explain the scheme;
teaching the working of the scheme to public servants who administer it, lawyers who
22
work with it and the sectors of the public who are affected by it; preparation and
printing of new forms; acquisition of new plant and equipment; and training operators of
new plant and equipment.

Court
Courts have made pronouncements on the factors that affect the cost of adjusting from
one rule to another. These concern the similarity of the facts of the two relevant cases
and the situation where people have made plans based on the earlier decision.

Similarity of the Facts

One factor consists of how similar are the facts of the case with the precedent to the
facts of the case before the court. The greater the similarity, the less willing is the court
to change a common law rule, because the higher are the adjustment costs. To explain,
in Case 1 the court made Law 1 which applied to Facts 1. In Case 2 the court is
contemplating making Law 2 to apply to Facts 2. If the court makes a new rule, Law 2,
society has to adjust to follow Law 2 and not Law 1 which it displaced. This creates
adjustment costs. Therefore, the more that Facts 1 are similar to Facts 2, the more likely
it is that people previously covered by Law 1 will now be covered by Law 2. Hence, the
higher will be the adjustment costs.

Plans Based on Earlier Decision

Adjustment costs are higher when people have planned their activities, especially their
business and professional affairs, in consequence of the earlier decision. There are two
key propositions about adjustment costs here:
(1) Costs are higher in these circumstances because any change to the rule in the
decision will entail their having to make and implement new plans to adjust to the new
rule.
(2) Obviously, the more widely and frequently a rule has affected people the more
likely it is embedded in business and commercial practice. 284

284 Van Alstine (2002)

 Chapter 11 Nature of Net Benefit 147
Consequently, a court should be less likely to change a rule in these circumstances
23
because the adjustment costs would be very high.

Predictability Costs 2
And always keep a-hold of Nurse / For fear offinding something 4
worse/
25
A change of law makes law less predictable. It takes away the benefit of stability and
continuity so that law is no longer certain and predictable. 285 286 287 288 289 290 291 292 This is a
problem because
27
society places great value on the stability of many institutional arrangements.

Continuity enables people to know what the law is now and will be in the future,
28
promoting ‘the necessary perception that law is stable and unchanging’. It enables
29
law to keep faith with established expectations so that precedent protects reliance.
People know how to run their lives because they know what rules will govern them.
Therefore they can make plans for the future with some confidence that the rules
regulating them will stay the same, something which is most important in a developed
economy. Without this confidence they are less likely to engage in long term planning
with a resulting decline in productivity and efficiency. By contrast, changing a rule
30
‘would upset existing plans made by fair men’ in business and commerce.

Indeed contemporary society is founded on the consistency and blindness of the law.
Modern business transactions must occur within a legal framework that promises redress
for breaches or unjust conduct; citizens must be able to interact with the certainty that
crimes against their person will receive appropriate redress from the state to deter
offenders.

Legislature
Citizens are used to legislatures making new statute law. So, in this general sense, they
live with some unpredictability. Moreover, some specific changes are predictable, for
example because it is known that the government is contemplating change or that a law

285 Commentary 11.3.

286 Hilaire Belloc 'Jim - Who ran away from his Nurse and was eaten by a Lion'. This is a
poem in Belloc's book Cautionary Tales for Children.
287 Jones v Commonwealth (1987) 61 ALJR 348, 349, 71 ALR 497, 498
288 Kingston v Keprose (1987) 11 NSWLR 404, 423, Peters, (1996) at p2039, Mirehouse v
Rennell (1833) 1 Cl & F 527, 546 per Parke J, Archer v Howell (1992) 7 WAR 33
289 Currier (1965) pp 235-238
290 Peters, (1996) at p 2039. See also Planned Parenthood v Casey 505 US 833, 853-868
(1992).
291 Currier (1965) pp 235-238
292 Carter and Burke (2007) p 55. This was a comment on Crowley v Lewis 239 NY 264
(1925) where the court refused to hold an undisclosed principal liable on a contract signed by
their agent under seal.
 148 Chapter 11 Nature of Net Benefit
is not working well and some citizens are pushing for change.

On the other hand, some changes are considered unlikely because there is good reason
not to change. Some examples are:
(1) The law is working well so any change is likely to diminish rather than enhance the
working of the law.
 Chapter 11 Nature of Net Benefit 149
(2) The law has given a licence or quota to firms and revoking them would work
major injustice. In these cases the people in question would have made plans and
invested time, energy and money in the relevant activities.
Where a government starts to become increasingly unpredictable in its decision making
firms are likely to be a reluctant to make new investment. With sufficient threat of
instability there will be a flight of capital from the jurisdiction.

Court
Avoidance of predictability costs is a reason that a court will be very willing to decide
the best version of a rule when there is disagreement in the cases over the existence or
definition of the rule itself. A rule is strong when it has been unanimously stated,
affirmed and applied; it is weaker if there has been divergence in the cases and
31
dissenting judgments. The more ambiguous and uncertain a rule is, the more a later
court has to reconsider and redefine it. By contrast a court is less likely to change a
decision which has been consistently applied and confirmed in a line of cases because
32
such change would generate substantial predictability costs. 293 294 295

Symbolic Costs
There is a significant symbolic cost arising from a change of law, although it applies
more to judge made law than statute law. This cost consists of the equality cost arising
33
from lack of continuity. Continuity brings ‘uniformity’ and ‘consistency’ to law. By this
means like cases are treated alike, so that ‘similarly situated persons’ are treated
‘similarly’. Hence we are all equal before the law, which ‘appears to be at the heart
296 297

35
of our received notions of justice’, and is enshrined in the maxim that ‘justice is blind’. 298

This is a symbolic benefit, so that there are symbolic costs when this benefit
299

37
is diminished. It tarnishes the ‘image of justice’.

Thus, continuity of a law is a major factor in equality of treatment, that is, in ensuring
that everyone is treated equally by the law. Justice requires consistency by treating like
cases alike.

Changing from one law to another reduces this sense of equality. This causes an
equality cost, which operates regardless of whether the policy is for making or
interpreting law and regardless of whether the law is common law or statute law.
Typically, though, it is a consideration more commonly raised with changing law based
on precedent (common law and the interpretation of common law and statute law) than
with altering statute law. This is so probably because the community accepts change to

293 John v FCT (1989) 89 ATC 4101, 4112,4119-4120

294 John v FCT (1989) 89 ATC 4101, 4112,4119-4120
295 Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J
296 Peters (1996) at p 2043. For judicial indorsement of this principle see James B Beam
Distilling Co v Georgia 501 US 529, 540 (1991).
297 Currier (1965) pp 235-238
298 Commentary 11.4.
299 Currier (1965) pp 235-238
 150 Chapter 11 Nature of Net Benefit
statute law more readily than it does change to common law.
 Chapter 11 Nature of Net Benefit 151
Legislature
Citizens expect a legislature to change old laws and make new ones. Moreover,
traditional basic rights such as freedom of movement, ownership of property and
freedom of contract are largely common law rights - statutes tend to operate outside
areas of rights. Consequently, the equality costs of a new statute are not necessarily high
although they certainly can be.

Court
While net benefit applies to any policy decision, it applies to precedent in a special way.
This is because precedent contains two rules. One is ratio decidendi which is the rule in
the case that is the precedent. The other is stare decisis which requires a later court to
follow the precedent; it therefore preserves the rule enshrined in the ratio and the policy
which this rule implements (which may not be the policy that the makers of
38
the rule intended). Policy justification for the ratio is based on the net benefit it
produces - no rule could do better. Policy justification for stare decisis is that it
preserves that benefit, but also avoids the four changeover costs, namely transaction,
adjustment, predictability and equality costs. With precedent, equality looms large
because there is a strong common law tradition that like cases be treated alike so that all
people are equal before the law.

Desire for equality of treatment is manifest in judicial reasoning when a precedent lacks
proper support because it is not ‘supported by the citation of any reported case or
authority,’ or it ‘is out of line’ or incompatible with other authorities.
300 301 302 303 304

In an obvious case, this happens where the court fails to advert to an earlier
42
inconsistent decision, especially where this decision has some binding force, that is, it is
a decision of the court itself, a coordinate court or a court of higher authority. (In such
305

a case the decision is given per incuriam, literally through carelessness, although the
306

phrase is also used to mean through ignorance. )307

In all of these cases the particular precedent generates equality costs. This provides
good justification for a court to change it. Lack of equality before the law creates
disaffection among those treated less well, and in the worst case brings on civil unrest.
In addition, lack of equality before the law brings the law into disrepute in the eyes of
the wider community.

300 For some academic attempts to articulate why courts overrule prior cases see Harris,
(1990) and Horrigan (1992).
301 Re Mason [1928] Ch 385, 400 per Romer J
302 Scruttons v Midland Silicone [1962] 1 AC 446, 476-477 per Lord Reid
303 Rankin v Baldi [1985] 1 NSWLR 274, 276
304 Young v Bristol Aeroplane Co [1944] 1 KB 718, Boys v Chaplin [1968] 2 QB 1 and see
Farrell v Alexander [1976] 2 All ER 345
305 Young v Bristol Aeroplane Co [1944] 1 KB 718
306 Lord Justice Scarman said in Farrell v Alexander [1976] 2 All ER 345, 359 that it means
when 'Homer nodded'.
307 Young v Bristol Aeroplane Co [1944] 1 KB 718
 152 Chapter 11 Nature of Net Benefit
Operating Costs and Benefits
[I]t takes 7,500 litres of water to produce $1 worth of rice in the husk and 1600 litres to produce $1
worth of seed cotton.308 309
Introduction
Operating costs and benefits are distinguished from changeover costs and benefits.
Operating costs and benefits, as their label indicates, are the costs and benefits that
ensue after a law or an interpretation of a law is operative. Operating costs consist of
running costs, while operating benefits are constituted by the inflow of returns.

Legislature
Statutes can be very elaborate in their scope. Examples are statutes that regulate large
areas of activity such as health, education, environmental protection and industrial
relations. Consequently, the operating costs and benefits can be both diverse and large.
Moreover, in a federation, where a matter falls within the province of the regional
legislature as distinct from the central legislature, transactions costs are increased,
because each region has to administer a separate scheme - hence the fixed costs (but
47
not the variable costs) of administration are duplicated.

Court
A rational court should change an interpretation or a common law rule when there is net
gain in making the change. Typically, though, courts do not articulate the rule in this
direct way. But some cases indicating when a court should reconsider a rule refer, even
if implicitly, to the operating costs and benefits.

Cases contemplate a change of common law rule in any of three circumstances. These
consist of the case where a rule is not working well, where there were problems in
making the rule and where there has been a change in historical circumstances.

Rule Not Working Well

One situation for changing a rule is when a rule is not working well. Examples are a
rule which has achieved no useful result,310 has led to considerable, serious or manifest
inconvenience,311 unduly restricts the liberty of the subject,312 313 314 315 is out of line with
current
51 52 53
trends, is unjust, or is ‘plainly unreasonable’. Such a rule produces too little benefit or
too much cost, or possibly a bit of each. This means that it is likely that changing to
another rule will produce a good outcome in terms of an enhanced net benefit - things

308 Rick Farley, a former head of the National Farmers Federation, commenting on an
impending water shortage with consequent rise in cost, quoted in Peatling (2003) p 5
309 See Hall (1998) and McConvill and Smith (2001).
310 John v FCT (1989) 89 ATC4101,4112, 4119-4120
311 John v FCT (1989) 89 ATC4101,4112, 4119-4120, Admiralty Commissioners v SS
Valverda
[1938] AC 173, 194, Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J
312 R v Taylor [1950] 2 KB 368, Nkambul v R [1950] AC 379
313 Connor v Sankey [1976] 2 NSWLR 570
314 Commentary 11.5.
315 Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J
 Chapter 11 Nature of Net Benefit 153
would now be better once the law was changed.
 154 Chapter 11 Nature of Net Benefit
Defects in Making the Rule
Doubts about the overall benefit of a rule are also manifest in defects in the making of
the rule. If the rule was not properly made there are lingering doubts as to whether it is
the best rule316 either because not all costs or benefits were fully identified, or because
costs and benefits were not carefully weighed. Defects in rule making take a number of
forms:
(1) Not all relevant arguments were before the court when it made its decision. 317 A
rule is weakened to the extent that a relevant argument or a matter of decisive
importance was not considered.318 319
(2) The earlier court gave insufficient time to decide the issue and so did not
consider it properly. There are two obvious cases where there will probably not be time
for a proper consideration of the issue - where a quick decision is needed (and
57
this fact will usually be stated in the judgment), and where a matter is interlocutory.
(3) Even if judges in an earlier case reached the same conclusion, that is, finding for
one party or the other, they may have done so by reference to different rules. 320
Consequently they disagree on their reasons for the decision321 and hence on the relevant
costs and benefits or on how these should be weighed.
(4) The original decision was based on an extreme possibility, and a court used this
to introduce a new rule or to vary substantially an existing rule. This is the genesis of the
saying among lawyers that hard cases make bad law.322 These cases are a problem
because they are made on account of a defect in the former law, which is or may not be
fully representative of how the rule worked overall.323

Change in Circumstances
One of the ways in which a court may assess the relative merits of the old and new rule
is by reference to the historical circumstances of the old rule.324 These are relevant
because ‘law is the product of its own period and environment and it cannot remain
static’.325 Over time there will be change in ‘social circumstances’ and changes and
developments in ‘human knowledge’.326 Consequently, the older a precedent is, the
more ready a court should be to review it because the more likely it is that the policy
behind rule is now not desirable.

There will be two aspects to this change in circumstances:

(1) Causation. Does the rule cause the effect that law-makers said it would?

316 Connor v Sankey [1976] 2 NSWLR 570 per Street CJ

317 Re Mason [1928] Ch 385, 400 per Romer J, Tumahole Bereng v R [1949] 1 AC 253 per
Lord Denning
318 Rankin v Baldi [1985] 1 NSWLR 274, 276, R v Taylor [1950] 2 KB 368
319 Boys v Chaplin [1968] 2 QB 1
320 See for example the High Court decision inTrident v McNiece (1988) 80 ALR 574.
321 Rankin v Baldi [1985] 1 NSWLR 274,276, Johnv FCT (1989) 89 ATC 4101, 4112, 4119
4120
322 Commentary 11.6.
323 See Maher and Evans (1984-86).
324 Tumahole Bereng v R [1949] 1 AC 253 per Lord Denning
325 Allen (1964) p 300
326 Allen (1964) p 299. Commentary 11.7.
 Chapter 11 Nature of Net Benefit 155
(2) Evaluation. Does the rule in its changed form cause the best outcome? This, of
course, is the central concern of, and the justification for, the net benefit rule.

Illustration
There is an interesting illustration of the net benefit rule implemented in New South
Wales in legislation that deals with the making of subordinate legislation. Section 5(1)
of the Subordinate Legislation Act 1989 provides as follows: ‘Before a principal
statutory rule327 is made, the responsible Minister is required to ensure that, as far as is
reasonably practicable, a regulatory impact statement complying with Schedule 2 is
prepared in connection with the substantive matters to be dealt with by the statutory
rule’.

Clause 1 of Schedule 2 provides that a regulatory impact statement must include the
following matters:
(a) A statement of the objectives sought to be achieved and the reasons for them.
(b) An identification of the alternative options by which those objectives can be
achieved (whether wholly or substantially).
(c) An assessment of the costs and benefits of the proposed statutory rule, including
the costs and benefits relating to resource allocation, administration and compliance.
(d) An assessment of the costs and benefits of each alternative option to the making
of the statutory rule (including the option of not proceeding with any action), including
the costs and benefits relating to resource allocation, administration and compliance.
(e) An assessment as to which of the alternative options involves the greatest net
benefit or the least net cost to the community.

As the reader will have observed, paragraphs (c), (d) and (e) refer to costs and benefits.
clause 2 of Schedule 2 makes two further provisions in regard to these. First, clause 2(1)
provides in effect that costs and benefits include ‘economic and social costs and
benefits, both direct and indirect’. Then, clause 2(2) deals with the problem of
quantification of costs and benefits. It provides first that ‘[c]osts and benefits should be
quantified wherever possible’. It then further provides, that if this is not possible, ‘the
anticipated impacts of the proposed action and of each alternative should be stated and
presented in a way that permits a comparison of the costs and benefits’. This may be
easier to order than to perform but at least it acknowledges the problem of measurement
and attempts to resolve the problem. This problem of measurement is discussed in the
next chapter.

Commentary
Commentary 11.1 Footnote 1
This is a proverb or popular saying. In Latin it is extremis malis extrema remedia,
literally extreme remedies for extreme illnesses. Two uses of the maxim in major events
are as follows:

327 Commentary 11.8.

 156 Chapter 11 Nature of Net Benefit
(1) Guy Fawkes allegedly used it to justify his attempt to blow up the English
parliament building in
(2) In the 1964 United States Presidential Campaign a candidate, Senator Barry
Goldwater, expressed similar sentiments in arguing that ‘extremism in defense of liberty
is no vice’.

Commentary 11.2 Footnote 15

Where courts exercise excessive legislative function they create a liberty cost. They
interfere with the democratic liberty and right of a citizen to have the legislative rule
created by an elected legislature and not an unelected judiciary.

Commentary 11.3 Footnote 23

Adjustment Costs
A case that recognises adjustment costs and how a change of law imposes them is John
v FCT (1989) 89 ATC 4101, 4112, 4119-4120.

Maxim: Communis Error FacitIus

There is a maxim that adopts this reasoning. It says communis error facit ius. Literally
the maxim says that a widely accepted or shared error makes law. This maxim alerts us
to a way of proceeding that we may not otherwise have noticed, rather than pressing on
us an inviolable rule. In fact judicial response to the maxim is mixed:
(1) Acceptance
In Bowman v Secular Society [1917] AC 406 Lord Sumner said that a decision of
antiquity should not be overruled ‘however little reason might incline your Lordships to
concur in them’. There is also support for the maxim in Bourne v Keane [1919] AC 815.
(2) Non Acceptance
The High Court of Australia did not apply it in several cases - for example Babaniaris v
Lutony Fashions (1987) 71 ALR 225 (where there was a long standing interpretation of
a statute that was manifestly incorrect and the court overruled the errant case) and
Buckley v Bennett Design & Constructions (1978) 19 ALR 257. In O’Connell v Reg
(1844) 11 Cl & Fin 155 Lord Denman also refused to apply the maxim. In doing so he
described the process of a wrong rule being accepted as an ‘incantation which becomes
magical by mere repetition’.

Logical Application of the Maxim

Logically, by applying the net benefit rule the communis error maxim should apply
when two requirements are satisfied:
(1) The rule works, even though it is not the best rule.
(2) The adjustment costs of changing the rule would be so large as to outweigh the
benefits ensuing from the change.

Cases supporting this reasoning are

(1) Wallis v Smith (1882) 21 Ch D 243, 265.
(2) Geelong Harbour Trust v Gibbs Bright (1974) 129 CLR 576, 582, 583-585.
 Chapter 11 Nature of Net Benefit 157
Commentary 11.4 Footnote 36
The maxim that ‘justice is blind’, in other words, even-handed is illustrated by the
traditional visual symbol of “Justice”, which is a woman who is blindfolded and holding
scales and a sword. The scales are for weighing right and wrong; the sword is to punish
the guilty; the blindfold is to show that justice is impartial (that is, it does not treat
friends differently from strangers, or high-ranking people better than humble ones,
because it does not ‘see’ them). But the woman symbolising justice is not deaf, because
she listens to all the evidence put before her.

Commentary 11.5 Footnote 52

Logically a court should be able to overrule or change a decision that is unjust. There is
judicial support for this proposition in several cases. See, for example, Bennett & Wood
v Orange City Council [1967] 1 NSWLR 502, Clutha Developments v Barry (1989) 18
NSWLR 86, Admiralty Commissioners v SS Valverda [1938] AC 173, 194, Robinson
Bros v Houghton Assessment Committee [1937] 2 KB 445.

Commentary 11.6 Footnote 60

A famous statement of the maxim that ‘hard cases make bad law’ comes from Justice
Oliver Wendell Holmes in Northern Securities Co v United States 193 US 197, pp 400-
401 (1904): ‘Great cases, like hard cases, make bad law. For great cases are called great,
not by reason of their real importance in shaping the law of the future, but because of
some accident of immediate overwhelming interest which appeals to the feelings and
distorts the judgment. These immediate interests exercise a kind of hydraulic pressure
which makes what previously was clear seem doubtful, and before which even well
settled principles of law will bend’. See also Nixon v Administrator of General Services
433 US 425, 439-55 (1977).

Commentary 11.7 Footnote 64

Change in social circumstances is a ground for changing a legal rule. See for example
M-T v M-T [1949] P 331. There the court took into account changes to gynaecological
knowledge to alter its approach to determining the legitimacy of a child.

Commentary 11.8 Footnote 65

The text cites s5(1) of the Subordinate Legislation Act 1989. Section 5 refers to a
‘principal statutory rule’. The expression ‘principal statutory rule’ is defined in s 3(1) to
mean ‘a statutory rule that contains provisions apart from: (a) direct amendments or
repeals, and (b) provisions that deal with its citation and commencement’.
Chapter 12
Measurement of Net Benefit
Introduction
Methods of Measurement Problems of
Measurement Attempts to Alleviate Problems
Conclusion Commentary

Introduction
Though I speak with the tongues of men and of angels, and have not charity, I am become as
sounding brass, or a tinkling cymbal. And though I have the gift of prophecy, and understand all
mysteries, and all knowledge; and though I have all faith, so that I could remove mountains, and
have not charity, I am nothing. And though I bestow all my goods to feed the poor, and though I
give my body to be burned, and have not charity, it profiteth me nothing. Charity suffereth long, and
is kind; charity envieth not; charity vaunteth not itself, is not puffed up, Doth not behave itself
unseemly, seeketh not her own, is not easily provoked, thinketh no evil; Rejoiceth not in iniquity, but
rejoiceth in the truth; Beareth all things, believeth all things, hopeth all things, endureth all things.
Charity never faileth: but whether there be prophecies, they shall fail; whether there be tongues,
they shall cease; whether there be knowledge, it shall vanish away. For we know in part, and we
prophesy in part. But when that which is perfect is come, then that which is in part shall be done
away. When I was a child, I spake as a child, I understood as a child, I thought as a child: but when
I became a man, I put away childish things. For now we see through a glass, darkly; but then face
to face: now I know in part; but then shall I know even as also I am known. And now abideth faith,
hope, charity, these three; but the greatest of these is charity .328 Let us restate the basic
propositions about policy and net benefit. Policy is based on the net benefit rule. In
simple form, policy entails seeking the best option. This consists of the outcome that
yields the highest net benefit.329 While the conventional use of net benefit confines it to
benefits and costs that can be expressed in money’s worth, this analysis includes any
type of benefits and costs. All relevant costs and benefits must be counted, including
those that are economic, financial, physical, emotional, aesthetic, spiritual and social.
All of this means that net benefit possesses a great strength and great weakness. Net
benefit is a single measure of the worth of a policy proposal. In principle it provides a
perfectly logical way to proceed when confronted by two or more options: choose the
option which possesses the highest net benefit. This is the strength of net benefit.

In practice, however, there is a problem with how to measure net benefit. Put briefly,
there are the related problems of measurement and comparison. Some things cannot be
measured. Even where they can be measured, they are not always measured by the

1.
2.
3
.

St Paul 1 Corinthians 13
Faulkes (1985). See also Sunstein (1994) and Mitchell
(1990). Commentary 12.1.
158
 Chapter 12 Measurement of Net Benefit 159
same means so that they cannot be directly compared. In ordinary language this is
portrayed as the problem of apples and oranges or chalk and cheese. 330 This is the
weakness of net benefit. This chapter explores ways that seek to overcome this problem.

Methods of Measurement
[T]he anticipated impacts of the proposed action and of each alternative should be stated and
presented in a way that permits a comparison of the costs and benefits331
introduction
Things can be measured on four types of measurement scales. These are the nominal
scale, the ordinal scale, the interval scale and the ratio scale. The scales divide among
themselves four desirable properties - classification (by putting a distinguishing label or
value on an item), magnitude, equal intervals and absolute zero.

Nominal Scale
The nominal scale involves just naming or classifying things. This can be specific
categories. For example, people can be labelled as male or female. Many other things
such as blood groups, games and foods can be labelled in this way. An alternative form
of labelling is that there is some condition quality or characteristic that is either present
or absent. Thus a person is either dead or alive, or they do or do not have a certain
disease.

There are two distinguishing features of the nominal scale. First, once something is
assigned to a category, for example, male or female, apple or orange, there is no further
description. Second, strictly it is not a measurement scale at all. While it is possible to
designate classes of things by a number, the number is used as a label not a value.

Ordinal Scale
The ordinal scale, also called the ranking scale, has the property called magnitude as
well as classification. It provides ordinal measurement. Magnitude gives items an order,
ranking or place. An example is the places in a horse race. These numbers, however,
only assign a place. They do not otherwise measure performance. For example, in a
horse race a horse still comes second no matter what the margin is between it and the
horse that comes first. As the saying goes, an inch is as good as a mile. In formal
language this is saying that with the ordinal scale, there are not equal scales between
rankings.

interval Scale
The interval scale provides both cardinal and ordinal measurement. Obviously it
provides cardinal measurement according to the interval scale, which also classifies the
item that is measured. The interval scale has two distinguishing properties. First,

4
.
5
.
Commentary 12.2.
Commentary 12.3.
 160 Chapter 12 Measurement of Net Benefit
there are equal intervals on the scale as the name indicates. No matter where something
is on the scale, the next interval up or down is always the same magnitude away.
Examples of the interval scale are the Celsius and Fahrenheit temperature scales.
Second, an interval scale does not have absolute zero (and this is how it is distinguished
from the ratio scale). This is why 40 degrees is not twice as hot as 20 degrees, which
would be the case if the scale had absolute zero.

Because the interval scale provides a form of cardinal measurement it also furnishes
ordinal measurement. It orders the items according to their cardinal value.

Ratio Scale
The ratio scale provides a cardinal and an ordinal form of measurement. It has the three
desirable properties covered so far, namely classification, magnitude and equal intervals.
It is distinguished by the fourth significant quality it possesses, absolute zero. For
example, an item that weighs nought (0) kilograms has no weight at all (as happen in
outer space). Most measurements used in the physical sciences, such as weight, volume
and speed, use the ratio scale.

A ratio scale incorporates another quality that is true to its name. Where items have
different measurements the ratio of the measurements reflects the ratio of the property
that is being measured. To illustrate this, the Kelvin scale for measuring temperature is a
ratio scale. Thus on the Kelvin scale 40 degrees is twice as hot as 20 degrees. By
contrast, on the Celsius scale, 60 degrees is not three times as hot as 20 degrees. It is
simply 40 degrees hotter (60°-20°= 40°)

Summary
‘Write that down ’ the King said to the jury, and the jury eagerly wrote down all three dates on
their slates, and then added them up, and reduced the answers to shillings and pence.332 These
scales and their properties are summarised in a following table that portrays the four
relevant characteristics of measurement:
# Classification. The scale classifies the items.
# Magnitude. The scale indicates the magnitude of the items.
# Equal Intervals. The scale has equal intervals.
# Absolute Zero. The scale has a point that represents absolute zero.

This now is the table:

Four Characteristics of Measurement
Classification Magnitude Equal Intervals Absolute Zero
Nominal Scale Yes No No No
Ordinal Scale Yes Yes No No
Interval Scale Yes Yes Yes No
Ratio Scale Yes Yes Yes Yes
Figure 12.1 Summary of Measurement Scales
Lewis Carroll Alice in Wonderland Chapter 11

332
 Chapter 12 Measurement of Net Benefit 161
Scales and Popular Sayings
Those who can give up essential liberty to obtain a little temporary safety, deserve
neither liberty nor safety.
Some popular sayings are best explained by reference to these forms of measurement.
On the surface the proverb ‘half a key opens no door’ and its close relative ‘a miss is as
good as a mile’ are in conflict with the proverb ‘half a loaf is better than no bread’. Yet
they all make sense by reference to the appropriate measuring scale. ‘Half a key opens
no door’ is apposite to items that are measured on the nominal scale where you are or
you are not, or you are in or you are out. As the popular saying goes ‘there is no half
measure’. By contrast the nostrum that ‘half a loaf is better than no bread’ is appropriate
for items that are measured on the interval or ratio scale.

Reference to the interval and ratio scales can also resolve an apparent contradiction
between two sayings. According to popular wisdom if a thing is worth doing it is worth
doing properly. In other words, if it is a good thing you might as well have as much as
you can acquire. Yet according to GK Chesterton ‘if a thing is worth doing it is worth
doing badly’. In other words, something is better than nothing.333 334

Problems of Measurement
O to be torn twit love and duty335 The problem with
measurement of net benefit has two aspects. First, many items cannot be properly
measured. Either they cannot be measured at all, or they cannot be measured on a scale
that is appropriate. This is the problem of measurability or incommensurability. The
second aspect flows from the first. Because an item has one or other of these problems it
cannot be properly computed into net benefit. Since the law or meaning in question does
not have a properly computed net benefit it cannot be compared to other laws or
meanings which constitute the options before the decision maker. This is the problem of
comparability.

This is a problem because in the model proposed here everything that a human can
value must be included in determining the net benefit of an option. To choose between
options a decision maker such as a legislature or court selects the effect whose net
benefit possesses the highest value. In practice, however, there is this major problem
relating to measurability and comparability. Many items are not measurable on any scale
at all. This means that it is impossible to tally up both costs and benefits, and impossible
to subtract total cost from total benefit. Consequently, options cannot be compared as
the net benefit rule requires.

Let us flesh this out. Three things are necessary in order to total costs and to total
benefits - to allocate a numerical value to all costs and benefits, to allocate this value
according to a single measure and for this measure to constitute a ratio scale.336

333 Commentary 12.4.

334 GK Chesterton (1910) What's Wrong with the World Part IV, Chapter xiv
335 Ned Washington High Noon. It was the theme song for the film of the same name.
336 Howell (1997)
 162 Chapter 12 Measurement of Net Benefit
All of this is necessary to allow the following tasks to be performed:
(1) Adding. Adding all costs and benefits to yield total costs and total benefits for
each option.
(2) Subtracting. Subtracting total costs from total benefits to yield the net benefit for
each option.
(3) Comparing. Comparing the value of the net benefit of one possible statute or
meaning against the value of the net benefit of any other statute or meaning in the list of
options.337 338

As stated above, the problem has two aspects. First, there is the problem of
measurability. Some of the items constituting costs and benefits cannot be measured at
all (nonmetricity) or have a unit of measurement which does not satisfy the
12
requirements for a valid and reliable measure. Even where appropriate measures can be
devised, they may be costly or difficult to apply. Second, there is the problem of
comparability. Because items cannot be properly measured they cannot be added or
subtracted. Consequently, it is not possible to construct a valid and reliable measure of
net benefit. This means that the net benefit of one option cannot be compared with the
net benefit of other options (the problem of incomparability). Therefore, it is not
possible to apply the net benefit rule for making the decision with any sort of precision.

Attempts to Alleviate Problems

There will be more rejoicing in heaven over one sinner who repents than over ninety-
nine righteous persons who do not need to repent.339
Introduction
There are at least two means of alleviating the problem. One is to construct measuring
devices, while the other is to get by with measuring the main item.

Constructing Measurement Devices

Attempts have been made to construct methods of measurement for items that have so
far been unmeasurable. Economists, for example, who are inherently interested in
differences and comparisons, have devised a number of derivative means of measuring
various aspects of welfare. Social scientists have devised measures of human and
sociable attributes, covering such things as extraversion, introversion, personality and
intelligence. However, most of these devices go only part of the distance because they
provide only an ordinal and not a cardinal measure.

Average Gross Domestic Product

A simple example is average gross domestic product (GDP). This is derived from total
GDP divided by the population of the country. Average gross domestic product can be
compared from one county to another. This gives some indication of how the

11
.
12
.
13 In the popular phrase this is described as weighing the 'pros' and 'cons'.
. These are sometimes referred to as 'soft values' - see Arup (1982).
St Luke's Gospel 15:7
 Chapter 12 Measurement of Net Benefit 163
development of one country compares to another. However, GDP does yield not a finely
tuned account of economic and social conditions in a country.

Distribution of Income
If income was evenly distributed throughout all countries, average gross domestic
product would be a useful measure of welfare, both absolutely and comparatively
between countries. However, income is not evenly distributed so it is necessary to
devise a measure of its distribution. One device is the Lorenz Curve which correlates
percentage of income to percentage of population. For example it might show in a
particular country that the bottom 50% of the population has 20% of income, while the
top 20% of the population accrues 50% of the total income.

It would, however, be useful to reduce income equality and inequality to a single figure.
This is done by the Gini coefficient.340 The Gini coefficient is the ratio of two areas on a
graph displaying income distribution. One is the area between the Lorenz curve of the
distribution and the curve of the uniform distribution; the other is the area beneath the
uniform distribution. The dividend is a number between 0 and 1, where 0 corresponds to
perfect equality (everyone has the same income) and 1 corresponds to perfect inequality
(one person has all the income, and everyone else has zero income). Alternativley the
Gini coefficient can be expressed as a percentage where the the Gini coefficient
multiplied by 100. This version is referred to as the Gini index.341

Poverty
Given that mass poverty and diminished welfare are two of the greatest problems that
the world now faces much research has been devoted to trying to measure poverty and
welfare. In this regard the economist Amartya Sen (b 1933) has been most innovative.

Sen has refined the measure of poverty. A common measure was designated H which
showed the percentage of population below a fixed poverty line. One of the defects of H
was that it did not measure degrees of poverty of those below the poverty line. To
rectify this Sen proposed five reasonable axioms.342 He used these to derive a new
poverty index: P = H [I + G(1 - I)]. Here P is the measure of poverty, H is the the
percentage of population below a fixed poverty line, G is the Gini coefficient and I is a
measure (between 0 and 1) of the distribution of income, with both G and I computed
only for individuals below the poverty line.

Sen has done similar work to develop measures of welfare that also take income
differences into account. Like his work on measurement of poverty this enables social
scientists to measure welfare and welfare differences. As a result of this the social
scientists are better able to understand problems in developing countries.

340 It was developed by the Italian statistician Corrado Gini and published in his 1912 paper
'Variability e mutabilita'.
341 Commentary 12.5.
342 Three of these axioms have been used by some researchers, who have proposed
alternative indexes.
 164 Chapter 12 Measurement of Net Benefit
OtherMeasures
Some examples of other measures are as follows. Psychologists endeavour to measure
items such as personality, intelligence, and happiness. Scholars in education try to
measure the skills of students in numeracy and literacy. Social scientists themselves
would be the first to concede that perfection in measurement cannot ordinarily be
achieved. Nevertheless they have made some gains in devising reasonably valid and
reliable tests for measuring many characteristics.

Integrative Scales
One option, suggested by Professor Chapman, involves devising scales that integrate
17
multiple criteria in a manner that eliminates conflict between them. Four means are
suggested.343 344 First, devise a weighing system to make a trade off between the criteria
(that is, to make them comparable). Second, make one criterion dominant and the rest
irrelevant or nearly so. Third, make a hierarchy by ordering the criteria in lexical order.
Thus ‘criterion C1 is used to rank options, C2 is then used to break ties between options
that are equally good under C1, C3 is used to break ties under C2, and so on’. 345 346
Fourth, combine the criteria in a conceptual sequence.

Chapman’s own example involves a law school committee, which has to select three
incoming students for scholarships. First, the committee ranks all the students with
respect to the criterion of financial need, then rank[s] the ten neediest students with
respect to the criterion of scholarly ability, and, finally, rank[s] the five most scholarly
of these ten with respect to community service. The criteria of financial need,
scholarly ability, and community service all combine to determine which students
20
receive the scholarship. Chapman actually claims that this process of ‘conceptual
sequencing’ is ‘embodied, and justifiably so, in the choice procedures that adjudicatory
bodies employ’ specifically in the doctrines of tort law, contract law, and criminal
law.347 348

Choosing for an Individual

Professor Richard Craswell makes a case that the problem of incommensurability is
reduced if not eliminated where government action affects an individual with regard to
something for which the individual otherwise could have made a choice. This is the case
where the government chooses for the individual what the individual would have chosen
anyway given that they had proper information and a free choice. Even if the individual
could not justify their choice, the government removes any ground for
objecting to the choice on the basis that the individual would have made the same
22
choice on their own behalf. In formal terms, while the individual has not made an actual
choice, they have ‘made’ an imputed choice.

343 Chapman (1998) p 1487

344 These are summarised in Adler (1998A)
345 These are summarised in Adler (1998A)
346 These are summarised in Adler (1998A)
347 Chapman (1998) p 1487
348 Craswell (1998)
 Chapter 12 Measurement of Net Benefit 165
A good illustration of this comes from the law of contract. Damages are the standard
remedy for breach of contract. Damages are calculated on the basis of the comparison of
the situation the plaintiff would have been in if the contract has not been breached
(Situation 1) and the situation that the plaintiff is now in (Situation 2). Damages are
compensatory so they are measured, within certain legal confines, by the financial
difference for the plaintiff between Situation 1 and Situation 2.

Damages are obviously a good remedy in a commercial context, but consider the case
where the motive for a contract is not simply financial. For example, a party makes a
contract for the purchase of a unique work of art. Here contract law avoids the problem
of incommensurability by providing a remedy that both indorses and enforces the choice
that the party made when they entered the contract. For whatever reason, which they are
not bound to articulate, the plaintiff wanted the artwork. In these cases contract law
forces the offending party to hand over the work of art by issuing against them the
remedy of specific performance.

Getting By
In practice, though, these difficulties in measurement may substantially diminish where
there is a measurement of some item that may be the major target of government action.
In this case it is possible to make a reasonable even if not comprehensive analysis of the
proposal by measuring dollar input and specific output. Consider these illustrations:
(1) An annual expenditure of $2 million dollars on vaccinating children against a
particular disease may eliminate 125,000 cases of the disease every year. That is $16 per
head.
(2) If the disease is fatal, painful or able to cause permanent harm to the patient, by
any human measure the cost is more than justified in its alleviation of physical and
emotional disadvantage and distress to patients and their families. In addition there will
be cost saving in not having to treat the disease and productivity gains through
avoidance of the disease.

In each of these cases common sense suggests an obvious conclusion. These savings
and gains would easily outweigh the $16 cost.

Conclusion
Shall I compare thee to a Summer's day? / Thou art more lovely and more temperate :349 In
private life within legal limits a person can make choices - for example, as to the music
to which the listen, the church which they attend or the party for whom they vote -
which they do not have to justify (they just prefer X to Y). In public life, by contrast, the
choices that a government makes when enacting or interpreting law need to be justified.
This is why incomparability or incommensurability of governmental options becomes a
pressing issue for legal theory. If a government cannot evaluate all outcomes properly
there is no sure way it can choose the best.

349 William Shakespeare Sonnet No 18

 166 Chapter 12 Measurement of Net Benefit
When all attempts to overcome the problems of measurement and comparability are
taken into account, the problems remain. It is still the case that many phenomena,
characteristics and outcomes cannot be properly measured in money or any other terms.
They are imponderable and incommensurable. For these, there ‘is no scale upon
24
which the various consequences can be weighed’. Since they cannot be measured they
cannot readily be compared or traded off, and they cannot be simply computed to yield
total benefit or total cost. Hence in these cases any gauge of the net benefit of a proposal
and any comparison with another proposal is at best a rough and ready process based on
gut feeling. As Kirk sums it up: ‘Assessing the advantages and detriments of legislation
is not a mathematical process; it depends on subjective
25
evaluation’.
Thus to the extent that there is no way of measuring an effect of a law, and no common
measure for two or more effects, the concept of net benefit generally cannot be
implemented with any precision. Nevertheless, the type of thinking which the net benefit
rule incorporates is the only rational way to proceed - high returns on their own are of
little benefit if they come at a high cost (as illustrated by the concept of a Pyrrhic
victory). While difficult or impossible in practice, net benefit is perfect in principle.

Commentary
Commentary 12.1 Footnote 3
Volume 146 of the University of Pennsylvania Law Review (1998) is devoted to the
problems of measurement and incommensurability - see Adler (1998A), Adler (1998B),
Chapman (1998), Craswell (1998), Hadfield (1998), Johnston (1998), Katz (l998),
Posner (1998), Schauer (1998) and Warner (1998).

Commentary 12.2 Footnote 4

Many languages have expressions that say the same thing but often by reference to
different items. (i) Many European languages refer to apples and pears. (ii) Serbians
refer to comparing grandmothers and toads. (iii) Romanians refer to comparing the
grandmother and the machine gun, or the cow and long-johns.

Commentary 12.3 Footnote 5

This quotation is taken from the Subordinate Legislation Act 1989 (NSW) Schedule 2,
Clause 2. A little explanation is required. Section 5(1) of the Subordinate Legislation
Act 1989 (NSW) requires the making of a legislative impact statement before a major
statutory rule is made. Clause 1 of Schedule 2 provides, in a little detail, that this
statement will include what amounts to a cost benefit analysis. Clause 2(2) then requires
that costs and benefit should be measured. If this is not possible, it goes on to provide, as
quoted in the text, that ‘the anticipated impacts of the proposed action and of each
alternative should be stated and presented in a way that permits a comparison

24. McHugh (1999) p 49

25. Kirk (1997) p 55
 Chapter 12 Measurement of Net Benefit 167
of the costs and benefits’. As has been stated, if costs and benefits cannot be measured
and compared it is not possible to ascertain which legislative option yields the highest
net benefit.

Commentary 12.4 Footnote 7

The saying ‘Those who can give up essential liberty to obtain a little temporary safety,
deserve neither liberty nor safety’ is attributed to Benjamin Franklin. A variant of this
was written by Benjamin Franklin shortly before 17 February 1775 as part of his notes
for a proposition at the Pennsylvania Assembly. It is published in Memoirs of the Life
and Writings of Benjamin Franklin (1818). The saying in this form was used as a motto
on the title page of An Historical Review of the Constitution and Government of
Pennsylvania (1759). The book was written by Richard Jackson but published by
Franklin. Franklin, however, did claim responsibility for some small excerpts that were
used in the book.

Commentary 12.5 Footnote 15

While the Gini coefficient is mostly used to measure income inequality, it can also be
used to measure wealth inequality. This use, however, depends on no one having a
negative net wealth.
Chapter 13
Cause
Introduction
Determinism
Science
Nature of Causation
Commentary

Did you really believe when they told you the cause?
Did you really believe that this war would end wars?350 351 352

Introduction
It wasn't me that made him fall, no you can't blame me at all.
Introduction
Law, as we have said, changes the world. It does so by acting on people and causing
them to change their behaviour. When people change their behaviour, this causes
further change. People’s behaviour can changes the behaviour of other people (and
there may well be a chain reaction in this regard). People also change the inanimate part
of the world by the things that they do and do not do in response to the law.

This is why causation is of central importance. Law causes change. For this reason
causation is one of the fundaments of purposive action (the other being evaluation). As
the Government of the British Prime Minister Tony Blair said in its electoral platform:
‘What matters is what works’. Causation invokes the twin concepts of cause and effect,
which are also referred to as means and ends. The effect is the end for which action is
undertaken and the action is the means for achieving or causing an end.

Cause
The hand that rocks the cradle rules the world.353
In its natural sense, causation means making something happen. It refers to the notion
that one thing, such as the making or interpreting a statute, will bring about an effect. It
is also used in this chapter in a special sense as a type of abbreviation to refer to two
processes involving causation. Before a law is made or interpreted it refers to the
process of trying to predict the effect that will ensue. After a law is made or interpreted
it refers to the process of trying to detect the effect that did in fact ensue.

Causation enters the process of forming law in the following way. Law is made to
change the world. Any possible law that a legislature might make, and any possible
meaning of an ambiguous term that a court might choose as legally correct, will cause

350 Eric Bogle No Man's Land. Commentary 13.1.

351 Bob Dylan (1963) Who Killed Davey Moore
352 Blair and Cunningham (1999)
353 Wallace (1819-1881)

168
 Chapter 13 Cause 169
an effect.354 Consequently, the rational approach to forming law entails predicting the
effects that each law on a subject or each interpretation of a law will cause. This is a
necessary precondition for the next step in the rational process, which is to evaluate the
effects of each possible law or interpretation to see which causes the best effect. Then
the legislature or court enacts this law, or chooses this meaning of a law as legally
correct. In other words making and interpreting law are performed according to a
simple decision making rule: the best law or the best interpretation of a law is the one
that causes the best effect. This, as has been argued, consists of the effect that yields the
highest net benefit.355 356 It is, as we have also said, impossible to be more rational than
this.

While cause applies to any action for forming law, that is, to making and interpreting
common law and statute law, much of the subsequent discussion focuses on making
statute law. In part this is because it is the most significant part of forming law, and in
part because what is said about making statute law applies to the other tasks, either
directly or with appropriate modification.

Effects
There are three important propositions concerning effects that have already been
explained, and so can just be noted here. First, there are many synonyms for the term
‘effect’, second, effects typically occur as a chain or a cluster, and third, there is no
earthly limit to the nature and scope of effects.357

Outline
Discussion of causation in this chapter takes place in three stages. First, we consider
the concept of determinism, which underlies causation. Next the chapter considers the
nature of science and its capacity to deliver laws that describe and enable us to predict
human behaviour. This includes an examination of some general theories of
behavioural science to illustrate that overall it is still neither an exact nor a complete
science. This means that it is not presently possible to devise a comprehensive theory of
law making because it is not possible to say with reasonable certainty the effects that
laws will cause. Third, the chapter considers the nature of causation.

Determinism
Introduction
There are two competing views about human behaviour, voluntarism and determinism.
Voluntarism says that humans have free will and therefore have choices as to how they
behave. Determinism says that humans do not have free will; instead their behaviour is
caused or determined. Clearly the concept of causation takes a deterministic view of
how things happen.

354 Magat and Schroeder (1984)

355 This is called the net benefit rule. It is discussed in Chapter 11 Nature of Net Benefit.
356 Passmore (1981), and Magat (1984). See also Chambliss (1967), and Akers and
Hawkins (1975).
357 Chapter 10 Policy
 170 Chapter 13 Cause
Voluntarism
[L]ead us not into temptation.358
Voluntarism accords humans free will. Consequently, humans have choices as to how
they behave. They can choose to do something or not to do it. Because of this, people
are morally responsible in that they can properly be held accountable for their
behaviour.

Determinism
Here I stand. I can do no other. God help me.359
Determinism asserts that human behaviour is caused or determined so that there are no
choices. On the extreme view of determinism, for every event there is a chain of
causation going back to the beginning of time. Consequently, according to this view the
destiny of each of us is set before we are born.360 361

Several thinkers and schools of thought have taken a determinist view. For example
Jeremy Bentham (1748-1832), taking up the ideas of philosophers such as Thomas
Hobbes (1588-1679), formulated the principle that humans are moved by two basic
forces, the desire to obtain pleasure and the need to avoid pain. Following the
experimental work of the Russian physiologist Ivan Pavlov (1849-1936), and through
the research of John Watson (1878-1958) and Burrhus F Skinner (1904-1990), this idea
later received expression as an influential theory in psychology called behaviourism.
On this basis people can be manipulated to behave in set ways according to their desire
to obtain pleasure and their need to avoid pain

Resolution
Determinism makes for good social science because, if behaviour is determined, there
are laws of human behaviour to be found and studied. Yet social science in this form
comes at a price because determinism in its extreme form eliminates all idea of moral
responsibility. Only when a human makes a free choice to do or not to do something
(as voluntarism propounds) can we make any moral judgment of them for having
12
performed or not performed an action.

Thus determinism wipes out free will and moral responsibility, while voluntarism
wipes out social planning and behavioural science. A possible resolution is a middle
view, which is some sort of compromise between the two extreme positions. This view
is labelled compatibilism. Humans have free will. Therefore they can make choices and
thus be morally responsible. Yet in making their choices they will be influenced by
various personal and social factors, so that a soft determinism prevails. Given that these
personal and social factors are shared by many, people sometimes or even often behave
in reasonably predictable ways so we can still have behavioural science.

358 The Lord's Prayer

359 Martin Luther, speech at the Diet of Worms, 18 April 1521. Commentary 13.2.
360 Commentary 13.3.
361 As Miller (1978) p12 puts it, with determinism 'all values in ethics, logic and aesthetics
disappear'.
 Chapter 13 Cause 171
The beauty of the middle view is that it accommodates both ethics and behavioural
science. It also squares with ordinary concepts as to how people behave. Additionally, it
harmonises with how the major schools of behavioural science spread across a
spectrum locating deterministic theories at one end and voluntaristic theories at the
other. This middle view is adopted here, and is labelled qualified determinism. People
generally choose how to behave, but often make their choice because of strong
motivation or other forces. To an extent this conclusion is supported by the reasons just
stated. To an extent it is also an assumption.

Science
Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell
13
us that when the storm is long past that the ocean is flat again.
Introduction
When legislators and judges make and interpret law, consciously or unconsciously they
rely on causal or behavioural laws. Behavioural laws should identify the effects that
statutes and their interpretation might cause or can cause. The point is that identifying
these effects is fundamental for applying the net benefit rule, which is the fundamental
rule for making and interpreting law. Ideally, these causal laws are properly supported
by scientific inquiry. In practice this is not always the case for two reasons. First, while
behavioural science has reached the point where it can explain much, it still cannot
provide explanations for a considerable amount of behaviour by pointing to a causal
law that drives the behaviour. Second, legislators and judges are generally not trained in
behavioural science so that even if there is a relevant behavioural law, they may not
know of its existence.

Using Science
Introduction
Proper science is based on proper method. Laws that explain causation in human
behaviour are most reliable when they have been derived by using a scientific method
based on investigation and proof. For this reason to understand legal reasoning it is
important to have some knowledge of scientific method. Scientific method, however, is
a complex topic, incorporating logical reasoning, statistics and probability. It is
therefore not possible to give anything more than a brief account. This will consist of
looking at three of the main methods used and explaining the reasoning processes
involved.

Hypothetico Deductive Method

Assume that medical scientists have done some study on Disease X. This study
strongly suggests, but without actually proving it, that a deficiency in the body of
Substance Y is the continuing cause of Disease X. This means or could mean that if
medical scientists can remove Substance Y from the body of a person with Disease X
they will cure them of the disease. (Clearly this is simplifying the hypothetical disease
but it assists to make the explanation clearer.) Consequently they devise a procedure 362

362 JM Keynes (1923) A Tract on Monetary Reform

 172 Chapter 13 Cause
that removes Substance Y from the body. They then seek to test this cure for Disease
X. This test rests on a deductive syllogism that takes the following form:
Components Relationships
Major Premise Substance Y is the continuing cause of Disease X.
Minor Premise This medical procedure removes Substance Y.
Conclusion Therefore this procedure cures Disease X.
Figure 13.1 Syllogism: Logic of Relations

When the researchers have tested a number of subjects there are three possible
outcomes from the perspective of scientific method. First, in all cases in the experiment
the removal of Substance Y did not cure the disease. This destroys or falsifies the
conclusion. It indicates the Substance Y on its own is not the continuing cause of
Disease X.

Second, there is a mixed result. Some patients are cured and some are not. In this case
the medical scientists need to continue investigating and seek to explain why the
procedure worked in some cases but not others. There are two obvious lines of inquiry:
(1) Substance Y plays a part in Disease X but there is some other factor or variable
at work as well.
(2) Disease X can, sometimes at least, have a psychosomatic cause. For example,
when the experimental procedure was performed by a charming doctor and some
attentive nurses, some of the patients felt wanted and cared for. Thus there was a
change of mood that alleviated their mental distress. This removed the psychosomatic
cause of Disease X and thus cured them of this disease.

Third, in every case the removal of Substance Y cured the disease. 363 In this case the
test has corroborated the validity of the cure. It has not absolutely proved that the
procedure of removing Substance Y is a cure but it has given some strength to the
notion.

Assume in this case where the procedure has cured the disease in all cases, doctors now
use it as a standard practice. Assume that the procedure continues to cure all cases. This
provides an even stronger case for the fact the procedure works. As this happens more
and more - that the procedure works - one can mount an inductive argument that it
works all of the time.

While this latter part of the discussion has focused on the procedure as the cure, the
continued and invariant success of the procedure also suggests that the reasoning
underlying it is correct. That is, Substance Y is the continuing cause of Disease X.
However, as would be clear from the reasoning so far, this is not established
conclusively although there is a lot or supportive evidence. Moreover, in real life the
hypothesis that Substance Y is the continuing cause of Disease X will not be idle
speculation but usually have some good sense to it as well.

363 Commentary 13.4.

 Chapter 13 Cause 173
That said, it is still possible that Substance Y is not the continuing cause of Disease X.
The real truth may be that something else is the cause. What happens is that the
procedure that removes Substance Y at the same time removes the real cause of Disease
X.

Experimental Method
Experiments test proposed causal laws. Researchers set up a situation where the causal
law might operate and see if it does. In ideal circumstances, which scientists aim for, an
experiment is conducted under conditions that are as controlled as human endeavour
can make them. In the experiment, the scientists want to test a supposed causal law, for
instance that X causes Y. This is referred to as the hypothesis. The hypothesis might be,
for example, that an increase in temperature upward from 20 degrees centigrade
negatively affects the capacity of a person to perform mental arithmetic. To test this the
core method might involve testing subjects in five stages. The first stage tests subjects
on mental arithmetic at a temperature of 20 degrees. Then the temperature is raised on
four occasions by a specific amount, say 1 degree, and a fresh test in mental arithmetic
is administered at each new level of temperature.364

Here X is known as the independent variable. This is because the experimenter

determines the level or degree of X before the experiment begins - therefore, the degree
or level of X is independent of anything that happens during the experiment. Y is
known as the dependent variable because the value of Y will depend on X if there is a
causal relationship between X and Y.

As stated, the experimenter endeavours to control conditions as much as possible.

Ideally they will control them completely. If they can do this they are justified in
arguing that any change in Y is solely due to X.365 366 If they cannot control the
conditions completely they run the risk that other factors affect the outcome. These
other factors are known as confounding variables because they confuse the outcome
and potentially defeat the purpose of the experiment.

Where external conditions are difficult to control, one method of enhancing control is
to include in the experiment two groups (or even more than two). In the case of two
groups, one is actually called the ‘control group,’ while the other is called the
‘experimental group.’ The control group is, as far as possible, equal in composition in
all respects to the experimental group. The two groups, however, are treated differently
in the experiment. Thus in the experiment testing the effect of an increase in
temperature from 20 degrees, the temperature for the control group remains at 20
degrees right throughout the experiment. By contrast, the temperature for the
experimental groups starts at 20 degrees but goes through an additional five stages as
17
outlined above.

364 Commentary 13.5.

365 Commentary 13.6.
366 To ensure better control, the second batch of mental arithmetic questions should be of
similar difficulty to the first.
 174 Chapter 13 Cause
To put the position simply, if the hypothesis is correct, the control group would be
reasonably consistent in its performance of mental arithmetic while the experimental
group would generally show a declining level of performance with each increase in
temperature.

A simple and classic illustration of experimental method comes from Galileo Galilei
(1564-1642) the distinguished scientist, mathematician and philosopher. Galileo was
born to science because his father, Vincenzo Galilei, a music theorist, had performed
experiments on the effect that stretching the string of a musical instrument had on pitch.
By these experiments he established that the pitch varies according to the square root of
the tension.

Galileo is famous for an experiment that may in fact have been apocryphal. It
concerned the velocity of falling objects. Aristotle (384-322) had argued that heavier
objects fell faster than lighter ones and that the velocity of falling objects was
proportionate to their mass or weight. A biography by Galileo’s pupil, Vincenzo
Viviani, claims that Galileo actually conducted an experiment to test Aristotle’s theory.
He ascended the Leaning Tower of Pisa and dropped balls of similar metallic material
but different masses. He observed that they all fell at the same rate. Thus the time of
their descent was independent of their mass.

Even if the story is apocryphal, the outcome of the experiment is not. Had Galileo
conducted the experiment he would have discovered that the balls did fall at the same
rate and that their rate of fall was independent of their mass. Now having done this,
what conclusion can be drawn?

From the point of view of science, as distinct from scientific method, the ideal
conclusion is a universal law of physics. It would take the following form: ‘All bodies
fall to earth at the same rate’. It is inherent in this proposition that the rate at which a
body falls to earth is independent of its mass.

This universal law, however, is not totally supported by the one experiment. So far it
has been shown to apply on just one occasion. In principle this might be overcome by
repeating the experiment at different places, from different heights, with objects of
different shapes materials and with different weights. Assume that these all showed the
same result, as they surely would, does this prove the law? It does not prove the law
absolutely but, to state the minimum positions, each time the experiment is repeated
with the same outcome it makes it more probable that the supposed law is true.

While repeated trials with the same outcome may not conclusively prove the existence
of the causal law, it does provide inductive support for the law. Essentially the best
inductive reasoning says that many observations of the same outcome from a process
provide strong even if not conclusive support for a law. The more times a supposed law
seems to work the more likely it is that the law exists.
 Chapter 13 Cause 175
There is also another approach. Where science is dealing with inert matter such as the falling
of metallic balls, it is a reasonable assumption, based on centuries of experience (strong
induction), that inert matter exhibits constant properties. If this reasonable assumption is
accepted it strengthens the inductive argument to the point where it is almost deductive.

By contrast to experiments with inert matter, experiments with living things, such as humans,
have certain limitations that do not apply to inert matter.
(1) Scientists cannot draw on an assumption that all people are the same. People, who are
the subject of behavioural science, are not as unyieldingly homogeneous as physical matter.
Obviously people share vast similarities but there are also variations. This is one reason that
any generalisation from one experiment must always be cautious.
(2) Behavioural scientists generally cannot control and measure the variables in their
experiments as easily as physical scientists can.
(3) The typical experiment involves not the whole population of people with a certain
characteristic that is of scientific interest such as a common disease, a common traumatic
experience or a common occupation. Instead it relies on a sample. Thus any result from the
experiment involves deriving a conclusion about the whole population from results obtained
from an experiment with the sample. In this regard the sample is representative of the
population but is not perfectly so. This is another reason that results from an experiment on
humans are tentative.

Correlation Method
Science gives the most reliable results when controlled experiments are possible. In many
cases, though, controlled experiments are not possible. In these circumstances a useful method
of investigating causation is to look for correlation. Two variables are correlated when they
move in concert. They may be positively correlated in that they rise and fall together, or they
may be negatively correlated in that as one rises the other falls, and vice versa. In the simple
case the two factors will move in perfect concert. Realistically, though, the concert will not be
perfect. This happens because outcomes are often a result of the operation of several factors
whereas simple correlation measures how one factor changes compared to one other.

To illustrate correlation, assume that an economist wants to know if there is a relationship

between the productivity of a factory in a town and the success on the pitch of the town’s
football team. First, they would need a definition of productivity and a definition of success for
the football team. Then they would make a graph. On one axis they would put the productivity
of the factor, while on the other axis they would put the success of the football team.

This graph will indicate if there is correlation and also how close it is. If there is correlation it
suggests that there is some connection between the two factors. The question then becomes
this: what sort of a connection is it? While correlation suggests a connection, it has nothing to
say on what the connection is. This conclusion is
 Chapter 13 Cause 176

captured in the maxim that correlation between A and B does not equal causation
between A and B even though causation between A and B is one possible explanation
for the correlation.

In fact there are several possible connections. To explain these we can label the
correlated items as A and B. These are the possibilities:
(1) A causes B.
(2) B causes A.
(3) In a less simple case, A and B mutually cause each other.
(4) In a second less simple case, the causal relationship does not lie between the
two correlated factors, A and B, but comes from a third factor. For example, when tar
on the roads softens and melts people buy more ice creams. It is not a case of the
softening tar causing the purchase of ice creams nor the purchase of ice creams causing
the tar to soften. Instead a third item, an increase in air temperature, causes both the tar
to soften and melt and people to purchase more ice creams. In other words, C causes
both A and B.

How do scientists respond to the results of using the correlation method. One
experiment may demonstrates in one instance that two variables are correlated. If the
experiment is repeated many times and on each occasion it shows the same correlation
there is good even strong inductive support for the rule that A and B are correlated.
The next step is to detect causation. One can always use intelligent guesswork. With
enough intensity of serious study this might graduate into abduction. That is, one
particular version of the possible causal laws represents the most plausible explanation
as to what has happened. In the next phase scientists might conduct further research to
find support (or non support) for this projected causal law.

Not Using Science

As stated above, there are two reasons that legislators and judges will not always
deploy scientifically based behavioural laws when making and interpreting law.

First, behavioural science is incomplete. It can explain some things but not everything.

Second, legislators and judges are generally not trained in behavioural science.
Consequently, even if there is a relevant causal law, they may not know of its
existence.
For both of these reasons, legislators and judges are sometimes forced to rely on causal
laws that are not properly grounded in science. In truth, they are assumptions. Such
assumptions may be derived from hunch, guesswork and impression, all being
processes which are not ‘readily susceptible of precise analysis’. 18 Generally they
acquire these laws from informal and highly subjective sources such as common sense,
intuition, ideology, anecdote, received or conventional wisdom, casual observation,
advice from mentors, popular wisdom, conventional perception, idle speculation,

18. Federal Commissioner of Taxation v Chubb (1995) 128 ALR 489

 Chapter 13 Cause 177

popular stereotypes, general knowledge, experience, folklore and folk psychology.367

Since these laws are not scientifically grounded they may be infected by error or
prejudice.368 369 370 371 372

Given this, the question arises as to how a society can determine questions of causation
as it makes policy for the purpose of enacting, and later interpreting, law. There are two
basic responses. First, in the absence of scientific knowledge the best that society can do
is to determine the question in a way that best represents and
reflects the choices in this regard of the individuals who make up society. How this is
21
done is explained in the later discussion on social choice.

Second, it is necessary for legislators and judges to be sensitive to the fact that some of
the behavioural laws that they deploy in making and interpreting law may not have a
sound scientific basis and in consequence may not be true. Without this insight they
may err too easily and too gravely. As Jerome Frank aptly put it: ‘There can be no
greater hindrance to the growth of rationality than the illusion that one is rational,
22
when one is [in fact] the dupe of an illusion’.

Nature of Causation
Earlier this year, a British government-sponsored report blamed the decline of family meals in part
for unplanned teen pregnancies. It seems lack of dinner table conversation contributed to
23
parents ’ failure to talk frankly to their teenagers about the dangers of unprotected early sex.
Introduction
Causation involving legal rules may be simple. Rule X is enacted and causes Y.
Causation can also be complex. There can be a great complexity in the relationship
between a law and its effect. Social phenomena such as these can exist in a complicated
matrix for which the causes are many, layered, intertwined, interdependent and hidden.
Legal causes can be mixed with non-legal causes. Consequently, for any situation there
may be an intricate chain of causation, which may be difficult to predict before a law is
made or difficult to detect after a law is made. Put simply, complication can occur.
There can be multiple causes. These can be both legal and non-legal. They can also be
separate and independent on the one hand or joint and interacting causes on the other
hand. There can be multiple effects. Both
24
causes and effects can be hidden or at least difficult to discern.

367 Hodgson (1995) p 738, Neat Holdings v Karajan Holdings (1992) 67 ALJR 170, 170-171
Commentary 13.7.
368 Jegatheeswaran v Minister for Immigration [2001] FCA 865 (9 July 2001), per
Finkelstein J, [58], citing Thayer (1898), Damaska (1997) p 25, Twining (1997) p 69 and
Anderson (1999).
369 Chapter 21 Social Choice: Making Law, Chapter 22 Social Choice: Interpreting Law
370 Frank (1930) p xx
371 Neil (2008)
372 Commentary 13.8.
 178 Chapter 13 Cause

Let us illustrate this by the following diagram. This diagram uses Statute X as an
illustration. Statute X causes the group of effects that are labelled Effect X in the simple
version of the model of legislative options. Statute X causes effects, but two
 Chapter 13 Cause 179

other social factors, features or phenomena also cause effects in the area of life where
Statute X operates. These are labelled Factor 1 and Factor 2:
Factor 1 Effect X.2A
Effect X.3A Effect X.nA
Effect X.2A
Statute X Effect X.1
Effect X.2B Effect X.3B Effect X.nB
Factor 2 ——
Figure 13.2 Continuation of Effects

This diagram shows that Statute X causes an initial effect, Effect X.1. Effect X. 1 leads
to Effect X.2 but the picture is complicated in two ways by two or more causes or by
two or more effects. Thus there are two strands to Effect X.2 and Effect X.2 has other
causes in addition to Statute X, namely Factor 1 and Factor 2.

There now follows some exposition and illustration of these complications. Some
illustrations come from law while others come from outside the field of law.

Separate and Independent Causes

Effect X.2A constitutes one strand of Effect X.2. Effect X.2A is part of a chain of
specific effects, which culminates in Effect X.nA.

Effect X.2A has two separate and independent causes, Effect X.1 (which is caused by
Statute X) and Factor 1. These operate in addition to each other and not in combination.
A useful illustration of two separate causes comes from changes to the crime rate in the
United States in the 1990s. While this did not come from the operation of statute law, it
still serves as a useful illustration of the concept of two independent causes of a
phenomenon.

As the decade of the 1990s progressed, the crime rate fell and continued to fall,
confounding the expectations of many commentators. For example, by 2000 the
25
overall murder rate was lower than it had been since 1965. An economist, Steven D
Levitt, investigated this phenomenon in research, which was published in 2005. 373 374 375
He considered the usual suspects for this reduction in crime. Two well touted causes,
greater use of the death penalty and different policing methods, provided little or no
explanation.

Two other causes, however, seemed to explain the drop in crime rate. One was an
increase in the length of sentences given to offenders while the other was the decision of
the United States Supreme Court in 1973 in the case of Roe v Wade, which made
27
abortion legal throughout the United States as a constitutional right.

373 Levitt and Dubner (2005)

374 Levitt and Dubner (2005)
375 Roe v Wade 410 US 113 (1973)
 180 Chapter 13 Cause

Increased Sentences
28
One explanation was increased sentences. This explained some part of the reduction in
the crime rate, but not the major part. There are two ways in which increased sentences
reduce or might reduce crime rates. First, much crime, at least according to popular
wisdom (and there is probably scientific grounding for this) is committed by people who
have already committed one or more crimes. Therefore, increased jail time flowing from
increased sentences keeps some of the crime-prone section of the population off the
streets, that is, out of harm’s way, for a longer time. This is labelled incapacitation.
Second, harsher sentences provide would-be criminals with a reason not to commit
crime. This is labelled deterrence.

Roe v Wade
The major cause of the decline in the crime rate was not established beyond doubt but
there was a good argument that it was the decision of the United States Supreme Court
29
in 1973 in the famous case of Roe v Wade. Yet, until Levitt conducted his research, this
had not even been broached as a possible cause of the decline in the crime rate.

Roe v Wade made abortion legal throughout the United States as a constitutional
30
right. Up until this case abortion had been legally prohibited in all but five states. In
consequence of Roe v Wade, the abortion rate rose considerably. There were
approximately 750,000 abortions in 1974 and 1.6 million by 1980. Prior to Roe v Wade
educated middle and upper class women could often obtain an abortion by collusion
with a willing doctor who could, if needed, pass the procedure off as something else.
Consequently, the group who would take most advantage of Roe v Wade consisted of
women who were in one or more of three categories - teenagers, unmarried or poor.
Children of these women were the ones most likely to end up as blue collar criminals.
Thus, following the Supreme Court decision the women most
31
likely to breed criminals were now aborting them.

This example illustrates the point, that the same social change may have two or more
separate and independent causes. A decline in the crime rate came partly from an
increase in the length of incarceration and partly from an increase in the abortion rate. It
also illustrates another significant point - that the cause of a social phenomenon can be
well hidden and therefore difficult to discover and prove by research.

Joint Interacting Causes

The second strand to Effect X.2 consists of Effect X.2B. Effect X.2B has two joint,
contributing or interacting causes, Statute X and Factor 2. These causes operate in
combination not addition. These causes, of course, possess two qualities:
(1) Joint Causes. They are joint causes in that they each contribute to the outcome.
(2) Interacting Causes. They interact on, and thus effect, each other. 376 377 378 379

376 Commentary 13.9.

377 Roe v Wade 410 US113(1973)
378 Roe v Wade 410 US113(1973)
 Chapter 13 Cause 181

WagonMound
The operation of contributing causes is illustrated by the facts of the Wagon Mound, a
32
well known case in the law of negligence. As with some other illustration this does not
come from statute law but still serves as a useful example of joint interacting causes.

The Wagon Mound was a freighter that was moored at Morts Dock in the port of
Sydney. The Wagon Mound carelessly discharged a large quantity of furnace oil onto
the water, which mixed with cotton waste floating on the surface. This mixture of oil
and cotton floated over to a shipyard, where it was ignited by molten metal that fell
from welding performed on the side of a ship. The resulting fire seriously damaged a
wharf and two ships. Here the fire was caused by the combination of three events - the
oil being discharged into the water, the cotton waste being caught in the oil slick and the
molten metal falling onto the oil sodden cotton waste.

Who Killed Davey Moore?

Davey Moore was an American boxer who won the World Featherweight Title from
Hogan Bassey on 18 March 1959. Moore successfully defended the title five times and
held it for 4 years and 3 days. On 21 March 1963 Moore attempted a defence of the title
again against the Cuban, Sugar Ramos. Moore was knocked down in the 10th round. He
lost the title on a technical knockout at the end of that round, so Ramos took the title.
After the fight Moore appeared not to be seriously injured. He walked back to his
dressing room himself and conducted post-fight interviews. Later he complained of
headaches and became unconscious. He was taken to White Memorial Hospital. There,
doctors diagnosed inoperable brain damage. Moore never regained consciousness and
died on 25 March 1963.

In that same year Bob Dylan wrote and performed a song entitled ‘Who Killed Davey
Moore?’ The song incorporates the structure of the children’s rhyme Cock Robin.
Before each verse there is a chorus posing the question of who was responsible. It says:
‘Who killed Davey Moore, Why an' what's the reason for?’ In successive verses the
song takes the perspective of the major parties involved - the referee, the angry crowd,
the manager, the gambling man, the boxing writer, and Sugar Ramos. Each attempts to
explain their lack of fault for the death. Each includes with the same words: ‘It wasn't
me that made him fall. No, you can't blame me at all’.
Structured in this way, along with moving lyrics, the point is clear. Individually no one
person was totally to blame. But, collectively, they all killed Davey Moore.

Hidden Causes: Famine in Bangladesh

Causes can be hidden. Already one example has been considered, namely Roe v Wade
as a possible cause of the decline of the crime rate in the United States. A second
example concerns famine. Based on empirical evidence, the renowned economist
Amartya Sen challenged the then prevailing view that famines always arise from a 380

379 Commentary 13.10.

380 Commentary 13.11.
 182 Chapter 13 Cause

shortage of food. In its place he proposed additional explanatory factors. For example,
part of his explanation for the Bangladesh famine of 1974 rested on the fact that there
was considerable flooding throughout the country in that year which prevented a
substantial part of the crop from being harvested. This caused at least two economic
effects. It caused a food shortage, which significantly raised food prices, while work
opportunities for agricultural workers declined drastically since some of the crops could
not be harvested. Both of these happenings caused substantial decline in the real
incomes of agricultural workers (loss of wages and loss of purchasing power through
increase in food prices) so that they could not purchase as much food as they required.
In this lies the major explanation as to why this group was disproportionately stricken
33
by starvation.

Hidden Effects: World Trade Centre

Effects of an event can be hidden. An illustration comes from the attack on 11
September 2001 of the twin towers of the World Trade Centre in New York. Terrorists
flew an aircraft into each of the towers, causing a huge explosion and fire, and the
subsequent collapse of the towers. Some people were killed or died from injuries
received on the impact of the aircraft. Some died from the fire. Some died from the
collapse. Some jumped to their death from the building to avoid death by fire.

According to the official figures, the death toll was 2,752. These were the highly
visible victims of the bombing. There are, however, at least two other sources of death.
One consists of road deaths. There is a persuasive case that in the period from 1 October
to 31 December 2001 there were 725 driving fatalities linked to the bombing and a
further 400 to 500 deaths between 1 January and 31 March 2006. People traveled by
road rather than air out of fear of flying and the delay and inconvenience of air travel
brought on by increased security arrangements at airports.381 382 383

35
The other cause of death is toxicity. Analysis of the dust cloud caused by the collapse
of the buildings found that it contained numerous toxins - pulverised cement, glass
fibres, asbestos, polycyclic aromatic hydrocarbons, polychlorinated biphenyls and
polychlorinated furans and dioxins. As the cloud spread it covered lower Manhattan and
Brooklyn, ‘affecting between 250,000 and 400,000 people’. There is now evidence of
384

health problems and deaths from this toxic fallout. The most affected group consisted of
the rescue workers. Preliminary findings by Mount Sinai Hospital in New York of a
small sample of the 16,000 workers and volunteers found several significant things:
(1) Almost three-quarters had new or worsening respiratory problems while working
on site.
(2) Half of them had symptoms that lasted at least eight months after they stopped
their rescue work.

381 Sen (1981)

382 Kadiyali, Blalock and Simon (2007) and Kadiyali, Blalock and Simon (2009)
383 Armour (2006), Barry (2006), Coultan (2006)
384 Armour (2006), Barry (2006), Coultan (2006)
 Chapter 13 Cause 183

(3) Thirty one per cent (31%) of people who never smoked had abnormal breathing
tests, compared to 13 per cent of the general population.
(4) Forty per cent (40%) had new or worsening heartburn or indigestion problems.

But the health problem may not be confined to rescue workers. The New York City
health department undertook a study of 70,000 residents, students and workers in lower
Manhattan. This study found three detrimental health outcomes. (i) Almost half had
developed new or worsening sinus or nasal respiratory problems. (ii) Forty two per cent
had shortness of breath. (iii) Thirty eight per cent had throat irritations or wheezing.

One of the rescue workers, John Sferanzo, has formed a group, Unsung Heroes Helping
Heroes, in an attempt to help responders with health problems. Sferanzo knows of 24
people who worked in the rescue and clean-up and have since died. Sferanzo, an
ironworker, was a volunteer rescuer. He was teamed with a police officer and a search
and rescue dog. When the dog picked up a human scent, Sferanzo would delve into the
wreckage searching for a survivor amidst the caverns and holes in the rubble. Often all
he would find was an arm or a leg. John Sferanzo is now dying of a respiratory disease.

Commentary
Commentary 13.1 Footnote 1
The lyrics of Eric Bogle’s song NO Man’s Land consists of a monologue. The
performer delivers this monologue to a soldier killed in action while the singer is sitting
at his graveside in a World War I military cemetery of mass graves. As a passing note,
the word play in the title NO Man’s Land is overwhelming.

Commentary 13.2 Footnote 10

In the original German Martin Luther, in his speech at the Diet of Worms, 18 April
1521 said: ‘Hier stehe ich. Ich kann nicht anders. Gott helfe mir’. There is a popular
view that Luther made this statement, but there is no direct evidence of it.

Commentary 13.3 Footnote 11

This notion that the destiny of each of us is set before we are born is memorably
captured in the following lines from the Rubaiyat of Omar Khayyam, LIII. (It is
rendered into English verse by Edward FitzGerald). The lines say as follows:
With Earth's first Clay They did the Last Man’s knead,
And then of the Last Harvest sow’d the Seed:
Yea, the first Morning of Creation wrote What the Last
Dawn of Reckoning shall read.

Commentary 13.4 Footnote 14

The text ventilates the possibility that in every case the removal of Substance Y cured
the disease. Given the variations in the human body according to age, sex and lifestyle
factors it is possible that there is a mixed result in that Substance Y brings about a
 184 Chapter 13 Cause

substantial cure in many but not all cases. In the absence of major side effects, this
would be justification for using it as a cure.

Commentary 13.5 Footnote 15

For the sake of simplicity in conveying basic notions this account of an experiment to
test the effect of temperature on a person’s capacity to do mental arithmetic avoids some
complications in and details about experimental design, especially those needed to
eliminate or reduce confounding variables. Two major examples of these qualifications
now follow. First, it would be necessary to ensure that the questions in each test were of
equal difficulty. If this were not the case, and the questions became more difficult, the
increase in difficulty presents an alternative explanation for a lowering of performance.
Second, as a subject does more and more mental arithmetic some other variables may
occur. (a) They may ‘warm up’ as it were and just naturally get better at it. (b) Their
performance may decline as they become bored or tired.

Commentary 13.6 Footnote 16

This notion of total control of conditions but for the independent variable is referred to
by the Latin tag ceteris paribus. It means everything else stays the same or all other
things are equal. When ceteris paribus fully applies it means that there are no
intervening factors that provide an alternative explanation for what has occurred.

Commentary 13.7 Footnote 19

Twining (1984) p70 describes the lack of science in fact finding thus: ‘We have little
systematic knowledge about the psychological processes of “weighing” evidence, about
the actual operation and impact of the rules of evidence, about the probative value of
most kinds of evidence in respect of particular kinds of probanda or about how
information is actually processed and used at different stages of litigation and like
processes’. However, some research has been done - see, for example, Schum (1982).
See also Briginshaw v Briginshaw (1938) 60 CLR 336, 361-362.

Commentary 13.8 Footnote 24

The text puts forward the proposition that for any situation there may be an intricate
chain of causation, which may be difficult to predict before a law is made or difficult to
detect after a law is made. An example is where A supplies heroin to B who uses it,
there is a chain of causation on each side. There is the chain of supply and the causes
operating there, starting with growing the opium poppies and culminating in the sale of
heroin to the user. On the demand side, the last step in the chain is B’s taking heroin.

This demand for heroin may have a causal chain involving a number of social, familial
and personal factors. On one view, for example, the familial factors may go back for
generations and involve maladaptive behaviour that is learnt in the family.

Commentary 13.9 Footnote 28

It is interesting to pursue the chain of causation here. Much crime, at least according to
popular wisdom (and there is probably scientific grounding for this) is committed by
 Chapter 13 Cause 185

people who have already committed one or more crimes. Therefore, increased jail time
flowing from increased sentences keeps some of the crime prone section of the
population off the streets, that is, out of harm’s way, for a longer time. This is called
incapacitation. A second possible explanation, not inconsistent with this, is that harsher
sentences have a deterrent effect.

Commentary 13.10 Footnote 31

Just to show how explanation for social change can come from superficially irrelevant
sources there is another contributing explanation for a decline in the murder rate in the
United States. In the 1990s a new speciality came into being in the form of the trauma
physician. The effect of this was that more people who were critically injured did not
die because a specialist trauma physician was able to saved their life. This produced a
decline in the homicide rate, which was completely independent of any decline in the
rate of potentially homicidal assaults.

Commentary 13.11 Footnote 32

There were in fact two cases arising from the Wagon Mound incident - Wagon Mound
(No 1), Overseas Tankship (UK) v Morts Dock and Engineering Co [1961] 1 All ER
404; [1961] AC 388; [1961] 2 WLR 126; (PC), and Wagon Mound (No 2), Overseas
Tankship (UK) v Miller Steamship Co [1966] 2 All ER 709; [1967] 1 AC 617; [1966] 3
WLR 498 (PC).
Chapter 14
Cause: Explanatory Theories
Introduction
1. General Theories of Behaviour
2. Theories of Complex Behaviour
Complex Systems
Chaos Theory
Catastrophe Theory
Adaptive Behaviour
System Accidents
Internal Conflict
3. Theories of Legal Compliance
Commentary

Introduction
This chapter describes various theories that seek to explain causation. These theories
are classified into three groups - general theories, theories of complex behaviour and
theories of legal compliance. By considering causation the chapter seeks to explain how
one thing, such as a law, can cause various effects or responses.

1. General Theories of Behaviour

Introduction
Behavioural sciences such as psychology, sociology, economics, management and
history, provide an array of theories, with some empirical support, which explain
behaviour by reference to such basic factors as biology, socialisation, learning,
motivation and cognitive processes. In propounding these theories, social scientists
broadly accept qualified determinism, while conceding that some theories are more or
less deterministic than others (and in consequence, less or more voluntaristic).
Therefore, these theories provide explanations for causation. This section outlines just
some of the major theories in social science by way of illustration. Outlining just come
of these theories shows that, while there are areas of agreement, there is no general
agreement among social scientists about the forces which control or influence human
behaviour.

Abraham Maslow
If the only tool you have is a hammer, you tend to see every problem as a nail.385 Abraham
Maslow (1908-1970) argued that humans are ‘wanting animals’ who usually want to do
or achieve something. Once they have satisfied one need they seek to satisfy another.
Human needs are arranged in a hierarchy so that we have to satisfy the lower need first
before moving to the next one. The five needs in the hierarchy, stated from the bottom
up, are as follows:

1
.
Maslow (1966) p 15

186
 Chapter 14 Cause: Explanatory Theories 187

(1) Physiological needs. This is the need for food, drink, sleep, oxygen, shelter and sex.
(2) Safety need. This is the need for a stable world free from violence and other
disruption.
(3) Belonging and loving needs. This is the need for love, intimacy and affection.
(4) Self-esteem needs. This is the need for self respect and for respect from others.
(5) Self actualisation. Self actualisation is the deepest need. Broadly stated it is a desire
to fulfil ones highest potential. Since we are all different, the specific details vary from
person to person. In Maslow's own words: ‘A musician must make music, an artist must
paint, a poet must write if he is ultimately to be at peace with himself’. Carl Rogers
(1902-1987) was another psychologist who argued that humans have this tendency
towards self actualisation.

Behaviourism
City girls just seem to find out early, How to open doors with just a smile.
Contrasting with the benign and individualistic theory of Maslow is behaviourism. Its
proponents such as John B Watson (1878-1958) and Burrhus F Skinner (1904-1990)
saw the human as a tabula rasa (that is, a blank slate), who responded to pleasure and
pain through learned habits. Because of this learning, when a particular stimulus was
presented to an actor, they responded with a specific behaviour that was geared to
obtain pleasure or to avoid pain.

Looking at the broad picture, according to behaviourism human development is a

continuous process, called conditioning. Stated in its extreme form, behaviourism
asserts says that a human will do anything that they have been conditioned to do.

Aside from this explanation of why humans behave as they do, behaviourism brought
special consequences for psychology as a discipline. Since both the stimulus and the
behaviour were observable events in the outside world, there was no need to refer to
either the conscious or unconscious mind in explaining behaviour. Consequently the
study of behaviour was made both objective and empirical.

Karl Marx
The final causes of all social changes and political revolution are to be sought, not in men's brains,
not in man's insight into internal truth and justice... but in the economies of each epoch A Karl
Marx (1818-1883) is often associated with a view of historical causation that is labelled
economic determinism. There is, however, some controversy among scholars as to
whether economic determinism is the sole major force in social causation or merely one
of considerable influence. However, to explain this notion briefly it will be best to
explain it in pure form and defer that debate to another time and place. Since Marx’s
views are considerd in a later chapter a brief statement will suffice here.386 387 388 389

386 Maslow (1970)

387 Don Henley and Glenn Fry Lyin' Eyes
388 Friedrich Engels (1882) Socialism - Utopian and Scientific p54
389 Chapter 27 Irrationality
 188 Chapter 14 Cause: Explanatory Theories

Survival is the primary instinctive force that drives humans. In order to survive a
society has to adopt a mode of production that is based on the prevailing material
conditions such as technology and raw materials. Each mode of social production
creates a set of supporting social relations which allocate economic and ultimately
political power. In capitalist societies obviously the capitalists held the bulk of
economic and political power.

These social relations generate an ideology to justify the current social order and to
socialise offspring into it. In this way the system is self supporting. Thus citizens could
not arbitrarily choose any one of several forms of society, but only that one which
promotes the prevailing mode of production.

A system can come to an end through technological change, for example, the
development of mechanised and power driven production, as occurred with the
industrial revolution. When this happens the dominant class will immediately set out to
create a new society to protect this new economic order. A system can also come to an
end through revolution, which was the Marxist aim, because this was the only feasible
way of ousting the dominance of the capitalist classes.

Max Weber
The fate of our times is characterised by rationalisation and intellectualisation and, above all, by
the "disenchantment of the world." Precisely the ultimate and most sublime values have retreated
from public life either into the transcendental realm of mystic life or into the brotherliness of direct
and personal human relations. It is not accidental that our greatest art is intimate and not
monumental.390
Natural science can achieve some sense of causal certainty through laboratory
experiments where variables are properly controlled because, in these circumstances,
the experiment can focus on the effect of just one variable. For example, to some extent
this can be done, and is frequently done, in psychology.

Out in society, however, laboratory experiments are not possible. Society is a complex
system with many forces at work in many directions. Consequently, as Max Weber
(1864-1920) argued, social phenomena had many causes. Therefore it was generally
impossible to make correct statements of comprehensive causal laws.

In default of pure science, the best that could be done was to try to identify social
forces, especially those that contributed to major events or phenomena. With this done,
it might be possible to invoke putative social laws to forecast events, but not with
certainty. The best that could be done was to make some assertion about their
probability.

Obviously this has implications for the question of causation in making and
interpreting law. While the theories and laws of psychology have some relevance for
causation as it is involved in making and interpreting law, typically they do not
6.

Max Weber (1918-1919) Science as a Vocation

 Chapter 14 Cause: Explanatory Theories 189

encompass or account for the complete picture. A more realistic approach, therefore,
may be to combine specific insights from psychology with the type of approach that
was proposed by Weber.

2. Theories of Complex Behaviour

Some theories address complex behaviour. These are worth noting because law can
often operate in a complex way. These theories may guide and enlighten research into
how a statute has worked once it has been enacted.

One can see some of the notions of complexity in the writing of Gottfried Liebniz
(1646-1716). In modern times, the critical works that introduced it as a defined field of
study were publication by Ludwig von Bertalanffy (1901-1972) on general systems
theory between 1945 and 1951. Our discussion covers several topics - complex systems,
chaos theory, catastrophe theory, adaptive behaviour, system accidents and internal
conflict.

Complex Systems
The discussion of complex systems has two parts:
# First, the book explains the nature of complex systems to enable the
reader to understand them.
# Second, the book explains how to change a complex system

Complex Systems: How to Understand Them

Introduction
Terminology
A complex system is variously described as a network, a system or a web. A complex
system is composed of interrelated items that may be termed elements or components.
Points of contact between the system and its external environment can be described as
couplings or interactions.

Nature
A system consists of a configuration of parts joined by a web of relationships. Complex
systems exist in the subject of many diverse fields such as biology, psychology,
economics, sociology, law and of course, management, which is a selective compilation
of these and other sciences.

To understand systems and its theory it is first helpful to examine the contrast in
approach between reductionism and systems theory. Reductionism examines the
elements and static relations between the items that create and stablise the subject.
Systems theory looks for energetics and kinetics as it views the system as dynamic
action involving relationships between activities and elements that constantly renovate
the system. As would now be obvious, these systems are complex because of the
dynamic action that constantly changes the system as it renovates it.
7 Commentary 14.1.
.
 190 Chapter 14 Cause: Explanatory Theories

The difference between reductionism and systems theory can be explained by a

comparison from the field of chemistry where a popular topic in the first lesson is to
explain the difference between a mixture of substances and a chemical compound made
from those substances. A mixture of two substances, such as iron and sulphur, retains
the individual properties of the specific ingredients. It displays characteristics of iron
(for example, the iron will be attracted by a magnet) and sulphur (for example, sulphur
has a distinct smell). By contrast a chemical compound of iron and sulphur (iron
sulphide), where the two are bonded at the atomic level, displays properties that have no
necessary relation, and in truth no relation in fact to the components.

As a term of science, reductionism has a cluster of meanings. A common notion among

them is that to understand something one analyses its parts. In other words, the whole is
the sum of the parts where the parts are summed in some simple means that is purely
additive (A + B = A + B) or linear (A causes B or B causes A). Reductionism is like the
chemical mixture. Each component contributes its individual properties which are
preserved by, and are present in, the mixture.

Systems, however, do not lend themselve to simple reductionism because something

can have properties as a whole that are not explainable from the sum of its parts. As
Aristotle expressed in in Metaphysics: ‘The whole is more than the sum of its parts’.391
A better rendition might be that the whole is different from the sum of the parts. Parts
interact with each other to produce the whole. This expresses the basic tenet of holism
or emergentism.

When the parts of the system come together, as in a compound of substances in

chemistry, something new and different emerges. It has a life and an existence of its
own as distinct from a mere assembly of its components. It is the relationship between
the parts, rather than their specific properties alone, that creates the system. (A good
illustration is the behaviour of the mob, which is not the additive behaviour of its
members. Another is found in the saying that a champion team is better than a team of
champions.)

Systems are the subject of a field called complex systems which is multi disciplinary. It
seeks as far as possible to lay down general rules that apply to all systems. These rules
can be difficult to identify (assuming that they exist) because, generally speaking, the
components of a system and the couplings or relationships between those components
are complex. Systems theory affords primacy to the interrelationships of the system in
preference to the static elements of the system. Initial attention is directed as to how the
complex phenomena that constitute a system came to be as they are. Items or
components are generally in some connected relationship like dots on the circumference
of a circle. They feed in and out of each other, they interlock, they affect each other
either immediately or later and either on their own or in conjunction with other items.

8
.
Metaphysics 10f-1045a
 Chapter 14 Cause: Explanatory Theories 191

Systems, however, are often open systems that interact with their environment. Hence,
the full study of a system extends to explaining, as far as possible, its behaviour as it
interacts with its environment. Moreover, the external environment itself can easily and
frequently change. As it does, these changes impact on those persons and things within
the environment, which then change in response. From this point on, when those
persons and things interact with the external environment they are now changed.
Obviously, this cycle of interdependent change will just continue.

Examples
There are many examples of complex systems - the human body, systems within the
body such as the nervous system, economies, ant hills and crime, to name just some.
Organisations, especially those of some size, either consist of complex systems or, to
put the proposition more conservatively, tend to partake of at least some of the
properties of complex systems. In some significant respects, therefore, sizeable business
firms are complex systems even if there are strands of simple systems within them.

Common Components
It is not possible to state categorically the components that are common to all complex
systems. However, there are some characteristics that complex systems generally
possess, and it might be difficult to find a complex system that does not possess a
quantum of these.

These possible characteristics consist of the following:

(1) Nesting. One complex system can be composed of or contain other complex
systems.
(2) Complex Emergent Behaviour. Frequently the system exhibits some form of
emergent behaviour, which is behaviour that as a whole is not a simple compilation of
the behaviour of the parts.
(3) Uncertain Boundaries. A complex system is subject to change so that its
boundaries as defined by its behaviour are uncertain (even more so because the
behaviour is emergent).
(4) Openness. A complex system interacts with the external environment.
(5) Unpatterned Connections. The relationships between the system and its external
environment are not patterned or systematic - they happen where they happen.
(6) Memory. Complex systems have memory. They record their past in a way that
enables them to recall it later.
(7) Information Processing. Complex systems draw on the record of their past and
process it in order to respond to present events. The system then behaves in response to
this stored information. By this means they create a loop that delivers a constant
feedback process. This constant feedback enables the system to learn and change.

Nesting
Complex systems may be nested. That is, components of complex systems may
themselves be complex. This means that the relationships in the complex system
 192 Chapter 14 Cause: Explanatory Theories

become more complicated, and that these components are likely to possess many or at
least some of the properties of a complex system. These component complex systems
may interact with some other components, and maybe with all of them. This produces
an overall effect in the form of emergent behaviour of the complex system. As it reacts
with its environment by displaying this emergent behaviour, the feedback loop operates
to communicate the results to the complex system and its component complex systems.
It is in spirit, even if not in numerical calibration, a process of exponential response.

Complex Emergent Behaviour

Introduction
Behaviour of complex systems is itself, not surprisingly, also complex and emergent.
Labels used to describe the various forms of behaviour can overlap. This behaviour has
consequences for many fields of endeavour including law and management.

Complex systems entail relationships (couplings) both within the system and between
the system and its environment. In consequence complex systems display emergent
behaviour. This is one of their major characteristics.
392

Nature
To explain this by comparison, each behavioural outcome in a simple organism is
derived directly from the operant forces - it is the sum of these forces when they move
in the same direction, it is their difference when the move in contrary directions. For
this reason, every outcome can be traced to the components that brought it about
because these are homogeneous and commensurable. This is a linear relationship, where
the outcome or effect is always directly proportionate to the cause.

In a complex organism, however, behaviour is emergent. This behaviour cannot be

measured or predicted on the basis of the components of the organism where they are
heterogeneous and incommensurable, because it cannot be expressed as, or reduced to,
their sum or difference. Properties of the whole cannot be found in properties of the
elements. Similarly, behaviour of the whole is not predictable or deducible from
behaviour of the parts. This is a non linear relationship.
393 394 395 396

A quite elaborate definition of emergence and a list of its common characteristics have
12
been devised by Jeffrey Goldstein. Emergence refers to ‘the arising of novel and
coherent structures, patterns and properties during the process of self-organisation in
13
complex systems.’ The common characteristics of emergence are the following:
(1) Radical Novelty. The behaviour possesses features not previously observed in
systems.

392 Commentary 14.2.

393 Commentary 14.3.
394 Lewes (1875) p 412
395 Goldstein (1999)
396 Goldstein (1999)
 Chapter 14 Cause: Explanatory Theories 193

(2) Global or Macro ‘Level’. This means that there is some property of ‘wholeness’.
(3) Coherence or Correlation. Structures that emerge constitute integrated wholes
that maintain themselves over some period of time.
(4) Dynamic and Evolving. The behaviour is the product of a dynamical process
because it evolves.
(5) Ostensive bBehaviour. The behavioiur is ostensive in that it can be perceived.
(6) Supervenience. There is supervenience which consists of downward causation.
These characteristics have a high degree of overlap and inter-dependence.

Radical Novelty
Radical novelty means that new features emerge that were not previously observed in
the system. To illustrate, a firm engages in production in its value chain, often
introducing new goods and services. Firms, however, possess a culture and ‘trust
relations’ that cannot be created just by the atomistic market transactions on which the
397

firm is based.

Coherence
Coherence or correlation means that the firm is an integrated whole that maintains its
existence over some period of time. Firms are organisations, designed to achieve a
specific goal or specific goals. While a few disappear quickly, most persist for some
time and many for a substantial time. Firms can do this because they are based on
‘higher-order organising principles’ (so they are not just a loose collection of people,
398

resources and so on) and thus possess ‘combinative capabilities.’ 399 400

Macro Level Existence

The entity exists at global or macro level so that in some way it constitutes a whole.
Firms have a manifest identity, displaying a corporate image as well as being seised of
17
legal personality. They are mini societies that possess a separate ‘identity.’ Their action
is structured by ‘organising principles that are not reducible to [the sum of the
behaviour of the] individuals [within the firm].’401

Product of a Dynamical Process

The entity is the product of a dynamic process. This brings it into existence and keeps it
operating which means that the entity evolves. Firms engage in ‘collective learning’ 402

that enables them to change and grow. Firms move from one industry to another and
merge with, or take over, other firms. Both of these are part of firms being dynamic as
they adapt and respond to changing conditions in the part of the world in which they do
their business. Indeed in the many areas where conditions and technology are changing
rapidly often a firm has a stark choice - change or die.

397 Ghoshal and Moran (1996)

398 Kogut and Zander (1992)
399 Kogut and Zander (1992)
400 Kogut and Zander (1996)
401 Kogut and Zander (1992) p 384
402 Hodgson (1998)
 194 Chapter 14 Cause: Explanatory Theories

Ostensiveness
Structures or whole entities that are created by emergent behaviour are ostensive in
20
that they can be perceived. Firms are visible in their name, their ‘identity’ and their
actions. Marketing and public relations freely refer to, and endeavour to manufacture,
the ‘profile’ or ‘image’ of a firm.

Supervenience
To explain supervenience it is necessary to consider two other terms, reductionism and
holism. Reductionism refers to the notion that the behaviour of a whole or system is
completely determined by the behaviour of the parts, elements or subsystems; therefore,
if the laws governing the behaviour of the parts are known it is possible to determine or
deduce the behaviour of the whole. Holism is from the Greek word ‘holos’ which means
all, total or entire. It refers to the notion that the properties of a true system cannot be
deduced or observed from the sum of its components; rather the system as a whole
determines how the parts behave.

Supervenience occupies a position between reductionism and holism, although it is

21
closer to holism. This is best expressed in the concepts of downward causation and
upward causation. As with reductionism, determination moves up from the parts to the
whole that they create. At the same time, however, with supervenience there is some
downward causation as well. To some degree the whole is constrained by the parts (so
that there is upward causation) while the parts are to some degree constrained by the
whole (so that there is some downward causation). Obviously, the causation in either
direction is not complete.

An example of this consists of a living organism. Clearly any organism is constrained

by the laws of physics and chemistry - it cannot just flout those rules. On the other hand,
these laws of physics and chemistry are insufficient on their own to determine which
shapes or organisations will evolve in the living world and what form they will take.
Yet once a particular biological organisation has emerged, it will strongly constrain the
behaviour of its components.

This same notion is encompassed in the special use attributed to the term ‘synergetics’
by Buckminster Fuller, referring to the concept of the output of a system not foreseen
by the simple sum of the output of each system’s part. This can also be described as
22
negative entropy, or negentropy.

Illustrations
One stark illustration of emergent behaviour by organisations such as business firms
and governments is that despite their common goals and the restraints of law and ethics,
they are able to perpetrate some of the most irrational action and dysfunctional
behaviour (as Weber puts it, they lack substantive rationality). 403 404 405

403 Hodgson (1998)

404 Commentary 14.4.
 Chapter 14 Cause: Explanatory Theories 195

This irrationality is widespread, so much so that ‘the irrationality of bureaucratic

23
institutions is a major factor in understanding contemporary society.’ A vivid and
extreme illustration comes from the extermination camps in Nazi Germany prior to and
during World War II. Their stated goal, which was achieved, was to murder millions of
men, women and children. Yet the ‘men and women who ran the extermination camps
were, in large part, ordinary human beings. They were not particularly evil people. Most
went to church on Sundays; most had children, loved animals and life.’ 406 407

One possible explanation for this capacity of organisations for irrationality is ‘that
individual officials have specialised and limited responsibility and authority within the
organisation.’ While the organisation has its purpose, its individual members have only
their responsibilities. Consequently, ‘they are unlikely to raise basic questions
25
regarding the moral implications of the overall operation of the organisation.’

Social psychology offers another explanation, although it is consistent with the first. As
Vaughan and Hogg explain it, ‘[p]eople usually refrain from exercising their basically
impulsive aggressive and selfish natures because of their identifiability as unique
individuals in societies that have strong norms against “uncivilised” conduct.’ 408

However, when they enter large groups or organisations, such as a bureaucracy, a

process called deindividuation occurs. The person becomes less of an individual and
27
more of a member of a group. During this process, as Zimbardo explained it, becoming
a member of ‘a large group provides people with a cloak of anonymity that diffuses
personal responsibility for the consequences of one’s actions. This leads to a loss of
identity and reduced concern for social evaluation: that is, to a state of
deindividuation that causes behaviour to become impulsive, irrational, regressive and
28
disinhibited because it is not under the usual social and personal controls.’
29
In this way, organisations take on an ‘impersonal character.’ As C. Wright Mills puts it
so eloquently: ‘It is not the number of victims or the degree of cruelty that is distinctive;
it is the fact that the acts committed and the acts that nobody protests are split from the
consciousness of men in an uncanny, even a schizophrenic manner. The atrocities of our
time are done by men as “functions” of social machinery - men possessed by an
abstracted view that hides from them the human beings who are their victims and, as
well, their own humanity. They are inhuman acts because they are impersonal. They are
not sadistic but merely businesslike; they are not aggressive but
30

405 Fuller (1975) Fuller(1979)

23. Elwell (1996). Commentary 14.5.
24. Elwell (1996)
25. Elwell (1996)
26. Vaughan and Hogg (1998) p253
27. Zimbardo (1970)
28. Vaughan and Hogg (1998) p253
29. Elwell (1996)
30. Mills (1958) pp 83-84. This was cited in Elwell (1996).
 196 Chapter 14 Cause: Explanatory Theories
merely efficient; they are not emotional at all but technically clean-cut.’ This is a
chilling but sadly convincing picture.

31. Hodgson (1998)

 Chapter 14 Cause: Explanatory Theories 197

Uncertain Boundaries
Boundaries are hard to determine. This characteristic is intertwined with, and in part
flows from, the existence of openness and feedback loops. As these operate, they
change the subject and its behaviour, so they change the boundary of the subject and
also the boundary of its sphere of influence.

Openness
Complex systems are open to the outside environment. As has been noted, they interact
with their environment as they adapt to new circumstances.

Unpatterned Connections
Complex systems may be scale free - that is, there is no pattern about connections
between parts within the system and between the system and its environment. There are
only unpatterned connections or random connectivity.

Using a Web crawler, physicist Albert-Laszlo Barabasi and his colleagues at the
University of Notre Dame in Indiana, United States, in 1999 mapped the connectedness
of the Web. To their surprise, the Web did not have an even distribution of connectivity
(so-called ‘random connectivity’). Instead, some network nodes had many more
connections than the average. Seeking a simple categorical label, Barabasi and his
collaborators called such highly connected nodes ‘hubs’. In physics, such right-skewed
or heavy-tailed distributions often have the form of a power law, because the
probability P(k) that a node in the network connects with k other nodes was roughly
proportional to k", and this function gave a roughly good fit to their observed data.

Memory
Complex systems are open so that they are subject to input. They usually have some
form of memory so that they carry forward with them at least some aspects of their
past. This can be fed into their information processing system to be incorporated into
their behavioural response that enters the feedback loop.

Information Processing
Relationships contain feedback loops. As an element or component of the subject
interacts with its environment, there can occur both damping (negative feedback) and
amplifying (positive feedback). For example, for a firm operating in the market place
one of the main feedback loops is provided by the price mechanism. Feedback that is
generated by an element comes back to the subject and is likely to cause a change to the
element or thus to the whole subject. This outcome and the non-linear effect and the
unpatterned connections are enhanced by the system having memory and an ability
31
to process information. Its components therefore can engage in ‘collective learning.’
This ability to engage in collective learning brings a major advantage. Those who can
learn can adapt and thrive. Those who cannot learn and adapt will be pushed aside.
 198 Chapter 14 Cause: Explanatory Theories
Complex Systems: How to Change Them
Introduction
Donella Meadows (1941-2001) was a scientist concerned with the environment and a
leading exponent for and scholar of the sustainability movement. Donella developed a
method for intervening in a system to make change. Her analysis utlised water
resources because of her passionate interest in sustainability, but there may be general
lessons that apply to any system.

Meadows analyisis invovles 12 steps. These steps are called leverage points because in
complex systems (such as a firm, a city, an economy, a living being, an ecosystem, or
an ecoregion) there are levers, or places where a ‘small shift in one thing can produce
big changes in everything’. (This, it might be observed, has similarity to Goldratt’s
theory of constraints).

While some people were aware of these points, at least intuitively, they often adjusted
them in the wrong direction. Understanding how these points worked was vital for
intervening positively in the system. Such insight could be deployed to a wide range of
global problems such as economic stagnation, poverty, environmental degradation and
resource depletion.

Meadow’s analysis of a system views it as containing a stock. There are inflows (things
going into the system) and outflows (things going out of the system). Those who seek
to change the system have a goal which constitues a desired state. The difference
between this desired state of the system and its current perceived state is termed the
discrepancy.

Her illustration for this, and the operation of the leverage points is a lake or reservoir.
This has stock, inflows and outflows:
(1) The stock consists of the amount of water now in the lake.
(2) Inflows consists of the volume of water entering the lake from a variety of
sources such as rivers, rainfall, drainage from nearby soils, and waste water from a
local industrial plant.
(3) Outflows consists of the various amounts of water that leave the lake. These
might be water appropriated for irrigation of crops, water taken for industrial use, water
to serve a camping site, natural evaporation, and overflow water when the lake is full.

Assume now that there are three problems perceived with the lake. Water levels are
declining, pollution is increasing and hot water released into the lake is harming fish
and plant life in the lake. Thus there is a disecrepancy between what the lake now is
and what it needs to be.

Intervention in this system to correct these problems can occur with any of 12 leverage
points. They are set out here by increasing order of effectiveness, thus moving from the
least effective up to the most effective.

31. Hodgson (1998)

 199 Chapter 14 Cause: Explanatory Theories

Hard and Fast Parameters

Some parameters are set hard and fast. Examples are taxes and subsidies. They may not
be impossible to change, but they are difficult. They may also not have much effect on
behaviours.

To give a business example, a firm might groan under the weight of a tax, but changing
the tax could be an arduous process that may not be successful. There is also the
possibility that economic behaviour does not change as much as is hoped for in the
event of the change. For example, the price elasticity of good classified as necessities is
low.

Size of the Buffer

A buffer offers protection from adversity. For example, a lake that is well stocked with
water can sustain a substantial amount of water loss and remain ecologically relatively
unaffected. Similarly, a firm with a huge customer base may be able to sustain a
substantial decline in sales and still show a profit.

Structure of the System

The basic structure of a system is difficult to change, and generally cannot be changed
quickly. To use the popular phrase, it is like turning around a battleship.

In our example of a lake, there may be pollution coming from industrial run-off. The
ideal would be to change the production method to avoid the polluted run-off
altogether. However, this is a major capital work.

Similarly in a city with a poor transport network, it is a major task to change it by

construcing an underground rail system. On the other hand, marking off parts of roads
dedicated to cyclists by constructing low-level barriers is a much cheaper way of
making some impression on the problem.

Similarly for a business, as micoecnomic analysis emphasises, in the short term it is

stuck with its premises and productive equipment. These can be changed in the medium
or longer term, and then only with substantial capital outlay.

Lengths of Delays Relative to System Changes

Information needs to be received on time. Information that is not received on time can
cause an overreaction or underreaction, or even oscillations. Information that is
received too early may cause decision makers to put it aside because it not pressing,
while information that is received too late will receive a hasty or even pannicky
response.

Strength of Feedback Loops Relative to Problems

This step concerns the strength of negative feedback loops, relative to the effect against
which they are trying to provide correction. For example, a negative feedback loop can
slow down negative behaviour and in this way promote stability.
 200 Chapter 14 Cause: Explanatory Theories
To return to the example of the lake, assume that an industrial plant is taxed for letting
out waste water, and is taxed by reference to both the volme of water it releases and the
degree to which it is polluted. Such a tax provides an incentive for the firm to reduce its
release. At the same time, the tax provides feedback as to the amount of pollution that
the firm is releasing.

Strength of Reaction to Positive Feedback

Positive feedback promotes a response, often to speed up process. However, Meadows
indicates that in most cases, it is preferable to slow down a positive loop, rather than
speeding up a negative one. A good illustration comes from our lake.

In a well nourished (that is, eutrophic) lake lots of life can be supported including fish.
Assume there is an increase of nutrients. This naturally leads to an increase of growth
in the lake. Phytoplankton grows first, using up as much nutrient as possible. Then
follows growth of zooplankton, feeding up on the phytoplankton. This in turn increases
the fish populations.

However, there is a problem. As the now increased in numbers plankton organisms die,
they fall to the bottom of the lake. There the matter is degraded by decomposers but in
the process, it uses up available oxygen in the water. Consequently, the water
progressively becomes anoxic (there is no more oxygen available). Given enough time,
all oxygen-dependent life dies, and the lake becomes a smelly anoxic place where no
life, including fish, can be supported.

Structure of Information Flow

Informations flows in various ways or structures which affects who does and does not
have access to what kinds of information. Compared to other means of change,
delivering information is cheap. It may have a significant effect on attitudes and
behaviour. For example, a newsletter that regularly informs people of the amount of
pollution in the lake may garner public opinion so that it supports change.

Rules of the System

Rules of the system provide incentives, punishment and constraints. These can have
significant effects. For example, taxing a firm by the amount of pollution it releases
into a lake provides strong incentive for it not to do so.

Power over the System Structure

Power to add or change the system rests somewhere. In some cases the system may be
self-organising: that is, the system can change itself by creating new structures, adding
new negative and positive feedback loops, promoting new information flows, or
making new rules. As an example, micro-organisms have the ability to not only change
to fit their new polluted environment, but also to undergo an evolution that make them
able to biodegrade or bioaccumulate chemical pollutants. This capacity of part of the
system to participate in its own eco-evolution is a major leverage for change.

32. Maddock (1972)

 Chapter 14 Cause: Explanatory Theories 201

Goal of the System

Changing the goal of a system is a powerful means of change because everything else is
naturally subordinate to the goal. The lake provides a good illustration. Assume that the
regulatory authority resposible for the lake changes the use of the lake from a free facility for
anyone to use to a tourist facility. Immediately there is now an economic incentive to preserve
the eco system, so the appropriate regulations will be enacted and enforced.

Mindset of the Underlying Paradigm

A system is built on a paradigm which in turn is based on a particular mindset. This generates
the goals, the structures and the rules of the system. A paradigm may be a stated assumption,
or an unstated assumption in which case it is harder to access. But even a paradigm that is
acknowledged can be hard to change. Dana suggests that a way to do this might be to point out
repeatedly and consistently to those with open minds anomalies in the current paradigm and
the consequent failures in the present system.

Underlying Paradigm
The ultimate power is power to change or transcend the paradigm itself. This is about more
than changing fundamental assumptions, but incorporates changing the values and priorities
that lead to the assumptions. For example westerners generally see Nature as a stock of
resources to be converted to human purpose. Many Native Americans see Nature as a living
god, to be loved, worshipped, and lived with. Again, white men in Australia viewed land as
something that men possess, while Aborigines
32
viewed land as possessing men.32

Chaos Theory
Introduction
Relationships between quantities of items where some amount of X, an input, causes a
calculable amount of Y, an output, can be either linear or non-linear. A function or
relationships is labelled linear or non-linear to reflect the fact that the relationship can be
represented by a straight line on a two dimensional graph (linear) or cannot be so represented
(non-linear). Chaos theory arises from events that involve an exponential relationship, which is
one type of non-linear relationship.

Linear Relationships
A function is linear if a change in input produces a proportional change in output. In
mathematics the term ‘proportional’ possesses quite a specific meaning. It exists when
multiplying an input by a factor also has the effect of multiplying the output by the same
factor. An example is the function f(x) = 2x. In words, this says: ‘The rule is that, if I give you
a number as input, I would like you to double it, then give it back to me as output.’ You will
find that the pattern persists, so that no matter what number ‘x’ you begin with, or what other
number ‘m’ you multiply it by, your answer will always be m*f(x) (that is, m times your
original number, and therefore proportional).
 202 Chapter 14 Cause: Explanatory Theories
Exponential Relationships
Exponential relationships are a species of non-linear functions. The exponential
function is written as: exp(x) or e ,
x

33
where e is the base of the natural logarithm. It equals approximately 2.71828183.

The exponential function has the following properties:

(1) It is nearly flat at the start.
(2) It climbs slowly for negative values of x, and climbs quickly for positive values
of x.
(3) It equals 1 when x is equal to 0.
(4) Its y value always equals the slope at that point.

Where x is a real number, the function has these additional properties:

(1) The graph of y=e is always positive (above the x axis) and increasing (viewed
x

left-to-right).
(2) This graph never touches the x axis, although it gets arbitrarily close to it (thus,
the x axis is a horizontal asymptote to the graph).
(3) The inverse function, the natural logarithm, ln(x), is defined for all positive x.

These properties lead to one consequence that is significant for chaos theory. As the
graph demonstrates, a small change in the value of x yields a large change in the value
of y. Thus the relationship between x and y is not proportional. Moreover, as the value
of x increases, the rate of increase in the value of y increases. Thus the
disproportionality between x and y grows as the value of x increases. This relationship
is at the basis of chaos.

Chaos
Explanation
Most readers have probably experienced or heard of a situation where one person
makes an apparently innocous remark to a second person and then a very extreme
reaction follows. For examle, the person reports: ‘I just said to Jack “How is the
family?” and he flew off the handle.’ This illustrates the type of event that is analysed
by chaos theory - where a small event causes something that is out of proportion to
what might normally be expected. This is often referred to as the butterfly effect. 409 410

Despite its label, chaos theory analyses causal relationships, but of a particular type. To
explain this, if someone had perfect knowledge they could know the cause and effect
relationship between two things and could predict the outcome in principle. However,
where chaos theory is utilised, there is a problem in practice. This is because there is a
distinction between determinism or causation in principle, and predictability in
practice. To put it more concretely, if it were somehow possible to record physical
measurements precisely, with zero error, then even a chaotic system would be entirely

409 Commentary 14.6.

410 Commentary 14.7.
32. Maddock (1972)
 Chapter 14 Cause: Explanatory Theories 203

predictable, since its governing laws permit only one course of evolution for a given
set of initial conditions. In reality however, every measurement comes with an error,
and the chaotic physical systems are by definition those systems that are extremely
error-sensitive; therefore they are unpredictable in practice. In plain language, the
unavoidable error in measurement can be greater than the change in the X variable.
Thus in chaotic systems, the exponential causal function produces disproportionate
outcome. When X causes Y, a small change in X causes a disproportionately large
change in Y. But not only is the outcome magnified, so too is the difference between
the true value of Y and the measured value of Y. Consequently, prediction in practice is
impossible because the calculated value of Y will be so far removed from the real value
as to be useless.

This preceding example involved the case where the observer has perfect knowledge of
the causal relationship. It is far more likely that they do not have this. Instead, they
observe an outcome that is undesirable. Because the outcome is undesirable, they wish
to know its cause so that they can, in the best case, prevent its recurrence, or if that is
not possible, ameliorate its impact. Here the problem is that just by looking at the
outcome, Y, one cannot detect the causal relationship that produced Y. If for some
reason, X was suspected of causing X, both the existence and nature of the relationship
between X and Y will not be apparent from the measured values of X and Y. Thus
chaos involves a large impact brought on by a hidden cause. It is the invisible enemy.

This is how chaotic systems affect human actions in practice. Something goes wrong.
A government wants to fix it and prevent it. However, both of these tasks are made
difficult or impossible since the causes of the problem are both undetectable and
unpredictable.

Characteristics
There is disagreement about the formal definition of chaos, but there is agreement that
chaotic systems all possess the following three characteristics:
(1) The Butterfly Effect. X causes Y in such a way that the final state or measure of
Y is highly sensitive to the initial causal condition, Y. A small change to X produces a
disproportionately larger change in Y.
(2) Determinism: There is no element of ‘chance’ or ‘probability’ in the system.
Instead, there are deterministic physical laws, which govern the system. Consequently,
fixing a choice of initial conditions (the value or amount of X) will determine its entire
subsequent evolution (the value or measure of Y). There is in other words no ‘chance’
element that could enter after the system has been started and alter the outcome
(something reflected in the phrase ‘the clockwork universe’). Another way of saying
this is that it is possible ‘in principle’ to predict uniquely the output of a given input. It
is clear from the fact that chaos is built on an exponential relationship that chaos
describes the outward appearance of what happens, not the inner reality. Perhaps
‘organised chaos’ might be a better name for it.
(3) Aperiodic Time and Asymptotic Behaviour. In plain language this means that in
a chaotic system there can be no regular, repetitive behaviour, no matter how long you
35. Business process re-engineering (BPR) can cause this type of change.
204 Chapter 14 Cause: Explanatory Theories

wait. Regularity and repetition can occur only by chance and not by the design of the
system, and the chance of these occurring is virtually zero.

Catastrophe Theory
Introduction
Catastrophe theory is now treated as a part of chaos theory. It originated, however, in
the late 1960s. It received its major early formulation in a book published in 1972 by
the mathematician Rene Thom, Structural Stability and Morphogenesis. Later in the
1970s Christopher Zeeman made some more pragmatic developments.

Continuous and Discontinuous Change

Catastrophe theory applies to non-linear systems. It can be best explained by a
comparison. In the simple case, change is steady, continuous and incremental. It
happens bit by bit along a line of development. Catastrophe theory refers to this as
change over a pre-defined existing stable surface. In the more complicated case, which
occurs in the domain of catastrophic theory, change is discontinuous. It is radical and
abrupt such that is entails a radical or fundamental departure from the state of affairs
before the change. However, when the change has run its course, there is new state of
35
stability. Thus the path is stability that leads to discontinuity that leads to a new
stability.

Catastrophic Change
Catastrophic change involves four stages:
Stage 1: If a system is ‘at rest’ (that is, not undergoing change), then it will
remain at rest in its standard resting state within a defined range of states. It tends to
occupy a preferred stable state, or at least a defined range of states.
Stage 2: The system is subjected to forces.
Stage 3: The system initially responds by trying to absorb the forces. If it is
possible, the system will attempt to return to its preferable initial state.
Stage 4: It ispossible that the system cannot absorb the forces because they are
so
strong. In this case the system gives way under the force.

Two consequences follow when a system gives way under force:

(1) There is no direct or continuous way back to the former stable state.
(2) Catastrophic change occurs and establishes a new preferred stable state or range
of states. These changes can take any of several forms.

Small changes in certain parameters of a nonlinear system can cause equilibria to

appear or disappear, and the system can change from attracting to repelling and vice
versa. The common characteristics is that a small change in one paramter on the margin
between stability leads to large and sudden changes of the behaviour of the system. In
the illustration below of tilting the box, past a point (called the degenerate critical
point), a small additional force was a enough to tip the box over the edge, both
 Chapter 14 Cause: Explanatory Theories 205

literally and metaphorically. This contrast between the small change on the one hand
and the resulting equilibria on the other is the hallmark of a catostrophe as that
expression is used in this context.

Catastrophe theory identifies seven elementary types of catastrophes. These are

labelled fold, cusp, swallowtail,411 butterfly, hyperbolic umbilic, elliptic umbilic, and
parabolic umbilic.

Illustration
Catastrophic change can be illustrated by a comparison. Assume there is a wooden box
on the floor with four sides. This box is resting on one side, (the down side). Some
force is applied to the top of the box on one side (the adjacent side). The box lifts a
little by leaning to the other side, then falls back to its original position. It may then
bounce a little on the floor and shift the whole position of the box slightly.

Assume now that this force is increased. Initially the same reaction occurs except the
box probably bounces a little more as the side that was uplifted returns to the floor.
However, past a point the box will not return. Instead if it will keep falling so that it
now rests on the side opposite the adjacent side. Thus the box has now substantially or
catastrophically changed its adjacent stable position on the down side to a new stable
position on the adjacent opposite side.

Adaptive Behaviour
Introduction
Systems which engage in adaptive behavour are called adaptive systems or complex
adaptive systems to emphasise that they are a species of complex systems. Being
adaptive means that they have the capacity to change and learn from experience. The
term complex adaptive systems was formulated at the interdisciplinary Santa Fe
Institute (SFI), by John H. Holland, Murray Gell-Mann and others

There are numerous examples of complex adaptive systems. They are also diverse
since they include economic systems (for example, the stock market), animal kingdoms
(social insect and ant colonies), the biosphere, the ecosystem, various parts of the
human body (for example, the brain, the immune system, the cell and the developing
embryo), a human community, and human institutions such as a government agency, a
business firm or a political party.

For a complex adaptive system the agents within the system itself as well as the system
overall are adaptive. Essentially they are adaptive because their capacity for self
organisation steers them to an adaptive state. There are two key propositions:
(1) This takes place because in the face of perturbation, the system engaged in
communication, cooperation, specialisation, spatial and temporal organisation, and of
course reproduction.

36
.
35. Business process re-engineering (BPR) can cause this type of change.
Salvador Dali's last painting, The Swallow's Tail, was based on this catastrophe.
 Chapter 14 Cause: Explanatory Theories 206

(2) This brings the system to a new stable adaptive state. This means that the system
has the characteristic of homeostasis).

Adaptive Capacity
In human social systems, adaptive capacity rests on a number of characteristics. These
consist of the the ability of institutions and networks to learn. For this they must have
memory, that is, the ability to store knowledge and experience, as well as the ability to
recall it when required, creative flexibility in decision making and problem solving and
the existence of power structures that are responsive to the needs of stakeholders.

Self Organisation
Self organisation means that a system has its own dynamic that tends by itself to
increase or at least strive to maintain the inherent order of a system. Renee Descartes,
the philosopher, mathematician and scientist, made one of the earliest statements of this
idea in the fifth part of his Discourse on Method. In that text Descartes presented the
idea hypothetically. He then elaborated on the idea at some length in a book called Le
Monde that was never published.

W. Ross Ashby, a psychiatrist and engineer, seems to be the first to use the term ‘self-
organising’, which he did in 1947. It was taken up by scholars in cybernetics where it is
a fundamental concept. These included Heinz von Foerster, Gordon Pask, Stafford
37
Beer and Norbert Wiener.

There are some major indicative signs that a human society or institution possesses
self-organising properties. These signs consist of statistical properties shared with self-
organising physical systems (for example Zipf’s law, power law, and the Pareto
principle), herd behaviour and groupthink.

Niklas Luhmann (1927-1998) introduced self organisation into sociology where it is

renamed ‘self-referentiality.’ Luhman based his analysis on communication. Elements
of a social system consist of self-producing communications. In other words, one
communication produces a further communication in response. Human beings are
sensors of their environment and the communicate to other what they observe, enabling
society to respond appropriately. On this basis, a social system possesses the capacity
to reproduce itself as long as there is dynamic communication.

Social communication can be simple transmission of information. It can also take place
as a dialectic between social structures and social practices. Essentially dialectical
thinking involves postulating conflicting propositions, labelled a thesis and an
antithesis. Throught the dialogue, the conflict is resolved, resulting in a synthesis of the
two conflicting propositions. This is obviously a more highly cognitive process than
mere transmission, so that the capacity to self organise and adapt is enhanced. Ideas of
this nature were put forward by sociologists such as Christian Fuchs, Anthony

37. Wiener (1961)

 Chapter 14 Cause: Explanatory Theories 207

Giddens and Pierre Bourdieu. In their theories, social structures both enable and
constrain social actions. As a result of the dialectical exchange, social structures are
produced and reproduced by social actions. This is how society constructs and
maintains a dynamic self-organisation process. In this way the social system becomes
endlessly creative and re-creative, as it permanently produces then reproduces actions
and structures.

The capacity of a self organising system is able to adapt and survive is referred to as
homeostasis. This is the property of a system to so regulate its internal environment that
it maintains stability and its capacity to engage in furher self organisation. Walter
Bradford Cannon coined the term in 1932. It is derived from the Greek words homoios
(same, like, resembling) and stasis (to stand, to posture).

Cybernetics
‘Cybernetics’ is derived from the Greek word KnPepvpT)* (that is, kybernetes). It
means steersman, governor, pilot, or rudder; it is the same root as the term government.
Cybernetics as a discipine is the study of a special type of self organising system.
Whereas self organisation in general usually entails self organisation for survival,
cybernetis involves a system such as a business, seeking specific goals. A cybernetic
system has a circular operation based on detecting signals as to how well the system is
functioning, responding to those signals by making appropriate adjustments, then
taking a fresh set of signals to determine whether the revised and supposedly enhanced
system is peforming as it meant to.

Thus cybernetic systems are both teleological (goal seeking) and self regulating - they
seek a goal, they set out to find it, they obtain feedback on how the search is going and
they adjust their rudder or direction accordingly. Stafford Beer (1926-2002) was one of
the early and distinguished proponents of cybernetics in management. There, as in its
other forms, it is based on feedback and concepts such as communication and control.
It is instutionalised in standard management practice under which firms, with the
processes of operations management and strategic management, monitor the internal
and external environment, rectify any problems that are found and take any
opportunities for improvement that present themselves. Meanwhile the firm continues
monitoring so that it can observe if prior changes are achieving its intended purpose.
By this means there is a continuous process of constant improvement, uptake of
opportunities and adjustment to a changing environment.

System Accidents
Introduction
System accident was a name devised by Charles Perrow a distinguished social
38
scientist, who studied among other things organisationational behaviour. Later he
39
replaced the expression system accident with ‘normal accident. ’ 412 413

412 His famous text on this is Complex Organisations: A Critical Essay (1972).
 208 Chapter 14 Cause: Explanatory Theories

His central argument runs as follows. System accidents occur in systems that possess
two characteristics. They are complex and they are tightly coupled. A system accident
is an accident which involves the unanticipated interaction of two or more failures.
These failures will occur in multiple and unforeseen ways since the system has just too
many possible action pathways. They are hard to prevent because they are virtually
impossible to predict in foresight. As explained below, tight coupling creates a network
of interdependencies. A consequence is that it makes it hard to see at a glance how
some particular component works. Consequently, the processes involved in the system,
and the events that occur there, are opaque, rather than transparent. Perrow terms this
incomprehensibility, and it can be a major contributing factor. Yet, in sad contrast, the
cause of the accident tends to be easy to understand in hindsight.

Complexity
Complexity in an institution can either be technological or organisational. In many
cases it is a bit of both.

Tight Coupling
Coupling is a term used in computer science and is taken by analogy into the study of
organisational behaviour. Coupling is an interaction between components or
applications. In computer science coupling is used in the context of interaction between
two pieces of software. Coupling is measured by (and thus describes) the degree of
knowledge that a programmer of one of the pieces of software must have about the
other in order to make a successful interaction between the two pieces of software.

Coupling, of course, is a concept of degrees. At one extreme there can be a fully

decoupled exchange where the two participants need have no knowledge about each
other in order to interact. In a loosely coupled exchange, the two participants may have
specific, but more limited knowledge about each other. In a tightly coupled exchange,
the participants require detailed knowledge.

In social science ‘coupling’ takes on a spread of meanings although there is at least a

whiff of commonality among many of them. In this context, ‘coupling’ means control
or dependency. There is a network of dependency so that change in one component in
the system requires the other system to change to accommodate it or to keep working,
or causes change in it in a chain reaction.

How the Accident Happens

One theory on how accidents happen is that people who are trained and experienced
such as a professional, operate on feel or instinct as well as logic, and will also ‘sniff
around’ and ‘taste’ before they seek to deal with a complicated problem. However, this
changes as an organisation increases in size. This occurs because with increased size,
an organisation generally contains more elements and more employees. Along with this
comes specialisation. Additionally, there may be some tendency for larger
organisations to become highly formalised so that operations become standardised

413 Perrow (1984)

 209 Chapter 14 Cause: Explanatory Theories
according to rules and procedures. This is evidenced by such things as specialisation,
backup systems, double-checking, rule books and detailed manuals of procedure.
Consequently, the opportunity for instinct or feel is curtailed and things now have to be
done in the ‘right’ way which is also regarded as ‘logical,’ in a style reminiscent of
Weber. There things proceed in a step-by-step orderly manner that is predetermined
and logical.

Now one effect of these developments into rules and logic is to improve safety and
efficiency. However, another effect is to set the stage and write the script for system
accidents which now become somewhat more likely.

Once the system is set on a logical course it will do what it will do. Of course those
who run the system can foresee that any component of the system can fail.
Consequently, they can take steps to reduce this likelihood and devise a plan of relief
and repair in the event of a failure.

But what they cannot so easily foresee in a complex, opaque system with many
interacting components is a combination of two happenings. There is not just one
failure but two or even more failures, that occur simultaneously. Once the multiple
failures occur, there is a reaction between them. This can be the disaster, and given the
way it has occurred, it is near impossible in the ordinary course of events for an
organisation to foresee.

Because the system is tightly coupled, any adverse effect runs through the system. It
may well do so swiftly and without obstruction from the system. By this means, small
problems or malfunctions in a few components can escalate into a disaster. System
accidents become more likely (and probably more serious) when certain conditions are
present. For example, components have multiple functions and can fail in more than
one direction or components are very close to each other.40

Some examples of system accidents are as follows:

# The Three Mile Island nuclear power plant meltdown, 28 March 1979.
Eventually the reactor was brought under control without loss of life.
# The crash of ValuJet 592 in the Everglades, 11 May 1996.
# The crash of the space shuttle Columbia, 1 February 2003. Columbia
disintegrated during re-entry over Texas, on its 28th mission. All seven crew members
aboard perished.

Contrast: High Reliability Organisations

There are, however, some organisations that do not seem to generate major disasters
even though according to Perrow’s formula they should. These are labelled high
reliability organisation (HRO). An HRO is an organisation that consistently avoids
catastrophes in an environment where normal accidents would be expected due to risk

40. Rijpma (1997) p16

 210 Chapter 14 Cause: Explanatory Theories

factors or complexity. It is possible that they avoid this because they have factored into
their operating sysem some measure of flexibility and initative.

Internal Conflict
Introduction
The American social psychologist Kurt Lewin (1890-1947) was regarded as one of the
founders of social psychology. His work has great relevance to dispute resolution in
domains such as law and management. One of his best known concepts is Force Field
Analysis, which is a means of describing and assessing conflicting forces. It
incorporates Force Field Diagrams.

Field
Nature of the Field
Lewin rested his analysis of social behaviour on the concept of a field which was
drawn from Gestalt psychology. Gestalt psychology (also Gestalt theory or the Berlin
School) is a theory of mind and brain. It does not view the mind as a box containng a
set of separate operators that perform functions for us such as memory and thinking.
Instead it sees the mind as a complex system - it is holistic and also possesses self-
organising tendencies.

This environment exists in an individual’s (or in the collective group’s) mind at a

certain point in time.414 This ‘field’ or environment is not static but very dynamic. It
changes for a person over time according to the experiences they have and how they
respond to those changing experiences. In its full form, the field is described by Lewin
as a person’s ‘life space’. It describes and covers the range of items in the person's
mind such as motives, values, needs, moods, goals, anxieties, frustations, vision and
ideals.

Changing the Field

An individual's field or ‘life space’ can change. Change occurs because of a person’s
life experiences. These cause an interaction between their ‘life space’ and things in the
outside world. These are the events and experiences that a person has. Lewen labels
these ‘external stimuli.’ This interaction takes place at the ‘boundary zone.’

Part of the change occurs because of the nature of these external stimuli. But the
principal driver of change is constituted by how the person responds to these stimuli. It
is how the person integrates them into their life space when they internalise the
experience. This determines whether they are better for the experience in that they
devleop, or worse in that they regress.

Forces
Forces are analysed from the perspective of an organisation seeking to achieve a goal.
Forces that drive towards a goal are described as driving forces or helping forces,

41
.
It can be mathematically described in a topological constellation of constructs.
 Chapter 14 Cause: Explanatory Theories 211

while forces opposing the goal (and thus favouring maintaining the status quo) are
labelled restraining forces or hindering forces.

issue
Lewin applied these princples to a range of matters such as learning, adolescence,
hatred and the morale of an organisation. These principles have been applied to the
analysis of group conflict. Specifically they are deployed in the situation where some in
an organisation desire change and some oppose it, so that there is an issue. An issue is
held in a dynamic balance or ‘equilibrium’ by the interaction of two opposing sets of
forces. In order for any change to occur, the driving forces must exceed the restraining
forces, thus shifting the equilibrium. Thus force field analysis provides a framework for
looking at the factors (or forces) that influence a situation and that must be dealt with to
resolve the issue.

Resolving the issue

There are six possible steps that might be taken to resolve the issue.

Step 1: Identifying Outcomes

At the outset it is necessary to construct an overview depicting both the current
situation and possible future situations. First it entails identifying and describing the
current situation. Then it is necessary to identify and describe two alternative future
situations - the desired situation and what the future situation will be if no action is
taken.

Step 2: Identifying Parties

Identify the most important participants because these are the stakeholders. Specifically
how the ‘battle lines’ are drawn with opponents and allies.

Step 3: Identifying Forces

Step 3 involves identifying forces. Forces compel or motivate people to favour or
disfavour seeking a goal. These forces are many and varied. Some prominent examples
include economic considerations such as resources, revenue and costs (both present and
future), institutional components such as regulations, policies and procedures, the
culture of the organisation, the history of a firm especially notable events both positive
and negative, personal qualities of those involved such as temperament, personality,
attitudes, experiences and values, perceived gains or losses of morally lawful
entitlements, damage to or promotion of vested interests, and events and trends in the
outside world. Identify these forces then list them. List all the forces resisting change
toward the desired situation. List all the forces driving change toward the desired
situation.

Step 4: Assessing the Forces

Step 4 is to assess the forces. First, consider whether all of these forces are valid.
Second, identify their respective strengths by allocating a score to each of the forces
using a numerical scale; for example 1 is extremely weak and 10 is extremely strong.
 212 Chapter 14 Cause: Explanatory Theories

Using some rating system like this identifies which forces are critical. This enables
managers to concentrate their attention and energy on these forces, with the obvious
aim of changing them as far as possible.

Step 5: Changing the Forces

Assessing the forces for and against change assists determining or planning how
change might be made. This in fact is the task performed in Step 5. It considers how
these forces might be changed to disrupt the present equilibrium. Consideration of
change involves assessing how it might be possible to decrease the strength of the
restraining forces or increase the strength of driving forces. At the same time one
should consider for each force how quickly or slowly it can be changed. However, this
is not necessarily a simple process, because increasing the driving forces or decreasing
the restraining forces may increase or decrease other forces or even create new ones. In
assessing how the forces can be changed it is obviously of the utmost importance to
focus on the contenders. It is necessary to see how they might be influenced to alter
their own fields.

Step 6: Making the Decision

Step 6 is to make the decision. Decide if it is feasible to seek the goal or to make the
contemplated change. If change is possible, it is necessary to devise a manageable
course of action. This should aim to accomplish the desired goal or change by
accomplishing three things - strengthening positive forces, weakening negative forces
and creating new positive forces,

Force Field Diagram

The Force Field Diagram is a model built on this idea that forces are both driving and
restraining change. These forces include persons, habits, customs, and attitudes. A
Force Field Diagram can be used at any level - personal, project, organisational,
network, to visualise the forces that may work in favour of and against change
initiatives. Usually, a planned change issue is described at the top. Below this, there are
two columns. The driving forces are listed in the left-hand column, and the restraining
forces in the right-hand column. Arrows are drawn towards the middle. The idea is to
understand, and to make explicit, all the forces acting on a given issue. The following
diagram explains the operation of the force field. It also shows how change occurs
when the driving forces become stronger than the restraining forces:

Driving Forces ! Restraining Forces

weak force ! weak force

no change
change

strong force ! weak force

Figure 14.1 Occurrence of Change
 Chapter 14 Cause: Explanatory Theories 213

3. Theories of Legal Compliance

Legislative Marksmanship
42
Although the popular mind tends to see law as the solvent for all problems, the reality is
that it is not always effective. A law does not always achieve its desired effect.
Therefore, enacting Statute X to cause Effect X is rational only if there is sufficient
reason to believe that Statute X will cause Effect X. Hence an important part of
reasoning in the policy process is trying to determine as accurately as possible the effect
that any contemplated law will have. This involves asking and answering a fundamental
question, which can be framed in various ways. What sort of things can laws cause and
what sort of things can they not cause? Once a law is made, how effective will it be?
415 416

How can a law best achieve its goal? 417

While it is not possible to provide a direct and simple statement as to how effective law
is as a social regulator, it is suggested that it is not an all purpose fix-it for social
problems. Further, in some cases makes the situation worse rather than better. 418

How well a law achieves its desired effect is reflected in the concept of legislative
marksmanship - this refers to how accurately the legislation hits its intended target. Does
it miss items that it wished to regulate so that it is affected by over inclusiveness? 419 420

Does it regulate items that it wished to miss so that it is affected by under inclusiveness?

Legislative Impact Analysis

You change your laws so fast and without inquiring after results past or present that it is all
47
experiment, seesaw, doctrinaire; a shuttlecock between battledores.
Behavioural sciences do not offer a single universal explanation for why humans behave
as they do. Consequently, there is no ready body of learning that will give society
comprehensive and accurate predictions about the effect of proposed laws.

However, to rectify this as much as can be, there has been specific research to determine
the factors affecting how successful laws can be in achieving their stated aims. Research
in this area is sometimes called legislative impact analysis. In current terminology it
encompasses evidence based policy-making.

Several eminent jurists have engaged in or promoted this research vigorously. An early
and famous scholar in this area was Jeremy Bentham (1748-1832). Other prominent
figures include Ernst Freund (1864-1932), Roscoe Pound (1870-1964), who was an
early and major figure in sociological jurisprudence, and Adam Podgorecki (1925-

415 Commentary 14.8.

416 This, it is worth noting to give a wider perspective on the question, is also a fundamental
question about the proper role and limits of government.
417 See Baldwin (1990) and Ingram (1980).
418 Commentary 14.9.
419 Commentary 14.10.
420 This was Florence Nightingale's admonition to the English Parliament.
 214 Chapter 14 Cause: Explanatory Theories

1998). However, despite major efforts by these and other jurists, there is still not a
421

comprehensive science of law making. As a result, when using our models there is often
a degree of assumption or even just speculation, rather than proof, that a proposed law
Statute X will cause Effect X. It is for this reason, as we discuss later, that rational law
making has to take this uncertainty into account. 422

Nature
Legislative impact analysis is the science of legislation. It is a specific form of social
423

engineering or socio-technics. To some extent the need for legislative impact analysis
has been institutionalised by the use of congressional and parliamentary committees and
special inquiries to examine proposed legislation, or a problem that might require a
legislative remedy. It has also been institutionalised in some jurisdictions by
establishment of a permanent body to examine and propose law reform. But despite 424

these gains, political manoeuvring rather than scientific analysis can still rule the law
making process. 425 426

According to Podgorecki there are four possible approaches to law making -

professional (informed by theory and performed by methodical practice), amateur (no
theory and/or haphazard methods), ideological (premised on selective values and/or
53
narrow interests) and maniacal (utilising psychopathic and/or sociopathic methods). Of
the four, the only rational means is the professional approach, which is the basis of
legislative impact analysis. This is founded squarely on the ‘notion that policy ideas
should stand or fall on the basis of research and trials’. It examines the effects of laws
427

by considering in a scientific and rational manner why laws may succeed or fail in
bringing about their intended goal. In pure form, it involves assessing the likelihood
428

that a law will cause its desired effect and not cause undesired effects, in an attempt to
make the law ‘more effective in achieving [its] purpose’ with a minimum of undesirable
side effects. Underlying this approach is the simple fact that knowledge of the possible
429

and likely effect of laws is properly based only on proper scientific method, in contrast
to resting on ‘hunches,’ ‘intuition,’ ‘opinion polling or
430 431 432

59
supposition .

Examining proposed legislation in a scientific way is an antidote to political rhetoric,

which scientific inquiry puts on trial. Moreover, it can also be economically justified
433

421 Commentary 14.11.

422 Chapter 15 Cause: Responding to Uncertainty. Commentary 14.12.
423 Commentary 14.13.
424 Commentary 14.14.
425 Kirby (1988A), Cretney (1984), Marsh (1983), Nakamura and Smallwood (1980)
426 Podgorecki and Shields (1996)
427 Leigh (2003)
428 Beerworth (1980)
429 Pound (1912) pp 514-516
430 Allen (1964) p 350, citing Scrutton J in Hill v Aldershot Corporation [1933] 1 KB 259
431 Hutcheson (1928)
432 Leigh (2003)
433 Leigh (2003)
 Chapter 14 Cause: Explanatory Theories 215

because the cost of the research that it commands is likely to be far less than the cost of
a policy mistake.434

If good prediction must be preceded by proper inquiry into the problem that the law is
intended to fix and the means proposed to fix the problem,435 how should this inquiry be
made? Roscoe Pound (1870-1964) proposed a ‘sociological study in preparation for
legislation’.436 Before a law is formulated and passed legislators should consider ‘the
actual effects of legal institutions and legal doctrines,’ the ‘means of making legal rules
effective’ (because ‘the life of the law is its enforcement’), and a ‘sociological legal
history which would consider what effects legal doctrine had in the past’.437

Use
Results of research into the function and impact of legislation can and should be utilised
in an obvious way. Before a legislature makes a law, or a court interprets a law, it is
important to predict, as scientifically as possible, what effects the law or its
interpretation will cause.438 Doing this enables legislatures and courts to use law to bring
about a desired effect. To state the obvious, a law passed to remedy a problem should fix
the problem.

Types
There are two fundamental or extreme types of legislative study or legislative impact
analysis. These are field studies and experimental law.

Field Studies
One can study legislation ‘out in the field’ and look at the actual operation of law. This
has the advantage that any conclusion one can draw bears directly on the subject under
scrutiny, but carries the disadvantage of uncertainty. Since conditions were not
controlled, it is possible that other factors apart from law caused the observed outcomes.

Experiments
One can set up an experiment involving controlled conditions. Controlled conditions
have the advantage of yielding more reliable and less contentious answers than field
studies, but suffer a problem because the result of the experiment may not properly
translate into a wider context that pertains in the real world. This type of research is
labelled experimental law.

Combination of Field Studies and Experiments

Obviously, these approaches represent the extremes. Between the extremes one can
have some mixture that uses and blends these two approaches.

434 Leigh (2003)

435 Pound (1912) and Podgoecki (1974). This is summarised in Tomasic (1980A) p 32.
436 Pound (1912) pp514-516
437 Pound (1912) pp514-516
438 Commentary 14.15.
 216 Chapter 14 Cause: Explanatory Theories

Legislative Impact Analysis: Field Studies

Social causality is very complex. It most cases, it cannot be proven in a strict 66
sensei Field studies refer to the examination of the impact of law by actually
considering how the law appears to affect society. 439 440 This has a great strength in that
it involves looking directly and specifically at the intended subject of study. It means
that the results bear directly on the question in hand.

This approach also has an inherent weakness in that the results lack the higher degree of
certainty that pertains in the experimental sciences. This is the case because there is a
problem in trying to examine the effect of legislation in a scientific way. This has
several related facets.

First, in social science the ideal means of investigation is through controlled research
because this makes scientific experimentation feasible. Controlled research entails
controlling all the variables in such a way that the most plausible if not the only logical
explanation for a difference between two situations is the operation or non operation of
the variable that is under consideration (the dependent variable). Hence the changes
observed in the two situations can be attributed to the effect of this variable.

When this is done it is possible to put forward a plausible view that one thing, the
variable under consideration, causes certain effects. But many social phenomena cannot
be specifically investigated in a laboratory by a controlled experiment. This is almost
invariably the case with the operation of statute law. It cannot, therefore, be directly
subjected to completely scientific analysis. Hence any conclusions drawn from
legislative impact research will always be tentative.441

Second, social change can occur for many reasons besides the enactment of a law.
Therefore when change occurs it is not always possible to identify the precise cause. It
may be caused solely by the law, by the law interacting with some other factors, or by
other factors entirely.

A hypothetical example can illustrate this. Assume that a government legislates for a
road safety campaign and that shortly after the legislation is passed there is an economic
recession. Two years later the statistics show a significant fall in road accidents and
fatalities. While the campaign may in part or in whole be responsible for the result, an
alternative explanation is that during the recession households saved money by using
their motor vehicles less; consequently the reduction in accidents and fatalities may in
whole or in part arise from reduced use of motor vehicles.

Third, society is constantly changing. When a law is passed and operates many other
changes take place at the same time. Consequently, it is difficult and often impossible
for social science to separate and analyse the effect of any single factor including

439 Mader (2001) p 123

440 Commentary 14.16.
441 Ross (1975)
 Chapter 14 Cause: Explanatory Theories 217

law.442 This means that any conclusion about what causes the factor, the nature of the
factor and what the factor causes (if anything) is inevitably tentative.

Legislative Impact Analysis: Experimental Law

How small, of all that human hearts endure / That part which laws or kings can cause or cure .443
444
Studying how law works in the field (in the wild as it were) is a useful pursuit that
gains some insights. Nevertheless, it is not totally scientific. Viewing law as it operates
in society almost invariably fails to subject legislation and its impact to totally scientific
study under controlled conditions. Consequently it gives us only qualified or limited
insights into what factors lead to a law will causing some desired outcome. In short, in
the planning stage it is impossible to be certain of the future effect of a proposed law.

There may be something of a solution to this problem from the field of experimental
law. The background to the development of this field comes from two other disciplines,
economics and archaeology. Traditionally these did not rely on experimentation but
have now started to do so. In the ideal case, researchers perform an experiment under
perfectly controlled conditions that tests the effects of a single variable. Where this is
not possible, they seek to recreate, control and examine as best they can the conditions
that they seek to investigate. Because of these innovations
71
there is now an extensive literature on both experimental economics and
72
experimental archaeology.445 446 447

Not surprisingly, jurists who wish to research the effect of laws have followed suit and
developed the field of experimental jurisprudence. One force that moved legal
scholarship in this direction consisted of a flourishing production of output in the field
of law and economics. Once economics became experimental, it was natural for this
development to flow on, or at least trickle down into, legal scholarship generally.
73
Consequently, experimental law is now an active field of scholarly endeavour. As has
been noted, experiments by their nature yield more reliable results than field studies, but
suffer from a potential problem. That said, there is a qualification: findings from within
the confines and artificial setting of a law laboratory may not easily or
74
naturally translate into explanations of how law works in the world at large.

Problems with Legislative Impact Analysis

Introduction
There is a revealing quotation from Banks that reveals much about the problems with
policy and consequent problems in trying to analyse policy: ‘Complexity and

442 See Mason (1993B).

443 Oliver Goldsmith The Traveller I: 427
444 Vernon L Smith (1980). Commentary 14.17.
445 Commentary 14.18.
446 Commentary 14.19.
447 Commentary 14.20.
 218 Chapter 14 Cause: Explanatory Theories

uncertainty would make policy choices hard enough even if they could be made purely
on technical grounds. But policies are not made in a vacuum. Rather, they typically
emerge from a maelstrom of political energy, vested interests and lobbying. Commonly,
those with special interests will try to align their demands with the public interest. The
average person (voter) rationally doesn’t do the hard work necessary to find out whether
that is correct or not, but often feels intuitively supportive’.448

Enlightened by this revelation it is possible now to come to the central point: there are
problems in practice with legislative impact analysis. While legislative impact analysis
may be perfect in principle, it can fail in the real world. In fact, two explanations have
already been considered.
(1) There is the question of causation - both causation in general and causation in law
- is complex so that causation can be difficult to predict before it happens or difficult to
identify after it happens. Complexity breeds uncertainty.
(2) Our knowledge of behavioural science is incomplete. Consequently people’s
reaction to change is often unpredictable.

There are, however, two further problems that need to be considered here.
(1) The forces of irrationality can overrule attempts to make law making rational.
(2) Decisions taken down the line after a law is enacted can inhibit the proper
operation of the law.

Forces of Irrationality
There are forces operating that oppose a rational study of proposed laws. One force
concerns political pressure, while the other is the myth of efficacy.

Political Pressures
Policy can be shaped by the play of ‘social and political forces as manifested in and
through institutions and processes’.449 450 451 In the result, according to Dr Ellen
Beerworth, ‘purely scientific evidence rarely enters into, or indeed survives, the power
play which accompanies the formulation of highly controversial legislation in
democratic
77
societies’. This is how social forces ‘will overwhelm socio-legal or other scientific
78
evidence’ when new legal policies are formulated’. For example, politicians fear ‘that
with real evidence, voters might discover that reality does not match political
rhetoric’.452

This happens because policy is not made in a vacuum. Instead, as was stated above,
policies can ‘emerge from a maelstrom of political energy, vested interests and
lobbying’.453 Commonly, those who push their own special interests will seek to make

448 Banks (2009) p 7

449 Simeon (1976) p 566
450 Beerworth (1980)p 68
451 Beerworth (1980)p 70
452 Leigh (2003)
453 Banks (2009) p 7
 Chapter 14 Cause: Explanatory Theories 219

them appear legitimate by trying ‘to align their demands with the public interest’. 454 455
456
One way to do this is to use evidence selectively rather than comprehensively.
Consequently instead of evidence-based policy the bias leads to policy based evidence.
But even without this chicanery, bad policy can be publicly accepted because
82
uninformed voters ‘often feel intuitively supportive’ of government proposals.

In principle, there is an antidote to this problem. Open the process to public scrutiny so
that the public can see the evidence and hear the arguments. By knowing the truth, the
public is less likely to be mislead by arguments based on selective or scanty evidence
propounded by sectional interests. This process would ‘enfranchise those who would
83
bear the costs of implementing’ the resulting policies.

Myth of Efficacy
Forces opposing scientific analysis of proposed legislation sometimes embrace in its
stead a popular view about law, which is really just a widespread misconception, the
myth of efficacy. Law is assumed to be the universal solution for social ills, reflected in
the common response to a perceived problem: ‘There ought to be a law about it’. The
psychology of this response is a simple reflex from hope to achievement and from
intention to effect.

This attitude, based on the ‘widespread belief that legislation invariably solves the
social problem to which it is directed,’457 creates a general reluctance to make a
thorough investigation of the likely effect or impact of a law before it is passed. So
much is this the case that this naive belief in legal efficacy may well be one of ‘the
greatest obstacles to the acceptance of legislative impact analysis as an integral part of
legal policymaking’.458

Decisions Down the Line

There are some decisions taken down the line once a statute has been enacted that add
significant uncertainty as to any prediction of how the statute will operate. Two obvious
examples concern amendment and administration.

First, the statute may be amended. When a statute is enacted, the text of the statute is
fixed for the time being. However, it is possible that after it has been enacted the statute
will be amended. It is virtually impossible for the legislators who originally enacted the
statute to predict the time and content of later amendments, let alone the effects that they
will cause.

Second, many statutes have to be administered by the government and there is

considerable scope for choice as to how this is done. Later governments will decide

454 Banks (2009) p 7

455 Banks (2009) p 7
456 Banks (2009) p 7
457 Beerworth (1980) p 67
458 Beerworth (1980) p 67
 220 Chapter 14 Cause: Explanatory Theories

the extent of resources they will commit to administration and where and how those
resources are committed. Again it is virtually impossible for the original legislators to
predict or control how a statute will be administered.

Data Gathering
Without evidence, policy makers must fall back on intuition, ideology, or conventional
wisdom — or, at best, theory alone. And many policy decisions have indeed been made
in those ways. But the resulting policies can go seriously astray, given the complexities
and interdependencies in our society and economy, and the unpredictability ofpeople’s
reactions to change.459 460
Social research such as legislative impact analysis depends on data. Several types of
bodies gather data - governments (most noticeably in a census), private industry and
researchers in institutions such as universities. Obviously, the more accurate the data
and the more of it, the better the chance that legislators and researchers can predict the
effects of a proposed statute. Moreover, ‘evidence and analysis that is robust and
publicly available can serve as an important counterweight to the influence of sectional
interests, enabling the wider community to be better informed about what is at stake in
87
interest groups’ proposals’.

Once data has been collected it should be made available to those who would use it.
There is an interesting contrast with regard to availability between Australia and the
United States of data collected in the national census. In the United States the rule is that
‘if the public answered the questions, the public has the right to analyse the data’. In461

Australia by contrast data collected from the nation in a census is not freely available. In
consequence, it is not available for primary analysis by researchers. This causes an
obvious problem. Researchers ‘cannot track vital individual experiences such as
“education, health, crime and labour market experiences,’’’ so they ‘lose the ability to
make subtle judgments about policy effectiveness’. 462

Explanations for Compliance

Introduction
Most of us are aware from both intuition and experience that behaviour concerning
complying or not complying with law is complex. It is likely that it is just not possible to
analyse compliance and then produce a set of across the board rules as to when and why
people do and do not comply with laws of various kinds.

This is the case for a reason. Compliance is complex. It may, for example, be contingent
on the entire situation and the confounding variables within it. This means that a best
attempt to explain compliance is limited to stating some major explanations that have
some reach but without necessarily being all embracing. Consequently the ‘science’ of
legislative decision making is at best tentative to a considerable degree.

459 Banks (2009) p 6

460 Banks (2009) p 7
461 Leigh (2003)
462 Leigh (2003)
 Chapter 14 Cause: Explanatory Theories 221

Rational Choice
Nature of Rational Behaviour
One theory of compliance is that people engage in calculating behaviour where they
weigh up the two outcomes:
(1) The position they would be in if they obeyed the law.
(2) The position they would be in if they did not obey the law.

Calculating behaviour is more likely to be involved in the situation where citizens may
obey a law because they will be rewarded if they obey it or punished if they do not obey
it (as is the case with criminal law). As a general approach this is an explanation for
behaviour advanced by learning theories in psychology, of which the most notable are
conditioning and cognitive (or social) learning.

Neo-classical economics also takes this view of human behaviour.463 This approach is
sometimes labelled the rational actor model. Where it is applied to law enforcement it is
also called the command and control model, and punishment is obviously the major
deterrence.

Put broadly, humans like to obtain pleasure and avoid pain (although what they like and
dislike will vary from person to person). Therefore they rationally calculate how to do
this. In consequence they will behave in ways that give them pleasure and avoid pain.
When faced with a decision, such as a decision to obey a law or not, they look at the two
outcomes - what will happen if they obey, and what will happen if they do not obey.
Then they choose the better outcome.

This type of reasoning is arguably the basis of decisions in many areas. Economists
claim that it is the basis of market forces that drive competition in the market place.
However, scholars from the law and economics school extend this view of behaviour
beyond the market into considerations about compliance with laws in many areas, and
indeed into other areas of behaviour as well.464 465 466 They argue that the behavioural
laws, which underlie economics, also determine the effect that some civil laws have in
that
92
they apply by analogy to the activities that these laws regulate.

This is how it allegedly works. Rules created by law ‘establish implicit prices for
different kinds of behaviour, and the consequences of those rules can be analysed as
93
the response to those implicit prices’. Prices stem from the fact that obeying and not
obeying law bring consequences. Not obeying the law possibly incurs punishment.
Obeying the law frees the actor from some restriction or brings in some benefit.
Therefore, there is a simple logic at work. The price or cost of compliance is to forgo the
consequences of not complying. Conversely, the price or cost of non compliance is to

463 For a general discussion see Hicks (1980).

464 Levitt and Dubner (2005)
465 Commentary 14.21.
466 Cooter and Ulen (1988) p11
 222 Chapter 14 Cause: Explanatory Theories

forgo the consequences of complying.

 Chapter 14 Cause: Explanatory Theories 223

This approach has been used to analyse activities as diverse as ‘drug addiction, sexual
acts, surrogate motherhood, rescue at sea, religious observances,’ ‘trust,’ ‘status,’ and
467 468

‘crime, racial discrimination, marriage and divorce’. 469

Consequently, economic
470

concepts such as ‘maximisation, equilibrium and efficiency are [used as] fundamental
97
categories for explaining society, especially the behaviour of rational people
responding to rules of law’. 471

Making the Calculation

So, according to rational choice theory, in calculating whether to obey a law, citizens
will logically weigh the two options. Where will I be if I obey the law, they ask, and
where will I be if I do not obey it? They calculate the value of each outcome and choose
the behaviour whose outcome has the highest net benefit.

In his landmark text, General Deterrence Model, Becker analysed the thinking
processes that underlie this rational choice - ‘felicific calculus’ as Jeremy Bentham
called it - as a common basis for rational decisions about whether to comply with a law
472

or other sanction. The decision constitutes a cost-benefit analysis of transgression

473

based on expected values of the alternatives:

(1) One factor is the probability of being apprehended (PA) or not apprehended
(PNA). This rests on detection, apprehension, prosecution and penalty. Obviously PA
and PNA are complementary. That is, PA + PNA = 100%.
(2) A second factor is the gain, return or utility derived from each of the two possible
outcomes. (i) Undetected Crime (UC). One consists of committing the crime and getting
away undetected. An example would be the proceeds of a robbery. (ii) Detected Crime
(DC). The other consists of the loss, punishment or disutility of being detected, caught
and punished.

This means that the expected values from committing the crime and getting away with it
or committing the crime and getting caught are as follows:
Return from committing the crime and getting away PNA x UC = R
Cost of committing the crime and getting caught PA x DC = C
Figure 14.2 Calculation of Expected Values

If for simplicity we exclude considerations of risk aversion the question for the actor is
this. Does the cost (C) justify the return (R)?

However, perception and the degree of unwillingness to take risks (termed risk
aversion) are relevant for compliance. Underlying this is that people may perceive

467 Posner (1992) p xix. Commentary 14.22.

468 Landes and Posner (1994)
469 Posner (1992) p 22
470 Commentary 14.23.
471 Cooter and Ulen (1988) p 11
472 Bentham (1789) Chapter 4. Commentary 14.24.
473 Becker (1968)
 224 Chapter 14 Cause: Explanatory Theories

risks differently or may possess a stronger or weaker desire to avoid a risk even when the
probabilities are the same.474 475 476 Hence a person’s capacity to perceive risk and their
tolerance for risk are factors that need to be taken into account when assessing how likely it is
that they will comply with or not comply with a law.

Application
Humans are capable of making rational decisions and frequently do so. However, they do not
always act on the basis of a rational decision. There is, for example, empirical evidence that
people are not just cold calculators about prospects of maximising or
102 103
even enhancing their personal wealth. Other factors may come into play. Consequently there
are limitations on this model as a predictor or producer of compliance.477

Government Response
Governments who believe that compliance will be based on calculating behaviour will typically
seek to do two things to enhance compliance. They will increase the penalties and they will
commit additional resources to detection, apprehension and prosecution. The idea is each case
is to make it more and more likely that the rational decision involves complying with the law.

Social Factors
Compliance with law based on calculating behaviour focuses on the citizen as an individual.
But to point out the obvious, most individuals are also members of various groups so their lives
have a social aspect. Therefore in seeking explanations for compliance and non-compliance it is
necessary to take into account that individuals are also social animals. 478 This approach focuses
on social and ‘contextual factors such as group membership, shared norms and perceptions,
relationships, model leadership, personal ethics and the experience of being governed’.479 480

To a significant extent social factors such as culture and custom will incline many
107
people towards obeying the law on many occasions. In these cases it is enough just to enact the
law and inform people of its existence.

The point is that most people are socialised to the extent that they belong to several groups. The
biggest and most obvious group is the whole collection of people within a nation. Another
obvious group is family. Other groups are defined by a variety of shared characteristics or
connections - school, religion, occupation, location, social class, ethnicity, sport, past times and
shared beliefs, interests and pursuits. Obviously

474 Parnell (2006)

475 Williams and McNeill (2005)
476 Hauck (2008), Sutinen and Kuperan (1999)
477 Simpson (2002), May and Handmer (1992)
478 Simpson (2002), May and Handmer (1992)
479 Ayres and Braithwaite (1992), Lind and Tyler (1988), Wenzel (2004)
480 May (2004), Walker (2004)
 Chapter 14 Cause: Explanatory Theories 225

the nature and intensity of these shared characteristics will have a major bearing on the
nature and effect of the socialisation that occurs because of membership of a group.

Groups will almost invariably have norms consisting of expectations about such things
as values, attitudes and behaviour. These norms exert an effect on individuals by
pressuring them to behave consistently with the norms. The more vehemently and
consistently these norms are held across all members of a community the stronger the
effects on individuals. Norms may increase or decrease compliance rates depending on
whether they suggest that regulations should be obeyed or rejected.

There are several aspects to the means by which groups control or influence behaviour.

First, generally the more controlling a group is, the more likely it will affect behaviour.
How controlling a particular group depends on a range of factors or dimensions such as
size, location, ease of joining and leaving, and the capacity of the group to control
behaviour and attitudes.

Second, the types of behaviour that a group regards as desirable or undesirable is highly
relevant. Linked to this is how widely, specifically and deeply the group is committed to
a particular behavioural norm. Commitment may be narrow, strict and defined at one
extreme or broad, flexible and fuzzy at another.

The third aspect concerns the sanctions that the group imposes for non compliance
(which also introduce the rational actor concept of rewards and punishment). Research
shows sanctions generally increase the pressure on members of a group to comply with
the norms of their peer group.481

But where there are sanctions they can vary in intensity and severity. At one extreme,
groups such as criminal gangs will kill, maim and terrorise to enforce their norms.
Sanctions can be material where the group has power to channel resources towards or
away from group members according to their compliance with norms.482 Sanctions may
involve a lessening or increase in reputation,483 status, respect484, social approval or
social disapproval. Sanctions can also involve increased or decreased acceptance or
some form of public shaming.485 486

Administrators can deploy social forces to good effect when they implement a law by
using ‘tit-for-tat’ strategies. Bit by bit those who administer the law can develop a
relationship of trust as both regulators and the subjects of that regulation seek solutions
113
to problems.

481 Jenny et al (2007) p240

482 Sutinen and Kuperan (1999) p181
483 May (2004)
484 Sutinen and Kuperan (1999) p181
485 Posner and Rasmusen (1999)
486 Ayres and Braithwaite (1992)
 226 Chapter 14 Cause: Explanatory Theories

Personal Morality
People may already be committed to the way of behaving that a law prescribes. It is
common that people believe as matter of personal morality that something is the ‘right
thing’ to do.487 Therefore they will do it without the need for sanction. On the other
hand, if the law runs counter to their moral views they may well not obey it. To state the
obvious, as history well demonstrates, if a person holds a strong view that doing
something is morally right but the law forbids it, nevertheless there is a good chance that
they will do the something regardless.

So, law is more likely to be effective when it is widely accepted (so that many believe it
is right),488 when individuals are not committed as a way of life to the prohibited
behaviour,489 and when law conforms to ‘prevailing ideas’.490 For people in these
categories, the law is instrumentally superfluous although it may have some symbolic
value. In other words, the law is rendered virtually redundant as citizens of their own
obey their own moral judgments about the right course of action.

Personal morality can be a cause of or factor in compliance in at least two ways. (i) A
person may believe that a good citizen obeys the law regardless of their personal views
on its content.491 (ii) The person may believe that the law is doing the right thing in its
task of commanding or forbidding something.

It is possible that the authorities can increase the moral appeal of a law and its intended
outcomes by an appropriate program of education. This can explain the benefits that
accrue from compliance. It may do this in general terms of social good. It may also
highlight individuals as role models who believe in the law or who have been
outstanding in their compliance.

There is a corollary to the notion that people may obey a law because they are morally
committed to it. There may be non compliance with and resistance to a law when the
aims of the legislation are not shared by the community because, for example, the
community does not agree with the aims of the law or the values that underpin it.492

If the resistance becomes widespread it brings problems. First, it increases the financial
cost of enforcement. Second, it generates significant political costs for governments.
These may be enough to cause the government to repeal the law or not to pass the law in
the first place.

Third, if the government persists with a law that lacks community support, there is a
good possibility that deterring disobedience and the imposing legal sanctions on those

487 Jenny et al (2007) p240, Sutinen and Kuperan (1999) p178

488 Cranston (1980) pp 89-90. Commentary 14.25.
489 Chambliss (1967), Cranston (1980) pp 89-90
490 Simeon (1976)
491 Jenny et al (2007) p 240
492 Bardach and Kagan (1982), Sheffrin and Triest (1992)
 Chapter 14 Cause: Explanatory Theories 227

who disobey may be counterproductive. It is not just that opposition to the law causes
resistance but it also magnifies the resistance in the face of conduct that seeks to deter or
sanction. This can happen because ‘[Resistance to change can become socially
galvanised, and galvanising’. Groups ‘identify as anti-regulation or anti-government’
120
which ‘becomes continually supportive of anti-regulation behaviour’.

Cooperative Behaviour
Some activities require group compliance or cooperation by members of a group. If
each member of a group cooperates and does their bit the task gets done. If some
members defect and do not cooperate there are two possibilities. The task will not be
done at all. Or the task will be done but not as well as it would if all had cooperated. In
this case defectors will gain a benefit without putting in the required effort. These are
referred to as social loafers or free riders.

Where this second option is the case, each individual has an incentive not to cooperate
but to defect instead. But if there are too many defectors the task is not done. This is
referred to as a social dilemma.

There are general moral orientations (or personality types) that make people more or
less likely to cooperate. For these purposes people are categorised in two groups:
(1) There are ‘pro-socials’ (more likely to cooperate). Within this group there are
121
‘strong or weak cooperators’, and ‘conditional or non conditional co-operators’.
(2) There are ‘pro-selfs’ (who are more likely to defect).493 494 495 496 497 498 These can
be classified
123
as ‘strong or weak defectors’.

Personality Differences
While people have many similarities they also have their personal or individual
differences. To illustrate, some laws require the adoption of new technologies or
practices. In these circumstances some personality traits are likely to make some people
adapt earlier and better than others. These include heightened ability to deal with
abstractions and with anxiety; possession of greater empathy, rationality, intelligence,
and aspirations; possession of more favourable attitudes to change, and to
124
science; and being less dogmatic and fatalistic.

Another aspect of individual differences concerns compulsive behaviour. People may

disobey a law because they act compulsively. This point comes to play in devising
policy about hard drugs such as heroin. One argument for making supply and use or

493 Bardach and Kagan (1982), Sheffrin and Triest (1992)

494 Kurzban and Houser (2001)
495 De Cremer and Van Lange (2001)
496 Kurzban and Houser (2001)
497 Rogers (1995)
498 Cooter and Ulen (1988) pp 570-579
 228 Chapter 14 Cause: Explanatory Theories

125
heroin illegal goes as follows. If heroin is made illegal under threat of great penalty,
suppliers will be deterred from entering the market. This will cause the price of heroin
 Chapter 14 Cause: Explanatory Theories 229

to rise. Increased prices will cause some heroin users to switch from heroin to
something else. However, for those users who are addicted, heroin is compulsive. Thus
they will not diminish their use of heroin if at all possible when the price rises.
Consequently, their demand for heroin is not elastic as the policy assumes, but inelastic.
So, they now seek the extra money needed to purchase heroin following the price
increase. If their addiction precludes their holding a decent job, they resort to crime (or
to more crime) to finance their habit.

Thus from the point of heroin users, the effect of illegality is to push them into a life of
crime. This happens because their behaviour is addictive.

Where does this leave a policy maker? First, consider suppliers. If you assume that
suppliers are criminal anyway and drug dealing is their crime of choice, if they abandon
the heroin market they will commit other crimes such as kidnapping, shop lifting,
robbery and extortion.499 500 With regard to this aspect, harm minimisation is to try to
deploy these criminals in the area where they wreak the least damage to society. This
may or may not be the sale of heroin. Second, from the point of view of users, the best
policy may be to distinguish between addicts and non addicts. Make heroin available
free to addicts (who have an inelastic demand curve) and so curb their crime and
perhaps make them amenable to rehabilitation. Make heroin illegal to non addicts (who
have an elastic demand curve). This puts the price up and discourages purchase. By thus
lessening the numbers of first time users, it lessens the number of future addicts.

Nudge Approach
Richard H Thaler and Cass R Sunstein have formulated a theory of compliance called
127
nudging. This contrasts with command and control mechanisms. The idea is that people
retain a choice, but are gently or even imperceptibly nudged in the right direction.

In some cases a person has a choice of two options so the nudge factor gently pushes
one option. An example is found at Schiphol airport in Amsterdam. In the men’s urinal
there is a life-size fly painted on the urinal at a strategic height. This has the effect of
causing men to pay more attention to their aim. In consequence, the urinal requires less
cleaning than others not endowed with a painted fly.

A second possibility is based on the fact that our automatic instinctive response to a
situation commonly emerges and prevails over our reflective and rational side in
determining our behaviour. In this case the art is to set up a situation so that the
automatic instinctive response to a situation is the one that regulators want. This is why
a canteen will sell more healthy food and less junk food if the healthy food is located at
the point in the cafeteria where the customer is likely to grab the nearest and most
available, rather than request it or move some distance to obtain it. In a simpler

499 Commentary 14.26.

500 Thaler and Sunstein (2008)
 230 Chapter 14 Cause: Explanatory Theories

case, a government can improve national savings if it sets up an automatic deduction of

savings or superannuation from pay packets but at the same time allows a person to opt
out. The alternative is that people have to actively choose to have savings or
superannuation deducted. In this case the government has to actively set out to persuade
them to save with the cost that this entails and with the likelihood that it will still
produce a much lower level of aggregate national savings than does the nudge
technique.

This second approach genuinely allows people a choice, but at the same time sets up the
system to make it likely that they will choose to treat the path desired by regulators.
Thaler and Sunstein refer to this as ‘libertarian paternalism’.

Miscellaneous Factors
As well as the major items discussed above that affect compliance there is a miscellany
of specific factors. These may operate on their own or in conjunction with one or more
other factors.

Compliance will be higher if the law is seen to be beneficial (and more so if it has been
widely publicised as such), if it is innovating social change and compliance does not
128
impose an excessive or unfair burden on the individual. Law is more likely to be
effective when behaviour is instrumental rather than symbolic because instrumental
behaviour is easier to detect than symbolic; when the law applies to few entities rather
than many; when law applies to large entities rather than small; and where there are
129
leaders and pace setters in the activity because these can more easily be targeted.

There are also restraints on the effectiveness of law because there are inherent
130
limitations on the power of a government to enforce law. Enforcement relies on
coercion, by force if necessary, but coercion is limited in several ways; for example, a
131
government cannot compel people to love one another or be creative. Similarly ‘social
relationships’ and ‘economic dynamics’ tend to be ‘outside a government’s
132
sphere of operations’. Legislation may also not operate effectively when it is trying
133
to resolve conflict over values; it may be difficult or impossible for a law to counter the
cohesiveness of a group; and law may not always be effective in changing
501 502 503 504 505 506 507

attitudes, for example in coercing people to be good, although some claim that the
508 509 510

137

501 Commentary 14.27.

502 Cranston (1980) pp 89-90
503 Passmore (1981)
504 Passmore (1981)
505 Hughes (2005)
506 Passmore (1981)
507 Passmore (1981) and Posner, Eric (1996)
508 Passmore (1981) and Schwartz (1978)
509 Passmore (1981), Skolnich (1968), Walker and Argyle (1964) and Gutman (1992-93).
See also Daintith (1989), Summers (1974), Kelbey (1979).
510 Passmore (1981), Gordbaum (1990-91)
 Chapter 14 Cause: Explanatory Theories 231

state can promote virtue. Even where coercion will work in principle, a government
 232 Chapter 14 Cause: Explanatory Theories

has only limited resources. In any particular case there will not necessarily be enough
138
resources to enforce a law. Finally, whether, how and to what extent these factors
operate will be determined by many factors, including the political environment,
139
demography, urbanisation, wealth and technology.

Some other specific factors are as follows. Where people are reminded of their own
mortality, they are likely to become more firmly committed to their pre-existing
values. Compliance with social norms may be ‘hard-wired’ into the brain.
511 512 513 514 515

142
Compliance may be affected by reasoning biases and errors. Compliance with
legislation may rest on inertia, or on the fact that there are no visible alternatives to
compliance. Finally, public policy aims may be frustrated by behaviour that complies
516

with the letter of the law but not the spirit.

517

Commentary
Commentary 14.1 Footnote 7
For discussion of systems theory by von Bertalanffy see von Bertalanffy (1945), von
Bertalanffy (1950) and von Bertalanffy (1951). Von Bertalanffy wrote up his work on
systems theory in the book General Systems Theory (1968).

Commentary 14.2 Footnote 9

The term ‘emergent’ was coined by the pioneer psychologist GH Lewes - see Lewes
(1875).

Commentary 14.3 Footnote 10

There is a saying about team sports that a champion team will always defeat a team of
champions.

Commentary 14.4 Footnote 21

To illustrate the holistic or supervenience attribute of a firm, Kogut and Zander (1992) p
384 assert: ‘Firms exist because they provide a social community of voluntaristic action
structured by organising principles that are not reducible to individuals’.

Commentary 14.5 Footnote 23

Elwell (1996) illustrates the irrationality of bureaucratic institutions by referring to
several classes of bureaucrats who actually do the opposite of that which the they are
required to do. The refer to ‘economic bureaucracies in pursuit of profit that deplete and
pollute the environment upon which they are based; political bureaucracies, set up to
protect our civil liberties, that violate them with impunity; agricultural bureaucracies

511 Passmore (1981)

512 Simeon (1976)
513 Schmeichel and Marten(2005)
514 Spitzer et al (2007)
515 Gifford and Hine (1997), Moxnes (2000)
516 Podgorecki (1972)
517 McBarnet (2003)
 Chapter 14 Cause: Explanatory Theories 233

(educational, government, and business) set up to help the farmer, that end up putting
millions of these same farmers out of business; service bureaucracies designed to care
for and protect the elderly, that routinely deny service and actually engage in abuse’.

Commentary 14.6 Footnote 33

Sometimes ‘e’ is called Euler’s number after the Swiss mathematician Leonhard Euler
(1707-1783), or Napier's constant in honour of the Scottish mathematician John Napier
(1550-1617) who introduced logarithms.

Commentary 14.7 Footnote 34

The name ‘butterfly effect’ derived from the title of a paper that Edward Lorenz gave in
1972 to the American Association for the Advancement of Science in Washington, DC.
His paper was entitled ‘Predictability: Does the Flap of a Butterfly’s Wings in Brazil set
off a Tornado in Texas?’ Here, of course, the flapping wing represents a small change in
the initial condition of the system, which causes a chain of events leading to large-scale
phenomena. Thus, if the butterfly had not flapped its wings as and when it did, the
outcome could have been significantly or even vastly different.

Commentary 14.8 Footnote 42

This view that any law or decree will always change behaviour is called ‘decretinism’
by Renner to encapsulate this idolatry of law - see Renner (1949) p 260.

Commentary 14.9 Footnote 45

There is an illustration, although it is only an opinion. It concerns government action
rather than just the enactment of a statute, but it still makes the point of how government
action can worsen a problem.

In The Australian of 24 August 2005 in ‘Trapped by their own folly’ Paul Kelly wrote
about United States and Australian involvement in the war in Iraq: ‘George W Bush has
no credible story to offer the American public about Iraq. Divisions are opening in his
own administration and there is now an unspeakable reality - on balance, Iraq under
Sadam Hussein was less a threat to US strategic interests than is Iraq today’.

Commentary 14.10 Footnote 46

Legislative marksmanship is the measure of how well a law achieves its desired effect.
A law can fail for either of both of two reasons:
(1) It misses items that it wished to regulate so that it is affected by over
inclusiveness?
(2) It includes and regulates items that it wished to miss so that it is affected by
under inclusiveness? Weida (2005) argues, for example, that United States statutes
imposing trade sanctions often have an impact on others beside the target states.

Commentary 14.11 Footnote 48

The key works of these famous figures in the field of legislative impact analysis are:
# Jeremy Bentham: Bentham (1967)
 234 Chapter 14 Cause: Explanatory Theories

# Ernst Freund: Freund (1965)

# Roscoe Pound: Pound (1942)
# Adam Podgorecki: Podgorecki (1972), Podgorecki (1974)

Commentary 14.12 Footnote 49

To determine if a law is performing as its makers intended it is necessary to investigate.

Mader (2001) and Schaffer (2001) have sought to assist this type of investigation by
formulating proposals for procedures and methods for examining the effects of
legislation.

Commentary 14.13 Footnote 50

There is a significant amount of literature on legislative impact analysis. See, for
example, Bentham (1967), Pound (1942), Easterbrook (1983), Freund (1965),
Podgorecki (1972), Podgorecki (1974) Robertson (1973); Lempert (1966); Dror (1971),
Ziegler (1988), Summers (1971), Summers (1974), Summers and Howard (1986),
Sunstein (1990A), Stone (1961), Stone, G (1975), O’Malley (1980), Passmore (1981),
Parker (1993), Tomasic (1985), Tomasic (1980A), Tomasic (1980B), Stone (1970),
Skolnich (1968), Ryan (1995), Robertson and Treitelbaum (1973), Rose (1959), Ross
and Blumenthal (1975), and Rubaon (1989).

Commentary 14.14 Footnote 51

One common form of institution to examine and propose law reform is to establish a
body called a law commission or law reform commission. To give examples, the United
Kingdom has the Law Commission established by the Law Commission Act 1965 (UK),
while the Commonwealth of Australia has established the Australian Law Reform
Commission under the Australian Law Reform Commission Act 1996 (Cth). For
discussion of the process of law reform see North (1985), Orr (1978-80), Barnes (1994),
Barnes (1995), Cretney (1984), Dowrick (1963), Gray (1966-67), Kirby (1988A),
Rawlings (1982), Ryan (1982), Sackville (1985), Sawer (1970), Sawer (1965),
Woodman (1975) and Johnson (1978).

Commentary 14.15 Footnote 65

The text puts forward the proposition that before a legislature makes a law, or a court
interprets a law, it is important to predict, as scientifically as possible, what effects the
law or its interpretation will cause. Muylle (2003) puts forward proposals to make
legislative procedure more effective in this regard.

One obvious proposal is to formally confer on the second legislative chamber (the upper
house of the legislature such as the Senate in the United States and the House of Lords
in the United Kingom) responsibility for careful assessment of legislative impact. In the
second chamber such consideration is likely to be less partisan and more deliberate than
in the political hurly burly of the first chamber (lower house). On the possible roles of
the second chamber see Lord Hope of Craighead (2004).
 Chapter 14 Cause: Explanatory Theories 235

Commentary 14.16 Footnote 67

Baldwin (1990) reports on an empirical study of why rules do and do not work in the
area of health and safety, then seeks to draw conclusions from them. There is a journal
that encompasses this field, the Journal of Empirical Legal Studies. See also Black
(1996).

Commentary 14.17 Footnote 71

Vernon L Smith won the Nobel prize in economics in 2002 for his work in the field of
experimental economics. Kagel and Roth (1995) wrote a handbook, which examine
some of the problems. There is also a journal dedicated to the task, Experimental
Economics, which is a journal of the Economic Science Association.

Commentary 14.18 Footnote 72

For readings on experimental archaeology see Coles (1970), Stone and Planel (1999),
Ingersoll, Tellen and Macdonald (1977) and Tringham (1978).

Commentary 14.19 Footnote 73

There is a good general account of experimental law contained in Volume 4 of the
University of Illinois Law Review (2002). The articles in Volume 4 consist of papers
given at a conference entitled ‘Symposium: Empirical and Experimental Methods in
Law’ that was held at the University. Papers in this volume consist of the following -
McAdams and Ulen, (2002A), McAdams and Ulen (2002B), Seidman (2002), Heise
(2002), Meares (2002), Ulen (2002), Croson (2002), Clermont and Eisenberg, (2002),
Harcourt (2002), Picker, (2002), Korobkin (2002), Schwartz (2002), Brinig (2002),
Coglianese (2002), Ginsburg (2002), and Klerman (2002).

Commentary 14.20 Footnote 74

There is an interesting use of experimental law in the sport of rugby union. After rugby
union became professional, and players fitter and faster, there were problems because
the game was becoming dull and play was hindered by numerous interruptions. In an
attempt to overcome these problems the authorities drew up some new laws. Before
seeking to introduce them the rugby authorities gave them a trial in some games played
at Stellenbosch University in South Africa in 2006. When the new laws seemed to make
the game less dull, they were introduced into the Super Fourteen rugby competition
played in the southern hemisphere. These new laws, however, were not very successful.

Commentary 14.21 Footnote 92

For discussion of economic analysis of law see Posner (1992), Trebilcock (1997),
Campbell (1996), McGuinness (1994) (arguing that there should be more economic
analysis), Gunningham (1992), Goodhart (1997), and Ulen (1997).

Commentary 14.22 Footnote 94

In explanation of this application of an economic type reasoning to fields other than
pure economics see Posner (1992) p xix. To illustrate, at p 3 Posner says:
 236 Chapter 14 Cause: Explanatory Theories

‘[E]conomics is the science of rational choice in the world - our world - in which
resources are limited in relation to human wants. The task of economics, so defined, is
to explore the implication of assuming that man is a rational maximiser of his ends in
life, his satisfaction - what we call his “self interest’’’.

Commentary 14.23 Footnote 97

As Cooter and Ulen (1988) make the following observation at p 11. ‘Where economics
uses rational man (homo economicus) law uses the concept of the reasonable man, and,
having alerted us to the similarity the authors proceed to explain the distinction.’

Commentary 14.24 Footnote 99

Felicific calculus is also called hedonic calculus, which is described and defined by
Mautner in The Penguin Dictionary of Philosophy in the following way: ‘Hedonic
Calculus. (Greek hedone pleasure). [This] is a method of working out the sum total of
pleasure and pain produced by an act, and thus the total value of its consequences; also
called the felicific calculus; sketched by Bentham in Chapter 4 of his Introduction to the
Principles of Morals and Legislation 1789. When determining what action is right in a
given situation, we should consider the pleasures and pains resulting from it, in respect
of their intensity, duration, certainty, propinquity, fecundity (the chance that a pleasure
is followed by other ones, a pain by further pains), purity (the chance that pleasure is
followed by pains and vice versa), and extent (the number of persons affected). We
should next consider the alternative courses of action: ideally, this method will
determine which act has the best tendency, and therefore is right. Bentham envisaged the
calculus could be used for criminal law reform: given a crime of a certain kind it would
be possible to work out the minimum penalty necessary for its prevention’.

Commentary 14.25 Footnote 115

Tyler (1990) argues that the main reason that people obey laws is because they approve
of the moral position that the law takes. Obviously, as Suchman (1997) points out,
different people will respond to laws in different ways on this basis because they have
different views on the morality of the particular law.

Commentary 14.26 Footnote 126

In economic language, this assumption is that the supply of criminals is inelastic but
within the broad field of crime commission, the supply of criminals for particular crimes
is elastic. Put another way, the second proposition is that just as push-pin is as good as
poetry, one crime is as good as another.

Commentary 14.27 Footnote 128

An example of a cost seen to be high is the cost of not using vast tracts of land as
farmland because there is a ban on clearing the land.
Chapter 15
Cause: Responding to Uncertainty
Introduction Expected Value Review of Legislation
Review of Judicial Decisions Disjointed Incrementalism
Precautionary Principle Defensive Design Commentary

Introduction
Economists have correctly predicted nine of the last five recessions .518 Discussion
in the previous chapter has shown that there is no great certainty about when a law is
likely to be effective in changing behaviour in the manner desired by legislators.519
Consequently any model for making and interpreting law must endeavour to take this
uncertainty into account.

There are several means that can be deployed for responding to this uncertainty. First,
there is expected value. This involves discounting costs and benefits to cater for the
uncertainty of their occurrence. Second, there is review of legislation and judicial
decision. This entails reviewing legislation and judicial decision after they are made to
see if they are on target. Third, there is disjointed incrementalism, which involves
proceeding in small cautious steps. Fourth, defensive design seeks to predict likely
failures and then work out means to avoid them. Fifth, the precautionary principle
requires us to guard against major or irreversible harm even if it is not certain to come
about.

Obviously, these measures differ in how they respond to uncertainty. Legislative and
judicial review entails becoming wise after the event, while disjointed incrementalism
entails being timid before the event. Expected value seeks to be rational in the task of
prediction that occurs in policy making. For this reason it can be embedded in the policy
process itself. Defensive design seeks to eliminate failure before it occurs.

Expected Value
Introduction
To explain expected value it is necessary to revisit a fundamental proposition. The
rational means to make and interpret law is to enact the law or choose the interpretation
that yields the highest net benefit, which is a measure of its social good. Net benefit is
the difference between the total benefits of the law or interpretation and

518 Paul Samuelson (1915-2009), Nobel Memorial Prize for Economics in 1970
519 Uncertainty of causation also occurs in economics - see Ford (1987).

237
 238 Chapter 15 Cause: Responding to Uncertainty
its total cost. Net benefit is the measure of social good or social gain from making or
interpreting law. Thus the primary decision making rule (the net benefit rule) is to enact
the law or choose the interpretation that yields the highest net benefit.

Nature of Expected Value

Expected value can be incorporated into the net benefit rule when the decision to make
or interpret a law is initially made. It is based on probability. Expected value entails
working out the probability that a particular effect, be it a benefit or cost, will ensue as
a result of making or interpreting law in a certain way. This probability is then used to
discount the value of the cost or benefit by reference to its uncertainty. To explain this
further, assume that Effect X is 60% probable. If Effect X is quantifiable, for example
as a financial return, we can give X a numerical expected value. If X is a benefit worth
$200, since it is 60% certain to happen, the expected value of X is 60% of $200,
namely $120.

After this exercise, when the costs or benefits are totalled the result is the expected
value of total costs and total benefits. When total costs are subtracted from total
benefits, the result is the expected value of the net benefit. When proceeding in this
way, it is necessary to make consequential adjustments to the framing of the net benefit
rule. Now the rule says that to choose between courses of action as is required in
making and interpreting law one takes the action whose net benefit has the highest
expected value.

Calculation of Expected Value

Expected value is calculated in the following way where it is assumed that Statute X
was enacted to achieve Effect X:
(1) Identify each and every component of the effect.
(2) Determine whether each component is a cost or benefit.
(3) Determine the value of the cost or benefit assuming that it actually is incurred or
gained. For convenience, and only for convenience, in illustrating this process here
assume that component X.4 of Effect X has a dollar value of $Y.
(4) Estimate the probability that the specific effect or component will come about.
Label this probability for X.4 as P.
(5) Multiply the value of the component, by the probability that it will occur. In the
illustration this entails multiplying $Y by P.
(6) The resulting value is the expected value of the component. In the illustration,
the resulting value is $[(P) x (Y)]. This is the expected value of the component X.4. (As
explained in discussion of the problem of measurement, where costs and benefits
cannot be expressed in some numerical amount as dollars can be, determining the value
of benefits and costs is obviously not precise. All a decision maker can do is to
3
measure these as well as the circumstances allow. )
(7) Total the expected value of all the components that are costs and the expected
value of all the components that are benefits. This yields the expected value of total

3. Chapter 12 Measurement of Net Benefit

 Chapter 15 Cause: Responding to Uncertainty 239

costs and the expected value of total benefits. This lays the groundwork for calculating the net
benefit, which occurs in the next step.
(8) Subtract the expected value of total costs from the expected value of total benefits.
This yields the expected value of the net benefit of Effect X.

Limitations of Expected Value

In principle expected value is a very logical way of factoring uncertainty into decision
making. There are, however, two major limitations in practice. First, determining the
probability that proposed action will incur a cost or return a benefit can rarely be known
precisely. While in some cases there may be statistics that assist this task, for example
insurance where actuaries calculate risk using vast tracts of data, in other cases it is fraught
with uncertainty.

Second, for various reasons it can be very hard to measure costs and benefits.520 More so is
this the case because to add and subtract them, as calculation of net benefit requires,
necessitates their being measured on a ratio scale.521 However, this scale cannot universally
apply to costs and benefits.

Yet despite these problems, the rationale for expected value makes sense. An outcome or
effect that is highly favourable is substantially diminished to the extent that it is uncertain.
This can mean that a less favourable but more certain effect may be preferred. Alternatively, a
law may be justified even though it goes only ‘a small way towards achieving an end which is
of great importance’.522 523

Review of Legislation
And you can never have certainty in public policy. All policy effectively is experimentation.
Introduction
Nature of Review
A legislature can review a law that it passes any time that it chooses. The purpose of a review
is to identify and solve problems that have arisen or to take up any opportunities for a better
performance.

To respond to both of these a rational legislature should conduct audits, which consider the
operation, administration and effect of each statute. What is proposed here is an
institutionalised system for audits that reviews legislation, especially legislation that is likely
to have a major social impact. In this context a review mechanism is proposed to deal with the
possibility (usually a likelihood) that the law will not cause all of the effects that its makers
intended or that it will cause other effects that are undesirable. When a law is made or
interpreted it is often only a reasoned guess at best that the law or interpretation will achieve
its intended and valued outcome. Once the law or interpretation has been operating for a time,
however, it is possible that at least

520 Chapter 12 Measurement of Net Benefit

521 Howell (1997)
522 Kirk (1997)
523 Banks (2009) p 6
 240 Chapter 15 Cause: Responding to Uncertainty

some of the need to rely on a reasoned guess has been alleviated. There may now be
empirical evidence available which indicates with acceptable certainty both the
anticipated and unanticipated effects that a law is achieving. Moreover, there may have
been a change in community values requires the law to be amended to accord with these
new values.

This review, which looks at the effects that laws cause, can also deal with another
problem with legislation, the possibility that a change of values has occurred since the
law was enacted. A rational legislature should periodically review all laws to ensure that
they still reflect community values. Staged review is an obvious means for providing
this additional type of review.

Institutionalised Review
Some jurisdictions have taken steps towards this goal by implementing various forms of
regular policy review. In Australia, for example, in 1985 the Commonwealth
government required government departments and agencies to develop performance
measures to enable them to assess the efficiency and effectiveness of their programs.524
Similar things have been done in other countries such as the United States of
America.525

Types of Review
Review of legislation can be any of three basic types, used on their own or in
combination. First, review may be ad hoc. It happens in response to a crisis or bad
publicity. Obviously this is a lax approach to the task of legislating. For this reason,
despite its popularity among politicians, it is now dismissed as a rational possibility.
Second, review of legislation can be constant or ongoing. Legislation or at least some
legislation is monitored all the time with a view to making an immediate response to
problems and opportunities for improvement. Third, review may be staged so that it
takes place at set intervals.

Obviously there is also a middle position in that a government can use both constant
review and staged review. In this middle position, the government may choose one of
two ways of proceeding in response to a perceived problem or opportunity. It may defer
action on some problems and opportunities until the next staged review. It may take
action to solve or seize other problems or opportunities as and when they arise. This
action may be the complete response, or it may be a partial response to do something
pending a more complete response that will be devised at the next staged review.

Information Management
Review of the operation of a statute requires information. Therefore, it is important for
those administering a statute to put in place a system for managing information. There

524 Mitchell (1990), Keating (1990), Ziegler (1988)

525 Halligan (1994)
 Chapter 15 Cause: Responding to Uncertainty 241

are three key concepts - collecting and gathering information, transmitting the
information and taking action to organise, store and use the information.

First, it is necessary to collect and gather information. Ideally everyone involved with
the operation of the statute should be instructed to note, store and report anything that
happens which is relevant to the operation of the statute. For this to happen, however, it
is necessary that the culture of the organisation is such as to allow subordinates to note
information even when it reflects adversely on the operation of the statute or the
performance of some official.

Second, once the information has been collected, the person who collects it needs to
transmit it to some official who is responsible for it. This is obviously done to ensure
that the information is protected and that the legislature can determine the ways in
which the information will be useful to them.

Third, once this official receives the information they do two things. They store the
information within some storage system. This system needs to organise the information
in such a way that those who use the system can readily see the nature and extent of the
information and can readily retrieve that information.

The official also decides what action to take with regard to the information because
there are three options regarding staged review:
(1) Wait until the next staged review to respond.
(2) Make a partial response now and defer a full response to the next staged review.
(3) Make a full response now.

Constant Review
In the discussion of information immediately above we suggested that there should be
constant information management so that relevant information is collected and
transmitted to a responsible. In this sense review is constant.

Review may be constant in another way in that the government responds to the problem
immediately rather than defer it to later. This response may be a partial response in the
form of some stop-gap measure to get by for the time being pending a completer
response. Or it may be the complete response.

Staged Review
Requirements
To ensure that staged review is actually carried out it, and is likely to be carried out
effectively, the review probably needs to be institutionalised. This invokes several
requirements:
(1) There needs to be a designated body responsible for the review.
(2) The legislature should establish a schedule for review.
(3) When the legislature enacts a statute it needs to insert two components that are
vital for review, a sunset clause and an adequate statement of their policy.
 242 Chapter 15 Cause: Responding to Uncertainty

Responsible Body
There needs to be a body that is formally responsible for the review. An obvious form
of this body is a special committee appointed by the legislature whose dedicated task it
is to inquire into the efficacy of the legislation and report on it to the whole legislature.

Schedule for Review

A legislature needs to schedule specified and sufficient time for review of legislation.
This scheduled time should be a standard part of the legislature’s schedule of work. It
should occur automatically and inevitably without the need for any express initiating
procedure. Such a schedule ensures that all of the targeted legislation is reviewed and is
reviewed at appropriate intervals. Obviously, the schedule can and should be varied
according to perceived needs. For example if it comes to light that a statute is manifestly
problem ridden, the legislature should bring forward its review.

Sunset Clauses
In some cases scheduling legislation for review may be sufficient to ensure that it is
reviewed. However, the possibility of review can be strengthened by the use of a sunset
clause. This is a provision in a statute stating that the statute is to finish on a specified
day. A legislature could impose a sunset clause on all legislation of substance, or it
might do so for legislation of special significance.

At the very least, a sunset clause ensures that a statute needs to be re-enacted if it is to
continue in operation. During this re-enactment there is obviously some opportunity for
the statute to be reconsidered. Typically, though, a legislature can determine the amount
of time it spends debating legislation and thus a majority can forestall or limit
consideration of the statute in this manner. However, having a schedule of review that
allocates proper time for reconsideration of legislation (as proposed above) should avoid
this problem. In any event, the need for re-enactment at least puts the statute before the
legislature again, and prior insertion of the sunset clause puts some moral pressure on
the legislature to engage in a reconsideration of the legislation.

Statement of Policy
When a legislature enacts a statute, it will greatly facilitate later review if the legislature
prepares and enacts a formal statement setting out the policy underlying the statute. By
this means the legislature can document the choices it makes when enacting the
legislation.

To effect this proposal, legislative counsel need to adopt an appropriate practice. When
drafting a bill they should prepare a statement that sets out the policy behind the statute.
This statement should be incorporated into the text of the statute, debated in the
legislature, and amended if needed when the statute is amended. As part of the statute,
these provisions would then be part of any published version of the statute whether
printed or electronic. In this way there would be a statement of policy that is
legislatively ordained, physically accessible, and available for use in a policy review.
Obviously this should be of immense value to the review.
 Chapter 15 Cause: Responding to Uncertainty 243

Content
Major items to constitute this statement of legislation policy include the following:
(1) A statement of the overall policy of the statute. Specifically this needs to identify
causation and evaluation. Therefore it should describe the options before the legislature.
It should say what each option should cause, and in doing so, spell out if needs be the
chain of causation from the law to the desired effect. It should evaluate these options
and say which was chosen and why it was chosen. By this means the statement captures
and records how the legislature predicted causation and made its evaluation of the
options.
(2) A guide to the meaning or purpose of major sections or at least of sections whose
meaning and purpose may be difficult to ascertain by inference.
(3) Illustrations and examples where appropriate.

Advantages
For purposes here, the targeted advantage from inserting a statement of intent in a
statute is to enhance subsequent review of the statute. It enables this review to measure
performance against purpose.

There are, however, other noteworthy advantages of the statement or intent or purpose.
It would inform and enhance legislative and public debate (and consequently, the
democratic process) when a statute is a passed by making clear the intended function of
the legislation. It would help those who had to administer the law, especially when they
exercises discretions authorised by the legislation (because it is a legal requirement that
discretions are exercised according to the purpose of the enacting statute). It would
directly and substantially assist a court that has to interpret a statute. According to the
argument accepted here, the most desirable interpretation of a statute is by reference to
its authentic purpose. Clearly the best source of legislative purpose is an authentic
statement of it in the statute itself. It beats inference and intelligent guesswork by a long
shot.

Consultation
Any review of legislation should involve proper consultation with the people involved
with the legislation, whether as administrator, subject, observer or in any other capacity.
In short the guiding principle should be, ‘[t]he wider the impacts of a policy proposal,
the wider the consultation should be’.526

Consultation brings several advantages. It confers additional legitimacy on ensuing

legislative change since it constitutes a form of participatory democracy. It is a source of
evidence on what might work and what might not because people ‘who are likely to be
affected by the policy’ provide ‘reactions and feedback’ that furnish ‘insights into the
likely impacts [of proposed policy] and help avoid unintended consequences.’ 527 This is
first hand evidence as to the effectiveness and efficiency of policy. Legislators may need
to analyse and assess this evidence but it is of enormous value.

526 Banks (2009) p 14

527 Banks (2009) p 14
 244 Chapter 15 Cause: Responding to Uncertainty

Process of Review
Review of legislation potentially occurs in two stages. On the surface, and quite logically,
review identifies the aim of a statute then examines whether and to what extent the statute has
fulfilled its aim. Has everything gone according to plan? Does performance, the reviewer asks,
match the purpose? This inquiry should reveal benefits and costs that were planned but not
achieved, as well as benefits and costs that were achieved but not planned.

However, it is always possible that there are now defects in the original policy. It may be
defective because it was not correctly made originally (remembering that there is always a
degree of guess work when passing statutes in predicting the effects that they will cause). In
this case, with the benefit of observation as to how the statute is actually working it might be
possible to revise the policy with some prospects of success.

Policy may also be defective for another reason. At the time it was passed the statute and its
policy may have been reasonably workable. But changing times - changes in values, attitudes,
behaviour, technology or circumstances - render the original policy inappropriate. In this case
the legislature needs to go right back to the beginning and rethink the policy. In doing this, it
should benefit from having observed the effect of the original statute and drawn the appropriate
lessons.

Finally, there is an important point about the procedure for this process. Subject to any strong
grounds for confidentiality, legislative review should be done in full view of the public.

Outcome of Review
It may be that the review concludes that the statute is working as well as it can and that no
action is necessary. Alternatively, a review of a law may find that the law, or its interpretation,
is defective. In this case the answer lies with the legislature. There are three possible courses of
action - (i) amend the statute and retain it in its amended form, (ii) repeal the statute and replace
it with a new statute or (iii) repeal the statute and not replace it.

Support for Review

When a legislature reviews legislation it should have on call technical assistance from a special
and independent audit office.

Problems with Review

In principle this review is a rational way to proceed. In practice, though, there is a problem.
Even after the event, when the law has been passed, we cannot always say with confidence that
a law has had a certain effect. There are two aspects to this.

First, there is the question of identifying the intended effect. Has literacy decreased? Is there
less crime? Do people feel less frightened in travelling on public transport? There are several
factors that can make questions like these hard to answer.
 Chapter 15 Cause: Responding to Uncertainty 245

Sometimes the intended effect, the gains and benefits, and the costs and detriments,
may be inherently hard to measure and even harder to detect, because, for example, a
12
law has a chain of consequences reaching in many directions. Sometimes a law may
cause effects that were not predicted (which may be either positive or negative).

Second, even if the predicted effect occurs, how do we know that the law caused it?
Sometimes there may be debate about whether something that happens after a law is
13
passed is an effect or the law or an effect of something else. The chain of causation
from cause to effect may not be ascertainable. It may lie concealed in, or linked with,
many other changes in society so that what causes a particular change is a matter of
guesswork. Often debate on these questions is politically or ideologically motivated.
Indeed in the case of detrimental effects there may be argument, from proponents of the
law, as to whether the law actually caused the unwanted outcome, or conversely in the
case of a successful law, it may be politically expedient for opponents to argue the law
did not cause the positive effect. In the popular phrase, success has a thousand fathers
while failure is an orphan.

Third, the review may be biased. Many factor, such as ingrained habits, shortage of
resources and political pressures often cause official to gather evidence that is ‘confined
to supporting one, already preferred way forward’.528 529 530 This is why Banks says that
the ‘joke about ‘policy-based evidence’ has not been made in abstract - we have long
observed such an approach in operation through the lens of regulation-making in
Australia’.531

These complications make it difficult to answer the basic question about the operation
of a law, determining on balance whether the law is worth having? Do the benefits of
the law outweigh the cost? If so, is there still an opportunity cost in that there is a better
way in which these resources can be allocated? Nevertheless some attempt has been
made to address these questions in the field called legislative impact analysis.532

Review of Judicial Decisions

A case may be considered and reviewed in later judicial proceedings when it is cited as
a precedent. The later court can adopt any of a range of positions in relation to the
earlier case. Stated broadly the later court can make a decision that ranges between two
extremes with a middle position possible:
(1) At one extreme its response is positive as it approves or follows the earlier case.
(2) At the other extreme its response is negative as it overrules or declines to follow
the earlier case.
(3) In the middle ground it may give qualified approval or disapproval to the earlier
decision:

528 See Ziegler (1988).

529 Commentary 15.1.
530 Banks (2009) p 8
531 Banks (2009) p 17
532 Chapter 14 Cause: Explanatory Theories
 246 Chapter 15 Cause: Responding to Uncertainty

# It may approve and indorse some parts.

# It may disapprove some parts.
# It may amend some parts.

Disjointed Incrementalism
The only sensible way forward, therefore, is to start gradually, to monitor, to learn by doing as we
develop institutions and see the effects of carbon pricing on our economy and community, and as
17
we wait for others to come to the party - in other words, an adaptive response.
Introduction
Disjointed incrementalism is another way of coping with uncertainty. Incrementalism
favours or values limiting the risk at the outset by not risking too much. It is an
approach to policy making that cautions against too big a leap into the unknown.533 534
535 536
It avoids a major project 1
that is both a complete failure 9
and is also difficult or vastly
expensive to unwind or reverse

Disjointed incrementalism involves proceeding by short retraceable steps in order to

minimise harm. Some short steps are taken. If these seem to function properly more
short steps are taken. These additional steps are reviewed and the process continues in
this way.

Legislatures
For a legislature, disjointed incrementalism is concerned to avoid a major project that
is both a complete failure and is also difficult or vastly expensive to unwind or
20
reverse. An example is building a new railway line that few commuters will use. So
instead of trying a major project to solve a problem, disjointed incrementalism takes
small measures that can be retracted without major cost or disruption. Incrementalism
favours or values limiting the risk at the outset by not risking too much.

An example is distribution of psychotropic drugs, such as heroin and cocaine, to users.

If the state of the law is now that these are forbidden, it would constitute a major policy
move to make these legal and freely available, for example over the counter from
pharmacists. An incremental approach is to make these drugs available only to addicts
and to do so in highly controlled circumstances such as injecting rooms or prescription
by a doctor.

Disjointed incrementalism has several possible justifications. First, it is a safety first

way for politicians because they eliminate monumental misjudgments, which can haunt
them for decades. By factoring this into the model for decision making, disjointed
incrementalism is putting significant value on the desire for a government to be re-

533 Banks (2009) p7

534 Lindblom (1980).See also Gillette (1997).
535 Gillette (1997)
536 Gillette (1997)
 Chapter 15 Cause: Responding to Uncertainty 247

elected. A government may face electoral defeat because the project is performed and
fails badly, or even because the government is just considering it and
 248 Chapter 15 Cause: Responding to Uncertainty

the possibility that the project might be implemented scares the electorate. Disjointed
incrementalism thus involves walking slow while running scared.

Second, it can be used when the probability of a major project being a success is so hard
to gauge that expected value is not a rational way to proceed. Third, it can allow on the
job experience (captured in the concept of the experience curve effect or
learning curve effect) to increase effectiveness and experience as the overall project
21
moves from increment to increment.

Fourth, it values cash flow and budget surplus more highly than the chance to fix a
problem with one major project:
# A big project that fails consumes a lot of finance, in setting it up, taking it
down and replacing it.
# This may beyond the available resources of a government, forcing it into
deficit budgeting.

There are two types of clauses found in statutes that represent a form of disjointed
incrementalism. One consists of a sunset clause, which specifies that the statute, or a
designated part of it, ceases on a particular day. One reason for the cessation is to make
it necessary for the legislature to review the statute if it is to continue, so the sunset
clause potentially combines two measures to deal with uncertainty, periodic review of
legislation and disjointed incrementalism. The second type of clause is the grandfather
clause. This limits the operation of a rule to cases that arise after the rule commences.
This often brings the law into line with latest technology. For example, a law might
require motor vehicles to have air bags but only if they are manufactured after a certain
date. The grandfather clause prevents retro fitting and retroactive operation of
legislation.

While disjointed incrementalism has an obvious logic, there are circumstances when it
cannot be properly used. For example, if there is some case for a bridge across a river at
a certain place, the basic options are to build the bridge or not build it. There is no point
to building half a bridge. The difference between the two types of cases - where
disjointed incrementalism is appropriate or not appropriate - is reflected in two
contrasting proverbs. One says ‘half a loaf is better than no bread’ representing the case
where disjointed incrementalism is workable, while the other says ‘half a key opens no
door’ which represents the case where disjointed incrementalism is not workable.

Courts
Courts can and do use a version of disjointed incrementalism when they make
precedent. They can make the precedent as wide as is necessary to resolve the case in
hand but within these limits make the precedent as narrow as it can be. At the same time
they may specifically or implicitly leave open future development for different 537

537 Commentary 15.2.

 Chapter 15 Cause: Responding to Uncertainty 249

cases. In this way a later court has a freer hand to develop the law than it would have if
the original court had sought to make a comprehensive rule for all cases for all times.

Precautionary Principle
Introduction
One response to uncertainty is the precautionary principle, which reflects two popular
sayings or proverbs ‘err on the side of caution’ and ‘better safe than sorry’. It applies in
situations where there is good reason to suspect that some activity raises threats of
severe or even irreversible harm. While the principle is most activated with regard to
harm to human health or to the environment, logically it can apply in any sphere.

Principle
The principle incorporates a substantive rule and a procedural rule. The substantive rule
requires that precautionary measures should be taken even if some cause and effect
relationships behind the apprehended serious or irreversible harm are not fully
established scientifically. The procedural rule says that the proponent of an activity that
might cause this harm, rather than the public, should bear the burden of proof that it will
not in fact cause harm.

Implementation
And Abraham drew near and said, Wilt thou also destroy the righteous with the wicked?
Peradventure there be fifty righteous within the city: wilt thou also destroy and not spare the
place for the fifty righteous that are therein? That be far from thee to do after this manner, to slay
the righteous with the wicked: and that the righteous should be as the wicked, that be far from
thee: Shall not the Judge of all the earth do right? And the Lord said, If I find in Sodom fifty
22
righteous within the city, then I will spare all the place for their sakes.
The precautionary principle is expressed in numerous laws and legal systems. Two
examples considered here are protection of the environment and the standard of proof.

Protection of the Environment

Since it gained prominence in connection with protection of the environment it is not
surprising that the precautionary principle frequently finds expression in environmental
laws. Thus it is stated in the Convention for the Protection of
23
Biodiversity, it is incorporated into the law of the European Union and it is found in
many statutory provisions for environmental protection.

The principle applies in situations where there are threats of serious or irreversible
damage to the environment. In these situations the natural response is to take action to
prevent this damage. There is, however, the possibility that there is uncertainty as to
whether this damage will occur. A possible, even likely, cause of this uncertainty is that
there is uncertainty about the underlying science. The function of the precautionary
principle is to overcome this uncertainty. It says that this uncertainty should not be a
ground for failure to take action. The huge value of the environment 538 539

538 Genesis 18:23-32 1

539 Recuerda (2006)
 250 Chapter 15 Cause: Responding to Uncertainty

outweighs the uncertainty and the consequent possibility that the authorities might
needlessly expend money to protect the environment.

Standard of Proof
In both civil and criminal cases courts require a standard of proof of at least 51% for a
party to win their case. As was explained in discussion of abduction, the requirement of
51% is pure abduction. Since 51% is the exact standard of proof for civil cases, the
24
standard there is based solely on abduction.

In some cases, most noticeably criminal trials, the standard of proof is higher than 51%.
In these circumstances of a standard of proof greater than 51%, the excess percentage
needs some other justification. This can be found in the precautionary principle.

Here the underlying point is that a higher standard of proof makes it less likely that an
innocent man will be convicted, although more likely that some guilty people will be
acquitted. Generally jurists have regarded the conviction of an innocent as a far greater
wrong than the acquittal of a guilty person. Hence the standard of proof is set high to
guard against, as far as is reasonably possible, conviction of an innocent. As Justice
Deane expressed it: ‘[T]he searing injustice and consequential social injury which is
involved when the law turns upon itself and convicts an innocent person far outweigh
the failure of justice and the consequential social injury involved when the processes
25
of the law proclaim the innocence of a guilty one’. However, in contrast to the
willingness of most jurists to forego convictions to avoid an innocent person being
convicted, Jeremy Bentham warned that ‘we must be on our guard against those
sentimental exaggerations which tend to give crime impunity, under the pretext of
insuring the safety of innocence’.540 541 542 543 544 545 546

So, the weight of opinion is that in a criminal trial, serious and irreversible harm occurs
if an innocent person is convicted. Over the years jurists have argued over what is a just
and proper ratio between innocent people convicte and guilty people
27
acquitted. In the Digest 9.5 Roman lawyers set the ratio at 1: 1. John Fortesque and
Sir Matthew Hale both set the ratio at 5:1, that is five guilty men to one innocent
28
man. Sir Edward Seymour (speaking for John Fenwick on a Bill of Attainder in 1696
27 30
for High Treason) and Blackstone have each put the ratio as a preference for 10:1, that
is, ten guilty men should go free rather than for one innocent man to be convicted. In
Schlup v Delo a United States court expressed the desired ratio as 99:1.547 The author

540 Chapter 7 Abduction

541 Van der Meer v The Queen (1988) 82 ALR 10, 31 per Deane J. Commentary 15.4.
542 Bentham (1829) 169, quoted in Laufer (1995) at p333 fn 17.
543 For a wide ranging account see Volokh (1997).
544 Commentary 15.5.
545 8 Will. 3, 13 How. St. Tr. 565 n. (1696)
546 Blackstone (1765) Vol iv c 27, 352
547 Schlup v Delo 513 US 298 (1995), 325, quoting Starkie (1830) p 751
 Chapter 15 Cause: Responding to Uncertainty 251

also believes that this ratio is appropriate.

 252 Chapter 15 Cause: Responding to Uncertainty

Defensive Design
Defensive design seeks to eliminate failure before it occurs. Defensive design involves
anticipating ways in which a scheme can go wrong, then devising the scheme in a way that
closes off the wrong options as far as possible. Two illustrations follow.

Need for Full Completion

Assume that part of a design is that a form has to be completed in full to be processed. A
computer program can be designed to avoid problems in this regard by two means.
(1) The program will not allow the form to be processed until all of the relevant information
has been entered.
(2) When a person seeks to submit a form when relevant information is missing or incomplete
the program can indicate to the person the ways in which the information is lacking or deficient,
thus giving them the chance to correct it.

Closing Off of Incorrect Option

An example from physical designs is the power plug that can only be inserted into the socket
correctly. This closes off the option of an incorrect insertion.

Commentary
Commentary 15.1 Footnote 13
The expression post ergo propter (after therefore because of) captures the error that people can
slip into here. Just because something happens after a law is passed does not mean that it
happened because the law was passed - there may be another cause.

Commentary 15.2 Footnote 21

In broad terms learning curve theory says that as the quantity of items produced increases costs
decrease. While there is some complexity about it and some debate, the central proposition just
stated appears very sound.

There is an addition, although there is some contention about it. Proponents claim that this
addition rests on empirical evidence - it says that for any given task as the quantity produced
doubles, costs decrease at a predictable rate. But even if this aspect of the rule is not established
with certainty the first aspect is. In plain language, generally the more times that you do a new
task the better you become at, but only up to some unspecifiable number of performances.

There are many possible reasons for this learning curve effect. Some of the ones commonly
proposed are as follows (but note that not all of them apply in all circumstances):
(1) The larger the amount of an activity that is performed the greater is the incentive to
introduce technology. The point, of course, is that technology enhances productivity while the
large scale of the activity justifies the cost of the technology.
(2) Labour becomes more efficient. Practice makes perfect is the relevant maxim.
Specialisation of labour is another factor that creates efficiency.
 Chapter 15 Cause: Responding to Uncertainty 253

(3) The task becomes more standardised and thus easier to perform.
(4) The firm may redesign the product to improve it. In the process it may gain
improvement in productivity by changing the resource mix.
(5) The firm improves its interaction with other firms on the supply chain and in this
way reduces costs.
(6) Methods of performing a task change to improve production.

Commentary 15.3 Footnote 23

Telstra Corporation Limited v Hornsby Shire Council [2006] NSWLEC 133 articulated
the precautionary principle.

Commentary 15.4 Footnote 25

In the United States one of the classic statements of the height of the injustice in
convicting an innocent man comes from Harlan J in Re Winship 397 US 358 (1970),
370-372, with support from Brennan J at pp 363-364. Another classic source is Jackson
v Delaware L&WRR 170 Atl 22 (1933), 23-24, which is discussed by Ball (1961) p 815.

Commentary 15.5 Footnote 28

John Fortesque and Sir Matthew Hale both set the acceptable ratio of convicting the
guilty compared to convicting the innocent at 5:1, that is, five guilty men to one
innocent man. These views are set forth in John Fortesque De Laudibus Legum Angliae
c 27, 13 St Tr 565 n (Amos’s translation, 1825) and Matthew Hale Pleas of the Crown
(1678) Vol ii 289.
Chapter 16 Effects
Introduction Continuation of Effects Operation of Effects Function of Effects
Prediction of Effects

The proper study of the social sciences is the unintended consequences of our actions.

1
Introduction
Effects
This chapter discusses the effects caused by laws and the interpretation of laws. It is
necessary to commence by spelling out some basic propositions.
(1) The term ‘effect’ also passes under a number of other labels. Before a law is
enacted an intended effect is an object or purpose. Once the law has been enacted it
achieves an outcome or result, or causes consequences. For our purposes there is no
distinction between these expressions.
(2) Every law that is made will cause an effect as will every meaning of an
ambiguous provision that a court decrees is the correct meaning of the provision.
(3) Effects include not only legal effects, but a variety of other effects which can, for
example, be symbolic, social, economic, political or psychological in nature.
(4) These effects will often constitute a chain or network of effects that interact with
one another and with other social phenomena.
(5) These effects can spread out widely, they can continue for a considerable time
and they can even go on indefinitely.
(6) In the model that is used we refer to a law or a meaning causing ‘an effect’.
Clearly the singular ‘effect’ is used here purely as convenient shorthand to cover the
full array of individual effects that a law or an interpretation of law can cause.

Effects are important in legal reasoning because the only rational way to proceed in
making and interpreting law is to reason by reference to the effect that a law or meaning
of a law will cause if enacted or decreed to be correct. Put simply, the best law or the
best meaning of a law is the one which causes the best effect. This form of reasoning is
labelled policy.

To reason according to policy, a legislature or court considers all the effects of a law or
an interpretation of a law. It considers both positive effects, called benefits, and
negative effects, called costs. It calculates the value of each individual cost and benefit.
It totals the values of costs and the values of benefit. It subtracts the value for
1. Popper (1972), p 342, cited in Rogers (1988) p 62. For similar sentiments see Popper
(1992) p 80, Merton (1964) p 81.
2. Magat and Schroeder (1984)

254
 Chapter 16 Effects 255
total costs from the value for total benefits to work out the value of the net benefit for
the law or the meaning of a law. Net benefit constitutes a highly useful single measure
of the value of a law or a meaning of a provision in a law.

Having done this, the legislature or court then determines the best law or meaning. This
is the law or meaning whose effect yields the net benefit which possesses the highest
value.

Options
Effects are one part of the options before a legislature or court about to make or
interpret law. The other part of the options consists of the array of possible statutes,
common law rules or meanings of an ambiguous provision, which are predicted to
cause the effects. It will be useful background to this discussion of effects to explain the
two parts of these options.

Statutes
Options for making a statute are set out in the following table:
Statutes Effects
Statute 0 Effect 0
Statute 1 Effect 1
Statute 2 Effect 2
Statute n Effect n
Figure 16.1 Statutes and Effects

Column 1 sets out the range of statutes before a legislature. Statute 0 is the option not
to enact a statute. Column 3 sets out the effect of each statute. Statute 1 causes or
produces Effect 1, Statute 2 produces Effect 2 and so on. Statute 0 produces the null
effect, Effect 0. The legislature does nothing when it enacts Statute 0, so nothing more
happens. Things stay as they are.

Now each statute is composed of rules and each rule has an effect. If Statute X is the
statute in question, the rules that it contain are Rules X.1-X.n, and their effects are
Effect X.1-X.n. Rule X.1 causes Effect X.1, Rule X.2 causes Effect X.2 and so on. This
can be set out in the following table:
Statute X Effect X
Rule X.1 Effect X.1
Rule X.2 Effect X.2
Rule X.n Effect X.n
Figure 16.2 Statutes and Effects

This table illustrates two equations. Statute X is composed of, and thus is equal to, the
sum of its rules. Hence Statute X = Rule RX.1 + Rule RX.2 ... + Rule RX.n. Since
Statute X is the sum of its rules, in simple terms the effect of Statute X, Effect X, is the
 256 Chapter 16 Effects
sum of the effects of Rules X. 1-X.n.3 Thus Effect X = Effect RX. 1 + Effect RX.2 + ...
Effect RX.n. However, the effects of individual rule may interact with other rules. Thus
the overall effect of Statute X may be something more than the sum of the individual
effects of the rules - it is the sum of the effects of the rules in combination.

Common Law Rules

Options for making a common law rule are set out in the following table:
Rules Effects
Rule 0 Effect 0
Rule 1 Effect 1
Rule 2 Effect 2
Rule n Effect n
Figure 16.3 Rules and Effects

Column 1 sets out the range of Rules before a court. Rule 0 is the option not to make a
rule. Column 3 sets out the effect of each Rule. Rule 1 causes or produces Effect 1,
Rule 2 produces Effect 2 and so on. Rule 0 produces the null effect, Effect 0. A court
does nothing when it makes Rule 0, so nothing more happens. Things stay as they are.

Meanings
Options for interpreting law can be set out in a table in the following way:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 16.4 Meanings and Effects

Column 1 sets out the possible meanings of the ambiguous provision, Meanings 1-n.
Column 3 sets out the effects, Effects 1-n, which each meaning will cause if chosen as
the legally correct meaning.

Effects
As these tables emphasise, each statute, each common law rule and each meaning of an
ambiguous provision will cause an effect. This effect can be viewed at two points of
time, before or after the action to make or interpret law. If making a statute is used as an
example, the effect can be viewed before the statute is made. In this case the effect is a
predicted effect. It can also be viewed after the statute is made. In this case the effect is
the actual effect even if it is not always easy to ascertain this with certainty and
precision. We can set out these two effects in the table below, using the following
designations:
(1) Predicted Effect. The table uses the letter ‘p’ to designate a predicted effect.

3 Commentary 16.1.
.
 Chapter 16 Effects 257
(2) Actual Effect. The table uses the letter ‘a’ to designate an actual effect.
Here now is the table:
Statute Actual Effect =? Predicted Effect
Statute 0 Effect 0a Effect 0p
Statute 1 Effect 1a Effect 1p
Statute 2 Effect 2a Effect 2p
Statute n Effect na Effect np
Figure 16.5 Statutes, Predicted Effects and Actual Effects

If our ability to predict the outcome of a law or an interpretation of a law were perfect,
the actual effect and the predicted effect would always be completely identical. They
are not, because our capacity to predict is a long way short of perfect.4 In any event,
there can also be difficulty in ascertaining the actual effect of a statute or an
interpretation after it has been enacted.

Thus the predicted effect of a statute and the actual effect (even if it can be ascertained)
will not necessarily be the same. Nevertheless, for the diagrams that we use for
analysing legal reasoning there is usually just one table headed ‘Effect’. In this table,
‘Effect’ refers to either the predicted or the actual effect, or both, as the circumstances
require. This is done purely for convenience and simplicity. Obviously, on any occasion
when the difference between the predicted and actual effect is important, it is necessary
to use a separate column for the predicted and actual effect as we have done above, or
to point out the distinction in discussion.

Comment
While both making a law and interpreting a law will cause an effect, the effect of the
interpretation of a provision is just a part, perhaps even a small part, of the effect of the
law which contains the provision. Because of this, and for general convenience, much
of the discussion of cause and effect in this chapter refers specifically to making law
rather than interpreting law. Doing, this, however, does not deny the fact that an
interpretation does cause an effect. Nor does it deny that predicting this effect should be
integral to reasons put to a court by counsel for interpreting the provision, one way or
another.

Outline
The following discussion of the nature of the effects of a rule or an interpretation of a
rule has four parts. First, we discuss continuation of effects. When the model for
forming law refers to each rule or meaning of a rule causing ‘an’ effect, that is, Statute
X causes Effect X, Effect X continues forward in time because it comprises a chain of
individual effects. This chain can be depicted as Effect X.1, Effect X.2 and so on, the
range being Effect X.1-Effect X.n. Second, we discuss the operation of effects. Effects
can be classified according to how they operate, as direct, ulterior, adjustment or
derived effects. Third, the function of effects is discussed. Effects can have any
4 of
. Baldwin (1990)
 258 Chapter 16 Effects
three major functions - they can be concerned with liberty, economics, or symbolic
matters. Or they can be a combination. Fourth, we consider how to predict effects of a
law or the interpretation of a law and the difficulties associated with this.

Obviously the question of effects is closely linked to the question of cause, which has
been discussed in the preceding chapter. For example that chapter considers the point
that there is always some uncertainty about whether a proposed law will cause a
particular effect.

Continuation of Effects
For what can war but endless war still breed.548 The model for
forming law shows that each meaning and each statute causes ‘an’ effect. This is a good
simple way of depicting the choices open to a legislature about to make a rule or a court
about to interpret a rule. Yet this simple picture hides an important point, namely that
cause and effect is likely to be a chain reaction. A statute will typically not just cause
one effect and then be spent. Instead it will cause something that will start a chain of
effects that both spreads out and continues into the future. The statute causes an event,
this event causes a second event, the second event causes a third event and so on. This
chain will involve all the steps to monitor and enforce the statute, as well as any other
consequences of the rule. It can go for some time, and may even proceed indefinitely.

Operation of Effects
[P]arliaments are rarely able to determine legislative outcomes.549 550
Introduction
Assessing how successful a rule has been in satisfying its intended goals can be
facilitated by a scheme for classifying effects. Roscoe Pound emphasised that rules
have an operation or effect in distinguishing between ‘rules in books’ and ‘rules in
—
action,’ that is, the rule as written and the rule as it actually operates.- Our concern here
is the rule as it operates - rules in action - although the effects of the operation of a rule
stem from the text of the rule as it is written.

This scheme is by no means complete, but still conveys some basic insights. It
classifies the effect of each rule into four categories according to whether the rule
achieves its likely intended effect, which may be a direct or an ulterior effect, or some
unwanted or unintended effect, which may be an adjustment or a derived effect.

Direct Effect
Direct effects occur because a rule is made to apply to facts to bring legal consequences
to the parties involved. The direct effect of a rule has two phases. One

548 John Milton 'Paradise Regained'

549 Muylle (2003) p 169
550 Pound (1910). It needs to be said that the other effects of a rule are referred to as rules
in action.
 Chapter 16 Effects 259
consists of the rule as it is written in the statute books. The other consists of the rule in
operation, which occurs when the rule is legally invoked.

Rule as Written
Rules are created by a legislature enacting a statute, which is entered in the statute book
and written about in legal texts (hence Pound’s term ‘rules in books’). This rule, of
course, divides into elements and consequences joined in a conditional statement. 551
Putting the rule on the statute books is one aspect of the direct effect of enacting a rule.
The rule as written is ready to visit its consequences on those who fall within its scope
when the rule is enforced or enjoined.

This is illustrated by the following table, which shows how Elements 1-n would apply
to Facts 1-n and produce Consequences. Consequences are the direct effect of the rule:
Elements Facts
Element 1 Fact 1
Element 2 Fact 2
Element n Fact n

Consequences
Figure 16.6 Elements, Consequences and
Facts
This effect is clear because it is defined by the terms of the statute. A legislature will be
100% accurate in creating this effect because it is also totally within its control. Within
constitutional limits, and ignoring political considerations, a legislature can enact any
rule that it likes. Elements of a rule define the conduct regulated, and consequences
provide what happens when the defined conduct falls within the rule.

There is no universally accepted classification for the direct effects of a rule, but it will
help to make some attempt to present a workable classification. This will help readers
to better understand what the direct effect of a rule can be. 552 The short point is that a
law has only a limited number of consequences at its disposal.

Institutions
Many statutes establish bodies or offices which are, logically enough, referred to as
statutory bodies or offices. As well as establishing the bodies or offices, these statutes
will usually provide for their composition, powers, objects and procedures.

Power
A statute can confer power on a legislature, a court, a body or an executive official.
This power can entail achieving an objective by means of force. Examples are statutes
authorising the taking of blood or a DNA sample, and a statute creating a power of
arrest.
8
.
9
.
Chapter 3 Structuring Legal Rules
Commentary 16.2.
 260 Chapter 16 Effects
Liability
A statute can create or affect liability. This liability has several types. First, it may
create civil or criminal liability for wrongs. It can punish behaviour as it does for
criminal rules, or provide compensation for a victim as it does for torts:
(1) Criminal Law. A statute can require a person to do something or to refrain from
doing something under threat of punishment. A Crimes Act or Penal Code, which is a
catalogue of criminal offences, is the most obvious example of these statutes. But in
addition many statutes create criminal offences as part of another function. They use
criminal liability in an incidental way as part of a larger scheme of regulation. For
example, many statutes establishing institutions or schemes create criminal offences to
protect the institution or the scheme.
(2) Tort Law. A statute can also create or affect liability in tort. Torts, that is, civil
wrongs, are creations of common law. Indeed tort is one of the few areas of law where
common law is the major type of law. Nevertheless statutes have modified, abolished or
altered some common rule torts and created some new forms of civil liability called
statutory torts. Statutory torts create a cause of action for an injured citizen. Obviously
the action is whatever the statute determines it, but typically it will give the citizen the
right to seek a remedy in damages to compensate them for their injury. It may also have
other remedies as well, for example allowing the court to grant an injunction or make an
ancillary order.

Second, a statute can create or affect liability in contract. Like tort, contract is a
common law creature. However, while common law is the basis of most contractual
liability, many contracts are now heavily regulated by statutes. Some prominent
examples are statutes dealing with money lending, consumer purchases and
employment. A common form of statutory intervention is to insert terms into contracts,
which protect consumers or others who have relatively small bargaining power.

Third, a statute of the legislature can impose a charge, tax or burden on the citizen. It
can do this in at least two ways.
(1) A statute can tax the citizen. In this regard it is worth noting that a basic principle in
most constitutions is that only a statute of the legislature can impose a tax because there
10
is no inherent executive or prerogative power for the government to do
so.
(2) A statute can impose a charge for a government service. Strictly this does not need
a statute of the legislature. A charge for services is not a tax, but if the service is one
which the citizen needs for any purpose then the effect is the same.

Fourth, a statute can prescribe some other detrimental consequences. These

consequences are similar to or analogous to criminal offences in that they have a
punitive tone. Examples of such statutes are those providing for dismissal from, or
forfeiture of, some office, forfeiture of some right or privilege, or disentitlement to some
benefit.

10. This is laid down in Magna Carta and the Bill of Rights 1688.
 Chapter 16 Effects 261

Property
A statute can create or alter property rights or provisions for transfer of property. It can
also provide for confiscation, resumption or transfer of property (although it will usually
do so only on the basis that there is good cause, for example the property consists of
dangerous goods or is needed by the state and just compensation is provided).

Benefits and Services

A statute may authorise conferment of benefits or provision of services. One example
consists of things such as pensions, allowances, bounties and subsidies. Typically the
statute will vest a discretion in an official, allowing them to confer the benefit or
provide the service. It is possible though, that the rule confers the benefit or provides the
service as a right, and not as a mere discretionary entitlement.

Alternatively, a statute may provide a procedure which, if followed, will result in

certain beneficial consequences. There is no obligation to observe or follow the
procedures, except in the sense that to achieve the consequences it is necessary to follow
the procedures. Examples of these are statutes prescribing the form of wills, providing
for the formation of companies, and providing for the transfer of property.

Regulation
Many statutes regulate an occupation or activity. Typically there will be two main
provisions. There is a provision forbidding anyone to perform an activity without a
licence. There is a provision for licensing whereby an official is authorised to confer a
licence on suitable persons permitting these persons to perform the otherwise prohibited
the activity. Frequently two additional powers are conferred on the official relating to
the licence - they can impose conditions on the licence and they can revoke the licence
for good cause.

Rule in Operation
Once a rule is made there is the ever present possibility that it can be invoked and
thereby brought into operation. There are three fundamental points about this.

First, once a rule is made, there is no accurate way to predict when, how often, how
easily and how well the rule will be implemented. Its operation depends on many things,
including how well and how wisely enforcement is funded and supported.

Second, once it is made a rule can be used properly but can also be misused or abused.
For example, there is a notorious practice on the part of some large corporations
engaged in litigation to undertake as many procedural hearings as they can to exhaust a
less well-financed opponent.

Third, where rules impose a penalty or disadvantage, it is quite likely that legislators
designed the rule primarily to deter the conduct in question rather than to impose the
penalty or disadvantage on those who transgress it. This is typically the case for
 262 Chapter 16 Effects

criminal offences, although in default of deterrence, prosecution and punishment of offenders is

generally a second best option. This is described in this book as an ulterior effect, which will
now be discussed.

Ulterior Effect
It is always possible that a law is not intended to be enforced but to deter conduct so that
enforcement is not necessary. In these cases the rule does not directly target the desired effect.
To illustrate, on the surface the purpose of taxes, charges and burdens is to raise revenue. In
some cases, though, imposition of a tax can be a way of discouraging an activity (where the tax
is referred to as a disincentive). Or it may be a way of requiring people to do something only in
a particular way. For example a tax statute may provide that if the citizen uses method X they
are taxed at 25% but if they use method Y they are taxed only at 15%. In this case the likely
effect of the statute is to compel people to use method Y. It is aimed at ‘suppressing or
discouraging the behaviour’ and so is ‘a means to that end’ rather than a means to provide the
government with revenue.553 554 If the government succeeds in this ulterior aim, the
revenue it gathers may be ‘negligible’ because ‘the revenue purpose of the tax’ is
12
‘secondary,’ but the goal it really wants is achieved. This, for example, can be part of the
rationale for imposing high taxes on cigarettes.

Another ulterior effect involves a chain of actions. If X leads to Y and the government wants X,
it can use legislation to promote X by rewarding or otherwise providing incentives for Y. This is
illustrated by the anecdote about a state government in the United Sates that wanted to reduce
the number of coyotes in the wild because they were killing livestock. It offered a bounty of $10
for the pelt of a dead coyote, hoping to encourage people to go out and kill them. This ulterior
effect, however, was not fully achieved, since some entrepreneurial people captured coyotes,
bred them and then presented the pelts for their $10 bounty. While they satisfied the
requirements of the rule, their conduct resulting from enactment of the rule did not achieve the
ulterior effect which the rule intended, namely the killing of wild coyotes.

Finally, an ulterior effect may involve bad faith on the part of the legislature. Or it may involve
deceiving the electorate by pretending that the rule will do one thing when it is really likely to
do another.

Adjustment Effect
When a rule is a passed there is an adjustment effect where a person does either of two things.
In the case of a rule providing beneficial consequences, often as an incentive for certain desired
conduct, the person may artificially bring themselves within the scope of the rule to enjoy the
consequences. This is the rationale for a good proportion of tax and financial planning. As
another example, to the extent that the rules for awarding a pension permit it, people might
arrange their affairs to enable them to be

553 Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1, 11 per Kitto J
554 United States v Sanchez 340 US 42, 44 (1950), per Clark J, citing Sonzinsky v United
States 300 US 506, 513, 514 (1937)
 Chapter 16 Effects 263

eligible to receive the pension. Indeed it this is one of the tasks carried out by members
of the profession known as financial planners.

In the case of a rule providing detrimental consequences, persons seek artificially to

locate themselves outside the scope of the rule to avoid the consequences while at the
same time reaping the benefits that the rule is trying to prevent. An obvious example is
drug dealers who use their power and resources to avoid the consequences of their
criminal action. They may do this at any stage of proceedings and so avoid detection,
capture, trial, conviction or penalty.

Derived Effect
As explained in the discussion above on continuation of effects, the effects of a rule
potentially go on for a long time and can go in various directions. Hence, there will be
many effects and the likelihood is that some will be detrimental and unforeseen. Law
13
can have ‘wholly unanticipated and undesirable’ side effects. To illustrate, one
consequence of making heroin illegal through the imposition of harsh penalties is to
increase the occurrence of house breaking because drug addicts have to steal to support
their habit. In fact, in the worst case a rule achieves an opposite result to the one
1
4
intended, and so worsens the problem or solves one problem by creating another
one.

There is one special type of derived effect worth noting, symbolic effects. These
involve non-instrumental matters where the rule addresses such things as moral or
emotional concerns (for example it makes us feel good), or it exercises a ceremonial or
ritual function.

An example of a derived effect comes from the multiplier in macroeconomics. The

multiplier effect refers to the fact that an increase in spending produces an even larger
change in income than the amount of the increase. Suppose a government injects an
extra $2 billion into the economy for health care. This will have an immediate effect of
increasing the income of those who derive income from health, for example hospitals,
hospital suppliers and health workers. These people will in turn spend some of their
extra money. This puts income into the hands of second parties. Second parties spend the
money putting income into the hand of third parties and so on. In theory, this process
could continue indefinitely, in which case the multiplier would have an infinite value. In
practice, most people save some of their extra income rather than spend it so the
multiplier effect eventually peters out. How much they spend will depend on their
marginal propensity to save and to consume. Every extra dollar is part saved and part
consumed; this is measured by a person’s marginal propensity to save which consists of
the proportion of the additional dollar that is saved, while the balance constitutes the
marginal propensity to spend. The effect or value of the multiplier is given by this
formula: multiplier = 1/(1 - marginal propensity to consume). Thus if the marginal
 264 Chapter 16 Effects

propensity to consume is 0.75 (75 cents of an extra dollar is spent), the multiplier is 4 555
556

555 Beerworth (1980) p 67

556 Sunstein (1990A)
 Chapter 16 Effects 265

(4 = 1/0.25). This means that every $1 that the government injects into the economy
will increase national income by $4. In practice, however, it is often hard to measure the
multiplier effect.

Function of Effects
Some of the passion in Sandall’s writing comes from a local issue: his horror at the betrayal of
Australian Aborigines by practitioners of romantic primitivism, the intellectuals who rewrote
Aboriginal history, enforced bilingual instruction that encouraged a cultural apartheid of self
determination and prioritised the preservation of traditional culture over the skills of modern life.
This has resulted in vocational disability among Aborigines, due in part to a catastrophic decline in
literacy, and (to use the English philosopher and anthropologist, Ernest Gellner’s words) in frozen,
visible and offensive inequality.15
Introduction
An effect is anything that the statute causes, regardless of its nature. Thus it may be
tangible or intangible, symbolic or instrumental, financial or spiritual, emotional or
behavioural; it may be concerned with liberty or resources; it may be good or evil. There
is no earthly limit to the nature and scope of effects.

Given the wide scope of effects, it is useful to attempt some classification. For working
purposes, at least, a simple and useful classification divides the functions of the state,
and hence the effects of laws, into two classes, symbolic and instrumental.

Instrumental matters concern the state of the physical world, especially behaviour and
resources. Two of the major instrumental functions of the state are economics
(producing and distributing goods and services), and the protection of civil liberties
including maintenance of law and order.

Law has symbolic effect, as the term is used here, when it has an effect on mental
processes. Here it does not affect the outer world of behaviour and resources but the
inner world of the mind. Used symbolically law affects ideology, ideas, beliefs, values,
perceptions, attitudes, awareness, consciousness and emotions. For example, law may
affect people’s emotions by having a ceremonial or ritual function. Or by banning
certain behaviour of permitting certain behaviour the legislature might lead people to
adopt new values - they come to believe that the banned behaviour is wrong and that the
permitted behaviour is right or at least acceptable.

Economics
Give us this day our daily bread.16
In practical terms by some means the state needs to feed and clothe the citizen - to put
17
clothes on their back, bread on the table and milk in the refrigerator. To explain why
this is so, we start with the five fundamental propositions which are at the basis of

15. Tallis (2002) p 25, taken from The Times Literary Supplement and being a review of
Sandall (2002)
16. The Lord's Prayer
17. Commentary 16.3.
 266 Chapter 16 Effects

economic activity. First, humans have wants which are potentially unlimited. Second,
these wants can be satisfied by goods and services which are produced from resources.
Third, resources are scarce and finite. Fourth, most resources can be used in production
in various ways and each way provides different combinations of goods and services.
Fifth, once goods and services have been produced they can be distributed in any one of
a large number of ways.

These propositions together raise a basic economic question - how to satisfy unlimited
wants with limited resources. To answer this question the state takes on two economic
activities. First, of necessity the state decides what goods society will produce and how
they are made. In this way the state answers the production question. Each society needs
to have some means of deciding how scarce resources are used in production. Second,
the state has to decide how the resulting products are distributed in an attempt to satisfy
human wants. In this way the state answers the distribution question. Having decided
what is produced it now decides who gets it.

There are two basic means by which the state performs its economic functions. It can
use a system based on self-interest, that is, the market (although the market is not
557

always a possibility), or it can use a system based on coercion, that is, government
regulation by means of legislation. Our direct concern in this discussion is with
legislation, but in studying legislation the market is important because it is an alternative
means of economic regulation, and indeed, is often the first means to be considered
when making the relevant policy.

Legislation can affect either production or distribution. A law affects production if it

increases or decreases overall production in the economy, or affects how, whether, or
how much of, a particular good is produced. Economic effects on the productive side are
easier to measure than libertarian and symbolic because they can often be measured (or
estimated) in dollar amounts or by volume of goods and services. Uncertainty about
future events can be taken into account to some extent by using the device of expected
value.

A law has an effect on distribution if it raises or lowers the wealth or income of some
people. Sometimes a law will distribute a gain in production. At other times a law will
just redistribute wealth, that is, take it from one group and give it to another.

While the most obvious economic effects of law relate directly to production and
distribution, there are also claims that many laws, which do not on the surface deal with
economic matters, still have indirect economic effects. For example the rule of estoppel
reduces transaction costs and so enhances productivity. Posner argues that
558 559

the economic policy underlying some legal rules is ‘to promote the efficient allocation
20
of resources’. Consequently, many legal rules ‘bear the stamp of economic

557 See Duxbury (1996).

558 Commentary 16.4.
559 Posner (1992) p 22
 Chapter 16 Effects 267

reasoning’ because in legal reasoning there is ‘an inarticulate groping towards

21
efficiency’. Thus ‘as different as the legal and economic approaches are [to a
question], they frequently lead to the same conclusion’; consequently, ‘the same legal
22
rule which legal scholars defend as just, economists defend as efficient’.

2
3
Liberty
My Father’s house has many mansions/
Once people are in society, the very existence of society makes regulation necessary or
likely in two ways. First, people are interacting and therefore it is necessary to regulate
personal interaction. One way in which the state protects liberty is by conferring rights
and enforcing them with a police force and courts. Second, the state also needs to protect
the citizen from external aggression and foreign subjugation by providing armed forces
to defend the state.

Symbols
Our father, hallowed be thy name.560 561 562 563 564
As stated already, when used symbolically (or expressively) law affects ideology,
25
ideas, beliefs, values, perceptions, attitudes, awareness, feelings, consciousness and
emotions (for example, by having a ceremonial or ritual function). It can, for example,
give us a warm inner glow, or comfort us, even if it has no instrumental effect. 565

How does law work at the symbolic level? Obviously law cannot effectively command
how we feel and think. It may, however, influence it. Possibly to some extent we think
and feel as we do because of what exists in the outer world, which is subject to
instrumental regulation. Hence by this regulation law may affect our attitudes. For
example, by banning something the law may lead many people to think that the banned
thing is bad.

A law may even be passed solely for symbolic purposes, such as the enhancement of
the status and self-esteem of the members of a group as distinct from economic or
material advantage. In some cases, though, a law is framed to have instrumental effect
but is passed for purely symbolic reasons. This is illustrated by Joseph Gusfield’s
interpretation of the American temperance movement of the 20th century, which was
able to have laws passed that prohibited the sale and consumption of alcohol in the
United States during 1919-1933. Mayer and Nelson summarise this interpretation in the
following way. This legislation allegedly resulted from ‘a symbolic crusade by certain

560 Posner (1992) p 23

561 Cooter and Ulen (1988) pp 4-5. Commentary 16.5.
562 John 14:2. This statement is open to several interpretations. One is that the divine love
has many aspects thus grounding a justification for religious liberty.
563 The Lord's Prayer
564 Gordbaum (1990-91), Gutman (1992-93)
565 Aubert (1966) p 115
 268 Chapter 16 Effects

middle-class, old stock, white American Protestants against a society increasingly hostile
to their values’. Even if the legislation was not enforced, it was
 Chapter 16 Effects 269

still ‘a sorely needed symbolic affirmation of their cultural values and style of life’ and
‘an official degradation of the values of their enemies’. A temperate Protestant middle
class had triumphed over a drunken Catholic working class. Consequently, ‘[e]ven if
27
the law was broken, it was still clear whose law it was’.

Deliberate or accidental use of law for symbolic purposes such as these has led to the
extreme view that in reality legislation is not for ‘guiding and controlling society,’ but
28
rather for ‘comforting society’. While passing legislation to deal with a problem does
not work, it makes us feel good. Legislation of this kind does not have much
29
instrumental effect but operates mainly ‘in the sphere of symbolism and magic’.

With symbolic matters, costs and benefits are not often amenable to quantitative
measurement so it is not possible accurately to evaluate a policy that is intended to cause
symbolic effects. It is also possible that there is conflict between the symbolic and
instrumental effects of a law. For example, the instrumental benefits of a law may be
considerable but there is symbolic detriment or cost. Indeed a source of tension in policy
making is between the role of law as a regulator of the outer world and as a soother of
the inner world. What is used for dealing with the external problem cannot always be
tolerated at the symbolic level. One example may be the prohibition in Australia on the
shooting of feral horses (brumbies) in national parks, solely stemming from a warm
fuzzy public feeling for horses, in defiance of practical considerations of economics and
environmental sustainability.

Given that humans are symbolic creatures the state will invariably perform symbolic
functions. Some of the most intimate symbolic functions of law concern the ideology of
the legal system. A major illustration is the maxim that justice should be seen to be done.
As the High Court expressed it: ‘It is of fundamental importance that justice
30
should not only be done, but should manifestly and undoubtedly be seen to be done’.
31
Why must justice be seen to be done? ‘Justice must be rooted in confidence’ because ‘it
is of fundamental importance that the public should have confidence in the
32
administration of justice’. Confidence is destroyed when ‘right minded people go
33
away thinking: ‘The judge was biased’’ or ‘if fair-minded people reasonably apprehend
or suspect that the tribunal has prejudged the case’.566

Yet in a liberal democracy there is an anti-symbolic force at work, namely a

27. Mayer and Nelson (1973) pp 467-468; Gusfield (1967). Commentary 16.6.
28. Beerworth (1980) p 69, citing Arnold (1935). Commentary 16.7.
29. Aubert (1966) p 115
30. R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256, 259 per Lord Hewart CJ
31. Metropolitan Properties v Lannon [1969] 1 QB 577, 599 per Lord Denning
32. R v Watson; Ex parte Armstrong (1976) 136 CLR 248, 263
33. Metropolitan Properties v Lannon [1969] 1 QB 577, 599 per Lord Denning
34. R v Watson; Ex parte Armstrong (1976) 136 CLR 248, 263
 270 Chapter 16 Effects

commitment to freedom of thought and expression. Attempts by the state at symbolic

action can easily be seen to infringe these basic freedoms. In thinking this way people
 Chapter 16 Effects 271

may be swayed by the debasement of humans that has been caused by former regimes
that were excessively and dogmatically symbolic, for example Nazi Germany and the
communist USSR.

Acts taken to administer the law will also be symbolic. Thus, the dress and protocol of
judges is rich in symbolism. Another poignant illustration comes from Oscar Wilde’s
description (in his poem Ballad of Reading Gaol) of the aftermath of an execution in
Reading Gaol where he was himself imprisoned:

The chaplain would not kneel to pray By his dishonoured grave,

Nor mark it with the blessed cross That Christ for sinners gave,
Because the man was one of those Whom Christ came down to save.

Scott Barclay makes an interesting argument about symbolic effects of the legal system
in relation to appeals. When people lose a case and appeal they are often not interested
in economic outcomes but symbolic. One major factor that prompts an appeal is how the
litigant feels in relation to their treatment by the lower court. If they were treated
unfairly and disrespectfully they are likely to appeal, even in the absence of hope of
winning.567

Prediction of Effects
Among all forms of mistake, prophecy is the most gratuitous,568
Introduction
When legislators make a rule, and when courts interpret a rule, they usually attempt to
achieve some aim or outcome. They may succeed and achieve the aims that they
37
‘anticipated and desired,’ but they also may not. The point is that they have to predict
the effect that a law or an interpretation of a law will achieve and this is an uncertain
task. There can be no general degree of precision in attempting to predict the future, and
this is especially the case with law. Generally we do not know for certain or with
confidence the effect a law is going to have. Social scientists have coined the
38
expression ‘unintended consequences’ to capture this uncertainty. This discussion,
however, refers to unpredicted consequences since it is emphasising the process of
prediction in forming law.

Reasons for Uncertainty in Prediction

There are several reasons for the uncertainty in predicting the effects of a law. First,
there is a problem in trying to examine the effect of legislation in a scientific way. In
social science the ideal means of investigation is with controlled research because this
makes scientific experimentation feasible. When this is done it is possible to put forward
a plausible view that one thing causes another. But many social phenomena cannot be

35. Barclay (1999)

36. George Eliot Middlemarch Chapter 9
37. Beerworth (1980) p 67
38. Commentary 16.8.
 272 Chapter 16 Effects

investigated in a laboratory by a controlled experiment. This is almost

 Chapter 16 Effects 273

invariably the case with the operation of statute law. It cannot, therefore, be directly
39
subjected to completely scientific analysis.

Second, society is constantly in a state of flux so it is difficult and often impossible for
social science to separate and analyse the effect of one factor such as law. When a law is
passed and operates many other changes may take effect at the same time and possess a
variety of causes.
569 570

Third, there is great complexity in the relationship between a law and its effect. Social
phenomena such as these exist in a complicated matrix for which the causes are many,
layered and hidden. Consequently, for any situation there may be an intricate chain
571 572

42
or network of causation.

Illustrations of Uncertainty in Prediction

Introduction
Unpredicted consequences can be illustrated by examining four categories. These
involve predicted benefits not occurring, predicted costs not being incurred, unpredicted
benefits occurring and unpredicted costs being incurred.

Two of these items are positive - intended costs that were not incurred and unintended
benefits that did occur - so they are of no concern to policy makers. They are
serendipitous gains. They are a pure gift to public welfare.

By contrast, the other two items are of concern - predicted benefits that did not occur
and unpredicted costs that were incurred. These are ways in which the policy
implemented by the law fell short of expectations. Obviously policy makers seek to
eliminate or minimise these problems.

Predicted Benefits Not Occurring

There are several ways in which predicted benefits may not occur. Here are two
examples, the Streisand effect and the reverse effect.
(1) Streisand Effect. If there is an attempt to hide or censor information the
information acquires value it did not have before. This makes it more sought after and
thus likely to be disseminated. 573

(2) Reverse Effect. Sometimes when the predicted benefit does not occur the law has
the reverse effect of intended benefit and thus worsens rather than alleviates the
problem. A good example comes the United States statute, the Endangered Species Act
of 1973. This sought to protect flora and fauna. One means by which it did this was to
declare land to be a ‘critical habitat’ with the legal consequence that the owner of the
land was restrained from doing anything that interfered with the capacity of the land to

569 Commentary 16.9.

570 See Mason (1993B).
571 Commentary 16.10.
572 Commentary 16.11.
573 Commentary 16.12.
 274 Chapter 16 Effects

remain a habitat. How did land owners respond? When they believed that their property
was heading towards becoming a habitat they cut down the trees or removed the
vegetation that would make it a habitat. By doing this they avoided a restraining order.
At the same time, they endangered the species that the legislation sought to protect by
limiting its possible habitats.

Predicted Costs Not Incurred

Predicted costs may in fact not be incurred. Two reasons for this consist of the
experience curve effect and economies of scale.
(1) Experience Curve Effect. This phenomenon is based on the adage that practice
makes perfect. It was observed and brought to prominence by Bruce Henderson of the
Boston Consulting Group.574 What happens is that the more often a task in producing
goods and services is performed the lower will be the cost of doing it. Observation
suggests some regularity in this effect, which is as follows. For a particular task,
whenever cumulative volume doubles, value added costs (including administration,
marketing, distribution, and manufacturing) fall by a constant and predictable
percentage. Many factors are involved in causing this effect. These include
specialisation of labour, on the job learning, trial and error to find the best method,
standardisation of best practice, improvement of technology, better use of equipment and
most likely a psychological factor of increasing confidence that leads to greater
motivation because nothing succeeds like success.
(2) Economies of Scale. As a scheme grows it acquires economies of scale. (a) The
mainstay is that fixed costs of production are spread over an increasing number of units
of output, thus reducing unit cost. (b) In some cases when an operation is large enough
an organisation can invest in large scale equipment and introduce expensive technology
that also lowers cost.

Unpredicted Benefits Occurring

Three cases will illustrate unpredicted benefits that can occur.
(1) Positive Side Effects. In medicine drugs can have positive side effects. This leads
to what is called off label use.
(2) Natural Habitats. Where humans cannot use land, natural habitats are likely to
develop. One example is the Korean Demilitarized Zone. Another comprises the parts of
the Falkland Islands where land mines were laid during the Falklands war. Since birds
are not heavy enough to trip the mines these areas have become de facto bird
sanctuaries.
(3) Invisible Hand. In economics there is the concept developed by Adam Smith of
the invisible hand. In broad terms, if everyone in a free market pursues their own private
interest, the ‘invisible hand’ will ensure that the public interest is also served. Putting
this in crude terms, private greed yields public good.

Unpredicted Costs Incurred

A project can incur unpredicted costs. Here are some examples:

574 Boston Consulting Group (1972)

 Chapter 16 Effects 275

(1) Adverse Side Effects. In medicine drugs can have unforseen adverse side effects.
(2) Rent Control. Rent control that is intended to benefit the poor lowers the return
from rental properties and thus drives investment away from the housing rental market.
This creates a shortage of rental accommodation. This increases the cost of rented
housing.
(3) Blowback. Covert intelligence operations against one group can produce
undesirable consequences down the line (which the CIA describes as ‘blowback’). An
example is the covert funding of the Mujahideen in Afghanistan, which led to the rise of
the Taliban

Responses to Uncertainty in Prediction

For reasons stated above we cannot be generally certain that a law will cause a desired
outcome. Therefore, in the planning stage it is impossible to be certain of the future
effect of a proposed law. Although the popular mind sees law as the solvent for all
problems, the reality is that law is not always effective.575 As a result, when using our
models there is usually a degree of assumption or just speculation, rather than proof, that
the proposed law, Statute X, will cause the desired outcome, Effect X. Ultimately
legislators have to live with the uncertainty about what a law will and will not cause.
There are efforts to alleviate the uncertainty by studying the impact of proposed
legislation, but the science is still not well developed.576

Commentary
Commentary 16.1 Footnote 3
Reference here to the ‘sum of the effects’ of a rule means the overall effect achieved
from the operation of each rule. Part of the overall effect of rules in a statute is their joint
effect so that the effect of the whole statute is possibly greater than the sum of the effects
of its individual rules operating in isolation.

Commentary 16.2 Footnote 9

There are two items:
(1) Effects of Statutes. Shortly stated, it seems a difficult task to develop a perfect
and watertight classification of the effects that statutes can cause but it is possible to
devise a workable and informative one.
(2) References. For some attempts to present a classification of the effects of statutes
or to discuss the problem with doing so see Bennion (1979), Abernathy (1983),
Summers (1971), Summers (1974), and Summers and Howard (1986).

Commentary 16.3 Footnote 17

For discussion of the economic effects of law see Guest (1981-84), Editor (1979),
Goodhart (1997), Groenwegen (1990), Black (1996), Kamesar (1997), Posner (1992),
Cooter and Ulen (1988) and McGuinness (1994).

575 Commentary 16.13.

576 Chapters 13-15
 276 Chapter 16 Effects

Commentary 16.4 Footnote 19

On economic analysis of law see generally Posner (1992), Cooter and Ulen (1988),
Trebilcock (1997) and Ulen (1997).

Commentary 16.5 Footnote 22

In the context of the economic analysis it is worth noting that Landes and Posner (1979)
explain how adjudication of cases can be regarded as a private good. On the conflict
between social and private incentives to bring a lawsuit in a costly legal system see
Shavell (1982).

Commentary 16.6 Footnote 27

The law that introduced the prohibition era, the National Prohibition Act 1919 (the
Volstead Act), was passed in 1919 and repealed in 1933.

Commentary 16.7 Footnote 28

Just as legislation may have symbolic effect, compliance with legislation and other
standards may also be symbolic. As Matolcsy and Watts (2003) show, some Australian
universities adopt government initiated accounting practices driven by a symbolic desire,
as the Abstract describes it, ‘to improve the organisation’s degree of externally conferred
legitimacy’.

Commentary 16.8 Footnote 38

The United States sociologist Robert K Merton (1910-2003) is credited with inventing
the expression ‘unintended consequences ‘. See Merton (1936).

Commentary 16.9 Footnote 39

In an attempt to alleviate the problem of law in action not being easily subject to
scientific analysis scholars have developed the field of experimental law. This involves
attempts to conduct experiments that might indicate in some way how laws work - see
Chapter 14 Cause: Explanatory Theories.

Commentary 16.10 Footnote 41

A good illustration of a hidden cause of an effect is the increased abortion rate in the
United States following the Supreme Court decision in Roe v Wade 410 US 113 (1973).
Levitt and Dubner (2005) propose this as a likely cause of a reduced crime rate that
started about a decade and a half later.

Commentary 16.11 Footnote 42

As an example of an intricate network of causation for a law consider the case when A
supplies heroin to B. This starts a chain of causation on each side. There is the chain of
supply and the causes operating there, starting with growing the opium poppies and
culminating in the sale of heroin to the user. On the demand side, the last step in the
chain is B’s taking heroin. This demand for heroin may have a causal chain involving a
number of social, familial and personal factors. On one view, for example, the
 Chapter 16 Effects 277

familial factors go back for generations and involve maladaptive behaviour that is leamt
in the family.

Commentary 16.12 Footnote 43

The expression ‘Streisand Effect’ was named after the singer and actress Barbra
Streisand. A photographer took aerial photographs of her beachfront house. Streisand
took legal action to protect her privacy. It was later noted that after Streisand took this
legal action the picture of Streisand’s house became more popular on the Internet.

Commentary 16.13 Footnote 45

Renner describes as ‘decretinism’ the view that any law or decree will always change
behaviour - see Tomasic (1980A) and Tomasic (1980B).
Chapter 17
Values

Introduction Nature of Values Use of Values

Outline Commentary

I know not whether Laws be right All that we know who lie in gaol And that each day
is like a year But this I know, that every Law Since first Man took his brother’s life
But straws the wheat and saves the chaff
Or whether Laws be wrong;
Introduction Is that the wall is strong A
Values are a crucial part of policy because year whose days are long
policy comprises two major processes. It That men have made for Man
involves predicting what effect or outcome a And the sad world began
law or an interpretation of a provision in a With a most evil fan.1
law will cause. It involves evaluating these
outcomes to determine which is best. This latter task depends on and is driven by the
values that are used to measure outcomes for the purpose of determining which is best.

Nature of Values
[SJocial science is not in a privileged position to pronounce on social values, because there is a
2
logical gap between empirical evidence and moral action.
Values are the criteria or standards by which people judge something to be good or bad
or right or wrong. In other words, a ‘value is a belief that something is good and
desirable’ and consequently ‘defines what is important, worthwhile and worth striving
for’.577 578 579 580

Values are deployed in two ways. Sometimes this may be a simple judgment that
something is right or wrong. At other times it may involve measuring how good (or
worthwhile) or bad (or worthless) something is. In other words, there is a question of
degree. In fact this is how legislatures and courts should use values when making and
interpreting law - they seek to measure the worth of an affect that a law or an
interpretation of a provision in a law will cause by establishing the net benefit that it will
yield.

577 Oscar Wilde The Ballad of Reading Gaol

578 Ambercrombie, Hill and Turner (2000)
579 McShane (2000) p 215
580 Haralambos and Holborn (1991) p 6
278
 Chapter 17 Values 279
Use of Values
Introduction
Legislatures and courts use values for making and interpreting law. To understand how
they should do this it is useful to consider the first two steps in the model for forming
law.

Legislatures
Step 1: Options
When making law by reference to policy, Step 1 entails identifying the options. These
consist of all of the possible versions of a statute and the effect that each causes (that is,
is predicted to cause). Versions of a statute consist of Statutes 0-n with the corresponding
effects of these statutes being labelled Effects 0-n.581 These options can be set out in a
table in the following way:
Statutes Effects
Statute 0 Effect 0
Statute 1 Effect 1
Statute 2 Effect 2
Statute n Effect n
Figure 17.1 Statutes and Effects

Step 2: Reasons
Having identified the options in Step 1, in Step 2 the legislature has to deploy reasons to
decide which statute to enact. To do this, the legislature should evaluate the effect of
each statute to determine which yields the highest net benefit. Doing this enables the
legislature to implement the basic decision making rule: the best law is the law which
causes the best effect which is the effect that yields the highest net benefit.582 583 So, if
Statute X causes Effect X, and Effect X yields the highest net benefit, the legislature
should enact Statute X. Clearly this is the point where legislatures deploy values.

In essence, then, the position is as follows. When a legislature is making law in a

rational way it has before it two or more options concerning the best law to enact. Each
law brings a different set of outcomes or effects as we term them. This means that when
making law it is impossible not to deploy values. When rational legislators enact Statute
X that causes Effect X they do so because they value Effect X more than the effects that
any other version of the statute would achieve. In short, when making law it is necessary
to make a value judgment.

Courts
Step 1: Options
After a legislature has made a statute in this way, a court may have to interpret the
statute to resolve ambiguity. In this task a court is faced with options analogous to

581 Chapter 30 Model for Forming Law

582 See, for example, Eskridge (1989), Finn (1989) and Guest (1981-84).
583 See Honigman (1964).
 280 Chapter 17 Values
those before a legislature. It has to interpret an ambiguous provision that has a range of
meanings, Meanings 1-n. Each meaning causes an effect so that collectively Meanings 1-n cause
Effects 1-n.584 These can be set out in a table in the following form:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 17.2 Meanings and Effects

Step 2: Reasons
In Step 2 Reasons, when interpreting law by reference to policy, a court values each effect in
the range Effects 1-n and determines which is best.585 Broadly, there are three ways in which a
court can approach this valuation. First, there is the elected legitimacy of the court or judicial
legitimacy. Where judges are elected a court can lay some claim to legitimacy if it exercises its
own personal judgment in evaluating the effects.

Second, there is the elected legitimacy of the legislature or legislative legitimacy. A court can
make this evaluation by reference to the policy behind the statute. Proceeding in this way, the
court would value as the best effect the one which most fits with the intention of the legislature.
In other words, the court does not exercise its own independent judgment as to which effect is
best but defers to the judgment of the legislature when it passed the statute. In this way, when
interpreting the statute, a court indorses and implements the legislatively determined values that
underlie the statute.586

Third, the court can resort to notions of metademocracy. This approach is premised on the
legislature’s falling short of the required standards of democracy. Consequently, the court does
not interpret the statute by reference to the actual intent of the legislature but to a notional or
imputed intent - the intent it would have had if it had acted in a properly democratic manner.

Importance of Values
This outline of the process of forming law emphasise that evaluation, like causation, is a
fundament of policy, and is therefore integral to the tasks of making and interpreting law. This is
illustrated by the wide range of legal literature dealing with values, or its synonyms, such as
ethics, standards, norms, morality, social virtue, attitudes, justice, well being, and premises of
decision-making.587

Sometimes the values of a person or institution are directly and explicitly stated. At other times,
however, values are buried in frameworks of belief that are described by a variety of names such
as concepts, models, ideologies, paradigms and schools of

584 Chapter 30 Model for Forming Law

585 Chapter 10 Policy
586 See Krygier and Glass (1995), Honigman (1964) and Honore (1993).
587 Commentary 17.1.
 Chapter 17 Values 281
thought. Examples are liberalism, feminism, liberty, rights, duties, formalism,
utilitarianism and the rule of law. All of these incorporate values, even if not all
adherents agree on the definition and scope of particular values. The study of these
concepts is an important part of a proper legal education. Nevertheless, they are not
directly relevant to this discussion. While they describe clusters of values, and may give
insights as to who holds them or why they hold them, the analysis here is about the
general nature of values. It is leading towards recognition of the role that evaluation has
in the related processes of making and interpreting law. Whilst frameworks of belief are
obviously highly influential in determining and identifying values that may be deployed,
for the policy model all that counts is what a legislature or court does with the effect of a
statute or a meaning - does it consider it a cost or benefit, and how does the legislature or
court rate it, that is, how much value does it put on the particular cost or benefit?
Frameworks of belief will often be highly influential in shaping this choice, but what
ultimately counts is the choice, not the
influences that brought it about. For this reason these frameworks of belief remain as
12
background not foreground to the policy model.

Outline
There are two matters discussed in the chapters that follow which need to be understood
in order to know how values are deployed in making and interpreting law. It is necessary
to be aware of two major classifications of values - classification into deontological and
teleological values and classification into absolute and relative
13
values. It is also necessary to know the reasons why a legislature or court has to make a
choice of which values to utilise when making and interpreting law and how that choice
can be exercised.588 589 590

Commentary
Commentary 17.1 Footnote 11
Some readings on these topics are: Values - Arup (1982), Braithwaite (1993),
Braithwaite (1995), Daintinth (1989), Honigman (1964), Stewart (1982-83), Dowrick
(1963), Krygier and Glass (1995), K Mason (1990), Salter (1982), Sward (1989) and
Summers (1974), Mason (2003) in Sheard (2003) pp 4-7. Ethics - Preston (1996), and
Sampford and Preston (1998). Standards - Freund (1965), Webber (1995). Norms -
Suchman (1997). Morality - Schwartz (1978); Finn (1989); Honore (1993), and Posner
(1998). Social virtue - Kelbey (1979). Attitudes - Krygier and Glass (1995). Justice -
Nagel (1997), Atiyah (1992), Hurd (1992), Jaconelli (1992), Kelbey (1979), Lucas
(1989), Nicolson (1994), Peters (1996), Pongle (1989), Rawls (1971), Solomon (1990),
Stone (1966) and Webber (1995). Well being - Sunstein (1994). Premises of decision-
making - Matheson (1997) and Krygier and Glass (1995).

588 For a general discussion of these matters in a legal context see Goodman (1995).
589 Chapter 18 Classification of Values
590 Chapter 19 Choice of Values
Chapter 18
Classification of Values
Introduction
Deontological and Teleological Values
Absolute and Relative Values Commentary

Torture and terrorism are equally abhorrent.591

Introduction
Necessitas non habet legem.592 Values can be classified in at
least two major ways. It is important to understand these classifications before studying
how values can be used in making and interpreting law. These classifications are as
follows:
(1) Deontological and Teleological Values. This classification appears under at least
five different labels, which are largely interchangeable.
# deontological or teleological values
# categorical or hypothetical values
# terminal or instrumental values
# inherent (alternatively intrinsic) values or consequential values
# intermediate or ultimate values
(2) Absolute and Relative Values. Values can be absolute or relative.

Deontological and Teleological Values

Necessity is the plea of every infringement of human freedom. It is the argument of tyrants; it is the
creed of slaves.593
Values may be deontological or teleological (and as we noted above, any of four other
sets of labels can be used for this classification). The distinction between them is one of
means and ends.594 Deontological values are fixed onto what we ultimately want, for
example, peace, happiness and justice. Teleological values indorse ways of behaving that
help us to reach the objectives of deontological values, for example one nation treating
another nation well is likely to lead to peace not war.595

Putting this in another way, deontological morality incorporates the notion that ‘some
acts are morally obligatory regardless of their consequences’.596 597 We desire an end just
because the end has ‘built into it’ the notion that, somehow, it is has to be pursued.

591 Commentary 18.1.

592 Commentary 18.2.
593 William Pitt the Younger, 1783
594 Commentary 18.3.
595 McShane andVon Glinow (2000) p 215
596 Flew (1984) p 89. See also Peters (1996).
597 Mackie (1986) p 775
282
 Chapter 18 Classification of Values 283
(Both of these definitions, we might usefully note, reveal how deontological values are
almost indistinguishable from absolute values.) Teleological morality, by contrast, values
an act by whether it brings good or bad consequences.598

This distinction was invoked by the sociologist Max Weber (1864-1920), although he
used different terminology, referring to action that was purpose-rational and action that
was value-rational. Weber explained purpose-rational conduct or action in the following
way: ‘[Social conduct may] be determined rationally and oriented toward an end. In that
case it is determined by the expectation that objects in the world outside or other human
beings will behave in a certain way, and by the use of such expectations as conditions of,
or as means toward, the achievement of the actor’s own, rationally desired and
considered, aims’. Value rational conduct consists of social conduct that is determined
‘by the conscious faith in the absolute worth of the conduct as such, independent of any
aim, and measured by some such standard as ethics, aesthetics, or religion’.599

To illustrate the distinction between deontological or teleological evaluation, assume

that Statute X causes Effect X, which is shorthand for a chain of effects, Effects X.1-X.n.
Since these effects are part of a chain, Effect X.1 causes Effect X.2, which causes Effect
X.3 and so on. For the purposes of illustration, we will assume that that there are five
effects, namely Effects X.1-X.5 (so n = 5). Using this example, the operation of
deontological and teleological values can be illustrated with three propositions.

First, Effects X.1-X.4 can be valued teleologically, that is, by the effects that they cause
further down the chain. Each effect is the immediate cause of the next effect and Effects
X.1-X.3 are the distant cause of other effects further down the chain. Effect X.2, for
example, is the immediate cause of Effect X.3 and also the distant cause of Effect X.4
and Effect X.5.

Obviously the further down the chain a later Effect lies from an Effect that causes it, the
more distant is the causal relationship. Thus, while Effect X.2 is a distant cause of Effect
X.4, it is an even more distant cause of Effect X.5.

Second, Effects X.1-X.5 can all be valued deontologically. That is, each might be
deemed to be a worthwhile end in itself.

Third, Effect X.5 can only be justified or valued deontologically. It is the end of the line
and causes nothing. At least this is the position in principle. In the real world, though, it
is not necessary for a statute to have an end of the line effect. There is no reason that the
effects of a statute cannot just continue onwards, and this is possibly what tends to
happen most times.
8
.
9
.

McShane and Von Glinow (2000) p 215

Weber (1925)
 284 Chapter 18 Classification of Values
This model involving Effect X.1-X.5 is good for seeing the big picture, but for more
detailed analysis we will take a simpler example and assume that Statute X causes two
effects. It causes Effect X.1 which causes Effect X.2. Now consider what it means to
justify Effect X.1 teleologically on the basis that Effect X.1 causes Effect X.2. Effects X.
1 and X.2 can be conceived as having costs and benefits even if, unusual as it may be in
practice, these are nil. So Effect X. 1 has Benefit X. 1 and Cost X. 1 and Effect X.2 has
Cost X.2 and Benefit X.2. This can be set out in a table in the following way:
Effects Benefits Costs
Effect X.1 Benefit X.1 Cost X.1
Effect X.2 Benefit X.2 Cost X.2
Figure 18.1 Effects, Benefits and Costs

Teleological justification of Effect X.1 is based on the notion that the end justifies the
means. Effect X.1 is potentially justified on this basis since it causes Effect X.2. This
happens when the value of [(Benefit X.1 + Benefit X.2) - (Cost X.1 + Cost X.2)] is
positive. That is, society would not lose but gain because Statute X.1 causes Effect X. 1,
for the reason that Effect X. 1 causes Effect X.2.

This analysis of teleological justification is simple, but it leads to an important

conclusion about teleological justification that is important for the framework of analysis
adopted in this text. Teleological justification is just another label for the net benefit
rule.10

And, surprising as it may be, deontological justification can also be analysed in this
way. To see how this is the case, it is first necessary to state the conventional approach to
deontological justification. In the model above involving Effect X.1 and Effect X.2,
deontological justification is asserting that the benefit of Effect X.2, Benefit X.2, is
inherently worthwhile. Taken simply, Benefit X.2 has absolute value and always
prevails. This means that we disregard the two costs, Cost X. 1 and Cost X.2, and have
no need of the benefit of Benefit X. 1 which is the benefit caused by Effect X. 1.

There is, however, another way of conceiving it. There is no denying that Effect X. 1
has costs and benefits, Benefit X.1 and Cost X.1. Nor can it be denied that Effect X.2 has
a cost, namely Cost X.2. This means that the deontological evaluation of Effect X.2 can
also be written in the form of the net benefit rule. Two propositions, Proposition 1 and
Proposition 2, are able to do this (and these propositions are related). The following table
sets out these two propositions:
Proposition 1:
The value of (Benefit X.2) - (Cost X.1 + Cost X.2) is always positive.
Proposition 2: Benefit X.1 is irrelevant to the deontological valuation of Effect X.1.
Proposition 2 flows from Proposition 1.
Figure 18.1 Deontological Evaluation Based on Net Benefit
10. Chapter 11 Nature of Net Benefit
 Chapter 18 Classification of Values 285
Absolute and Relative Values
Inter arma leges sunt silentia600 601 602 Absolute values are
values that take precedence over all others. With them something is absolutely right or
absolutely wrong. Obviously this has a strong deontological flavour.

Relative values, by contrast, are values that can be weighed against other competing
values. In this regard, relative values treat an action as desirable or preferable, in varying
degrees, and in comparison to alternative actions.

An absolute means of evaluating action is concerned with whether an action is

inherently right or wrong, or in the words of Immanuel Kant, whether the action is
12 13
‘good in itself regardless of other ‘consequences’. This approach can be invoked to
assert that there are rights or duties which the law must enforce. It is also the basis for
claims based on need rather than just wants.

An absolute approach to evaluation is authoritarian. If something is right it should be

done regardless of the consequences. If something is wrong it should not be done
regardless of the consequences. This is morality in terms of principle or immutable
values, regardless of costs and benefits. In the ringing words of the maxim: ‘Let justice
be done though the heavens may fall’.603 It is also reflected in some popular sayings -
‘There is a principle at stake here;’ and ‘To hell with the consequences, do it’.

So, absolute values are authoritarian in that they override values which are not absolute.
For example, if murder is wrong, it is wrong to murder someone even if they are a bad
person.

Lawyers often invoke the concept of absolute values in the field of human rights, even if
they do so implicitly. In the extreme, they claim that the values behind human rights are
absolute because they are universal and enduring, and deontological because they are
inherently valuable. In the popular form of this idea, liberty is everything. There is no
argument about whether we should have it because liberty is totally right.

This is illustrated by the legal mechanism commonly used to protect rights, namely
constitutional prohibitions, which are the building blocks of a bill of rights. A bill of
rights is simply a collection of these prohibitions.

Constitutional prohibitions deny a government power to take action, especially

legislative action, which will infringe a particular right. For example, si 16 of the
Constitution of the Commonwealth of Australia says, in part, that the ‘Commonwealth
shall not make any law . . . prohibiting the free exercise of any religion’.

600 Commentary 18.4.

601 Kant (1785) p 62
602 Flew (198) under 'deontology'.
603 Commentary 18.5.
 286 Chapter 18 Classification of Values
Notwithstanding the strong attachment to human rights in western societies, there are
analytical problems in maintaining the distinction between absolute and relative values.
It is simpler and better to treat these absolute values as higher order values, that is, as
values to which legislatures and courts will generally attach, and be under political and
moral pressure to attach, significant weight so that they are diminished in a particular
circumstance only for very good reason. These higher order values will prevail over
other values that do not involve rights. So, when making or interpreting law, if a law or
meaning causes several effects and one consists of implementing human rights, this
effect will generally be paramount so that it outweighs any detriment which the law or
meaning causes.

There are a number of reasons for treating absolute values as not really absolute but
higher order values instead. First, there is often debate about the very existence of these
values.604 For example, in the abortion debate many anti abortionists who propound that
an unborn child has a right to life, while in counter to this some pro abortionists simply
deny that the right exists.

Second, even if the existence of a value is agreed, there can be argument as to its scope
and definition. An example, also taken from right to life debate, concerns the claim over
society’s resources - for example to what medical or surgical procedures is a person
entitled in order to save or prolong life, or to enhance its quality?

Third, there can be conflicts between two values. Whenever this occurs, at least one, and
possibly both, will be reduced in scope to resolve the conflict. 605 606 In this vein John
Stuart Mill (1806-1879) asserted in his celebrated treatise On Liberty (1859) that a
justification (indeed in Mill’s view the only justification) for impinging liberty is ‘to
prevent harm to others’.

Consequently, no one value, except the greatest, is totally immune. In the practical
world there are numerous examples of this conflict. In the abortion debate, those pro
abortionists who conceded that an unborn child has a right to life, argue that the right of
a woman to control her own body overrides the right of the child. In the free speech
debate there is argument about how free speech is to be reconciled with the right of
others to a good reputation. With contempt of court debate concerns the extent to which
free speech can be curbed in the interest of maintaining public confidence in the
17
judicial system. In the debate on economic fairness there is conflict between those who
value the right of property and freedom of contract above all else, or at least most else, 607
and those who would subjugate them to the claims of distributive justice.608 Obviously,
in cases of conflict between values or rights (which are always founded on values), some
authority has to draw a line to determine the boundary between the two.

604 Commentary 18.6.

605 Commentary 18.7.
606 Commentary 18.8..
607 Prominent examples are Robert Nozick (b 1938) and Friedrich Hayek (1899-1992).
608 Commentary 18.9.
 Chapter 18 Classification of Values 287
Frequently, there is no ready measuring rod to determine where to draw this line so it is
impossible to be totally prescriptive about it. In the end the relevant authority just has to
draw it.

Fourth, most values depend on the use of resources for their protection and some values
depend on resources for their implementation. Since resources are limited not infinite,
values of this kind cannot be absolutely given or protected. Consequently it is
not possible to lay an absolute claim to resources in support of an absolute value. Chief
20
Justice Brennan of the High Court of Australia took this point directly in Dietrich.
There, he was the lone dissenter in a decision by the court to establish, even if
21
indirectly, a common law right to legal aid. Brennan’s objection was succinctly put:
‘Who is to pay for it?’609 610 611 612 613 614

As an illustration of how protection of rights might require resources, take freedom of

23
worship. Ordinarily this is economically costless for society. In some situations, though,
it may not be. Assume that when believers in Religion X wish to exercise their right to
worship, a substantial number of citizens strenuously oppose them. Since this opposition
may turn violent, the believers will need state protection, possibly in a number of spheres
- at their place of worship and when going to and returning from the place.

Rights which inherently require resources for their implementation are rights
24
concerning distributive justice, such as rights to a decent income, legal aid, proper
medical care and adequate education. Obviously these rights are inherently economic
because they make a direct claim on society’s resources. If no resources are made
available, the right is just not implemented at all. For example, if citizens have a right to
adequate education this right is implemented only when and to the extent that
25
resources are directed to building the schools, paying the teachers and so on. Our point
of course is that economic rights such as these must be qualified and balanced not
absolute.

It is also possible that a costless right ceases to be so in a practical sense because of

social or technological changes. A case in point is free speech and television
broadcasting.

Free speech in an open public place is costless, or close enough to it. Nowadays, though,
a substantial amount of communication about political and social matters is done by the
medium of television. What is significant is that television broadcasting is a means of
communication by words, pictures and symbols to a mass audience.

609 Dietrich v The Queen(1992)177CLR 292

610 Commentary 18.10.
611 Dietrich v The Queen(1992)177CLR 292, 320-321
612 Commentary 18.11.
613 Dietrich v The Queen(1992)177CLR 292
614 Commentary 18.12.
 288 Chapter 18 Classification of Values
It is also significant in practice, although it is not inevitable, that in a western liberal
democracy such as Australia, the right to broadcast on television is, as a matter of strict
government policy and licensing regulation, put under the control of a handful of
corporations.615 While this private ownership of a public medium is sometimes offset by
establishing public broadcasters, it still vests enormous economic, political, cultural and
social power with the private broadcasters. This means that an oligopoly has, in this
regard, an almost exclusive right to freedom of public speech (and with advertising,
freedom of emotional manipulation as well). The rest of us have to obtain their favour,
crave their indulgence, or become wealthy enough to purchase one of the
27
commercial channels for ourselves.616

Fifth, whenever a law is trying to protect or advance a value, there may well be
uncertainty about the efficacy of the law. This will dilute the absolute nature of the
value. Take racial vilification as an example. If a legislature believes that racial
vilification is wrong, an obvious response is to prohibit it under pain of punishment or
damages or both.

Prohibition, however, has two aspects. One is that the legislation provides a mechanism
for redressing this wrong. In this regard, the statute is 100% successful, in that it has
created the mechanism, assuming the legislation is accurately drafted in terms of the
right it is protecting. This 100% success squares with the absolute nature of the right of a
person not to suffer racial vilification.

The other aspect, enforcement of the legislation, is the problem. This can be anywhere
from 0 to 100% successful. To the extent that it is not 100% successful, what some might
see as an absolute right may not receive absolute protection.

Despite abandoning the notion of absolute rights, the cause of human rights is not lost.
As has been said, these values are higher order values. In any conflict, they will
generally override values not concerned with human rights. In this way human rights
have an absolute tinge but not an absolute colour.

Commentary
Commentary 18.1 Footnote 1
Bacina (2005) put forward the proposition that ‘torture and terrorism are equally
abhorrent’ as part of a discussion of the debate as to whether Australia would be justified
in torturing terrorists, or terrorists suspects, in order to obtain information from them
about planned acts of future terrorism.

Commentary 18.2 Footnote 2

The Latin maxim necessitas non habet legem translates ‘necessity has no law’. The
sense of it is that necessity provides justification for some, many or even all breaches

615 Broadcasting Services Act 1992 (Cth)

616 Commentary 18.13.
 Chapter 18 Classification of Values 289
of the law. Clearly the maxim makes good sense in principle, but in any given situation
there is a problem of knowing where, when and to what extent this maxim can operate.
The maxim is attributed to Publilius (often just Publius) Syrus.

Commentary 18.3 Footnote 4

This distinction between means and ends is manifest in the labels ‘terminal’ and
‘instrumental’, which are one of the fives set of labels used to describe the classification
of values now under discussion.

Commentary 18.4 Footnote 11

The Latin maxim inter arma leges sunt silentia translates ‘amidst the clash of arms, the
law is silent’. In plainer language it means that in a situation of great exigency there is
justification for lessening human rights. The maxim was cited with eloquent disapproval
by Lord Atkin in Liversidge v Anderson [1941] AC 207, 244-245. As part of the war on
terror George W Bush, then President of the United States, imprisoned ‘enemy
combatants’ who were given no right to challenge their internment. In 2004 the United
States Supreme Court ruled in two cases - Hamdi v Rumsfeld 542 US 507 (2004) and
Rasul v Bush 542 US 466 (2004) - that the administration could not imprison these
suspected ‘enemy combatants’ without giving them a right to contest this designation.

Commentary 18.5 Footnote 14

There is a maxim that says in English: ‘Let justice be done though the heavens may
fall’. This maxim is stated in the text in its original Latin form where it says fiat justitia
et ruant caeli.

Lord Mansfield LCJ uttered this maxim on at least two occasions:

(1) R v Wilkes (1770) 4 Burr 2527, 2561-2562; 98 ER 327, 346-347.
(2) His Lordship uttered the maxim at the end of his judgment in the famous case of
Somerset v Stewart (Somerset’s Case) (1772) Lofft 1; 20 Howell’s State Trials 79, 98
ER 499. Somerset’s Case case is discussed in Chapter 21 Social Choice: Making Law.

Commentary 18.6 Footnote 15

Allan (2005) makes the following observation about identifying rights for the purpose
of enacting a bill of rights: ‘The rights set out in these bills [of rights] - the right to
freedom of expression or of religion or equality - enunciate very general standards about
the place of the individual in society. Bills of rights offer us all an emotionally attractive
statement of entitlements and protection in vague, very broad terms. Up in the Olympian
heights of abstract rights guarantees, nearly all of us can and do support them. Who, after
all, would say he or she is against free speech? The problem, however, is that the effects
of rights are not felt up in these Olympian heights. They are felt down in the quagmire of
detail, of where to draw the line when it comes to hate speech or campaign finance rules
or defamation. Repeating the mantra that we have a
 290 Chapter 18 Classification of Values
right to free speech doesn’t change the fact that down in the quagmire of drawing these
lines there is no unanimity’.

Commentary 18.7 Footnote 16

Henry Kissinger, in an address to a peace conference after the Yom Kippur war put the
problem of resolving conflicts between right in the following way: ‘The great tragedies
of history occur not when right confronts wrong, but when two rights face each other’.
Ned Washington’s song, High Noon, (music by Dimitri Tiomkin), the theme song in the
film ‘High Noon’, puts the dilemma in simpler terms. This happens when the hero, a
Sheriff, faces a conflict. His wife is a Quaker and a pacifist yet several gunmen have
come into his town to kill him and make further trouble. The song expresses his dilemma
in the memorable line ‘O to be torn twixt love and duty’. In Kirk (1997) pp 910 Justice
Michael Kirby expressed the key proposition (in a non cinematographic medium) when
saying that in any given situation where law is made or interpreted, there can be only one
supreme value.

Commentary 18.8 Footnote 17

An example of the conflict between the right of free speech and other rights such as the
right to have a fair trial in a court came to the fore in Gallagher v Durack (1982) 44
ALR 477. Gallagher, who was secretary of the Builders’ Labourers’ Federation, was
convicted of contempt of court. Gallagher had commented to the press that a decision of
the Federal Court, coincidentally to acquit him of another charge of contempt, had been
influenced by industrial action by members of the Builders Labourers’ Federation and by
fear of the economic consequences that could follow that industrial action. (This
statement, it is worth noting, is almost straight from the pages of a textbook on realist
legal theory).

Commentary 18.9 Footnote 19

There are numerous examples of the conflict between rights of property and distributive
justice from many allied fields such as ethics, legal theory and economics. A prominent
example from legal theory, and a noteworthy attempt to resolve the conflict, is found in
Rawls (1971).

Commentary 18.10 Footnote 21

In Dietrich v The Queen (1992) 177 CLR 292 the High Court decided that a court could
stay a criminal trial where an accused through no fault of their own was without a
lawyer. In effect, this meant if there was no legal aid, there was no trial.

Commentary 18.11 Footnote 23

Some comments about freedom of worship will expand the discussion of values. If the
religion in question has a place of worship (or prayer), there is an opportunity cost to
society in that the resources devoted to the place of worship could have been used in
some other fashion. However, society’s acceptance of the right to own property means
that the social cost is not considered important. In any event, the percentage of society’s
resources used to establish and maintain places of worship is small in the
 Chapter 18 Classification of Values 291
extreme, so the social opportunity cost is small. Funding and attending a place of
worship, though, is an opportunity cost for followers of the religion, but that is for them
to decide. If they freely adhere to the religion and voluntarily attend its place of worship,
the opportunity cost for them is negligible, because on their scale of values based on
their personal assessment of utility, there is no better way they could use those resources.
God comes before all else.

Commentary 18.12 Footnote 25

An example of rights with an economic base is native title in Australia. In Mabo v
Queensland (No 2) (1992) 175 CLR 1 the High Court of Australia held that indigenous
Australians still had rights in relation to land that they had held at the time that Australia
became a British colony in 1788.

Commentary 18.13 Footnote 27

This point about lack of freedom of speech in the allocation of broadcasting licences
surfaces only infrequently in political debate in Australia. One explanation is that
politicians are so beholden to the media that they will not raise the matter (itself an
argument against current licensing laws). Another is that oligopoly generally confers an
opportunity to make easy money (and in this case to exert substantial political influence
as well), so the television proprietors have no interest in free speech in the full sense of
the term (that is, where all of us get a turn). Finally, there seems to be public
acquiescence. Even a majority of the High Court of Australia acquiesced (Brennan J the
exception on this point) in its decision in Australian Capital Television v Commonwealth
(1992) 177 CLR 106. This was done despite the court claiming in this case that the
Australian Constitution contained an implied right of free speech. One possible
explanation for this strange decision is a phenomenon, which Julius Stone’s
perspicaciously identified, the normative force of the actual. Another explanation, which
can be taken consistently with Stone’s, is Marxist. As explained in Chapter 27, Marxist
analysis, put simply, is that in a capitalist society judges make verbal adherence to
uplifting values such as rights and freedoms, while really making decisions to further the
interests of capitalists. In Australian Capital Television the High Court asserted an
implied constitutional right to free political speech, while at the same time indorsing by
acquiescence deliberate legislative establishment of oligopoly control over two of the
major means of mass communication, radio and television broadcasting. In this way the
High Court furthered the interests of the moneyed classes so that, in public life, money
does the talking while the rest of us remain mute.
Chapter 19 Choice of Values
Introduction Unity of Values Diversity of Values
Compromise View Choice of Values Commentary

Blessed are the merciful, because they will have mercy.

Blessed are the pure of heart, for they shall see God.
Blessed are the peace makers, for they are God’s children.617

Introduction
A major issue, both in general and with forming law, arises in relation to the nature of
values. There are two extremes and a middle position. For the two extreme positions
values are labelled in several ways - as unified or diverse (which are the labels of choice
for this chapter), subjective and objective, chosen and ascertained, or individual and
social. So, at one extreme, values are unified. There is one universal set of values for all
men and women for all time. At the other extreme, values are diverse. Each person
adopts their own. In the middle position, values are a bit of each. People have some
choice with their values but most if not all values are shared with some other members of
society, sometimes with large numbers of other people.

This question runs parallel to contrasting schools of thought in psychology, sociology,

and political philosophy. Psychology recognises both individual differences and
behavioural laws of general application. Sociology includes both functionalism, which
emphasises consensus, and a conflict perspective, which emphasises differences.618
Political philosophy has a notion of liberalism which espouses personal freedom to think,
believe, speak and act as one wishes, provided this does not hurt another, and
communitarianism which puts emphasis on the value of social institutions.

While we have posed the question by asking if there is unity or diversity of values, these
are really the consequences of the answer to a more fundamental question. Are values
objectively or subjectively ascertained? If they are objectively ascertained there will be
one set of values for all humans. If they are subjective, they can vary and probably will
vary between groups, between individual and individual and between one age and the
next.

Unified Values
One possibility is that values are unified. They constitute a system, as the expression
‘legal system’ suggests? If they are truly and fully so, all laws and their interpretation
1
.
2
.

Sermon on the Mount, St Luke 6.20-6.33

Schaefer and Plamm (1992) pp19-22

292
 Chapter 19 Choice of Values 293
will be consistent, and there will be one right answer for every legal (and moral)
question. In other words, if society has one set of comprehensive, enduring, immutable,
consistent set of values, judging what is best will be uncontentious. For this approach to
be realistic, it is necessary that values are objective and ascertainable. That is, it is
possible to ascertain by reasonable endeavours what these comprehensive values are.

Diverse Values
Values may be diverse, with different legislators and judges able to adhere to and apply
different values so that they ‘pull in different directions’.619 If this is the case there is
potentially more than one ‘right’ answer to any question about how to make or interpret
law since it all depends on the values that one applies. This is the subjectivist view. It
propounds that ‘value is not intrinsic to the universe around us, but is somehow some
sort of function, or manifestation or expression, of human desires and human
inclinations’.620

Middle View
There is a middle view, that some values are shared in a political community, but there
is not uniform adherence to them in fact, degree or circumstance. Hence values are both
shared and diverse. In the course of discussion below it is argued that this is, or tends to
be, the true state of affairs in liberal democracies.

Unity of Values
Introduction
[O]nce there is agreement on certain goals and values, one can argue rationally about the means
by which these objectives may be obtained.621 622
One view is that we can know values objectively and that these values are
comprehensive, universal and enduring. In consequence, human societies can have and
share a stable and unified system of values. Two major arguments for the existence of, or
the need for, unity of values will be considered, natural law and functionalism.

Natural Law
He prayeth best, who loveth best All things both great and small;
For the dear God who loveth us, He made and loveth all.
Introduction
In legal theory, natural law proclaims that there is a comprehensive, universal and
eternal set of values by which humans should live. Consequently, according to Ronald
Dworkin, a latter day disciple and preacher of natural law theory, ‘law is structured by a
coherent set of principles about justice, fairness and procedural due process’.623 This
enables the law in a particular society to ‘speak with one voice’ in the face of conflict.624
This approach finds judicial support. Sir Frank Kitto, for example, says that ‘the

619 R v Carroll (2002) 77 ALJR 157, [24]

620 Flew (1971)
621 Einstein (1950) p 12
622 Samuel Taylor Coleridge The Rime of the Ancient Mariner
623 Dworkin (1986) p 139
624 Dworkin (1986) p 165
 294 Chapter 19 Choice of Values
common law and the law of equity alike in their development took constant account of
the standards of fairness and reasonableness that prevail in ordinary life’.625 626

Natural law tries to justify its stance - that there is a comprehensive set of values that
should govern human affairs - by showing that humans can readily ascertain the
existence and authority of these values. There are four major means by which humans
might ascertain the existence and authority of these values - reason, revelation, esoteric
knowledge and innate knowledge. These, however, do not stand up to scrutiny, as the
following analysis will show.

Reason
Reason itself is a matter offaith. It is an act offaith to assert that our thoughts have any relation to
reality at all.
An argument for the proposition that humans can ascertain the universal standards of
behaviour postulated by natural law rests on the fact that humans, constituting the
species homo sapiens, are rational animals.627 Therefore, reasoning by means such as
deduction or induction can devise or discover the standards by which humans should
live.628 In the words of Sir Edmund Coke in his Institutes ‘reason is the life of the law
[because] the common law itself is nothing else but reason;’ properly made, therefore,
‘law is the perfection of reason’. Therefore, ‘how long soever [a law] hath continued, if it
be against reason it is of no force in law’.629 This was echoed more than two centuries
later by Lord Esher who declared: ‘Any proposition the result of which would be to
show that the common law of England is wholly unreasonable and unjust, cannot be part
of the common law of England’.630 As the Levellers of the 17th century put it, ‘reason
hath no precedent for reason is the fount of all just precedents’.631

Induction
Common lawyers claim that courts develop law by induction. Induction is discussed
earlier,632 but briefly, it entails a court examining decided cases, and using these to
determine the content of new legal rules. For example, it is arguable that underlying
common law crimes and torts against the person such as assault and false imprisonment,
there is some general principle to the effect that a person is entitled to bodily integrity.
Courts can therefore draw on this principle when necessary to create new rules of tort
and crime that protect the person.633

There is an obvious problem with the claim that induction enables us to know that the
world has an underlying moral order, and to know what this order is. Induction involves
looking at decided cases, and using these to divine, then to apply, the

625 Kitto (1992) p 794

626 GK Chesterton Orthodoxy (1908)
627 Commentary 19.1.
628 Allen (1964) pp 298-299
629 Sir Edmund Coke Institutes: Commentary upon Littleton, First Institute 62a
630 Emmens v Pottle (1885) 16 QBD 354, 357 per Lord Esher
631 Hill (1961) p 179
632 Chapter 6 Induction
633 Commentary 19.2.
 Chapter 19 Choice of Values 295
underlying principle. It does not, therefore, explain how the first rule was made since
there were then no decided cases to draw on for induction.

Deduction
Deduction is discussed in an earlier chapter.634 635 Essentially deduction entails a form of
argument whereby a conclusion is derived from two premises, the major and minor
premises. Argument by deduction is correct when the major premise and minor premise
are true, and the logic used to deduce the conclusion from these is sound. In other words,
the truth of the conclusion is inherent in the truth of the major and minor premises in
conjunction with the relationship between them.

This means that deduction cannot establish the moral authority of a new principle.
Instead, it merely exposes, in the conclusion, a truth that is inherent in two other
propositions (major and minor premises) that are known to be true themselves. In doing
this, however, it may show a new application or development of a principle. But, it needs
to be stressed that as enlightening and useful as this sort of reason is, it is totally
dependent on the value on which the reasoning is based. This is why deduction cannot by
itself establish the existence of a comprehensive and binding moral code.

Revelation
Go you therefore, and teach all nations, baptising them in the name of the Father, and of the Son,
and of the Holy Ghost.
Some, typically religious believers, rely on revelation as a source of moral authority. In
the Christian tradition revelation goes back to the account of the creation of the world in
the Book of Genesis. God made the world in a physically ordered way in six days. On
the seventh day God rested. While some read this literally, it can also be taken as an
allegorical account of the creation of moral order and the ever presence of God among
his people. Humans, therefore, are created by God with a certain nature, which God has
commanded them to follow. God’s commands are made known to humans by revelation
in the Bible, both in the Old Testament (for the Ten Commandments telling us many
things that we should not do in order to avoid spiritual death) and in the New Testament
in the teachings and example of Jesus Christ (for example the Sermon on the Mount
telling us what we should do in order to attain spiritual life).636 This version of natural
law is neatly summed up in an evangelical religious slogan: ‘For best results follow the
Maker’s instructions’.637 Or as William Cowper expressed it: ‘Nature is but the name for
an effect, Whose cause is God’.638

Revelation also has judicial recognition. As one example, the jurist Henry of Bracton
(circa 1210-1268) formulated the maxim as to where authority resided. It said non sub
homine, sed sub deo et sub lege, that is, not under some human (authority) but under God
and the law. As another example, the case that laid down the tort of negligence in
English common law, Donoghue v Stevenson, invoked the moral precept that ‘you are

634 Chapter 5 Deduction

635 St Matthew's Gospel 28:19
636 Commentary 19.3.
637 Commentary 19.4.
638 William Cowper The Winter Walk at Noon 1:223
 296 Chapter 19 Choice of Values
to love your neighbour’.639 This is an unacknowledged reference to the commandment
that thou shalt love thy neighbour and to the teaching of Jesus in the Gospels,
specifically his telling the Parable of the Good Samaritan to illustrate that precept in
action.

In the western tradition, where church and state are now separated, revelation on its own
is not admitted as a basis of belief in matters that concern public order and welfare. This
is why the claim of revelation alone is not acceptable in debate on these matters, even
though people who accept revelation are free to adapt it to their private lives and argue
for the moral standards it proposes in debate on public affairs.

However, it may be possible to bring revelation into a rational framework. This is

exactly what one of the great Church Fathers, St Thomas Aquinas (c 1225-1274) tried to
do. In the 13th century when Catholic Europe was starting to re-acquaint itself with
Greek philosophy, a problem emerged. Greek philosophy emphasised the power of
natural reason. Consequently, there were now potentially two means of finding the truth
about the moral order, natural reason of pagan origin, and the revelation in the Bible.
This presented a problem. As long as there were two sources of natural law, reason and
revelation, there was the possibility of conflict. A person who had studied Greek
philosophers could argue that reason suggested a moral course different from that
propounded by the Catholic Church.

This was the problem which Thomas Aquinas addressed. Aquinas attempted to reconcile
the two and at the same time to invoke reason to bolster revelation by providing five
proofs of the existence of God based on philosophical argument. Philosophy proves the
existence of God, God revealed standards by which we should live through the teachings
of Jesus Christ, and Jesus Christ was the Son of God. In this way philosophy became an
ally not an opponent of religious faith. After all, who made our reason but God, and as
Milton puts it: ‘God so commanded [that] our reason is our law’.640

By this means Aquinas believed he was able to show to the satisfaction of his listeners
and readers that there was no conflict between reason and revelation. At the time he was
successful, so the challenge of philosophy to faith was resisted, and faith was made
stronger because it rested on reason. In modern terms Aquinas was a company
spokesman, and a very effective one at that. While he is justifiably revered both as a
philosopher, and by the Catholic Church as a theologian and a saint, there are problems
with his five proofs. Several ‘seem to depend on antiquated physics,’ and ‘none of them
has yet been stated in a way clear of fallacy’.641

Innate Knowledge
Several strands of thought put forward the idea that humans have some sort of innate
knowledge of moral standards. The argument is that people naturally know the

639 Donoghue v Stevenson [1932] AC 562, 580

640 John Milton, Paradise Lost 1.652
641 Flew (1984) p 19
 Chapter 19 Choice of Values 297
principles by which they should live. This knowledge is ‘the common property of
mankind,’642 based on ‘common sense’643 or the ‘common thoughts of men’.644 It is part
of ‘every man’s natural reason’.645 Consequently the principles that should direct our
lives, and the values from which they are derived, are ‘self evident’.646 This view goes
back at least as far as St Thomas Aquinas (1225-1274), who said that ‘man has a natural
inclination to know the truth about God’ enabling him, therefore, ‘to live in society’.647

Ronald Dworkin (b 1931) makes a similar point, claiming that humans know moral
principles as a matter of ‘instinct’.648 In a similar vein, Stephen Covey argues that
humans have ‘an innate consciousness and awareness’ of these principles. 649 Covey
concedes, though, that this innate consciousness and awareness can, for some people or
at some time for all people, be ‘submerged or numbed’ by social conditioning.650

It is common enough to find judicial statements which also take this line. Thus Lord
Steyn asserts that judges should determine values to apply in legal reasoning by
reference to ‘what the ordinary citizen would regard as right’.651 Other judges use
phrases of a similar inclination when they refer to ‘prevailing community standards’652
and ‘accepted standards of right conduct’.653

This consciousness and awareness may be a positive recognition of what is good and
worth striving for. It may also be that when we ‘do bad’ we ‘feel bad.’ According to this
view, as Mackie put it ‘the denial of values can carry with it an extreme emotional
reaction, a feeling that nothing matters at all, and that life has lost its purpose’.
Consequently, we know that there are objective values because of ‘assumptions
ingrained in our thoughts and built into some of the ways in which language is used’. 654

Julius Stone also deferred to innate knowledge when he lectured in jurisprudence at the
University of Sydney in 1969. He discussed the prosecution of Nazi war criminals after
World War II. One of their defences was that their murder of Jews and others in
concentration camps was not illegal under the law then prevailing in Germany. Stone’s
comment was that slaughtering millions of people was so obviously wrong that lack of a
specific law forbidding it was not relevant. Putting this another way, people do not need
a law to tell them that slaughter of innocent people on a mass scale is wrong - they know
it already in their heart.

642 Allen (1964) p 286

643 Pearce v Gardner [1897] 1 QB 688
644 Carrington (1997)
645 Sir Edmund Coke 97b, Calvins case (1608) 7 Co Rep 1a, 19a
646 United States Declaration of Independence, Covey (1998) p 34
647 Thomas Aquinas Summa Theologica Qu 94 Art 2
648 Dworkin (1986) p 180
649 Covey (1998) p 35
650 Covey (1998) p 34
651 McFarlane v Tayside Health Board [2000] 2 AC 59, 82 per Lord Steyn
652 Mason (2003) in Sheard (2003) p 7
653 Cardozo (1921) p 112
654 Mackie (1986) pp 772-773
 298 Chapter 19 Choice of Values
Another approach to demonstrating innate knowledge of values is not to look at how
knowledge of moral principle is acquired, but to the very fact that it is widespread. Wide
acceptance of values suggests that they are ‘socially right,’655 and this acceptance is
evidence that all humans have innate awareness of fundamental moral principles
espoused by natural law. These principles are described by a variety of expressions such
as public values,656 a ‘general public sentiment of moral wrongdoing,’657 ‘community
attitudes’ and ‘community values,’658 all of which are in sharp contrast to ‘mere personal
values’.659

Some support for the notion of innate knowledge of values is that moral principles
which should underlie law are recognised at a national level when they are promulgated
in constitutional guarantees of human rights.660 On this line of reasoning values are most
fully recognised and legitimised when they are incorporated into international law. 661

This has in fact happened. Some principles are found in the customary rules of
international law, some are repeatedly asserted in ‘international instruments’ such as
treaties and covenants,662 and some are ‘honoured in state practice’.663 The most
prominent example of international recognition of principles is provided by the United
Nations Universal Declaration of Human Rights (1948). Its very description as
‘Universal’ indicates its stature, as does its authorship by the United Nations. It
represents in principle and in practice the Roman law concept of ius gentium (the law of
all peoples), which was used by some philosophers in formulating the concept of natural
law.
It must be conceded that the argument for universal principles based on innate
knowledge has some force, and more force than any others. However, it is strictly
consistent only with the notion that some values are shared, even widely shared. This can
be explained by other causes besides innate knowledge, with socialisation being a very
obvious possibility.

Esoteric Knowledge
Awareness of the dictates of universal standards of behaviour might comes from esoteric
knowledge. This contention concerns the Crown or lawyers.

Crown
Thomas Hobbes (1588-1679) wrestled with the assertion of Thomas Aquinas, noted
above, that humans had innate knowledge of the governing moral order. Aquinas

655 Wilson v Glossop (1888) 20 QBD 354 per Fry LJ

656 Moore (1994)
657 Donoghue v Stevenson [1932] AC 562, 580
658 Braithwaite 1995) p 353
659 Mason AF (1986) p 5
660 Lebanese Moslem Association v Minister for Immigration (1986) 11 FCR 543, 67 ALR
195
661 French (2000) p 20
662 Minister for Immigration v Teoh (1995) 183 CLR 273, 291, 128 ALR 353, 365
663 Lebanese Moslem Association v Minister for Immigration (1986) 11 FCR 543, 67 ALR
195
 Chapter 19 Choice of Values 299
argued the everyman's reason would guide him to the truth. Hobbes' concern was that we
would all see it differently and there would be no commonly accepted standards. To
avoid this, he argued society had a sovereign, the King whose commands were the voice
of reason. As Hobbes described it, the ‘King’s Reason, when it is publickly upon Advice,
and Deliberation declared, is that Anima Legis [spirit of the law], and that Summa Ratio
[highest reason], and that Equity which all agree to be the Law of Reason, and is all that
is, or ever was Law in England’.664 Clearly this assertion of regal authority on moral
questions is not logically acceptable today.

Lawyers
Sir Edmund Coke expounded the view that the moral authority of common law was
known only to lawyers. This knowledge, he proclaimed, was imparted by legal training -
it was ‘gotten by long study, observation, and experience’. 665 Hence, as the maxim said,
neminem oportet esse sapientiorem legibus666 that is, no man [out of his own private
reason] ought to be wiser than the law.667 That the law derived from this esoteric
knowledge of lawyers was highlighted by the notion that common law resided in gremio
judicium, that is in the bosom of the judges.668

Today there may be little overt support for this proposition, but it receives covert
expression. For example, there are hints of it in legal judgments and discussion, where an
unstated premise may be that judges and jurists get it right because they are equipped by
legal training to do so. Thus, lawyers commonly refer to judges getting the ‘right’
answer669 or making the ‘proper construction’ of a provision;670 judges assert that basic
values underlie, and are recognisable in, common law;671 Justice Michael Kirby refers to
the High Court of Australia deploying, over its history ‘a happy mix of creativity and
continuity.’672 In the same vein Robert French, now Chief Justice of the High Court of
Australia, asserts that fundamental values can be found ‘in the writing of jurists,’673
Beverlyy McLachlin, Chief Justice of Canada, says that ‘through their experience, both
legal and non legal, judges come to have a sense of what justice requires in a particular
case’.674 Without being specific, statements such as these suggest that judges can find the
right or best answer due to some esoteric knowledge acquired by legal training and
experience.

Needless to say, there is a problem with this view that reason is imparted by special legal
training. It is a hard claim to prove that lawyers possess ‘a monopoly’ in moral wisdom -
although ‘they have to deal in argument more frequently than other people,

664 Hobbes (1971) p 62

665 Sir Edmund Coke 97b, Calvins Case (1608) 7 Co Rep 1a, 19a
666 Sir Edmund Coke 97b, s138
667 See Kelly (1995)
668 Commentary 19.5.
669 Doyle (1999) p 937. Commentary 19.6.
670 Bourke v State Bank of NSW (1988) 85 ALR 61, 71 per Wilcox J
671 See, for example, Dietrich v The Queen (1992) 177 CLR 292, 306 and Derbyshire County
Council v Times Newspapers [1993] AC 534, 549
672 Kirby (2000) p 9
673 French (2000) p 20
674 McLachlin in Sheard (2003) p 18
 300 Chapter 19 Choice of Values
and they naturally develop a special facility in doing so,’ they do not acquire a special or
professional style of reasoning.675

Consequently, lawyers can get it wrong. To illustrate this, as Lord Justice Greer pointed
out, when the criminal law of England was ‘in a state to disgrace a halfcivilised country,
judges of high authority and writers of textbooks’ still continued to regard it ‘as the
‘perfection of reason.’’676

Conclusion
There is an obvious problem with natural law. While the voices of reason and revelation,
and the claims to innate or esoteric knowledge based on a special sort of reason, may be
convincing to those who hear them, they are not to others. Put simply, revelation is a
matter of faith, and reason is a matter of dispute. In consequence neither the secular nor
the sacred claims of natural law can be accepted.

Functionalism
In sociology, functionalism takes the view that humans must have shared values. A
leading exponent, Talcott Parsons (1902-1979), argued that ‘social order depended on
the existence of general shared values which are regarded as legitimate and binding, and
act as a standard by means of which the ends of action are selected’.677 Since humans
‘have no instincts,’ the argument continues, without ‘shared values, members of society
would be unlikely to cooperate and work together’; instead they ‘would often be pulling
in different directions and pursuing incompatible goals,’ resulting in ‘disorder and
disruption’.678 679

This argument, however, does not seem go the full distance for at least two reasons.
First, it may constitute sufficient social glue for values to be widely shared without
necessarily being universally accepted. Second, it may be sufficient to accept as a shared
value the right to liberty, including within it the right to be different. In other words
society will still hold together when liberty of spirit is the shared value, which allows
other values to differ.

Diversity of Values
For the kind of social experiment that you are making, I would not sacrifice a frog's hind legs!
Introduction
As just discussed, one extreme of the values debate is that there is one unified and
identifiable set of values by which all humans should abide.680 At the other extreme, law
is ‘a wilderness of single decisions, totally unpatterned and with no concern for internal
consistency’.681 No one, however, takes this view to its full extreme, but some

675 Allen (1964) p 286

676 Leon v Casey [1932] 2KB 488
677 Abercrombie (2000) p 373
678 Haralambos (1991) p 6
679 Commentary 19.7.
680 For example, Julius Stone called one of his texts Legal System and Lawyers' Reasoning -
see Stone (1964).
681 Twining and Miers (1999) p 140
 Chapter 19 Choice of Values 301
approximate it. AWB Simpson describes common law rules as ‘chaotic’682 to the extent
that they are ‘more of a muddle than a system’.683 Charles Sampford takes a similar
view. Institutions of law lack an ‘overall structure;’ instead they are just ‘a part of the
social melee’.684 Justice Rosalie Abella goes in a similar direction, arguing that the
willingness of people to advocate human rights, depends on public opinion, which in
turn depends to a considerable extent on the media.685

Arguments for Diversity of Values

Arguments for diversity of values are both empirical (based on observation) and
philosophical (based on reason). Observation includes everyday observation as well as
systematic scientific observation. Since it is not possible to canvass fully philosophical
arguments for diversity of values, a sample must suffice. Here the sample consists of the
argument of John Leslie Mackie (1917-1981) and John Passmore (1914-2004) along
with the observation that if there is a universal code of values there is no obviously
infallible guide as to how these values can be ascertained.

Observation
Common observation suggests that human actions are driven by a diversity of values, 686
even if there are substantial areas of agreement.687 Values vary from time to time, from
culture to culture, from group to group and from one individual to another. Values ‘may
pull in different directions’688 reflecting ‘the mores of the time.’689 In these cases policy
makers must reappraise values according to social necessity or changed conditions.690

While the existence of a diversity of values is easily observable it has been judicial
indorsed,691 and has been noted by Vaughan and Hogg, the authors of a text on social
psychology. As they summarise the position: ‘Value systems vary across individual,
groups and cultures’.692 Schaefer makes a similar observation in stating that ‘[o]bviously
not all the 250 million Americans agree on one set of goals’. 693 In fact it would surprise
most of us if they did.

These differences have also been empirically demonstrated by social scientists.

Abercrombie, for example, notes the large extent to which empirical research indicates
that values are not uniformly held throughout the population of a country. As
Abercrombie puts it ‘dominant social values are not completely or consistently

682 Simpson (1986) p 15

683 Simpson (1986) p 24
684 Sampford (1989) p 261. See also Barnes (1994) and Barnes (1995).
685 Abella (2003) p 59
686 See Nedelsky (1997).
687 Commentary 19.8.
688 R v Carroll (2002) 77 ALJR 157, [24]
689 Cardozo (1921) p 112. There, Cardozo also opines that judges are not 'powerless to raise
the level of prevailing conduct'.
690 Brennan (1993), Mason (1992), Mason (1993B)
691 Cardozo (1921 p 112, Brennan (1993), Mason (1992), Mason (1993B)
692 Vaughan and Hogg (1998)
693 Schaefer and Plamm (1992) p 81
 302 Chapter 19 Choice of Values
accepted by large sections of the population’.694 One significant illustration of this
research consists of the annual survey of the attitudes of United States students entering
college. Schaeffer and Plamm explain that the survey focuses ‘on an array of issues,
beliefs and life goals’. In it, the 7 million respondents to a questionnaire are asked if
various values are important to them. Results certainly showed overall similarities, but
also variations. There were variations from individual to individual both as to what
values they held and the importance they attached to them. There were also variations in
values from one time to another. For example, values concerned with money, power and
status had growing support in the 1980s, while values concerning ‘social awareness and
altruism, such as ‘helping others’’ had declining support; however by 1990 ‘there was
evidence that college students were once again turning towards social concerns’.695

Another illustration is the work of Gordon Allport (1897-1967), a pioneering

psychologist in the field of personality and assessment. Allport administered self report
inventories of questions to subjects. While he found substantial levels of shared values
(for example among occupational groups), he also found substantial variations in values
between individuals.696

Reason: John Leslie Mackie

John Leslie Mackie (1917-1981) also observed that values vary between communities,
groups and individuals, and vary from time to time.697 In an attempt to explain this he
propounded an argument that had two aspects. The first Mackie seeks to justify
subjectivity of values and explain how it is more rational or less paradoxical to ‘reject
than to retain the common-sense belief in the objectivity of moral values’. The second
seeks to seal up the argument by explaining why, despite lack of rational support, belief
in objectively determined standards ‘has become established and is so resistant to
criticisms’.698 If this cannot be explained, there is room to argue it is evidence of the
existence of objective values.

For the first part of his argument Mackie considers two competing explanations for these
observed variations in values. One supports the notion of subjectivity of values. Practices
vary between cultures and from group to group within a culture. Values follow practices
rather than vice versa. Society does not value polygamy first, then practise it. Rather it
goes the other way round from practice to standards. A society first practices polygamy.
Then it adopts a moral standard that indorses polygamy as acceptable or even beneficial
(because, for example, it enables the widow of a man killed in battle to obtain support in
various forms by finding a husband).

An alternative explanation supports objectivity in values. In the face of variations in

values, it argues that variations in both stated and practised values arise because people
have distorted and inadequate perceptions of objectively determined values. However,

694 Abercrombie (2000) p 71

695 Schaefer and Plamm (1992) p 81
696 Allport (1931)
697 Mackie (1986) p773
698 Mackie (1986) p775
 Chapter 19 Choice of Values 303
there is problem with this cure in that it harms the patient because it undermines the
notion of objective values. If there can be serious flaws and misunderstandings in
ascertaining them, how can they be considered to be objective, and thus ascertainable by
rational inquiry?

The second argument for justifying subjectivity is an argument from queerness. This
combines metaphysical and epistemological considerations. At the basis of this argument
is the following proposition. Mackie argued that if there were objective values they
would be ‘entities or relations of a very strange sort, utterly different from anything else
in the universe’. Correspondingly, if we are aware of them, it would be by some special
faculty of moral perception or intuition, utterly different from our ways of knowing
everything else’. Yet ‘none of our ordinary accounts of sensory perceptions or
introspection of the framing of explanatory hypotheses or inference or logical
construction or conceptual analysis, or any combination of these, will provide a
satisfactory answer’. Instead it has to be ‘something else again’. In other words, a sense
such as sight enables us to see things and a sense such as hearing enables us to hear
things but humans do not have a sensory mechanism for detecting universal values that
pervade the universe. Thus resort to ‘a special sort of intuition [such as innate
knowledge] is a lame answer, but it is one to which the clearheaded objectivist is
compelled to resort’.699

Having justified the assertion that values are subjective, Mackie sought to seal the
argument as far as it is possible to do so. This is done by explaining why, in the face of
conflicting evidence, it is so prevalent for people to believe that the standards in which
they believe and by which they live are externally determined.

Mackie expounds a functionalist approach. Moral standards are socially necessary.

Society needs a degree of common values to produce and distribute goods, to defend
itself against external and internal threat, and to have people not harm others despite
some inclinations to the contrary. Consequently individuals learn these standards, often
unconsciously, as part of their socialisation.700

In the process, these individuals internalise these standards. This enables them, and other
similarly socialised individuals, to bond in order to pronounce, defend and comply with
these standards. Given that much of the process of socialisation and internalisation is not
explicit, these standards appear to originate externally. In reality, they are constructed
and imposed by society for its own purposes.

Reason: John Passmore

John Passmore (1914-2004) raises another objection to the argument that values are
objectively determined. He does this in the process of pointing out that some of the
major practices in western societies that are underpinned by values are in conflict with
each other, which is incompatible with values being objectively determined. This
conflict puts limitations on what a government can do. Going too far in one direction

699 Mackie (1986) p 774

700 See, for example, Elkins (1983)
 304 Chapter 19 Choice of Values
promotes one value at the expense of the one that is in conflict with it. Specifically, too
much coercion is the death of liberty, too much subsidisation is the death of enterprise,
and too much equity is the death of efficiency.701 Honigman makes a related point in
arguing that legislation may not be effective when it is trying to resolve conflicts over
values.702

Ascertaining Values
There is also a practical objection to the notion that there is one unified set of values. If
values are objective, how can we know them? This question was raised and its potential
answers discussed when considering natural law. There it was concluded that none of the
claims that there was a universal and comprehensive system of values was borne out
because there was no infallible way of knowing what those values were. Thus a uniform
set of values, if it exists, is inaccessible, and so for practical purposes it might just as
well not exist.

Explanations for Diversity of Values

If there are these differences in values, how do they arise? Explanations involve
individual differences or differences in socialisation. Social scientists sometimes
consider these as separate compartments, as evidenced by the two different disciplines
that deal with these explanations, psychology for individual differences and sociology
for differences in socialisation. Realistically, it might be suggested, the two are
enmeshed.

Individual Differences
Individual differences and their assessment is a recognised specialty in psychology.
Conventional wisdom is that individual differences arise from three basic sources, on
their own or in combination. These are biology, cognition and environment. These
ground five different major theories - genetic (biology), psychodynamic (biology and
cognition), phenomenology (cognition), social learning (cognition and the environment)
and behaviourism (environment).703

This notion of individual differences comes through in legal realism, which asserts that
judges (and by logical extension legislators also) differ in their values for reasons of
personality, temperament, idiosyncrasies,704 ‘individual predispositions,’705 and ‘personal
preference’.706 Whatever the basis, the result will be something that distinguishes one
judge from another and one legislator from another, and causes them to make different
decisions.

Differences in Socialisation
Social factors affect values and therefore decisions because all of us are socialised.
Social groups, however, vary enormously in such features as their size, ease of entry and

701 Passmore (1981)

702 Honigman (1964)
703 Phares (1997) pp 15-18
704 Allen (1964) p 350, citing Scrutton J in RUl v Aldershot Corporation [1933] 1 KB 259.
705 Wilson v Minister for Aboriginal Affairs (1996) 189 CLR 1, at 43 per Kirby J
706 Walker (2002)
 Chapter 19 Choice of Values 305
effect on beliefs and behaviour. We belong to, or have belonged to, various groups
which have helped to form values, perceptions and attitudes. Differences between social
groups will mean that values differ as between groups. Social groups push values in two
directions. They pressure members to share group values, at the same time causing those
values to differ from those in other groups.707

Compromise View
Introduction
Between the two extremes - that values are universal and objective or that they are
individual and subjective - there is a middle view. This says that liberal democracy
incorporates values that are both unified and diversified. In some respects there is an
‘overall similarity’ in values,’708 although with qualifications - not every one will
espouse them, not all will espouse them in the same way, not everyone who espouses a
particular value will regard it as having the same meaning,709 and not everyone will
espouse a particular value to the same extent or in the same situations; but there will still
be large areas of agreement and substantial areas of broad but not complete agreement.

Schaefer and Plamm argue that this similarity possibly arises because ‘culture provides a
general set of objectives’. Yet despite this sharing of values and even an overall
similarity, there are also differences. Some groups will not espouse dominant social
values (indeed propagating this alternative view may be the function of the group).
Individuals will also develop their ‘own personal goals and ambitions’ creating further
diversity.710

Law, therefore is systematic to some extent because there are social, cultural and
political forces that promote consistency. So, even given the inherent problem of social
choice, and defects in the way democracy is implemented, a law enacted by a legislature
will often be substantially representative of the preferences of voters. At the same time,
there are factors that promote diversity. These include individual differences, differences
in socialisation and differences in life experience, knowledge and understanding.

Thus, law in the western world operates in a society that has both Gesellschaft and
Gemeinschaft characteristics:
(1) Gesellschaft. Western society has some of the Gesellschaft qualities of
individualism, pluralism and diversity. This is so because judges and legislators have
different personalities, and in the extreme case can be idiosyncratic, and laws are made at
different times when confronting different problems.711 In plain language not all judges
are cut with the same cloth even if they wear the same type of robes.

707 Factors that adversely affect legal decision-making are discussed in Chapter 27
Irrationality.
708 Schaeferand Plamm (1992) p 81
709 Krygier and Glass (1995), especially p 359, where they stress that shared or
community values are 'essentially contested'.
710 Schaeferand Plamm (1992) p 80
711 Commentary 19.9.
 306 Chapter 19 Choice of Values
(2) Gemeinschaft. Western society has some Gemeinschaft quality with a substantial
degree of shared values that can create at least some organic unity.
This middle view seems to be correct at a common sense level. Our everyday
experience, witnessed by newspaper editorials, letters to newspapers, public statements
and opinion polls, is that people both agree and disagree on major social and political
issues. Similarly eminent lawyers frequently agree and disagree, as illustrated by the fact
that decisions of superior courts such as the United States Supreme Court and the
Supreme Court of the United Kingdom (formerly the Judicial Committee of the House of
Lords) frequently involve both concurring and dissenting judgments.

It may be possible for this middle view to become the basis of a new functionalism.
Shared values enable society to establish institutions, along with the sense of community,
the continuity and the stability that these engender. However, too much stability can
make a society unresponsive to change and the need to adapt. Individualism can provide
this as it promotes and nurtures diversity, innovation, adaptation and creativity. At the
same time tolerance, the live and let live attitude that underpins true liberty, promotes
social acceptance and harmony. Every individual has a basic worth and dignity, creating
a preparedness to allow individual differences as people exercise their liberty in different
ways. Individual liberty thus has a dual visage in this functionalism. It is founded on a
shared values, respect and tolerance, but give rise to differences.

On this view, there are forces at work promoting both public and private good. 712 Public
good is promoted by the existence of a community incorporating community rights
which are based on shared values. Private good is fostered and promoted by individuals
possessing individual rights. Public and private good are bound up because this
commitment to rights is a shared value,713 even though the manner of exercise of these
rights is highly individual.

Subsequent discussion in this text analyses and illustrates the following four aspects or
appearances of the compromise view, highlighting important areas where there is
agreement about values, and areas where there is some mixture of agreement and
disagreement.
(1) Public Interest. Some shared values promote the public interest and help keep the
community together. But while these values are widely shared, they are not universally
held.
(2) Individual Rights. Individual rights are founded on a shared respect for the
individual and their dignity and well being. In this sense individual rights rest on shared
values. However, while there is wide agreement as to the need to respect the individual
and their rights, there can be disagreement as to the existence and scope of specific
rights.
(3) Pursuit of Happiness. The right to pursue happiness is derived from several
specific rights such as freedom of person, freedom of movement, the right to own
property and the general right to do anything that is not forbidden by law. While all

712 Heydon's Case (1584) 3 Co Rep 7a, 7b. Commentary 19.10.

713 Commitment to rights, however, is not totally shared because there is not complete
agreement about the existence and scope of some individual rights.
 Chapter 19 Choice of Values 307
possess the right to pursue happiness, the right allows each person to pursue their own
version of happiness in their own way.
(4) Markets. In the market, pursuit of individual self interest leads to a huge common
good in terms of the production and distribution of goods and services that people want.
In this way the market is a major social institution where public and private, and
communal and individual, needs are mixed and inter fused.

Public Interest
Do unto others as you would have them to unto you.714 715 716 717 718 719
Introduction
Liberal democracies are founded on a commitment to individual liberty and the
differences arising from the individual choices that this allows. This emphasis was
important when a liberal democracy was formed against a background of repression and
autocratic rule. As time moved on, however, there was increasing awareness that
individual rights, although essential, were not sufficient. Humans are social animals and
need some form of society to function. Realisation of this has led to emphasis on some
sense of a community based on shared social values. Shared social values underpin
institutions, which are the basis for society and a source of stability. Most obviously
these institutions consist of institutions of government such as legislatures, courts and
administrative agencies, but they also include other institutions such as welfare
organisations, universities, schools, hospitals, libraries, art galleries, museums and parks.

Values that underlie these institutions tend to be the ‘relatively permanent values of [a]
community,’99 and sometimes are even ‘internationally accepted’.100 These values
constitute part of the glue that holds together the social fabric. Consonant with this, they
are values by reference to which legislatures and courts should generally make and
interpret law.101

Values promoting a public interest are discussed here in a way that emphasises their
position as shared values. Nevertheless, the fact that they are widely shared, and even
socially fundamental, does not mean that all members in society are in total agreement
about them. Moreover, even where there is fundamental agreement on the existence and
importance of a value, there may be disagreement as to its operation and its scope,
particularly where it conflicts with some other deserving value.

Public Values
Common labels for shared or public values102 include public interest,103 the national
interest,104 morality,105 justice,106 ‘fundamental principles of justice,’107 natural

714 St Matthew's Gospel 7:12

715 Dietrich v R (1992) 109 ALR 385, 402-403
716 Minister for Immigration v Teoh (1995) 183 CLR 273, 291; 128 ALR 353, 365 per Mason
CJ, Toohey J
717 Cooper Brookes v FCT (1981) 147 CLR 297, 320-321; 35 ALR 151, 169-170
718 See Moore (1994).
719 Attorney General v Heineman Publishing (1987) 10 NSWLR 86, 191, McManus v Scott-
Charlton (1996) 140 ALR 625, 632
 308 Chapter 19 Choice of Values
justice,720 721 722 723 724 fairness,725 the ‘guiding rules of right,’726 a ‘sense of legal right,’727
equity,728 reciprocity,729 and the fundamental principles which ‘underlie a parliamentary
democracy based on the rule of law’.730 These are in contrast to, and oppose, that which
is unjust,731 irrational,732 inconvenient,733 capricious,734 absurd,735 manifestly
unreasonable,736 unfair,737 or illogical.738 In contrast, public values promote what is
effective,739 fair,740 and reasonable.741 They exhort the achievement of goals that are
harmonious, rather than conflicting,742 the correction of prior action which ‘we now take
to be wrong,’743 the satisfying of human needs,744 the enactment of statutes that are
‘public regarding,’745 the ‘rational solution of social conflicts,’746 the creation of social
utility747 and the need for parties to deal with each other fairly and in good faith.748 These
values are also manifest in the economic concept of public goods.749

Utilitarianism
Utilitarianism constitutes a famous attempt to write a general prescription for how
legislation should operate in a way that promotes public interest by trying to benefit as
many citizens as much as possible. Thus, it is a good illustration of a philosophy which
has a strong community or public interest bent. It is also of historical importance in
common law because it was expounded by thinkers such as Jeremy Bentham (1748-

720 Chaudary v Minister for Immigration (1994) 121 ALR 315

721 Donoghue v Stevenson [1932] AC 562 at 580, Honore (1993), Wilson v Glossop (1888) 20
QBD 354 per Fry LJ
722 National Bank of Greece v Metliss [1958] AC 509, 525
723 Robinson v Continental Insurance Co [1915] 1 KB 155
724 Valentini v Canali (1890) 24 QBD 166
725 New South Wales Law Reform Commission (1968) First Annual Report
726 Allen (1964) p 299
727 Sir Edmund Coke
728 Duggan (1997)
729 Commentary 19.11.
730 Legislative Standards Act 1992 (Qld) s4(1)
731 CentronicsSystems v Nintendo (1992)111 ALR 13
732 CentronicsSystems v Nintendo (1992)111 ALR 13
733 CentronicsSystems v Nintendo (1992)111 ALR 13
734 Graham v Ninness (1986) 65 ALR 331, Australian Telecommunications Commission v
Parsons (1985) 59 ALR 535
735 Director of Public Prosecutions v Fowler (1984) 55 ALR 175, Newcastle City Council v
GIO (1997) 149 ALR 623
736 Hilton v FCT (1992) 110 ALR 167
737 Minister for Immigration v Petrovski (1998) 154 ALR 606
738 Alcatel v Commissioner of Patents (1996) 138 ALR 504
739 Richardson v FCT (1997) 150 ALR 167
740 Cooper Brookes v FCT (1981) 147 CLR 297, 320-321; 35 ALR 151,
169-170
741 Cooper Brookes v FCT (1981) 147 CLR 297, 320-321; 35 ALR 151,
169-170
742 Project Blue Sky v ABA (1998) 153 ALR 490
743 Webber (1995) p 7
744 Thomson (1987)
745 Mace (1986)
746 Fleming (1977) p v
747 Allen (1964) p 297
748 Finn (1989)
749 Commentary 19.12.
 Chapter 19 Choice of Values 309
1832), James Mill (1773-1836), John Stuart Mill (1806-1873)750 and Henry Sidgwick (1838-
1900) who constitute a creative strand of English philosophical scholarship.751

In the words of John Stuart Mill himself, the basic tenet of utilitarianism is ‘that actions are
right in proportion as they tend to promote happiness, wrong as they tend to produce the reverse
of happiness. By happiness is meant pleasure and the absence of pain; by unhappiness, pain and
the privation of pleasure’.752 The aim then, according to the famous maxim of Francis Hutcheson
(1694-1746) is to obtain ‘the greatest happiness for the greatest number’.753

A more recent formulation of this notion comes from the United States jurist Roscoe Pound
(1870-1964). Law, he urged, should try to provide ‘as much as we may of the total of men’s
reasonable expectations in life in civilised society, with the minimum of friction and waste’.754 755
756

Individual Rights
It is time for our liberal societies to stop apologising, to get back our self-confidence, and state that
tolerance and freedom is our way, and those who are out to destroy that deserve no
tolerance.139
Introduction
Individual rights incorporate areas of both unified and diversified values. Unified values are
evidenced in the wide spread agreement of the importance of rights, and by the notions of
tolerance and respect for human dignity and differences that go with it. This is reflected in two
of the major ways in which rights are protected, a bill of rights and public opinion.

Public opinion sways democratic governments. As the fall of the communist bloc countries
illustrates, it can also sway non democratic governments. In each case it threatens a government
with loss of office, in the first case by defeat at the ballot box and in the second by uprising and
rebellion.

In its classic form, a bill of rights is a prohibition on power which is written into the
constitution. First it describes rights, usually in broad terms, leaving more precise definition to
the judiciary when an issue arises.

Second, it then denies a government any power at all to interfere with the rights that it
designates. In this practical day-to-day sense, the rights are inalienable because they cannot be
legally infringed until the bill of rights is changed, which in many constitutions requires
compliance with special and often hard to satisfy procedures.140 Protecting rights in this way
happens only because the bill of rights denies power to a

750 Mill (1861)

751 See Guest (1981-1984).
752 Mill (1861). Commentary 19.13.
753 Hutcheson (1725) sections 3 and 7. Commentary 19.14.
754 Pound (1954)
755 Johan Norberg (2005)
756 Commentary 19.15.
 310 Chapter 19 Choice of Values
government. Ordinarily this will come about only if there is wide public support for the
rights that are protected in this way. This is likely to happen, to state the obvious, only if
there is widespread agreement in the population about the values that support and justify
these rights.

While there is considerable unanimity over individual rights there is also a diversity of
values. This diversity is reflected in two major ways.

First, it is reflected in disagreement about the existence and scope of rights. While just
about everyone believes in rights, not everyone agrees on the existence, nature and scope
of these rights. This is discussed here.

Second, diversity of behaviour, based on diversity of values, is exhibited when people

make choices by exercising their rights. This is further discussed below in the context of
pursuit of happiness. Essentially the point is that as people pursue happiness in their own
way they display different values or at least different tastes and preferences. In plain
language people do not always like and dislike the same things.

Agreement about Rights

[T]he idea that we shouldn’t impose our values [on immigrants] is bizarre. Of course we should.
We should force everybody to accept every other human being as a free and autonomous individual
with the same rights as himself. That is the law of a liberal, open society, and that is what has
created the most creative and humane societies in the world history. Everybody who wants to enjoy
that society must conform to it.757
Democracy is the most fundamental and general way by which human rights are
implemented. Western democracies are founded on a belief in individual liberty, which
itself is founded on a belief in the dignity and inherent worth of all humans. Individuals
are inherently free, runs the argument, so the only legitimate form of government is self
government because this least detracts from and most likely guarantees liberty. Self
government can consist of direct democracy or representative democracy. In fact western
democracies are largely representative and direct only in specific instances. This is
because direct democracy, although the purer form, is clumsy as a general mechanism
for making law. Some jurisdictions, nevertheless, effect a compromise by having some
provision for citizen involvement by limited provisions for citizens to initiate a law,
propose a law, repeal a law or pass a law. Typically this is done by requiring a mass
petition or approval of a law at a referendum. For example, under s128 of the
Constitution of the Commonwealth of Australia, a law to change the Constitution itself
has to be approved by voters at a referendum.

Laws, therefore, are made legitimate and rational because they are enacted by a
democratically elected legislature. This means that the very thing that legitimises laws
made by a democracy, the value of human liberty, it itself a moral restraint on that
legitimacy. Laws which unduly restrain human liberty undercut the very principle which
makes those laws morally binding. Therefore a rational legislator has to ensure that their
legislation does not improperly invade liberty. One way to seek to

757 Johan Norberg (2005)

 Chapter 19 Choice of Values 311
accomplish this is to establish a committee of the legislature whose job it is to scrutinise
the content and operation of statutes to see whether they unduly restrict liberty. If any
statutes do restrict liberty unduly, the committee can bring them to the attention of the
legislature.

Disagreement about Rights

[Catherine Blyth] says it’s no accident that historical periods when conversation was revered, such
as the Enlightenment, have been most fruitful for intellectual thought, scientific discovery and
respect for individual rights.758
Human rights require protection. To protect a human right it is necessary to demonstrate
the existence of a human right. Rights need to be articulated, defined and accepted before
they can be implemented.

This, however, is a problem because of disagreements about rights. Human rights would
be so much simpler if there were some authoritative declaration by which everyone
abided. Unfortunately this is not so because human rights are not written on tablets of
stone. In consequence much uncertainty surrounds them. There is no way we can prove
authoritatively the existence of human rights, define their scope, resolve conflicts
between them nor determine the extent to which they can be implemented or protected
when resources are required (since finite resources cannot be infinitely deployed).

So, despite broad agreement as to the desirability of human rights, and some consensus
about specific rights, there is still considerable uncertainty. This uncertainty can detract
from their moral force. It also lessens the likelihood that a legislature will implement
them - as long as there is uncertainty it is impossible to point a legislature towards a clear
duty to protect a particular right.143

Pursuit of Happiness
In a liberal democracy citizens are free to pursue happiness.144 This pursuit is made
possible or is underpinned by a combination of individual rights and social rights.

Individual rights confer freedom on the citizen to pursue happiness in their own way
without molestation - as the maxim puts it, true freedom is your own road to hell.145 In
other words, the effect of possessing a shared commitment to rights is to foster and
protect diversity as people pursue happiness and fulfilment in their own way. For
example, there is commitment to freedom of religion, but there is a diversity of religious
values, displayed when a person embraces one religion rather than another or no religion
at all.
Social rights are the foundation of institutions such as parks, schools, hospitals and
libraries that enhance the pursuit of happiness. As Amartya Sen (b 1933) puts it in his

142. Neil (2008)

143. These questions are discussed in Chapter 18 Classification of Values.
144. Commentary 19.16.
145. For discussion of the connection between happiness and moral dilemmas see Bagaric
(2006).
 312 Chapter 19 Choice of Values
capability theory, it is not enough for citizens to have a right, it is also necessary that
they have the capacity or capability to use it.759 Social institutions are one significant
means of providing this capability.

Some historical perspective will further illuminate the contrast between shared values
that underpin human rights and the different preferences that are enlivened when
exercising those rights in pursuit of happiness. Centuries ago England was an agrarian
society and common law was the major source of law. This society lived close to the
edge. There was, for example, constant threat of death from starvation following a poor
harvest. In this society, with no organised police force, there was also a constant threat of
violence and civil strife. In these circumstances it is not surprising that law was closely
connected to rights, especially the right to life. Trespass by a neighbour’s cow onto your
field was not only a dent in profits but could be a threat to the winter food supply.

Once society had moved past the time when survival in a near subsistence economy was
the dominant concern, law became less concerned with basic issues of life and liberty as
the industrial mills started to churn out a supply well above subsistence level. At the
same time citizens interacted more and had more spare time.

Consequently there was now a substantial sphere of civil life, founded on surplus time
and surplus income, which was not preoccupied with survival. In these circumstances
society needed law not only to guarantee life but to enhance it. Law was now no longer
concerned only with what was right or wrong, or necessary, but also with what was
better or even best. Law was concerned not only with protection of life but pursuit of the
good life, the greatest happiness of the greatest number rather than just survival of the
species. From this time onwards, many new laws would not necessarily involve serious
issues of human rights.

And, we might note, new laws were largely statutes, the heralds of the interventionist
state, rather than common law innovations. This change broadly coincided with a major
change of emphasis in legal ideology. In the days of common law, when law was
substantially about rights, natural law was the dominant legal ideology. It proclaimed
that the only valid law was a law based on universal moral standards, such as those that
underlay human rights. As statute law came increasingly to be used there was more
acceptance of the positivist view of law. Law was what a legislature said was law.
Questions of moral standards and rights were separated from determining whether a law
was a valid law. One reason that this was possible is, as intimated above, that laws made
by statute were often matters of social preferences to improve society rather than
fundamental liberty.

This historical sketch suggests the following means of distinguishing, in broad terms, the
sphere of human rights from other areas of legislative activity. For this purpose, consider
the scope of legislative action as represented by two circles, with one inside the other.
The inner circle is for human rights, matters which are essential for survival

759 Sen (1985). Commentary 19.17.

 Chapter 19 Choice of Values 313
and for basic decencies and standard of living in a civilised society. This area of human
activity is involved with the law of rights and wrongs, human rights and the legal wrongs
created by tort and criminal law to protect those rights. It is, as mentioned, the areas of
activity originally regulated by the older form of law, common law, which had a strong
affinity with natural law.

The outer circle is for matters not involving human rights. It does not involve matters
relating to life and liberty but questions of life style and how liberty is exercised in
pursuit of happiness. It represents those areas of our life where we deal with spare time
and surplus production (time and production that are not devoted to staying alive).
Although these involve matters of value, they are not values of a higher order, but in
many cases are matters of taste or personal preference. This sphere of our lives is
regulated more by statute law than common law.

Yet a qualification is needed. Legislation has layers of policy which can be represented
as a pyramid. Sometimes the bottom layers are questions of right while the higher layers
are detail. For example, debate about what equipment to put in a children’s playground is
not, in isolation, an issue of rights. Yet the underlying notion that a child is entitled to a
decent upbringing involving recreation, exercise and the company of other children is a
matter of rights. Similarly, sacred institutions such as trial by jury, and revered principles
such as the right to silence are not necessarily inherent to human rights. Rather they are
chosen ways to implement the citizen’s right to procedural justice in the courts.

Markets
Greed is good.760
Introduction
One of the prominent institutions especially in first world communities is the market. It
requires special attention because it incorporates a special mixture of public and private
interest. The account of the market which follows portrays it in theoretical, formal and
simple terms. While in practice it yields much of the good that its supporters claim it
does, it also has shortcomings.

Many of these shortcomings, however, occur because in practice, for a variety of reasons
the market is often not allowed to operate as it should. Some other, shortcomings,
however, are inherent in the market itself. Governments often enact legislation to counter
these shortcomings, which are labelled market failure.

When the nature of the market has been explained, discussion turns to two major
economic questions - productive efficiency and distributive justice. It considers the
extent to which the market answers these questions.

Stated shortly, the market is most adept at delivering productive efficiency. Distributive
justice, however, is complex and the market delivers it only in some

760 In the 1980s this was the catchcry of share traders that was shouted along the canyons of
Wall Street.
 314 Chapter 19 Choice of Values
measure. Consequently it is necessary to consider other means of attaining it, including
the work of John Rawls. Rawls is a major figure because he proposed a means of
providing distributive justice that was largely consistent with the productive capability of
capitalism,

Markets
Markets are based on self interest. In a market a self interested seller wants to obtain
maximum profit for their goods, while a self interested purchaser wants to obtain
maximum satisfaction for their dollar. Self interest of sellers leads to production of
goods. Rivalry among sellers leads to competition. Competition leads to efficiency,
innovation and lower prices. Innovation and lower prices attract buyers who purchase
goods. Purchase of goods provides revenue for sellers. By this means competition leads
to satisfied sellers and satisfied buyers. This is a good result for the individuals. Since
any one can, in principle, be a buyer or seller, the market can satisfy many individual
wants. By doing this it also satisfying the social need of keeping the people fed and
clothed.

Thus the market is a wondrous institution since it enables individual pursuit of self
interest to achieve both personal satisfaction and public good. It holds within a special
intermixture of communal and individual benefits and values. This is illustrated by the
mixture of virtues that the market promotes or requires - ‘self reliance and individual
responsibility,’761 innovation, technical, economic and political rationality,762 the saving
of costs,763 and efficiency.764

Given the widespread use of the market, it is not surprising, therefore, that many rules of
commercial law are directed towards ensuring that the market works properly. Economic
policy underlying these rules is ‘to promote the efficient allocation of resources’.765
These rules ‘bear the stamp of economic reasoning’ because they encapsulate ‘an
inarticulate groping towards efficiency’.766 Their effect is to reduce transaction costs and
so enhance productivity. Thus, Cooter argues, ‘as different as the legal and economic
approaches are, they frequently lead to the same conclusion’; consequently, ‘the same
legal rule that legal scholars defend as just, economists defend as efficient’.767

Productive Efficiency
Productive efficiency is one of the major advantages of the market. It involves
producing more for the same cost or producing the same at less cost than before. Rivalry
between sellers in competitive markets will naturally push towards productive efficiency.
Productive efficiency yields one of two outcomes. First, it often leads to an increase in
productivity because as firms increase efficiency they can produce more for

761 Finn (1989)

762 Matheson (1997)
763 Sawer (1970)
764 Mitchell (1990)
765 Posner (1992) p 22
766 Posner (1992) p 23. See also Campbell (1968).
767 Cooter (1988) pp 4-5.
 Chapter 19 Choice of Values 315
the same cost. Second, it is always possible that firms will produce the same amount as
before but sell it cheaper. This option is least likely because if firm can sell more it will
earn more revenue.

It is a prevalent but often unstated criterion among many economists that greater
productivity is always a greater good is a.768 This view, however, has been challenged.
Some argue that more is less and less is more. In arguing this, they do not challenge the
desire to produce more efficiently, but the desire to produce and distribute more
goods.769 Their reasons are underpinned by a commitment to non commodity values,
being items that the market cannot provide, which may be excluded by excessive
emphasis on productive efficiency.770

Distributive Justice
Why should people care if some individuals will become very rich under a low tax regime, if the
economic prosperity of the majority is substantially lifted?771
Distributive justice, that is, distributing wealth justly, is a well supported value but a
question arises. What is a just distribution of wealth and how it can be achieved?

Market
One view is that the market determines distributive justice because in the market each
individual receives what they deserve. This proposition, however, is only partly true.
What you can purchase in the market depends on your income. Income often depends on
hard and diligent work, something which is in the control of many. But it also depends
on factors that are potentially beyond the control of the individual such as health, natural
talent and the opportunity to acquire skills.

Socialism
Opposing this extreme capitalist line is the extreme socialist view that the only fair
distribution is one that is totally equal.772 This has some theoretical merit, but on the
basis of many attempts at practice, seems to fail miserably when attempts are made to
implement it.773

John Rawls
Since neither pure market forces nor pure equality are compete answers to the question
of distribution other methods are proposed. One of the interesting ones is the approach of
John Rawls (1921-2002). In his Theory of Justice Rawls tried to formulate principles for
defining justice which combined socialist notions of equality with liberal notions of free
enterprise.774 The theory assumes that we are rational. Therefore, if we were asked to
make a decision about what we wanted, even when confronted with

768 Posner (1992) p 530, Baumol (1991) p 5 ('production is everything in the long run'),
Jackson (1994) pp 436-437
769 See Schumacher (1989).
770 Stewart (1982-83)
771 Ingram (1996)
772 For discussion of equalitysee Baker (1990)
773 See Duggan (1997) and Haddad(1990).
774 Rawls (1971)
 316 Chapter 19 Choice of Values
uncertainty, we will make a rational response. This rational but hypothetical response
that Rawls depicts is the mechanism for arguing that the current state of society,
involving unequal distribution of wealth, is based, in broad terms at least, on consent.

Then the theory takes us back to the State of Nature, which existed before humans
entered society. There, humans were in what Rawls calls the Original Position. Being
rational, people will want to form and join a society only if they are better off in it than
out of it. Hence, society is founded on a social contract.775 It is not an actual contract, but
a notional one, the deal we would make if given the opportunity. So if law and society do
not give what this notional contract demands that they should, they lack legitimacy.

In this situation, then, what sort of society would we want? If we could actually predict
how any society could function we would be able to make a fully informed choice. But
we cannot. Specifically, we cannot predict how we will fare economically in the society
created by rules that we choose. We may be prosperous or destitute, or somewhere in the
middle. This want of information Rawls labels a veil of ignorance. Because of it, we
cannot design social institutions that best serve our personal needs regardless of how
they affect others.

Given this, how would we choose or design the sort of society we would want to live in?
What principles should regulate it? Rawls argues that there are two key principles for
this. One is the liberty principle. Each individual has a right to the maximum amount of
liberty compatible with a like liberty for others.

The other is the difference principle. Beneath the veil of ignorance we could not be sure
when we joined society how we would fare economically. If we are rational we have to
allow for the possibility that we or our loved ones may be the worst off members of
society. Being rational we would want to make sure that in that case we would be well
off as possible. In other words we would want the lot of those who are least well off to
be as good as it could be. Social inequality is justified, on this basis, only if it provides
sufficient benefits to the worst off.

This approach is adopted from game theory which tries to explain behaviour in
uncertainty.776 Players in the game of citizenship adopt a strategy which maximises the
minimum position. They do this by implementing the difference principle which says
that ‘situation ‘a’ is to be preferred to situation ‘b’ only if the least advantaged members
of society is better off in ‘a’ than the least advantaged would be in ‘b’’.777

A possible objection to this argument is that rational people may choose to be equal.
Further, equality as a criterion for distribution is morally defensible. Why, therefore,
would they not choose to be equal? The answer to this question is that making everyone
equal has merits as a principle of distributive justice, but it has problems for production.
Socialism for all of its moral idealism, stifles initiative and is relatively

775 Solomon (1990)

776 Lucas (1989) p 185
777 Scruton (1982)
 Chapter 19 Choice of Values 317
unproductive. Capitalism, for all of its inherent self-interest, unleashes enormous powers
of production. Therefore given a choice we would choose capitalism because those who
are poor and disadvantaged will be better off unequal in a capitalist welfare state than
completely equal in a purely socialist state.

Thus, inequality can be justified when two requirements are met, one concerning liberty
and the other concerning economics. The economic requirement is that society provides
adequate benefits to those who are least advantaged. The liberty requirement concerns
access. Social and economic advantage must be open to all. There cannot be a privileged
class benefiting from licences or favoured treatment from the government. The game of
life must be played on a level playing field, so that, in principle, each of us must be able
to make it to the top.

One of the major criticisms of this theory comes from Robert Nozick (1938-2002), a
Harvard colleague of Rawls.778 One of his central points is that there is conflict between
the liberty and the difference principles. Liberty entails the right to earn and prosper,
while the difference principle wants to appropriate some of that prosperity for others.
This, Nozick argues, would stifle the very enterprise which creates the assets that can be
redistributed.

Choice of Values
It now seems fairly clear that humans, including legislators and judges, have a choice of
values. There are two major reasons for this conclusion. First, the arguments that there is
one unified value system are just not strong enough to convince. Second, it is an easily
observable fact that people do hold and deploy different values; this observation is made
in everyday life and also in the legal tasks of making and interpreting law.

A simple conclusion follows. Since there is a diversity of values, any analysis of making
and interpreting law must acknowledge it, and specifically state that those who make and
interpret law can choose the values which they utilise in these tasks. This, however,
raises an important issue. How can those who make and interpret law make this choice in
a manner that is rational? The next three chapters attempt to answer this question.

Commentary
Commentary 19.1 Footnote 11
In English jurisprudence one of the influential proponents of this view that humans are
rational animals was the philosopher John Locke (1632-1704) in his work Two Treatises
of Government (1690). These treatises, it is also worth noting, used this notion that
humans are rational to justify democracy.

Commentary 19.2 Footnote 17

Two House of Lords cases illustrate reasoning by induction:
(1) Donoghue v Stevenson [1932] AC 562

778 Nozick (1974)

 318 Chapter 19 Choice of Values
(2) Shaw v DPP [1962] AC 562.
These are discussed in Chapter 6 Induction.

Commentary 19.3 Footnote 20

There is a pointed reference in the Lord’s Prayer to the notion that humans should
behave in a manner that God has willed them. The relevant part says: ‘Thy will be done
on earth, as it is in heaven’.

Commentary 19.4 Footnote 21

Covey (1998) p 33 expresses the notion that God has ordained the way in which humans
should behave. For this Covey quotes Cecil B de Mille, the producer of the film The Ten
Commandments. De Mille said: ‘It is impossible for us to break the law. We can only
break ourselves against the law’.

Commentary 19.5 Footnote 52

The text states the view that the values that underlie law derive from the esoteric
knowledge of lawyers. This notion was highlighted and underpinned by the assertion that
common law resided in gremio judicis, that is, in the bosom of the judge. Sometimes,
though, instead of the singular, in gremio judicis, the expression is put in the plural, that
is, in gremio judicium, in the bosom of the judges. Sometimes the expression in gremio
legis, in the bosom of the law is used. For illustrations of reasoning based on this outlook
see Willis v Baddeley [1892] 2 QB 324, 326 per Lord Esher MR, and Harnett v Fisher
[1927] 1 KB 402, 424 per Lord Scrutton LJ.

Commentary 19.6 Footnote 53

An illustration of this approach that there is one correct moral code is an assertion by
Chapman (2003). He said that ‘the common law system always gets it right in the end’.

Commentary 19.7 Footnote 63

This statement ‘for the kind of social experiment that you are making, I would not
sacrifice a frog’s hind legs’ was said by the Russian scientiest and physiologist Ivan
Pavlov (1849-1936) after returning from his first visit to the United States in 1923 as he
publicly denounced Communism and asserted that the basis for international Marxism
was false.

Commentary 19.8 Footnote 71

For further discussion of diversity and agreement regarding values see Krygier and
Glass (1995), Honigman (1964), Honore (1993). If accepted values can change it means
that legislators need to change law to accord with any change in values. For discussion of
this see AF Mason (1993B) and K Mason (1990).

Commentary 19.9 Footnote 95

This diversity of outlooks is not necessarily fatal or threatening because, as Abercrombie
(2000) p 373 points out, societies continue to ‘exist despite considerable disagreement
over values’. Societies still survive and thrive even though not every member of society
possesses precisely the same set of values.
 Chapter 19 Choice of Values 319
Commentary 19.10 Footnote 96
Heydon’s Case (1584) 3 Co Rep 7a, 7b prescribes that statutes should be interpreted one
way rather than another:
(1) A court should interpret a statute to make it pro bono publico, that is, for the
public good.
(2) A court should not generally interpret a statute so that it operates pro privato
commodo, that is, to create a private or personal gain for some narrow sector of the
community.

Commentary 19.11 Footnote 113

The notion of reciprocity is exemplified by the teaching of Jesus Christ in the Scriptures
propounding the golden rule of moral action: ‘Do unto others as you would have them do
unto you’. This is taken from St Matthew’s Gospel 7:12.

Commentary 19.12 Footnote 133

Public goods in the strict economic sense of the term are goods that must be supplied
communally because they cannot be withheld from one individual without withholding
them from all. Examples are defence, street lighting and police protection. There are also
quasi (or non pure) public goods. Examples are education and health. These are provided
publicly because it is felt that their quality and quantity, and the fairness of their
distribution, would be compromised if they were privately supplied.

Commentary 19.13 Footnote 136

Bentham (1789) pp 12-13 formulated his version of utility on the following lines. He
referred to a ‘principle of utility’, which regards as good action an action that has a
‘tendency to augment the happiness of the community is greater than any it has to
diminish it’. This is echoed in the concept of net benefit as measure of the value of a law,
as discussed in Chapter 11 Nature of Net Benefit.

Commentary 19.14 Footnote 137

In Hurd (1992) p 2209 says that the principle of the greatest happiness of the greatest
number involves ‘maximizing good consequences or minimising bad consequences’.
Francis Hutcheson who coined the phrase ‘the greatest happiness of the greatest number’
was Adam Smith’s teacher at Glasgow University. Adam Smith went on to construct a
vast utilitarian analysis of economic behaviour in his book The Wealth of Nations (1776).
There he describes the ‘invisible hand’ that guides the market, and in so doing directs
human greed towards overall economic good by ensuring economic productivity and
efficiency.

Commentary 19.15 Footnote 140

While legislation is the obvious source and authority for a constitutional guarantee of
rights, the Australian judiciary has legislated for some rights by their method of
interpreting the Constitution. They ‘read down’ a legislative, executive or judicial power,
which involves giving it a more restricted meaning or scope than it bears on the surface.
To do this court use the mechanism of implied qualification. They find holding that it is
subject to an implied qualification. This implied qualification is that the power will not
be exercised in a way that interferes with the right.
 320 Chapter 19 Choice of Values
To illustrate this judicial manoeuvre, in Australian Capital Television v Commonwealth
(No 2) (1992) 177 CLR 106, 108 ALR 577 the High Court of Australia read into the
Commonwealth Constitution an implied right to freedom of political speech. For
discussion of this decision see Lee (1993), Williams (1996) and Zines (1994).

The juristic basis of this reasoning is both interesting and arcane. The background is
that, in formal terms, Queen Victoria enacted the Commonwealth of Australia
Constitution Act (1900) with the advice and consent of the two houses of the United
Kingdom parliament, the House of Lords and the House of Commons. Section 9 of this
statute set out the Constitution for the Commonwealth of Australia. The High Court
claimed that the right of free political speech is based on an implied qualification to the
text of the Constitution, while at the same time doing two things that undermined their
reasoning:
(1) They did not observe the guidelines as to when it is appropriate to read a statute
(the Constitution in this case) by reference to an implied qualification. (Implied
qualifications and the guidelines are discussed in Christopher Enright Legal Method
Chapter 14 Classifying Meanings).
(2) The court ignored the manifest intention of the founding fathers, who drafted the
Constitution. The founding fathers considered whether to have a bill of rights and
decided to have not a full bill but some specific guarantees of some select freedoms. This
makes abundantly clear that where a right is not expressly protected in the Constitution
there was no actual or imputable intention that it should be implicitly protected by an
implied qualification.

In formal terms Australia is still a colony of the United Kingdom since the United
Kingdom enacted its Constitution and constructed it as a controlled constitution. It is a
controlled constitution since the only method of legislative amendment is, in broad
terms, to enact a statute that is approved by majorities specified in s128 of the
Constitution. The relevance of this excursion into constitutional law is that in
proclaiming that there is a right of free political speech implicit in the Constitution the
High Court is giving this alleged right juristic foundation by drawing on the superiority
of the United Kingdom parliament over Australia, even though the colonial status of
Australia is now nominal rather than substantive. In plain language the judges are
sheltering their reasoning behind Queen Victoria’s skirts.

If the court was so minded as to create a guarantee of free political speech there was a
more logical path to take. To do this the court could have drawn on the ideas in John
Locke’s Two Treatise of Government (1690). The basic ideas are that men and women
naturally have rights. They form government by consent when they freely exercise their
rights to come together in a civil society. Their motive for this is a measured decision to
make a choice. One option is to enter civil society. This involves some surrender of
liberty but also brings benefits. The other option is to live in isolation where they have
no government ruling over them but more freedom. Men and women choose to
voluntarily surrender some liberty to live in civil society because they judge that the
gains in doing so are greater than the losses. To echo a notion that underpins the analysis
forming law, by coming into civil society people enhance their net benefit.
 Chapter 19 Choice of Values 321
Given that government is based on free consents given by free people a government has
no moral or political mandate to act in a way that inhibits liberty more than is necessary
for the proper functioning of civil society. While determining these limits involves
debatable assessments, in some cases action will manifestly fall outside the
government’s consent based mandate. In these cases the action is unconstitutional since
it violates the fundamental premises on which the constitution was established.

To come now to the point, the High Court could have argued the case for free political
speech by utilising Locke’s analysis of the basis of civil society. That said, while
Locke’s views provide some support for a court to take this action there would still be
objections to it. First, s128 of the Constitution provides a mechanism for amending the
Constitution, which involves the consent of the Australian people. So when the High
Court creates this right to free political speech and does so in its own image it tramples
on the democratic rights of the Australian people to amend their Constitution. Second, it
violates the rule that the High Court has found implicit in the Constitution, namely that
the court will exercise only judicial power and not, therefore, exercise legislative power.
Creating a right of free political speech crosses the line between interpretation and
legislation.

Commentary 19.16 Footnote 144

In the United States, the ‘pursuit of happiness’ is one of the ‘unalienable rights’ of
people enumerated in the Declaration of Independence, along with ‘life’ and ‘liberty’. In
Butchers’ Co v Crescent City 111 US 746, 757, (1884) pursuit of happiness was defined
as being ‘the right to pursue any lawful business or vocation, in any manner not
inconsistent with the equal rights of others, which may increase their prosperity or
develop their faculties, so as to give them their highest enjoyment’.

Commentary 19.17 Footnote 146

Lack of institutions to confer and support social capability tends to be more a problem in
the undeveloped rather than the developed world. That said, an interesting anecdotal
illustration of incapability and how corrupt governments can malevolently impose it on
the under privileged arises in relation to electoral practices in developed countries. This,
according to the anecdote, occurs in jurisdictions where the term of the legislature is not
fixed, where the government can decide the date of an election and where voting is
optional. In these cases a government in a country with a cold climate that fears
unpopularity among the poorer sections of society can hold an election in mid winter.
Some poorer people will be deterred from voting if they have to walk to the polling
booths in the freezing cold; richer people do not have to worry since they can drive there
in air conditioned vehicles.
Chapter 20
Social Choice
Introduction
Making Law
Interpreting Law
Commentary

Introduction
In principle policy is the means for making and interpreting law in a rational manner. In
the discussion so far, however, it has been implicitly assumed that law was being made
by one rational mind as can occur when an individual makes a decision. Laws, however,
are made and interpreted as social not individual acts. As social scientists term it, making
and interpreting law constitute a social choice. How, therefore, we must ask, can a
society make rational decisions when making and interpreting law?

Being an abstraction, society cannot think or decide for itself. Like a corporation, which
is also an abstraction, it has ‘no mind of its own any more than it has a body of its
own’.779 Hence on its own society cannot take action, and cannot think, feel or believe.
Consequently, these actions have to be done for society by human persons. Society has
to exercise its choices through human agents. These agents have to decide the two
questions that decision making according to policy entails. One is the question of
evaluation - what effects (or outcomes) are worth pursuing? The other is the question of
causation - what means might cause these desired effects?

Causation is potentially scientific. However the science is imperfectly known, leaving

room for choice. Some person or persons have to decide, in the absence of perfect
knowledge, whether a particular law or interpretation of a law will cause a desired effect.

Evaluation raises a greater problem than causation since there is no science involved at
all - there is no rational means of determining the values that should be utilised for
making and interpreting law. Consequently, there is no official system of values set in
tablets of stone that control the tasks of making and interpreting law.

In contrast to the case of a social choice, an individual engaging in purposive action is

not troubled by this lack of science for causation and evaluation. First, they judge
causation as best they can by applying as much or as little science as they choose.
Second they simply deploy any value system they wish in their pursuit of the good life,
since they are not answerable to any one else. Moreover, from one perspective at least,
an individual does not have any problem in knowing their own values because values
equate to revealed preferences - if an actor wants or chooses X rather than Y they

779 Lennard's Carrying CO V Asiatic Petroleum CO [1915] AC 705 per Lord Haldane LC
322
 Chapter 20 Social Choice 323
value X more than they value Y. It is a case of thought following action not thought
following action.

Thus there are questions for both causation and values when society makes legal policy
as a basis for making and interpreting law. First, how does society judge causation in the
absence of science to guide it? Second, since society does not have an accessible set of
values in the way that an individual does, how does society decides in a rational manner
the values that it should use for making and interpreting law?

For both of these questions there is an answer that is simple in principle but complicated
in practice. Since society is composed of individuals, and also exists for their benefit, the
most rational way to proceed is to try to amalgamate individual choices into a social
choice. This has to be done for both making and interpreting law.

Making Law
Democracy provides a widely accepted means of exercising the social choice that
making law entails by requiring, in its common implementation, that laws should be
made by an elected legislature. In principle this makes sense because democracy is a
system of self government, so in a sense, all citizens have a say in the decision.
Specifically, democracy rests on two justifications.

One such justification is based on rights and was propounded by the philosopher John
Locke (1632-1704). In his view we are born free. However, since we are social creatures
we need government and law to enable us to co-exist with fellow human beings and to
reap the benefits of social rather than individual production of goods along with the joys
of living in society. Government, however, involves coercion by others and a consequent
diminution of liberty. Logically, the only way to resolve this dilemma is to constitute
government as self government - in societies which prize individual liberty highly this is
the only legitimate authority.

The second argument is based on self interest. Democracy is based on mutual regard and
non interference of one with another. If society functions in this way it creates a large
sphere of liberty that can be enjoyed by all. It also creates conditions for free enterprise
based on a market economy, which is the road to prosperity.

Democracy, however, while widely regarded politically as the promised land, is still in
many ways a disputed territory. While there is this broad sense that democracy provides
a form of self government there is much debate as to how this should be done and indeed
as to how effectively it can ever be done. Since this debate is complex with many
intersections and by-ways, the best approach here is to sketch some of the major strands
of this debate in order to indicate to the reader some of the major problems and some of
the answers proposed to them. After the outline here, the book discusses these 780 781

780 Commentary 20.1.

781 John Locke Essays Concerning Human Understanding 1690
 324 Chapter 20 Social Choice
problems and possible answers in more detail in the later account of making law in
Chapter 21 Social Choice: Making Law.

Debate about democracy tends to concern one of four major aspects. First, there is
debate about the conception of democracy. If democracy means self government, what
form of government does this beget? One form of democracy is direct democracy where
the people themselves participate in every decision. Another form consists of
representative democracy where voters elect members of the legislature.782 This is the
form invariably used for national governments. There are also other forms of democracy
such as consensus democracy and participatory democracy.

Second, even if there is agreement on the form of democracy, how is it to be

implemented? With representative democracy this raises several further questions. The
most fundamental question is whether an aggregate of individual preferences can ever be
translated into a representative social choice, a concern raised by Kenneth Arrow’s
impossibility theorem. Another important question is the nature of the electoral system.
Are there single member or multi member electorates? What is the voting system? For
example is it proportional representation, preferential voting or first past the post?
Another concern involves the components of the legislature. Is there a second legislative
chamber? If so, what powers does if have? If the head of state is part of the legislature,
what power do they have? For example, can they refuse to assent to legislation?

Third, there can be issues about the operation of a democracy. With representative
democracy one of the issues concerns debate on proposed legislation. How much time is
allowed for the debate? Who can speak? Can the majority use its power to bring the
debate to an end even if there are members of the legislature who still wish to contribute
their voices? Is there a free media which can report the debate? In this regard, many
western democracies greatly limit free speech with regard to (so called) free to air
television and radio by putting severe limitations on access to licences. In Australia, for
example, there are only three major licence holders for commercial television.

Fourth, there are issues about the outcome. When legislation has been passed there is a
problem if the legislation unduly tramples on human rights. More so is this the case if
legislation tramples on the rights of a sector of the population or disadvantages them
economically (so that there is a form of majoritarian tyranny).

Any of these items that have been canvassed can be a factor in determining how
effectively or ineffectively a democracy functions. Yet these are just some of the matters
that can be raised,783 although they are more than enough to demonstrate the problems
that arise with social choice. It is a difficult question and in some ways an unanswerable
question on that there may be no perfect answer to it.

782 Commentary 20.2.

783 Commentary 20.3.
 Chapter 20 Social Choice 325
Interpreting Law
There are three major ways in which a court might interpret law consistently with
principles of democracy:
# Possibility 1 Legislative Legitimacy
# Possibility 2 Metademocracy
# Possibility 3 Judicial Legitimacy

Possibility 1 Legislative Legitimacy

Possibility 1 is the simple case. If a statute is democratically made based on a policy
choice, rationally that policy choice should flow through and govern how the law is
interpreted. In essence, a law should be interpreted by reference to and in accordance
with the policy on which it is based.

Possibility 2 Metademocracy
Possibility 2 is a response to perceived problems with Possibility 1. In practice there is a
problem, which really recycles the problems raised with making law - if there are flaws
in the conception of democracy, or its implementation, operation or outcome, then it
cannot be said with total authority that a statute is democratically made. In turn this
places strictures on how the statute can be democratically interpreted. A response to this
problem adopted by some courts is to interpret the provision so that it functions as
closely as possible to the way it would have been written to function if it had been
democratically made in the first place.

Possibility 3 Judicial Legitimacy

Possibility 3 applies in jurisdictions where judges are elected. In this case there is some
claim that they are cloaked with an elected legitimacy and can therefore make up their
own minds on how law should be interpreted. That, after all, is exactly why they were
elected (or so it seems).

Consequences of Differences
This difference of views has a consequence. Much of the debate about the legitimate
way to make and interpret law is overtly or covertly debate about the true nature or best
form of democracy.

Shortly stated, this book proposes the conclusion that pure reason cannot irrefutably
resolve this dispute. At best one can propose a plausible view. Proposed here is the
notion that while representative democracy has flaws in both principle and practice, it is
the most workable system available. Reforms are needed in most jurisdictions to
eliminate glaring defects and thus make the system more democratic and effective.
Nevertheless, the safest course for courts, even while these defects remain unrectified, is
to interpret statutes by reference to their original legislative intent. This makes good
sense because the resulting interpretation derives legitimacy on the basis that the
legislature is democratically elected.784

6.

Commentary 20.4.
 326 Chapter 20 Social Choice
Commentary
Commentary 20.1 Footnote 2
Democratic notions of a social choice provide justification for a legislature to take
purposive action by enacting laws. Max Weber, however, advances another source of
legitimacy or justification for legal authority. One of his ideal forms of authority
consisted of rational legal authority. Rational law-making delivers the goods, both
literally and figuratively. It keeps society functioning in a relatively harmonious way. It
helps ensure economic productivity. In short, legitimate government is effective
government. As the adage says: ‘Nothing succeeds like success’. This is reminiscent of
ancient tribes who dethroned their kings when harvests were inadequate to feed the
population, of Roman emperors who palliated the populace with bread and circuses
(panem et circenses), and of 20th century Italy where the dictator Benito Mussolini
(1883-1945), according to popular legend at least, acquired legitimacy because he made
the trains run on time.

Commentary 20.2 Footnote 4

Miller and Barnes (2004) put an interesting slant on this in their study of making policy
and making law in the United States. The conventional view is that Congress makes law
and policy, the executive government implements it and the courts adjudicate it. Their
study, by contrast, shows that all three branches of government play roles in making,
enforcing and legitimising policy. There is, however, not even a roughly consistent
pattern of relationships between the three branches. Each plays different roles at different
times under different conditions.

Commentary 20.3 Footnote 5

Murphy (2003) describes an attempt to make a government more effective and efficient.
In 1968 the Canadian Prime Minister Pierre Trudeau introduced changes to Cabinet
procedure in relation to policy-making. Part of the plan was intended to transfer power to
make policy from public servants to Cabinet. Part was also to introduce some procedural
rationality by introducing ‘orderliness and informed deliberation and discussion into the
procedure’ for making policy (p 158). A major means of implanting these reforms was to
require a Minister to draft, sign and present a formal Memorandum to Cabinet before
Cabinet could discuss an issue. The Memorandum had to present a concise statement of
the matter for consideration, the possible solutions to the problem, and the advantages
and disadvantages of each option for solving the problem.

Commentary 20.4 Footnote 6

For discussion of judicial use of policy see Symmons (1977), Bell (1983) and
Richardson (1985).
Chapter 21
Social Choice: Making Law
Introduction Direct Democracy
Representative Democracy Deliberative
Democracy Social Democracy Conclusion
Commentary

Our governments are self-proclaimed democracies, and yet the democratic component
within them is subject to such enormous pressures that the key decisions in public policy
seldom appear to be the output of any democratic choice.785

Introduction
As the discussion in preceding chapters has made clear, there are two fundamental
processes in formulating policy for making and interpreting law. The legislating or
interpreting body has to deal with the question of causation. It has to predict the effect or
outcome that any version of a law or any meaning of an ambiguous provision in a law
will cause. The legislating or interpreting body also has to deal with the question of
evaluation. It has to evaluate each of these effects or outcomes in order to decide which
is best.

When a society makes a policy decision, however, issues arise with causation and
evaluation that do not arise when an individual does so. To explain this let us start by
considering the position of an individual. First, an individual can adopt or ignore the
findings of science when deciding on causation. In the areas of causation that science has
not yet adequately explained an individual can decide any issues of causation in the
manner that they deem fit. Second, an individual can answer the question of evaluation
according to their own lights. In the absence of a comprehensive and universal system of
values binding on everyone an individual can deploy any value they choose when
deciding how to act.

Now let us consider the position of society. Society, consists of a vast collection of
individuals whose values and whose beliefs on causation do not totally coincide. The
question then arises as to how a society can formulate a preference on these questions
that determines them in a fair and rational way. Democracy is the oft given answer, but it
is an answer that raises further questions since there is debate about the nature and form
of democracy. These questions are studied further in this chapter. It considers some of
the major forms of democracy - direct democracy, representative

1
.
2
.

Ison (1985-1986) p
1 Commentary 21.1.
327
 328 Chapter 21 Social Choice: Making Law
democracy, deliberative democracy and social democracy - and explores how and the
extent to which each can justify the social choices entailed in legislation. The chapter
concludes by making proposals for reform to improve the democratic character of the
social choice that brings legislation into existence.

Direct Democracy
Democracy is not philanthropy; it is not even altruism or social reform. Democracy is not founded
on pity for the common man; democracy is founded on reverence for the common man, or, if you
will, even on fear of him. It does not champion man because man is so miserable, but because man is
so sublime.786
Introduction
With direct democracy in pure form, sovereignty is vested in the assembly of all
citizens. Consequently all citizens directly participate in making decisions of state in this
assembly. Direct democracy of this pure kind was practised in the city state of Athens
from about 508 BC for about two centuries. A similar system operated in ancient Rome
from about 449 BC to the death of Julius Caesar in 44 BC.

Direct democracy was able to work in these city states because the small size of the
population allowed it. Athens had a population of about 300,000 and gave suffrage only
to adult males. In nations of today with mass suffrage there are practical problems in
obtaining a vote from citizens on every piece of legislation, (although electronic
technology may alleviate some of the problem by allowing an instantaneous ‘yes’ or ‘no’
vote or some other simple choice as now is commonly the case with television talent
shows).

However, even if the problem of voting is resolved, there is the problem of deliberation.
Just voting on a proposed law is not really adequate consideration of it. Legislation of
even moderate complexity requires deliberation and exchange of views. Ideally this
proceeds to careful policy formulation possibly followed by amendment to the original
proposal and then legislative enactment.

Formal Implementation
In the modern garden of political freedom direct democracy is a small plant
overshadowed by the sprawling growth of representative democracy. Its formal
implementation is confined to several specific types of legislative operations 787 that may
be allowed by a constitution.788 These consist of the following:
(1) Legislative Power. This can consist of one or a combination of two provisions.
(i) Initiation. Citizens can initiate legislation by petition if they obtain sufficient
signatures. This may be an initiation for making proposed legislation or for repealing
existing legislation. There are two broad possibilities if the petition is successful:
(a) The legislature must consider enacting the proposed legislation.

786 GK Chesterton Heretics

787 Morris (2004) considers with regard to the New Zealand provision how democratic such
provisions really are.
788 Commentary 21.2.
 Chapter 21 Social Choice: Making Law 329
(b) The proposed legislation is put to a referendum for approval.
(ii) Referendum. The constitution can require that a law of particular kind or in
particular circumstances is referred to the people who have power to approve or
disapprove it at a referendum. In these cases the legislature may be constituted solely by
the people, or the people may be one component along with the existing elected
legislature. Commonly where citizens can initiate legislative action by a petition the
provision also allows them to vote on it.
(2) Executive Appointments. Citizens may be authorised to vote public officials into
office, or to petition to recall an elected official so that their office is vacated.

Informal Implementation
There are however less formal means of implementation. One consists of what is
labelled participatory democracy. This entails citizens being given opportunities to make
a meaningful contribution to decision making. An obvious way that this can be done
consists of consultation with interested parties by the government prior to taking action,
something that now commonly occurs. However, if the consultation is not adequate this
is partisan rather than democratic. Public debate, or course, is another means of
consultation where citizens can express both their thoughts and their feelings. Finally,
there can be devolution of decision making power to local communities, sometimes
referred to as grass roots democracy.

Representative Democracy
Verily I say unto you, inasmuch as ye have done it unto one of the least of these my brethren, ye
have done it unto me.789 790
Introduction
Social choice for making law is made in most cases through the institution of
representative democracy when legislatures elected by the citizenry pass statutes. While
this has many benefits, it also is fraught with problems.

Operation
In practice representative democracy involves a two phase process. Citizens vote at the
ballot box to elect legislative representatives. This part is contentious because there is no
perfect method of selection of candidates. Such is the nature of possible electoral
systems that there will be anomalies regardless of which voting system is deployed.

Second, once elected, these representatives make laws on behalf of their constituents.
There are two approaches as to how representatives should behave. One approach is
enunciated in the doctrine known as Edmund Burke’s Principle. Representatives, while
elected by the people, are elected to exercise their own judgment and to act according to
their own conscience. An alternative approach is that a representative must at least
consider the views of their electors; however in extreme form this view says that
representatives are mere delegates of the electorates and should act only on

789 St Matthew's Gospel 25:40

790 Commentary 21.3.
 330 Chapter 21 Social Choice: Making Law
the wishes of their constituency. Such an approach can, at least in theory, be enforced by
provisions for recall of an elected member who does not comply with the wishes of their
constituents.

Problems
[I]n competing against the vast entertainment industry for the public’s flickering attention, the
media have largely grown indifferent to reporting the complexities and difficulties of policymaking
in favour of an eye-catching but adversarial and often contemptuous attitudes to politics. There are
several problems with representative democracy. One is a problem inherent in
aggregating individual choices to construct a social choice, a problem exposed by
Arrow’s impossibility theorem. Other problems concern authenticity, agency and
domination.

Problem: Authenticity
Legislators’ choice on behalf of their electors is authentic only when full preconditions
for democratic elections are met.791 792 These conditions include that the system of voting
is fair, that voters have full access to the information necessary to make an informed
choice,793 that candidates have fair and equal access to the media regardless of their
resources, and that legislators are not corrupted by money or improperly swayed by
lobbyists. The problem is that in the practice of democracy these conditions are often not
fully achieved, and in this way the resulting choices made by legislators are not
authentically representative.

Problem: Aggregation
Social choice refers to a choice for society made by aggregating choices of its individual
members. In this sphere there are two such choices, election of legislators by the
electorate and the making of a law by legislators. For both of these tasks there are
arguments that aggregation of individual choices cannot produce a social choice that
perfectly represents the constituent individual choices.

Arrow’s Impossibility Theorem

Study of social choice by mathematicians and political scientists has tried to show how,
if at all, a social choice can be made which is squarely based on, or directly derived
from, the aggregated preferences of individual members of that society. If it can be, the
social choice is seen as legitimate because it represents the wishes of a majority of
individual members.

In fact, research suggests that such a choice is not possible because society as a whole is
different from the sum of the individuals, the parts that make up the whole. While this
research is based on complex mathematics, it is easy enough to state the major finding of
this research that is relevant here. This finding is derived from the

791 Button (2007B). Button was quoting John Lloyd, Director of Journalism, Reuters
Institute for the Study of Journalism, at Oxford University.
792 Burnheim (1985)
793 Commentary 21.4.
 Chapter 21 Social Choice: Making Law 331
impossibility theorem of Kenneth Arrow (b 1921)794 and the research of Amartya Sen (b
1933).795 796 This research makes certain assumptions. For example, no member of the
choosing group (voters or legislators) can dictate the outcome, and the ensuing social
choice will satisfy a given principle of optimality. Once these and other proper
assumptions are made, it is just not possible to derive a representative social choice
(called a social welfare function) that is based on or derived from the preferences of
individual members. To this extent the proposed model for making and interpreting law
is, in itself, not fully rational.

Social Interaction
Any attempt to amalgamate individual choices must also involve social interaction. This
very process of interaction may thwart representative aggregation by producing
outcomes that differ from the original intentions of the purposive individuals who make
up the social system.

Electoral choice is a pertinent example. It is not just a decision by individual voters.

Instead it is made in the political process involving organisations such as political
parties, and behaviour such as electioneering, both of which may significantly influence
individuals’ choices. Hence the preference that they start out with may be altered during
the electoral process leading up to their exercising that preference at the ballot box.

Division Between Individual and Social

The notion of numerous individual choices being amalgamated to become a social
choice assumes that there exists a clear division between the individual and the social;
specifically it presupposes that the choice is entirely and purely the work of the
individual unaffected by their social setting. In truth, ‘social systems have properties
13
that both constrain individuals and influence their preferences’. Hence it is not possible
or realistic to conceive a social choice that is constructed purely of individual choices
because social factors will influence the choice.

Bounded Rationality
There is research which suggests that people in organisations such as a legislature
engage in a form of decision-making which seems to be not totally rational and efficient,
although it may still be partly rational. It is called bounded rationality. 797 A person can
make a decision that is good enough (called satisficing) rather than a decision with the
highest payoff (called maximisation or optimisation).798 They do this because their
decision making is limited in two ways - they have limited rather than complete
information so they are not fully informed, and they have limited time and ability to
process the information that they do have.

794 Arrow (1951)

795 Sen (1970). See also Kamesar(1997).
796 Abercrombie (2000) p 287
797 Conlisk (1996), Lipman (1995).
798 Pinfield (1986)
 332 Chapter 21 Social Choice: Making Law
Comment
Despite the acknowledged difficulties inherent in and occurring with social choice, a
social choice made by a legislature, however flawed in principle, is still possibly the best
available general method of making law in a rational way.

First, notwithstanding that there are problems in principle as well as practice in perfectly
translating individual preferences into a social choice both at the ballot box and in the
legislative chamber, representative democracy is still the best available means of
determining and giving effect to social values. To put it bluntly, it is better than any other
method so that it is the best that is achievable. While elected legislators may not be
perfectly representative they are also not totally unrepresentative either. In addition,
elected legislators are beholden to the values of their constituents because failure to
observe these values sufficiently may lead to not being re-elected. Fear of being voted
out at the next election operates as a public pressure between elections to comply with
community standards.

Second, notwithstanding that liberal democracies are pluralist Gesellschaft societies,

there are still many major values shared throughout the community, for example caring
for those unable to care for themselves, providing a basic health care system, nurturing
the environment, and providing proper education for all according to ability. Of course
not every one will espouse them, and not all will espouse them in the same way, in
identical circumstances and to the same extent, but there will still be large areas of
agreement and substantial areas of broad but not complete agreement. So, even given the
inherent problem of social choice, and defects in the way democracy is implemented, a
law enacted by a legislature is likely to be substantially representative of the preferences
and values of voters.

However, as time passes a problem can arise because values can change. Consequently,
in later years, the values incorporated in the statute may not be as relevant as they were
when the statute was passed. This detracts from the legitimacy of any law which is a
based on these changed values. It also undermines the legitimacy of a court interpreting
these laws by reference to their original policy. (Indeed, this is the basis for the argument
that a court should interpret a statute by reference to contemporary values rather than
original legislative policy.)799 800

The obvious answer to this question of changing values is to make periodic reviews of
17
legislation. How this can be done is discussed in the context of causation.

Third, it is possible to offset some of the formal limitations of representative democracy

by combining it with some forms of participatory democracy.
(1) In a general sense the public participates in the democratic process when it
expresses its views on legislation at public meetings and in the media. There is, however,
a problem in that those who can take advantage of these opportunities tend to

799 Chapter 22 Social Choice: Interpreting Law

800 Chapters 13-15
 Chapter 21 Social Choice: Making Law 333
be the articulate and the financially comfortable whose views tend to be represented any
way.
(2) A government can actively consult with and seek input from members of the
public who will be directly affected by proposed legislation. If done properly this will
ensure that the government is aware of how people believe that proposed legislation will
affect them and how they view the legislation.

Problem: Agency
The right of citizens to bear arms is just one guarantee against arbitrary government, one more
safeguard against the tyranny which now appears remote in America, but which historically has
proved to be always possible.801
When representatives vote in the legislature, there is no realistic mechanism that can
ensure that they act in the interests of their constituents. Consequently they are free to act
in their own interests. This is one of the agency costs of having representatives make
laws on behalf of the citizen rather than operate a direct democracy where citizens
themselves make the laws.

Agency costs are allegedly incurred because we are all motivated by egoism (a basic
assumption in rational decision making), so we desire to act in our own interest. Hence
an agent such as a legislator (or judge) may act in their own interest rather than
according to the wishes of their constituents. To the extent that this happens - legislators
act in their own interest rather than in the public interest - individual choices are not
incorporated into the social choice made by legislation, or are incorporated only in a
distorted way.802 803

In the simple case legislators act entirely out of their own personal interest. However,
their incurring of agency costs may involve other parties. Legislators may be swayed
from adherence to constituents’ interests or wishes because the rich and powerful, by
threats, favours, influence or bribes, have caused them to pass legislation favourable to
their interests. There is tendency for this to happen in countries where electoral
advertising is conducted on commercial television on the basis that each party or
candidate has to pay their own cost. Legislators who desire re-election need money to
pay for electoral advertising so they have a strong incentive to do what campaign
20
contributors, present or future, want done.

One way in which the interest groups that become campaign contributors can convey
their wishes to legislators is through lobbying. Consequently, a political system that
houses active and powerful lobbyists is prone to agency costs because lobbyists can
convey, in forceful terms, the wishes of their masters. An illustration of the adverse
effects of lobbying comes from the frequent support that governments give to ailing
industries in the domestic economy. Baldwin and Robert-Nicoud explain how this often
happens. Policy is influenced by pressure groups that incur lobbying expenses,

801 Senator Hubert H. Humphrey (Minnesota)

802 Commentary 21.5.
803 For discussion of the corruptive aspects of lobbying see Girling (1997).
 334 Chapter 21 Social Choice: Making Law
their aim being to create protection. Economically this generates rents (that is, payment
to a factor of production above what is necessary to procure it, the amount needed to
procure it being called its transfer earnings). As an industry expands, competition
increases and erodes rents. But in a declining industry other firms will be reluctant to
enter because costs of entry and establishment become sunk or unrecoverable costs.
Except where the gains from rent are high enough to compensate for this, entrants to a
field are deterred. Thus protection creates rent for a privileged few (which in technical
language means that rents have an asymmetric appropriability). Consequently those who
are losing as an industry declines have two incentives to lobby - they are already losing
and they will gain exclusive rents if they
succeed. So, ‘losers lobby harder. Thus it is not that government policy picks losers, it
21
is that losers [by lobbying] pick government policy’.

Problem: Domination
In a democracy, the majority of the citizens is capable of exercising the most cruel oppressions
upon the minority.804 805
Introduction
An essential idea in democracy is that everyone counts. Consequently, domination of
some by others is anathema to the concept of democracy. There are two aspects to
domination - domination of the minority by the majority and domination of the
democratic process by an oligarchy.

Domination by the Majority

Democracy is founded on majority rule, sometimes labelled majoritarianism. While
representative democracy might be founded on majority rule, there are constraints that
should apply. One consists of a logical prohibition on double entrenchment, the other
concerns oppression of a minority.

Double Entrenchment
A provision in a statute may be entrenched. This happens when a statutory provision
imposes a procedure for passing or repealing a provision that is more difficult to satisfy
than the single majority of votes for ordinary passage of a bill through a legislature.
Entrenchment has two forms, single entrenchment and double entrenchment. Double
entrenchment is also called self entrenchment. Entrenchment, especially double
entrenchment, involves oppression of later generations by an earlier generation.

Single entrenchment is illustrated by s5 of a hypothetical law that imposes a special

procedure - approval at a referendum - for passing the legislation:

5 Change of composition of Upper House

A law to change the composition of the Upper House of the legislature must be approved by
a referendum as well as by the legislature itself.

804 Baldwin and Robert-Nicoud (2007)

805 Edmund Burke Reflections on the Revolution in France (1790)
 Chapter 21 Social Choice: Making Law 335
This is a law about the procedure of the legislature. To change the composition of the
23
upper house there are two alternative means of proceeding. The legislature can pass a
law changing the composition of the upper house and have it passed by a referendum (if
it can) in accordance with s5. Alternatively, the legislature can do two things. It can
repeal s5 by a statute passed in the ordinary way. With s5 out of the way, the legislature
can then change the composition of the upper house by a statute passed in the ordinary
way.

Double entrenchment, as the label indicates, doubles the entrenchment so that both the
target provision is entrenched as well as the entrenching provision itself (hence the label
self entrenchment). An illustration is the following hypothetical provision:

5 Change of composition of Upper House

(1) A law to change the composition of the Upper House must be approved by a
referendum as well as by the legislature itself.
(2) A law to change this section must be approved by a referendum as well as by the
legislature itself.

Section 5(1) constitutes single entrenchment (discussed above), while s5(2) imposes, or
attempts to impose, double entrenchment. If a double entrenchment is constitutionally
valid then the legislature still has two ways of changing the composition of the upper
house but each involves a referendum:
(1) The legislature can pass a law changing the composition of the upper house and
have it passed by a referendum (if it can) in accordance with s5.
(2) The legislature can do two things:
(i) Repeal s5 by a statute. Because of the double entrenchment in s5(2) this
law has to be passed by a referendum.
(ii) With s5 out of the way, change the composition of the upper house by a
statute passed in the ordinary way.

This analysis indicates that a law which is doubly entrenched has three components:
(1) It refers to a law about something. The something is the subject. The provision
dealing with the subject is the subject provision. In the example above the subject is the
composition of the upper house and the subject provision is the reference in s5(1) to ‘a
law to change the composition of the upper house’.
(2) It has a procedure for changing that law (the procedural provision). In the
example above the procedural provision is the requirement for approval at a referendum
which is in s5 (1) and (2). Although we call this provision the procedural provision it can
be characterised in either of two ways:
(i) It is, as we have already described it, a procedural requirement for passing
the law.
(ii) In the case where the provision stipulates a referendum it involves a
redefinition of the composition of the legislature. The legislature now consists of four
things - the normal components such as the head of state, the upper house and the 806

806 Trethowan v Peden (1930) 31 SR (NSW) 183, Clayton v Heffron (1960) 105 CLR 214
 336 Chapter 21 Social Choice: Making Law
lower house, as well as the electorate. In short, the legislature has been enlarged by
adding the citizenry as a third house.
(3) It has a provision which applies the procedural provision to the law containing the
procedural provision (the reflex provision). In the example above the reflex provision is
s5(2), especially the phrase: ‘A law to change this provision must . . . ‘
24
Double entrenchment detracts from the sovereignty of a legislature. Sovereignty of the
legislature means that at any time the legislature can make any law it likes on any subject
that is within constitutional power. Double entrenchment offends this notion because it
permits one legislature to exercise its sovereign power to fetter its own sovereignty.
Double entrenchment would detract from the sovereignty of the legislature and so
destroy some of the rights of a future majority of citizens. To highlight this point,
yesterday’s majority is given more authority than today’s majority. Such ancestor
worship is antidemocratic. These are the reasons that there is doubt about the inherent
constitutional validity of double entrenchment in a Westminster constitution - if a
legislature is taken to be sovereign it cannot pass a law that detracts from that
sovereignty for itself and for future legislatures.

Oppression of the Minority

Majority rule in a democracy is no justification for passing legislation that oppresses the
minority by unduly interfering with their rights or denying them the benefits of civil
society. Legislation of this kind is unjustifiable because it is in fundamental conflict with
the foundations of democracy. On the analysis of John Locke, freedom is the birthright
of humans. Humans consent to government only on the basis that it is democratic
because democracy as self government is the form of government that is least offensive
to a human’s inherent right to liberty. Consequently, a democratic government has no
moral right to detract wantonly from the rights of a minority; indeed it is under a positive
duty to respect and protect them.

Naked use of majority power to oppress a minority is labelled ochlocracy (a formal term
for mob rule) or tyranny of the majority. If you have the numbers, you have the
25
power and you have at least an appearance of legitimacy.

Slavery is the most graphic illustration of oppression since it involves one of the most
fundamental invasion of rights possible, legal ownership by one person (the master) over
another person (the slave). This actually arose for adjudication in English law in the
celebrated case of Charles Stuart, the supposed master, and James Somerset, his would
be slave.

Charles Stuart purchased Somersett or Somerset (he then had no first name) as a slave in
Virginia in 1749. In 1769, Stuart along with Somerset, travelled to England. While there,
Somerset met and became involved with people associated with the anti-slavery
movement and was christened in a church ceremony. He was given the name James, 807
808

807 Commentary 21.6.

808 For criticisms of majoritarianism see Chemerinsky (1989) pp 74-77.
 Chapter 21 Social Choice: Making Law 337
one of the Apostles, as a mark that God had always recognised him as one of his chilren.

Later in 1771, Somerset ran away but was recaptured by Stuart and put on board a ship
bound for Jamaica where Somerset was to be sold. When Somerset’s god-parents (from
the christening) learned of this, they obtained a writ of habeas corpus from the Court of
King’s Bench requiring the ship’s captain to produce Somerset in court so that the court
could adjudicate on the legality of his imprisonment on the ship. 809

Counsel for Somerset submitted in support of his client’s case that ‘that England was too
pure an air for a slave to breathe in’. In this same spirit, the Chief Justice of the King's
Bench, Lord Mansfield, spoke of slavery in terms that also echoed John Locke: ‘The
state of slavery is of such a nature, that it is incapable of being introduced on any
reasons, moral or political; but only positive law, which preserves its force long after the
reasons, occasion, and time itself from whence it was created, is erased from memory:
it's so odious, that nothing can be suffered to support it, but positive law. Whatever
inconveniences, therefore, may follow from a decision, I cannot say this case is allowed
or approved by the law of England.’810 811

The conclusion that followed was simple. Slavery had no legal basis. Consequently, in
Lord Mansfield’s own words: ‘[T]he black must be discharged’. This decision was made
despite the high dependence of England on sugar produced by slave labour in its colonies
in the West Indies. English law now at last also recognised Somerset as one of God’s
chilren.

While Somersett’s Case provided a common law rule that the state of slavery was
unlawful in England itself, neither British participation in the slave trade nor slavery in
other parts of the British Empire ceased immediately. This did not happen until the
passage of the Slavery Abolition Act 1833 (UK), following which the Royal Navy
frequently confronted other sovereign nations (particularly Spain) at sea seeking to free
enslaved Africans.

Sommerset's Case in 1771 makes strong contrast with the decision of the United States
28
Supreme Court, some 85 years later, in Dred Scott v Sandford. There the Supreme Court
held that a black ‘whose ancestors were...sold as slaves’ was not entitled to the rights of
a federal citizen and therefore had no standing in court. Blacks ‘beings of an inferior
order’ were not included in the phrase ‘all men’ in the United States Declaration of
Independence nor afforded any rights by the United States Constitution.

While slavery is the most extreme case, oppression can obviously be constituted in other
ways as well. It may be done like slavery with one fell swoop or it may be done with
more stealth, as little by little rights are whittled away. However, it is often

809 Somerset v Stewart (1772) Lofft 1; 20 Howell's State Trials 79 (Somersett's Case)
810 Somerset v Stewart (1772) Lofft 1; 20 Howell's State Trials 7979 (Somersett's Case)
811 Dred Scott v Sandford, 60 US (19 How) 393 (1857)
 338 Chapter 21 Social Choice: Making Law
difficult in debate to argue oppression in a totally convincing way since rights, while
based on higher order values, are not absolute. It is a give and take world, and there is no
authoritative declaration as to where the line between two competing claims is drawn.

Domination by Oligarchy
Commonly democracy is encapsulated in the notion of pluralism. There is a multitude of
perspectives and voices which compete for support in political and legislative debate.
From this tumult emerges a deliberated and majority supported course of action. Given
this, domination of the political process by small group (an oligarchy) to this extent
renders it undemocratic.

Currently, however, there is much scepticism about the existence of pluralism as a

29
corner stone of democracy, and consequent fears that a few powerful voices drown out
812

the rest of us. Even at an institutional level one can see the reason for this scepticism
since many democracies in fact possess only two major political parties. And in some
cases the voting system and rules for political funding, along with entrenched
allegiances, to some extent shield the major parties from challenge by outsiders.

Moneyed interests are another problem for pluralism since wealth and economic power
easily beget political influence either legally or illegally. One prominent sphere where
this happens is electoral funding. In representative democracies elections are generally
fought by campaigns that involve extensive use of paid media advertising. This means
that to contest an election it is necessary to have access to substantial funds to spend on
this advertising. (So, Abe Lincoln making it from a log cabin to the Whitehouse is now
just political nostalgia.) A few candidates will have the resources themselves (if you are
wealthy enough you are politically competent). Most candidates lack the resources and
thus depend on donations, many of which come from large corporations. In the way of
things, most of these corporations will demand something from their representative in
return for their continued funding. In a similar way, powerful interests can lobby an
aspiring or elected representative with promises of campaign support if they do the
business of the lobbyist.

Reduced to its elements, this system of electoral funding amounts to a purchase of

political power. Essentially the more money a person gives to a candidate, the more they
can expect in return. Such a system, of course, makes a mockery of the notion that the
legislature is an assembly of those with high ideals who are determined to act in the good
of the nation.

There is a simple conclusion. Until there is massive reform to this system, most
representative democracies will be a shadow of their intended role; their campaign
accounts will of course be the richer, but democracy itself will be much poorer.

812 Schacter (1995A) pp 603-606

 Chapter 21 Social Choice: Making Law 339
Deliberative Democracy
30
If liberty means anything, it means the right to tell people what they do not want to hear.
31
Deliberative democracy is also called discursive democracy. It is an idea formulated in
response to one of the problems of representative democracy. Once legislators are
elected by the people, they engage in debate and discussion to determine government
policy and to pass legislation. While the people have some voice through devices such as
petitioning, consultation and participation in public discussion, most citizens are
effectively excluded from the deliberative process most of the time.

Deliberative democracy entails a respect for pluralism along with the belief that true
legitimacy is conferred on a statute by the extent and quality of the deliberation that
precedes it. In other words, democracy vests in a deliberative process as much as it does
in representative institutions. Since the rich and powerful can usually take care of
themselves more than adequately, deliberative democracy is aimed at alleviating the
plight of those who are ignored, isolated or marginalised.

However, the advantages of such a system extend beyond giving a voice to the
politically mute. Deliberation is not just about being heard, although that is an important
part of it. It is also about understanding and being understood. Done properly, according
to its supporters, deliberation can generate decisions that are well informed, impartial
and rational.

Social Democracy
Social democracy originated from supporters of Marxism. In its present form, however,
it has cut loose from its revolutionary past. It does not even seek socialism in the full
sense. Instead it seeks to work an analogy with democracy. Just as democracy entails a
sharing of political power, social democracy entails some sharing of wealth and
opportunity. Its aim is to offset the problems of unrestrained capitalism by promoting a
society where everyone has the security of a decent standard of living, reasonable access
to properly funded public amenities and opportunity to better themselves by hard work
and enterprise.

Social democracy contrasts with representative democracy which is democracy founded

on institutions and deliberative democracy which is democracy based on the process of
dialogue. Social democracy is founded on outcomes providing some
32
minimum and acceptable level of equality for all citizens.

Conclusion
There are, to put it broadly, different forms of democracy each with different
requirements for legitimacy. When those requirements are satisfied, two consequences
813 814 815

813 George Orwell

814 Commentary 21.7.
815 Arup (1982) at p 14 refers to this as 'a guaranteed fundamental level of integrity and
humanity'.
 340 Chapter 21 Social Choice: Making Law
follow that are relevant to this discussion. Statutes made by the democratic process are
legitimate. These statutes are interpreted in a legitimate way when they are interpreted
33
by reference to the democratically determined purpose for which they are enacted.

In the face of competing forms of democracy with plausible claims for their
implementation, it is probably impossible to achieve perfection. At best one can make a
plausible case. In this spirit the following propositions are suggested.

Representative democracy is the most practical way of implementing democracy. Indeed

despite its substantial shortcomings it has provided stability and prosperity for millions.

If one accepts this proposition, the task is then to minimise as many of the shortcomings
of representative democracy as are possible and to graft onto it any practices which will
achieve the advantages of other forms of democracy. Some specific suggestions and
comments are as follows. Provide proper access to government information. Provide a
system of electoral advertising in which each candidate obtains without cost equal
opportunity to propound their policies in the media. Ensure that any proposal put to a
government by a lobbyist, corporation or citizen is fully disclosed on a government
website. When legislation is proposed, prepare a full discussion of policy that is
displayed on the government website some considerable time before the legislation is
presented to the legislature (if the legislation has to be done quickly, insert a sunset
clause to ensure that it receives full publicity and debate at the earliest opportunity).
Provide for systematic review of all legislation.816 817 Governments should take special
care to protect the welfare of those who are politically less able to stand up for
themselves; for example they could actively seek out their views on proposed legislation.
Have the legislature establish dedicated committees to consider the perspective of the
disadvantaged; in a similar vein establish a committee to look after politically unpopular
questions such as issues that involve the future and any other matters that do not
naturally command political attention. Try to ensure that the electoral system produces
representatives that broadly represent the electorate. Define the composition and role of
the second chamber so that it properly contributes to the democratic process. Where
government is federated, ensure that problems do not fall between two governments on
the basis that each has some power but not total power, the operative maxim here being
that divided responsibility
35
amounts to no responsibility.818

With dedication to the task and a willingness to experiment it may be possible to

eliminate some of the major flaws in representative democracy. At the same time, it
should be possible to ensure that it achieves some of the advantages of some other
legitimate forms of democracy.

816 However, see Weaver (1985).

817 This proposal is discussed in Chapter 15 Cause: Responding to Uncertainty.
818 Commentary 21.8.
 Chapter 21 Social Choice: Making Law 341
Commentary
Commentary 21.1 Footnote 2
Professor Edward L Rubin (2001) put up an intriguing argument about our conception
of democracy. Our conception of democracy is heavily rooted in its historical origin as
direct democracy and has never come fully to grips with representative democracy,
especially as it now operates in modern democracies as a complex array of legislative,
judicial and administrative institutions and activities that continually interact with one
another. What is needed therefore is a new conception of democracy to guide and
legitimise this arrangement.

Commentary 21.2 Footnote 5

Professor Schacter (1995B) p 109 points out the huge problems for a court to interpret
statutes made this way by reference to their original intention. She writes: ‘There are
reasons to suspect that a search for “popular intent” will be even more problematic than
the traditional search for legislative intent. Consider, for example, the mass size of the
electorate; the absence of legislative hearings, committee reports, or other recorded
legislative history; and the inability of citizen law-makers to deliberate about, or to
amend, proposed ballot measures. In addition, voters are not professional lawmakers, so
it is problematic to impute to the electorate the same knowledge about law, legal
terminology, and legislative context that courts routinely ascribe - if sometimes only as
aspiration - to legislators’.

Commentary 21.3 Footnote 7

Burke’s principle was named after Edmund Burke (1729-1797) the English lawyer,
politician and writer. Burke’s principle is laid out in the following passage: ‘Parliament
is not a congress of ambassadors from different and hostile interests; which interests
each must maintain, as an agent and advocate, against other agents and advocates; but
parliament is a deliberative assembly of one nation, with one interest, that of the whole;
where, not local purposes, not local prejudices ought to guide, but the general good,
resulting from the general reason of the whole. You choose a member indeed; but when
you have chosen him, he is not a member of Bristol, but he is a member of parliament’.
And further: ‘Your representative owes you, not his industry only, but his judgment; and
he betrays instead of serving you if he sacrifices it to your opinion’. (Speech to the
Electors of Bristol, 3 November 1774.) Burke was a member of the House of Commons
from 1765-1794. For most of this time, as a Whig, he was in opposition. Chambers
Biographical Dictionary says that the ‘best of Burke’s writings and speeches belong to
this period, and may be described as a defence of sound constitutional statesmanship
against prevailing abuse and misgovernment’.

Commentary 21.4 Footnote 10

One impediment to access to information is media management by an incumbent
government. Callaghan and Warne-Smith (2009) describe the media management tactics
of the Australian Government under the then Prime Minister Kevin Rudd. They reported
how a media adviser would walk through the parliamentary press gallery asking
journalists ‘What are you writing?’ Two other problems were that journalists
 342 Chapter 21 Social Choice: Making Law
were not given early enough access to press releases, nor where they given proper access
to question the Prime Minister and his Ministers. The authors quote one member of the
press gallery as saying: ‘It’s very obvious what the strategy is. Get an image for nightly
news for people who don’t follow politics - an image that makes the government look
like it’s frenetically trying to help people through the economic crisis - and then make
life as hard as possible for journalists who try to analyse the Government’. As a Liberal
Party consultant summed it up: ‘Why deal with the media who ask informed questions if
you don’t need to do so?’

Commentary 21.5 Footnote 19

Wawro (2001), however, casts an interesting light on the assertion that legislators act in
their own interest rather than in the public interest. Based on a study of ‘legislative
entrepreneurship’ Wawro does not see legislators as acting solely in their self interest of
re-election. They are also, according to his study, motivated to enact good public policy
by their desire to advance to some prestigious position. In other words, ambition for high
office is also part of their driving force.

Commentary 21.6 Footnote 24

This analysis of double entrenchment is obviously addressing the situation where a
present legislature by ordinary legislation attempts to restrict the power of a future
legislature. Another way of entrenching a provision is by exercise of superior power.
This can happen when a former colony is given a constitution by its former coloniser.
For example, the Constitution of the Commonwealth of Australia is conferred by a
statute of its coloniser, the United Kingdom. Section 9 of the Commonwealth of
Australia Constitution Act (1900) sets out Australia’s Constitution. Section 128 of this
Constitution provides a mechanism for amending the Constitution, including s128 itself,
under which the relevant legislation needs to be approved by an overall majority of
voters (the simple majority principle) but also imposed an additional majority
requirement - the legislation has be approved by a majority of voters in a majority of
States. If imposed as a double entrenchment this additional majority requirement would,
as a matter of logic, be constitutionally invalid.

In the case of s128 it was not originally invalid since at the time the United Kingdom
enacted the Constitution in 1900 Australia was still a colony of the United Kingdom and
the United Kingdom imposed this entrenchment by virtue of its overriding legislative
sovereignty. An imperial power can give legislative orders to its colonies. Now that
Australia is no longer conceived as a colony, (as provided or confirmed by the Australia
Act 1986 (UK) and its counterparts enacted by the Australian Commonwealth and state
parliaments) that justification no longer pertains.

Commentary 21.7 Footnote 31

Joseph M Besette coined the expression deliberative democracy in his book Deliberative
Democracy: The Majority Principle in Republican Government (1980). Besette
elaborated and defended the notion in a later book enticingly entitled The Mild Voice of
Reason (1994).
 Chapter 21 Social Choice: Making Law 343
Commentary 21.8 Footnote 35
Divided governmental responsibility is a common problem in Australia where
Commonwealth and State governments make political play by utilising the federated
excuses. Since power is divided, each pleads their lack of political power as an excuse
for inaction. An alternative version of the excuse arises from the fact that the
Commonwealth is the principal revenue gatherer, raising revenue it does not spend but
gives to the States; consequently the States spend revenue that they do not raise. Here the
excuses federate between constitutional power and fiscal capacity. The Commonwealth
asserts that is not constitutionally responsible for a problem because it is not
constitutionally empowered, while the States complain that they lack the finances
because the Commonwealth does not give them enough money.
Chapter 22
Social Choice: Interpreting Law

Introduction
1. Legislative Legitimacy
2. Metademocracy
Deference
Reconstructionism
Pragmatism
Disciplinarianism
3. Judicial Legitimacy
4. Legislative Legitimacy Reinterpreted
Commentary

Every judicial interpretation of a statute carries with it a lesson about democratic

theory, albeit one that is often unacknowledged and sometimes unintended.819

Introduction
They ain ’t nuthin ’ until I calls ‘em.820
Preview
In order to explain and analyse the social choice that is made when interpreting law, this
chapter considers three broad approaches to interpretation. These are:
# legislative legitimacy (which is commonly called originalism)
# metademocracy
# judicial legitimacy (of an elected court)
The chapter concludes by arguing the case that a renovated form of legislative
legitimacy would generally be best.

Legislative Legitimacy
Interpreting law is really an extension of, and thus part of, the legislative process. If,
therefore, a legislature obtains legitimacy by making laws that are democratic, a court, it
seems, should interpret these laws in a similarly democratic way. Courts should ascertain
the intention of the legislators, then interpret the statute in a manner that advances this
intent.

This method of interpretation is also labelled originalism. It rests on three fundamental

premises. First, the core meaning of democracy is self government, a system of
government in which all citizens have a voice in making laws. Second, if a particular
system of government is unquestionably democratic, laws made by that system are
unquestionably legitimate. Third, laws that are legitimate because they are

819 Schacter (1995A) p 593

820 This was attributed to Bill Klem (1874-1951), the father of all baseball umpires.

344
 Chapter 22 Social Choice: Interpreting Law 345
democratically made should be interpreted as they are made, according to the wishes of
the people. Laws are made by legislators on behalf of the people for a purpose and so
they should be interpreted in the way that best furthers that purpose.

Metademocracy
While the reasoning behind the originalist view is valid in principle, in the view of
some, there is a problem in practice. Governments are not unquestionably democratic.
Therefore interpreting laws by references to the intent of the makers does not necessarily
confer democratically derived legitimacy on the ensuing interpretation. A major
response to this is an approach to interpretation labelled metademocracy. As applied to
interpreting law, metademocracy represents a cluster of ways in which courts interpret a
statute not by the actual intention of the legislators but by reference to how the statute
would read and operate had it been properly made according to the precepts of
democracy in the first place. Four of the major versions of metademocracy are labelled
deference, reconstructionism, pragmatism and disciplinarianism821 822 These approaches
reject legislative legitimacy and proffer their own versions of restorative democracy.

Judicial Legitimacy
A third approach is possible when judges are elected. It is possible to make some claim
that the elected nature of the office gives judges the right to exercise their own judgment.
It is as if the elected legislature has two tiers:
# There is the legislative body which enacts statutes.
# There is the elected judicature that decides for itself how to interpret
statutes. This is referred to here as judicial legitimacy.

Legislative Legitimacy Renterpretated

To conclude, the chapter considers a reconfigured version of legislative legitimacy,
which seeks to defend it against its critics. This is obviously a suggestion for the readers
to consider. It is not a pronouncement made ex cathedra by the author. To put it broadly,
there are good arguments for adopting each of the approaches to interpretation that are
commonly proposed by jurists. An author need to possess the virtue of durability but has
no claim to infallibility.

1. Legislative Legitimacy
Introduction
Legislative legitimacy is also called originalism,823 purposive interpretation824 825 or
original constructivism. These terms are used interchangeably in this discussion.
Originalism

821 Clearly this is a normative view of interpretation. For an attempt to describe and explain
how judges in the United States actually go about the task of interpreting statutes see Popkin
(1999).
822 This usage is directly illustrated by Schacter (1995A).
823 Schacter (1998)
824 Kingston v Keprose (1987) 11 NSWLR 404
825 Schanck (1990) p 850 and see also Goldsworthy (1997).
 346 Chapter 22 Social Choice: Interpreting Law
is a widely accepted view on how interpretation should be performed, so much so that it
‘verges on the canonical,’826 although it also has fierce critics.

Originalism is so called because it involves interpreting a statute by reference to its

original intention, purpose or object - these expressions all refer to the policy of those
who made the statute (this policy being labelled the original or authentic policy). Behind
legislative legitimacy is the notion that the ‘historical intention [behind the statute] is
permanently set, and can never be changed with the passage of time’.827 The interpreter’s
role resembles that ‘of an historian or an archaeologist, in quest of an ancient thought of
which the enactment may contain traces’.828 Through the process of statutory
archaeology the originalist interpreter sifts through the statute’s text in an attempt to
unearth the intention of the drafters.829 830

Legislative legitimacy is squarely based on the notion that ‘any deviation from the
12
originalist construction is an improper judicial intrusion into the legislature’s role’. To
quote Felix Frankfurter, ‘the function [of a court] in construing a statute is to ascertain
the meaning of the words used by the legislature. To go beyond it is to usurp a power
which our democracy has lodged in its elected legislature’.831

Proponents of originalism argue that society makes an apparently rational choice for
making law by amalgamating individual choices in the practice of representative
democracy. To make a similarly rational social choice for interpreting law, the legal
system needs to impose a duty on judges to interpret statutes according to the policy on
which they are based.832

Legislative Legitimacy in Principle

A perfect judge will read each work of wit With the same spirit that its author writ .833
Introduction
To be logically and totally supportable, legislative legitimacy must rest on certain
foundations. These foundations comprise the following propositions:
# Proposition 1: The legislature is perfectly democratic.
# Proposition 2: When the legislature has passed a statute it has fully (or at
least sufficiently) and clearly revealed its intention as to what this statute means or as to
what its purpose is.
# Proposition 3: The task of a court interpreting this statute is to interpret the
statute by reference to this revealed intention. Ideally this intention refers to the effect
that the statute was meant to achieve. It can, though, refer to intent as to the meaning of
the word or phrase that the court is interpreting.

826 Schacter (1995A) p 594

827 Schacter (1995A) p 594
828 Cote (1992) p 6
829 Graham (2002) p 93
830 Graham (2002) p 97
831 Frankfurter (1947) p 533
832 See Symmons (1977).
833 Alexander Pope (1688-1744) An Essay on Criticism
 Chapter 22 Social Choice: Interpreting Law 347
Proposition 1: Democratic Legislature
Proposition 1 is that the legislature is perfectly democratic.834 835 A legislature embodies
the will of the electorate and is accountable to it. Democratically constituted, it reigns
supreme. Consequently, courts have no legitimate role to play in the process of
interpreting statutes beyond implementing the intention of the legislature. So, they reject
activism in favour of interpretive neutrality.

This twin role of the legislature as the democratically constituted body possessed of
legislative supremacy and the courts as the interpretively neutral transmission belt for
the legislature’s intention is sometimes referred to as ‘essentialism’. Each institution is
vested with a simple and essential role, and under the doctrine of separation of powers it
should not deviate from it.
17
There is, as has been discussed, debate as to how correct is Proposition 1. If Proposition
1 is not correct, and the legislature is not perfectly democratic, the question arises as to
what action should be taken and who should take it. There are two alternative solutions
offered. First, it is for the political process to correct its own inadequacies. Public debate,
pressure from the media and political action by the legislature are the acceptable ways of
seeking to rectify infirmities in the democratic body. Second, there is the road paved
with metademocracy. Courts themselves can take matters into their own hands and
engage in other interpretive approaches. These deploy ‘interpretive rules that are self
consciously designed to produce ‘democratising’ effects - that is, institutional or social
effects that correspond to a particular image of democracy’.836

Proposition 2: Revealing of Intention

Proposition 2 says that when the legislature has passed a statute it has fully (or at least
sufficiently) and clearly revealed its intention as to what the statute means or as to what
its purpose is. There is an ascertainable intent or a ‘discoverable legislative
design’.837 838 839 840 Some ‘singularly correct statutory meaning exists and is inscribed in
the
20
statute at the time of enactment’. Consequently all a court has to do is to engage in ‘a
21
fairly mechanical retrieval of legislative meaning’.

In some if not many cases it should be possible in principle for legislators to reveal
much or even most of their intention to satisfy Proposition 2 in a substantial way. That
said, it is inherently impossible for a legislature to foresee every possible situation that
a statute might face and to encode in the statute some authoritative guide as to

834 Schacter (1995A) p 597. Commentary 22.1.

835 Chapter 21 Social Choice: Making Law
836 Schacter (1995A) p 595. Illustrations are the approaches discussed later in this chapter -
deference, reconstructionism, pragmatism and disciplinarianism.
837 Schacter (1995A) p 595
838 Schacter (1995A) p 623
839 Schacter (1995A) p 597
840 See, for example, Easterbrook (1984) especially p 93.
 348 Chapter 22 Social Choice: Interpreting Law
22
precisely how the statute is to be interpreted in all of these situations. Moreover,
 Chapter 22 Social Choice: Interpreting Law 349
empirical studies show that legislators will sometimes deliberately employ wide
23
ranging or uncertain language for political and self serving ends. It is a way of avoiding
making a firm and specific policy decision. This may enable controversial legislation to
obtain majority approval. It enables the statute to speak with two voices, to appease
constituents who demand the legislation and placate those who do not like it.

Because of limitations such as these, Proposition 2 has been subjected to considerable

24
criticism. In answer to the criticisms, some satisfactory if not perfect mechanisms might
be devised for ascertaining legislative intent. These are explained below in discussion of
a renovated or reinterpreted form or originalism.

Proposition 3: Interpreting by Intention

25
If Parliament does not mean what is says, it should say so.
Proposition 3 says that the task of a court interpreting the statute is to interpret the
statute by reference to its revealed intention. If the intention has been clearly ascertained,
this is a straightforward task. However, to the extent that there is uncertainty about the
actual intention, there is obviously uncertainty as to whether the desired result has been
achieved.

Rationale
There are two major justifications for originalism. It does not pervert the intention of the
legislature and it confers certainty.

First, if a court interprets a statute in any other way it perverts the intention of a supreme
parliament and usurps the parliament’s role. A ‘non-elected judiciary lacks the
constitutional mandate to give meaning to legislation beyond that which was intended by
the legislative body that was responsible for the legislation’s enactment’.841 842 843 844 845

Second, originalism gives an instant certainty, or at least an enhanced degree of

certainty and predictability to legislation.

Problems
Originalism comes with a number of problems:
(1) Legislators do not necessarily have a comprehensive and agreed intent. It may,
for example, be garbled and self contradictory. Indeed, the very concept of intent is
27
fraught with difficulty.
(2) Legislative intent is generally not written in specific terms so that set in stone in
minute detail. Instead it is commonly written in broad and open terms that need to be
shaped by application of the law to specific situations.

841 Schacter (1995A) pp 604-605

842 Schacter (1995A) pp 599-603
843 AP Herbert
844 Graham (2002) p 98
845 However Vogenauer (1997) argues that this is not the case.
 350 Chapter 22 Social Choice: Interpreting Law
(3) Ambiguity in a statute is often not detected until it confronts a novel set of facts
so in these situations there will probably not be any guide from the makers’ intentions.
(4) A legislator or a lobbyist can ‘cook the books’ of record by deliberately planting
in them documents that are solely for the purpose of persuading judges of a particular
intent. 846 847 848 849 850

(5) Legislative intent may not be documented or may not be documented

comprehensively or accurately.

Legislative Legitimacy in Law

Introduction
In the absence of any legal rule to the contrary a court is free to interpret statutes by
reference to legislative legitimacy. Legislative legitimacy can also be required by legal
rules. One such rule, at least in Westminster constitutions, consists of a common law
rule, the mischief rule. The other possible rule consists of statutory provisions, as
happens in some jurisdictions, that require courts to interpret statutes by reference to the
policy that underlies them.

Mischief Rule
The mischief rule directs a court to interpret a statute by reference to its original policy.
In the original phraseology of this common law rule in the celebrated Heydon’s Case, a
court must interpret a statute ‘according to the intent of the Parliament that
29
made it’ which will involve removing the ‘mischief or ‘defect’ that caused the
30
statute to be enacted.

In Heydon’s Case the mischief rule was stated in the following way: ‘[F]or the sure and
true interpretation of all Statutes in general four things are to be discerned and
considered: (1st) What was the common law before the making of the Act? (2nd) What
was the mischief and defect for which the common law did not provide? (3rd) What
remedy the Parliament hath resolved and appointed to cure the disease of the
Commonwealth? And (4th) the true reason for the remedy; and then the office of all the
Judges is always to make such construction as shall suppress the mischief, and advance
the remedy, and to suppress subtle inventions and evasions for continuance of the
mischief, pro privato commodo, and to add force and life to the cure and remedy,
31
according to the true intent of the makers of the Act, pro bono publico.’

Under this rule a court is directed to make a ‘sure and true interpretation’ of a statute
32
by interpreting it ‘according to the true intent of the makers of the Act’. Heydon’s Case
specifically refers to the situation where common law did not adequately deal with a
problem, but by logical extension the rule should also apply where earlier

846 Cox (1947) p 44, Scalia (1997) pp 32-36

847 Heydon's Case (1584) 3 Co Rep 7a, 7b.
848 Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers' Case) (1920) 28
CLR 129, 161-162, per Higgins J
849 Heydon's Case (1584) 3 Co Rep 7a, 7b. Commentary 22.2.
850 Heydon's Case (1584) 3 Co Rep 7a, 7b
 Chapter 22 Social Choice: Interpreting Law 351
statute law on a subject is inadequate and has, for that reason, been changed by a later
statute - the rule is regarded in this way in discussion here.

In short, the mischief rule requires a court to look at the problem with which the statute
is dealing and to interpret the statute by treating it as the solution to the problem. To
33
explain the rule in more formal terms, a court initially does three things. First, it
ascertains the ‘common law before the making of the Act’ or the statute law then
prevailing. Second, it has to ascertain the problem, that is ‘the mischief and defect for
which the common law’ or the statute did not provide. This constitutes the ‘true reason’
for the remedy that parliament proposes in the statute. Third, it had to discern the
‘remedy’ which the Parliament decreed to fix the problem, that is, what Parliament
‘resolved and appointed to cure the disease of the Commonwealth’.

These done, a court had to interpret the statute by choosing a meaning which would get
rid of the problem - this meaning would ‘suppress the mischief,’ which was often pro
privato commodo, that is it entailed a purely private or personal gain. The mischief had
to be suppressed directly, but also indirectly by eliminating ‘subtle inventions and
, 34
evasions .

A consequence of proceeding in this way was that the proposed interpretation would
invigorate the statute. It would ‘advance the remedy,’ and so ‘add force and life to the
cure and remedy, according to the true intent of the makers of the Act’. In consequence,
the statute would now operate pro bono publico, that is, for the public good.851 852 853

Statutory Requirements
In some jurisdictions there are also statutory requirement to the effect that courts
interpret statutes by reference to the policy that underlies them. For example, there is
such a rule in all Australian jurisdictions, where it is referred to as the object and purpose
rule.854

We can illustrate the object and purpose rule by setting out the Commonwealth
provision, which is in s15AA(1) of the Acts Interpretation Act 1901. The heading to the
section says ‘15AA Regard to be had to purpose or object of Act’. Section 15AA(1)
provides as follows: ‘In the interpretation of a provision of an Act, a construction that
would promote the purpose or object underlying the Act (whether that purpose or object
is expressly stated in the Act or not) shall be preferred to a construction that would not
promote that purpose or object.’ It is worth noting here that the section does not
specifically refer to the meaning that the legislature intended but to the effect, the
‘purpose of object’, that it was intended to achieve. Our analysis, the reader will recall is
that the words of the statute are intended to cause an effect.

851 Heydon's Case (1584)3 Co Rep7a, 7b

852 Heydon's Case (1584)3 Co Rep7a, 7b
853 Heydon's Case (1584)3 Co Rep7a, 7b
854 Commentary 22.3.
 352 Chapter 22 Social Choice: Interpreting Law
Overall, this rule directs a court to adopt an interpretation that promotes the original
policy, that is the ‘purpose or object’ or intended effect underlying the Act in preference
to one that would not promote it. The purpose of this rule is to enable a
37 38
court to give effect to every provision of the legislation according to its spirit,
39
intent and meaning. Rules such as these close off arguments supporting other forms of
interpretation. Legislative supremacy is maintained by the statutory command to
interpret by reference to object and purpose.

Illustration
A telling illustration of originalism occurred in Perka v The Queen where one of the
issues concerned the interpretation of the provision in the Narcotics Control Act 1970
(Can) which designated Cannabis Sativa L as a prohibited substance. At the time this
provision was drafted it was assumed that all cannabis was of the Cannabis Sativa L
type. In the years after enactment, however, botanists had reconsidered the classification
of cannabis. They now considered that there were three types of cannabis only one of
which was classified as Cannabis Sativa L. The court held that the original meaning
must stand - the prohibition in the provision covered only one type of cannabis, namely
Cannabis Sativa L, saying that ‘it would do violence to Parliament’s intent to give new
meaning’ to the phrase ‘Cannabis Sativa L’.855 856 857 858

Agency Costs
Judges, according to economic analysis of law, seek ‘to maximise a utility function that
includes both monetary and non monetary elements (the latter including leisure, prestige,
and power)’.859 860 This means that there are some forces tending to have judges not
comply completely with the rational dictate of interpreting a statute by reference to
42
its policy or with any common law or statutory duty to that same effect.

There are, however, forces which may counteract this. There are formal rules which
furnish and protect judicial independence and which forbid a judge adjudicating on a
case where the judge has a significant interest861 - undoubtedly these reduce the
opportunity and incentive to decide cases on non legal criteria. Other forces, such as the
judges’ own professionalism, the fear of criticism and the fear of reversal on appeal,
limit this opportunity even further.

Nevertheless, many cases allow legitimate leeways of choice within which a judge can
make a respectable decision. It is clear both from differences between judges, and
recurring patterns in decision making of particular judges, that to some extent judges
decide cases according to their particular leanings, even if they may do so

855 In South Australia it is 'each Act and every provision'.

856 In Western Australia the provision refers to 'true' spirit.
857 In South Australia the provision refers to the 'true' intent.
858 Perka v The Queen [1984] 2 SCR 232, 264, 266
859 Posner (1992)p 534
860 Commentary 22.4.
861 Commentary 22.5.
 Chapter 22 Social Choice: Interpreting Law 353
unconsciously and with the purest of motives. To the extent that this leaning is at
variance with the policy behind the statute, there is an agency cost. It may, however, be
offset or even eliminated if the chosen interpretation has a higher net benefit than the
rejected one (the one that best implements legislative policy).

Where there are agency costs arising from judges pursuing their own agenda, a way to
limit them is for the legislature to provide a statement of the policy behind each statute.
If this is done properly, the policy is likely to be more evident and judicial deviation
from it more apparent.

On one view judges, may unwittingly act in disregard of public interest, and instead act
as agents of the rich and powerful because they are ideologically inculcated to think and
act in this way. This is the view propounded by exponents of public choice theory (so
named because it is an intended antidote to the private interests that prevail when agency
costs are incurred).

2. Metademocracy
Metademocracy as an approach to legal interpretation is a response to perceived defects
in the practice of democracy. It gathers in a cluster of ways for interpreting a statute.
Courts interpret a statute not by the actual intention of the legislators but by reference to
how the statute would read and operate had it been properly made according to the
precepts of democracy in the first place. In other words the court interprets the statute by
reference to the real popular intent.862

This questioning of democracy, which is the basis of metademocracy, involves two

issues. What precisely constitutes democracy? Has democracy been faithfully
implemented in a particular system of government?

The first level of dispute concerns the very nature of democracy. While democracy
means self government, what does self government mean? There are at least three views
on this. Democracy is implemented institutionally, as is the case with representative
democracy. Democracy is implemented by processes, as it is with deliberative
democracy. Democracy is implemented by proper outcomes, as is the case with social
democracy.

At the second level, even if there is agreement on a particular form of democracy, there
can be dispute as to whether the particular form of democracy has been properly
implemented. In current debate, most of this argument focuses on how representative
democracy should be implemented. Should a legislature have one chamber or two? If it
has two chambers, what role does each chamber perform? What voting system is used
for electing members? Is democracy compatible with federalism since dividing power
between governments also divides responsibility? How should pre-election debate be
conducted, and specifically, what should be the role in this regard of the

862 Schacter (1995A) p 607

 354 Chapter 22 Social Choice: Interpreting Law
corporations that exercise oligopoly control over television broadcasting due to
government imposed licensing? What rules should govern electoral funding? What rules
should govern political lobbying? How much access should there be to government
information?

In the first instance this debate over democracy and legitimacy is directed towards
making law. In the second instance, the debate re-emerges when law has to be
interpreted. If a law is made by a process that is flawed, so that it is less than democratic,
it cannot unquestioningly be interpreted as if the process were perfectly democratic.
How then should the law be interpreted? In answering these questions, as Professor
Schacter neatly comments, courts have to determine the proper ‘structure of democratic
legitimacy’.863

With regard to making law, anything that lessens the democratic nature of the task needs
to be rectified by some restructuring of the way in which democracy is implemented. For
example, a common theme of critics is that allowing private funding of election
campaigns makes the funded representative beholden to those who provide the funds. As
the proverb puts it, the man who pays the piper calls the tune. Rectifying this problem
would involve a change to electoral law and practice.

Courts, however, are largely stuck with the composition and procedures of the
legislature by the time a statute has been enacted. Therefore any attempt to make a law
before them more democratic can be done only by the way in which they interpret the
law. Specifically, it is often within their power to rectify the problem, to some extent at
least, by the way in which they interpret an ambiguous provision. If courts interpret a
provision in a statute from this perspective, they seek to do so in a way that makes the
provision operate as it would operate had it been made democratically in the first place.

In short, metademocracy entails deploying an interpretive principle that seeks to

accomplish two overlapping ends. It is ‘calculated to promote a particular vision of
democracy’. By this mean it ‘retains but fundamentally reconfigures democracy as
864 865

47
an anchoring normative principle’.

Four forms of the metedemocratic approach to interpretation are now considered. These
are labelled deference, reconstructionism, pragmatism and disciplinarianism.

Deference
In practice an administrative agency that is applying a statute must also interpret the
statute for itself if some ambiguity arises. This is where deference operates. It refers to a
court deferring to such an interpretation of a statute made by an administrative agency
providing that the interpretation is reasonable. This is also referred to as a

863 Schacter (1995A) p 607

864 Schacter (1995A) p 607
865 Schacter (1995A) p 607
 Chapter 22 Social Choice: Interpreting Law 355
‘preservationist’ view because it preserves the current political structure. A major
illustration of this approach is in the case Chevron Inc v Natural Resources Defense
Council866

Full scale deferral entails a court deferring to the interpretation of an agency at all times,
provided the agency’s interpretation is reasonable. Deferral, however, may be restricted.
For example in one of the leading cases in the United States, Chevron, the court deferred
to the agency only because it could find no separate evidence of legislative intent.
Congress, which was the legislature in question, had ‘not directly addressed the precise
question at issue’.867 868

There are two justifications for deference. One rests on political accountability. An
agency is accountable to the executive government for its action including the
interpretation of a statute. Since interpretation is a policy laden task, political
accountability as there is with defence is to be preferred to accountability to the courts.
In 5
short 0
, an
administrative agency possesses ‘a better democratic pedigree’ than a
court

The other justification rests on experience and expertise. Agencies have inside
knowledge and vast experience in the regulated field. They are, therefore, better placed
to divine the best way in which to interpret a statute than is a court, which lacks the
experience and expertise. Judicial impartiality is no match for executive technical know-
how.869

Both of these justifications differ from the originalist justification for interpretation. It is
not a case of relying on the democratically formulated intention of the legislature which
must underpin statutory interpretation. Instead it is a two pronged approach. An agency
makes a better decision than a court, so excellence prevails over lineage. An agency is
accountable, so if it makes a mistake, someone in the political arm must answer for it.

Reconstructionism
The main problem in public administration is not the excess or abuse of power; it is inertia and
under-achievement through the under-use of power; the failure to engage in the conscientious
pursuit ofpublic policy objectives.870
Democracy is founded on a concept of basic or minimum equality. While we are not all
naturally or fully equal, each of us possesses a minimum equality of liberty, rights and
entitlements. These lie at the heart of democracy since one of the basic justifications for
it is liberty. If liberty is fundamental, the only acceptable government

866 Chevron Inc v Natural Resources Defense Council 467 US 837 (1984).
867 Chevron Inc v Natural Resources Defense Council 467 US 837, 843 (1984)
868 Schacter (1995A) p 617
869 Deference to the interpretation of an agency may, however, affect legislative deliberation
and drafting - see Molot (2001).
870 Ison (1985-1986) pp 1-2
 356 Chapter 22 Social Choice: Interpreting Law
coercion is that which is both self imposed, and also consistent with the fundamental
equality of humankind that underpins democracy. Oppression and democracy are
incompatible. Self government exists for all society, not just a privileged sector.

Reconstructionist interpretation restores this fundamental equality where it is

53
lacking. Typically it is invoked to protect those who are silenced, marginalised,
oppressed or sidelined871 872 through lack of either political power or economic
capacity.873 It also rejects the majoritarian view that democracy largely resides in
institutions (the winner take all view); instead it is constituted by outcomes. In the
biblical phrase: ‘By their fruits ye shall know them’.874 875

But reconstructionism does not just reconstruct democracy by outcomes, it also

reconstructs democratic institutions. Courts are not mere ciphers, transmitting the
57
policy wishes of a legislature. Instead they become gatekeepers and auditors. Where a
legislature fails to preserve fundamental equality, courts unapologetically step up to do
the task for them. Courts restore democracy by seeking ‘to ‘hear’ in political and legal
discourse voices historically silent and to rectify the antidemocratic exclusion of
chronically disadvantaged groups from the theatre of politics’.876 Statutory meaning is
thus ‘not indelibly inscribed at the moment of statutory creation;’ rather courts perform
the task that the legislature failed to do.877

Obviously this approach echoes the notion of deliberative democracy. Truly democratic
laws cannot emerge from the mere exercise of voting power by a legislative majority. A
legislative decision must be preceded by careful and sufficient deliberation. This must be
an ‘undominated dialogue,’ so that all groups participate in discussion and policy
formation.878 In this vision of democracy, legislators do not come to a debate with fixed
unchanging views which emerge in what they say and how they subsequently vote.
Instead the process helps legislators to make up their mind.

According to the republican strand of this position, such an extensive and undominated
dialogue cannot but lead to a right and just outcome which is ‘uniquely correct’ 879
because it reflects and incorporates a number of underlying principles. These include
provisions such as:
(1) Protection of disadvantaged groups to free them from their subordination.
(2) Lessening legislation that is nakedly in the interest of one undeserving sector.

871 Reconstructionism has judicial support in the celebrated footnote 4 of the Supreme Court
decision in United States v Carotene Products 304 US 144, 152 n 4 (1938).
Ely (1980) gave great impetus to this approach.
872 Commentary 22.6.
873 The analysis of political power by Lukes (1974) explains how this can happen.
874 St Matthew's Gospel 7:16
875 Commentary 22.7.
876 Schacter (1995A) p 619. Commentary 22.8
877 Schacter (1995A) p 620
878 Sullivan (1988) p 1718
879 Schacter (1995A) p 626
 Chapter 22 Social Choice: Interpreting Law 357
(3) Promoting welfare.
When courts inject norms such as these into interpretation their interpretive practice
becomes a substitute for the legislative debate that would have advanced these norms
properly had it taken place in the first instance. This judicial legislation can be justified
by reliance on notional assent. If given the opportunity the people would have consent to
it.

Pragmatism
Introduction
Pragmatism, also labelled complementarianism or dynamic interpretation, regards the
role of the court as complementing that of the legislature in producing legislation.880 A
dynamic or progressive interpretation is not tied to the ‘framer’s original intention but is
permitted to evolve in response to both linguistic and social change’881 because once
enacted, a statute can operate ‘under conditions originally unguessed at’ by those who
made it.882 On this basis a court takes an active role in adapting legislation to current
circumstances by the way it is interpreted.

Illustration
A good illustration of pragmatism comes from Re BC Motor Vehicle Act. This case
involved s7 of the Canadian Charter of Rights and Freedoms, which used the phrase
‘fundamental justice’. The issue was whether ‘fundamental justice’ applied only to
procedural justice or applied to both procedural and substantive justice. There was strong
evidence that the framers intended the phrase to cover only procedural justice (and so
virtually they meant natural justice). The court adopted a dynamic approach and found
that it meant both procedural and substantive justice.883

Rationale
There are several reasons for courts to adopt this role - uncommunicated policy,
defective policy, opportunity for improvement, response to social change, creation of
consensus and the alleged representative nature of judicial decision making.

Uncommunicated Policy
A legislature may fail to communicate to those who use statutes what its policy was
when enacting the statute. In this case the court has to use its best efforts to guess the
policy.

Defective Policy
It is one thing for a court to be obligated to interpret a statute, as originalism requires,
according to the policy of those who made it. However, there can be problems. There is
no guarantee that this policy is complete or totally functional. Policy may have been
incompletely made by the legislature, in which case a court has to supplement the role

880 See, for example, Atiyah (1980) p 368.

881 Sullivan (1994)
882 Bennion (1983)
883 Re BC Motor Vehicle Act [1985] 2 SCR 486
 358 Chapter 22 Social Choice: Interpreting Law
of the legislature and make policy to fill the gap. It is also possible that the policy is in
the worst case, utterly dysfunctional, or in other cases not as good as it could be. A
court’s resorting to pragmatism when interpreting a statute may lessen or possibly
eliminate these problems.

Opportunity for Improvement

Opportunity for improvement is really a sibling of defective policy. In this case the
policy works, but could work better. A court’s resorting to pragmatism when interpreting
a statute may enable at least some of this opportunity for improvement to be realised.

Proponents of pragmatism ague that a court possesses advantages in making law that a
legislature lacks. Indeed in some respects courts possess a ‘superior competence,’ that 884

assist them to produce ‘effective and coherent statutory law’. The basis for these
885

assertions is that modern legislatures ‘simply do not have the time to monitor and amend
legal rules, particularly those rules dealing with the relationships between private
citizens’. A court, by contrast, has a unique vantage point that the legislature enacting
886

the original statute did not have, of seeing how the law has worked so far. Or when faced
with a question of interpretation it may face a possible application of the statute that
legislators just did not contemplate. In relation to this application the court has
887 888 889 890 891

capacity to ascertain at least the immediate consequences of any proposed interpretation.

In short, ‘enactment of a statute’ is seen ‘as the beginning, not the end of the process
70
of creating statutes’. A ‘strong judiciary can improve legislative outcomes and so
71
strengthen the democratic process’. Conversely, if there is failure to bring the law into
line with contemporary social needs, ‘public confidence in the rule of law would be
seriously impaired’ to the extent that some ‘areas of law would be out of touch with
72
the needs of society’.

Response to Social Change

A statute might become out of date. This happens through the inertia of the legislature.
It also arises even more acutely in those cases where a statute is difficult to amend
because of some special procedure, for example approval at a referendum or approval
73
by a special majority (for example two thirds).

The point of course is that times change, and so also do social conditions and social
values, along with social problems and their possible solutions. Obviously the more

884 Goldstein (1984) p 104

885 Schacter (1995A) p 627. Commentary 22.9.
886 McHugh (1999) p 42
887 Commentary 22.10.
888 Schacter (1995A) p 634
889 Schacter (1995A) p 636
890 McHugh (1999) p 42
891 Commentary 22.11.
 Chapter 22 Social Choice: Interpreting Law 359
74
time that elapses, the greater the probability of change. In theses circumstances a court
may interpret or may consider interpreting a statute by reference to what is
75
variously known as contemporary policy, contemporary values, contemporary
70 77 78
needs,892 893 894 current views of justice,895 or values in line with current trends,896 897
which are in
79
contrast to ‘the values of a bygone era’. Interpreting statutes in this way is called
evolutive constructivism because it views the statute as a ‘living, evolving document’.898
It makes statutory interpretation dynamic as it responds to social change, rather than
static when anchored to the original intention and perspective of those who made the
statute (the point being that with the passing of time a statute may be functionally
obsolete even though it is still an operative statute).899 900 901 It enables the law to bend
and stretch so that it adapts to changed circumstances.

Contemporary policy, therefore, is policy based on current or contemporary views of

what a statute should be achieving. Confronted with an ambiguous provision, judges
choose the meaning that is best in terms of current social conditions, values, ‘events,
82
attitudes, beliefs, and knowledge’. Thus they ‘view statutes through the prism of
83
their understanding of the current context’. This ‘view’ can take into account items such
as changes in values, the prevailing circumstances and the availability of resources to
enforce the law.

If a judge does decide to interpret a statute by reference to current values an obvious

question arises. How then does a judge ascertain them? In some cases judges will have
some formal sources of policy, for example writing that analyses contemporary society
and its problems. In the absence of this they will be based on a judge’s own impression
and observation.

There is, however, the problem of determining the accuracy and representativeness of
these sources in providing an account of contemporary social needs. Since there is no
authoritative declaration of current values and needs, there will always be doubts as to
whether judges have got it right. Since such judicial ruminations can be based on
impression and observation, not science, it is possible that the chosen values are, or are
seen to be, those of the individual judge and not society at large.

892 Mason (1992), Mason (1993)

893 Fleming (1977) p v
894 Sawer (1970)
895 Sawer (1970)
896 Connor v Sankey [1976] 2 NSWLR 570
897 Mason (1988)
898 Schanck (1990) p 851; Eskridge (1987), Eskridge (1990)
899 Eskridge and Frickey (1987). Commentary 22.12.
900 Schanck, (1990)p 851
901 Schanck, (1990)p 851
 360 Chapter 22 Social Choice: Interpreting Law
In turn, this will threaten the legitimacy of courts, which can be depicted as making up
their own minds, according to the imperatives of their rather unrepresentative
composition, rather than acceding to the intentions of a democratically elected
 Chapter 22 Social Choice: Interpreting Law 361
legislature.902 903 This is why a judge’s view of contemporary policy can sometimes be
seen as ‘idiosyncratic’ by some observers, especially those who disagree with those
85
views.

Creation of Consensus
Some jurists claim that pragmatic interpretation can create consensus where none
existed before. In this way it preserves the primacy of popular will by creating an
interpretation on which the populace agree. This is a difficult claim to accept, not least
because there may be no willingness of the people to reach consensus. Nevertheless the
distinguished jurists Eskridge and Frickey make this claim.904 905 Ronald Dworkin also
echoes this approach in arguing that judges can create a ‘community of principle’
87
rather than just a mere ‘rulebook community’.

Representative Nature of Judicial Decision Making

There is an argument that courts themselves operate as a form of representative
democracy.906 This argument runs as follows. When courts make law, they do so in a
constrained way. They do not legislate at large and at will but are constrained by the case
before them. This case is brought by parties. These parties participate actively in the law
making process by their submissions to the court which are analogous to debate in a
legislature. When the court makes law in response to a case, the law binds only those
parties who are in broadly similar position to the parties in the case that made the
precedent. These initial parties can be seen as representative of these other similarly
placed parties.

Operation
With the legislature and courts forming a partnership to make statute law, each statute
may become the ‘best it can be’.907 This, however, comes at a price since courts as
legislators are not politically accountable to the people. Legitimacy must therefore be
sought functionally, in the capacity of courts to produce the best outcome. Democracy,
on this view, is not constituted by an elected institution such as a legislature, but by an
outcome in terms of the quality of government that it delivers. This justification can
stand alone. It can also be linked to the notion of democracy as choice; on this basis
courts provide the electorate with an outcome that it would have chosen had it been
given the opportunity.

By constructing an imputed choice in this way, this reasoning seeks to ‘protect the
primacy of the popular will’.908 This after all is the heart of democracy.

902 However, Kirby (2000) p 5 refers to Canadian judges justifying interpreting according to
contemporary values on the basis that their efforts in this regard were viewed favourably by
opinion polls.
903 Metal Manufacturers v Lewis (1988) 13 ACLR 357 per Mahoney J
904 Eskridge and Frickey (1987)
905 Dworkin (1986) pp 338, 345. Commentary 22.13.
906 Peters (1997)
907 Dworkin (1986) p 342
908 Schacter (1995A) p 629
 362 Chapter 22 Social Choice: Interpreting Law
Because of difficulties with a court utilising the pure intention of legislators there is
likely to be a degree of pragmatism in many cases of statutory interpretation. Schacter
cites as an illustrative example the Braschi Case. This case involved a homosexual
couple in a committed relationship. One of the men was the tenant of residential
premises where he and his partner lived together. The relevant legislation permitted a
landlord to evict any remaining occupant after the tenant died, unless they were a
surviving spouse or member of the deceased tenant’s family. In the result the court held
that the tenant’s surviving same sex life partner was a member of the deceased’s family.
This case is illustrative because a gay relationship does not fit within the traditional
conception of ‘family’. In Braschi the court overtly articulated its role in complementing
the legislature in asserting that a statute must be construed to ‘avoid objectionable
consequences and to prevent hardship and injustice’.909 910 911

Constraints
Fear that judicial law making, as pragmatism promotes, will spread as a wild and
unconstrained growth on common law may be alleviated by forces at work to constrain
92
its scope. First, courts do not make new law spontaneously. Instead their law making is
opportunistic since it is made in response to a dispute which parties bring to the
93
court. Second, judges tend to put a high premium on certainty and predictability, which
are necessary to create a stable legal system.912 Third, judges are aware of their
limitations as lawmakers and so move cautiously, making change only when justification
for it is manifest.913

Problems
Put simply, the problems of pragmatism are that it fails to gain the advantages that
originalism does. First, the law becomes unpredictable. Or at least it become even more
unpredictable than it would have been under originalism. This is a problem because the
law prizes certainty. Second, courts can be accused of shooting blind since they have ‘no
fixed external frame of reference’ for determining how to interpret a statute.914 Here
justice is blind, not in the sense of being even handed, but of being ignorant, which is
hardly a satisfactory state of affairs.

Disciplinarianism
Introduction
The mantle of some varieties of pragmatists is that legislators are not very good at what
they do. Disciplinarians go further by claiming that legislators actually misbehave.

909 Braschi v Stahl Associates 543 NE 2d 49, 51 (NY 1989)

910 McHugh (1999) p 43
911 Consequently, as Lord Diplock (1978A) p 279 pointed out, common law could not 'have
created the welfare state'.
912 Kingston v Keprose (1987) 11 NSWLR 404, 423, Peters (1996) p 2039, Mirehouse v
Rennell (1833) 1 Cl & F 527, 546 per Parke J, Archer v Howell (1992) 7 WAR 33, Currier
(1965) pp 235238
913 McHugh (1999) pp 43-44
914 Graham (2002) p 114
 Chapter 22 Social Choice: Interpreting Law 363
Therefore a court should respond and seek reparation in the way that it
 364 Chapter 22 Social Choice: Interpreting Law
interprets this kind of statute. The appropriate response is for the Courts to interpret
these statutes in a manner that amounts to disciplinary and corrective action.

Legislative Misbehaviour
Legislators can misbehave or abuse the process in any of a number of ways.
Disciplinarians tend to focus on the abuses of process brought to light by the analysis
done according to the tenets of public choice theory. There are two aspects, interest
group theory and decision theory.

Interest Group Theory

Legislators, like other people, sometimes (perhaps often) act in their own self-
interest.915 Hence, when they legislate, they further their own self-interest,916 most
obviously by furthering ‘their own monetary or re-election opportunities’.917 Thus
interest group theory regards legislators as selling statutes to the interest group that bids
the most for it, that is that offers most in return to the legislators, who are, as Schacter
pointedly declares, both ‘re-election minded’ and ‘contribution-dependent’.918 This
means that a statute results from a suspect use of power, and may even be corrupt.

Hence ‘[m]ost statutes are, in effect, ‘sold’ by legislators to the interest groups bidding
highest in money or votes’.919 920 921 In these cases a statute is a public choice but not a
choice made in the public interest. Instead the statute is the result of deals between the
government and groups with special interests and political pull. To put it in simple
language, legislation is now a commodity that those with money and influence can
purchase while at the same time they corrode the democratic foundation of the
legislature. In even plainer language it is corruption.

There is a further aspect of this problem. In the view of some, such as Justice Antonin
102
Scalia, legislators ‘are chronically tempted to pass off difficult choices of policy’ to
courts and administrative agencies by using broad and evasive language. By this means
they both simultaneously satisfy more and alienate fewer of their constituents. They
lessen the quality of their product at the same time as they keep more of their
103
customers satisfied. This is certainly clever, but by no means does it pass for good
government. Legislators are elected to make hard choices, not to bypass them by
political stratagems.

Decision Theory
Decision theory focuses on the problem discussed earlier, and exemplified by Kenneth
Arrow’s impossibility theorem, of inherent difficulties in aggregating individual

915 Commentary 22.14.

916 Commentary 22.15.
917 Schanck (1990) p 843
918 Schacter (1995A) p 639
919 Schanck (1990) p 843
920 Schacter (1995A)
921 See Mistretta v United States 488 US 361, 413, 417-422 (1989) per Scalia J dissenting
and Morrison v Olson 487 US 654, 697, 703-715 (1988) per Scalia J dissenting.
 Chapter 22 Social Choice: Interpreting Law 365
choices to derive a social choice. In consequence of these problems there is another
reason that statutes are not the product of a majority will and may be the outcome of
manipulative politic s.922

Remedy
Logically the remedy for both of these constitutional ailments is to read the statute
narrowly. This limits the harm which the statute causes. It disciplines the legislature for
stepping out of line. It lessens the likelihood of this behaviour happening again since the
interest group that ‘purchased’ the statute has not received its full ‘money’s worth’.

Thus, on this approach a statute is read narrowly in favour of those whose interests are
not advanced by the statute.923 Of the two or more meanings of an ambiguous provision
a court should choose the meaning which least favours the interest group for whose
benefit the legislation was passed. This deviates from the specific policy of the
legislature, but does so in the interests of rationality. It brings the statute back close to
where it should be if it is to be rational, namely reflective of the preferences of the
electorate overall.

This approach actually translates into modern form the wisdom of two ancient maxims
of interpretation. One is from Heydon’s Case, which urges that statutes be interpreted
pro bono publico (for the public good) rather than pro privato commodo (for private
benefit).924 925

The other is a maxim from private law, verba chartarum fortius accipiuntur contra
107
proferentem (called the contra proferentem rule for short). This says that the words of
an instrument should be interpreted strongly against the interest of the party who, vested
with superior power, prepared and procured the instrument.

Several justifications are proffered for this approach. First, it redresses and discourages
abuse of the legislative process.926

Second, it squares with originalism to the extent that by taking and ascribing the
minimum scope to a statute a court is giving the statute only the meaning and scope that
is emphatically and beyond all doubt within the intention of the legislature.

Third, it more and more brings government into line with the illustrious maxim of
Thomas Paine (1737-1809): ‘That government is best which governs least’.927 (Like
many generalisations this has some merit but it is not the full picture.)

922 Chapter 21 Social Choice: Making Law

923 Easterbrook (1983). See also Gunningham (1992) and Eskridge (1989).
924 Heydon's Case (1584) 3 Co Rep 7a, 7b
925 See, for example, White v John Warwick [1953] 1 WLR 1285, 1293.
926 Schacter (1995A) p 645 however, points out that part of the analysis of the problem is
exaggerated because it is doubtful that 'legislators can enact excruciatingly clear laws'.
927 Commentary 22.16.
 366 Chapter 22 Social Choice: Interpreting Law
3. Judicial Legitimacy
In some jurisdictions, particularly those with a Westminster constitution, the executive
government appoints judges. In other jurisdiction, however, the people elect judges. This
happens, for example, in several jurisdictions in the United States.

If judges are elected they naturally have some claim to legitimacy when they exercise their own
personal judgment to interpret law. This after all, is or at least may be the reason that they were
elected. The author labels this approach ‘judicial legitimacy’.

One response of critics to this approach is to question the wisdom of allowing judges to be
elected in the first place and thus be given some legitimacy. A second response questions how
far this legitimacy extends, because it conflicts with the common law notion of impartiality. In
the common law tradition judges are required to be impartial. In the simple version they apply
the law and decide the case without fear or favour. There is, however, a problem with this
concept of impartiality. Procedures or methods for performing the three major tasks in deciding
a case - finding facts, interpreting law and exercising a discretion - are not cut and dried. Even
when attempts are made to devise objective and rational procedures for performing these tasks it
is not possible to remove all opportunities for a subjective choice.

That said, even if the ideal of even handed justice cannot be totally achieved in practice, it is
worth striving for. In this regard, the fundamental objection to an elected legitimacy is that it
makes justice even less impartial than it is with appointed judges because it legitimises the
personal choices of the judiciary.

A further problem is that the electing of judges leads to unsavoury practices. One is that, as
happens with legislators, elected judges become beholden to those who support and finance
their election and re-election. Money does the talking and the judge becomes a mere mouthpiece
as they deliver justice heavily laced with favouritism, cronyism and corruption. Another is that
as part of their election or re-election campaign some judges boast of their conviction rates.928
This is tantamount to saying that all that counts is convicting someone of a crime, regardless of
their guilt or innocence. This unfortunately is neither truth nor justice, but sadly for some
defendants it is the American way.

4. Legislative Legitimacy Reinterpreted

I look forward to seeing my plays staged so that I can find out what they mean.929
Introduction
There is a dilemma in determining the best method of interpreting statutes. While the general
recourse to interpreting in a way that is democratic possesses enormous strength, democracy
itself is contentious since it does not lead to one single undisputed method of interpretation.
There is contention as to what the concept of democracy

928 Moles (2007)

929 Tom Stoppard, playwright
 Chapter 22 Social Choice: Interpreting Law 367
truly entails. Even if one accepted the constitutionally invoked version of representative
democracy this is still troublesome since it is imperfectly implemented and defectively
practised. Consequently, it cannot lay unchallengeable claim to judicial allegiance.

However, other forms of democracy and their means of implementation are also
challengeable in terms of legitimacy and effectiveness. This means that it is not possible
to demonstrate one unassailable method of interpretation. All that can be done is to
argue, among the various claims based on democracy, that one method is superior to the
others, despite its flaws.

An attempt will be made to do this here, arguing for legislative legitimacy or

originalism with specific characteristics to deal with its limitations. This will be
explained according to the first two steps of the model for interpretation, discussed
later, which entail identifying the options before the court and formulating reasons for
112
deciding which option is best.

Clearly there is need for major reform to make representative democracy as workable as
human endeavour is capable. For the present, it is necessary to try to propose a means of
interpreting statutes in a manner that is as rational and democratic as it can be. It is
premised on the value judgment that, pending reform, it is better to make creaky
institutions work as well as they can rather than to transfer excessive power to an
institution as some styles of interpretation do to courts.

There are two broad arguments that might justify this approach. First, legislators are
elected and are subject to pressure from electors because they may be voted out at the
next election. Second, despite pluralism, many values are widely shared in society. This
is behind the advice Lord Steyn gives about interpretation: ‘The law must not be allowed
to drift too far from intuitive reactions of justice of men and women of good
113
sense’. Consequently, when interpreting law ‘[e]ducated intuition may play a larger role
than an examination of niceties of textual analysis’.930 931 932

Thus, however flawed is the concept of social choice in a democracy, it is a possibly the
superior method of making law. Consequently, interpreting statutes according to original
intention is made as legitimate and rational as the process can be by its indorsement and
implementation of the wishes of a legislature with some claim to be socially
representative.

Options
Options before a court that has to interpret law have two aspects, the meanings of the
provision and their predicted effects. The meanings of the ambiguous provision are the
fundamental part of the options. However, since policy constitutes a purposive form of

930 This model is developed and described in Chapter 30 Model for Forming Law.
931 Steyn (2002) p 12
932 Steyn (2002) p 7
 368 Chapter 22 Social Choice: Interpreting Law
reasoning it requires consideration of outcomes, so it is also necessary to include in the
options the effect that each meaning will cause if the court chooses it as the correct legal
meaning of the ambiguous provision. To emphasise this point, the best meaning is the
one that causes the best effect. However, with interpretation both the focus and the
emphasis will often be directed to the immediate effect of an interpretation, namely the
way in which it designates the class of facts that fall to be regulated by the legal rule,
rather than more distant effects.933

These options can conveniently be set out in table. This labels the range of meanings
that a court choose as Meanings 1-n, and label the effects as Effect 1-n to correspond
with Meaning 1-n. That is, Meaning 1 causes Effect 1, Meaning 2 causes Effect 2 and so
on:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 22.1 Meanings and Effects

Reasons
There are two reasoning processes involved on this reinterpreted view of originalism.
One is pure originalism. Here the court tries to find the actual or original intention of the
legislature that passed the statute then interpret the provision in the manner that best
furthers this intention.

The other is the special case of statutory common law where the legislature has
delegated legislative authority to the court. It does this by conferring a discretion or by
using a wide and open term such as fair, just and reasonable. In these cases the
legislature requires the court to legislate to the extent necessary to flesh out and apply
these provisions when they are the subject of litigation.

Reasons: Legislative Legitimacy

Introduction
Reasoning with policy involves identifying and taking the course of action that yields
the best effect. On a simple view, the best effect is the effect that yields the highest net
value or net benefit.

If the value of the net benefit of each effect could be predicted and measured in an
uncontentious way, interpretation by this means would be a straightforward operation.
This is not the case for two reasons. First, behavioural science has not advanced to the
point where it is possible to predict the effect of a meaning accurately or even to gauge
the uncertainty of the prediction. Consequently, there is a degree of guesswork which

933 Courts often do not perform the task of identifying the meaning of the ambiguous
provision very clearly. To assist in identifying meanings there is a classification of meanings in
Christopher Enright Legal Method Chapter 14 Classifying Meanings.
 Chapter 22 Social Choice: Interpreting Law 369
raises the question: who does the guessing. Second, there is no objectively determined
or agreed set of values by which the effects of a law or an interpretation of a law can be
measured.934 935

So a question of interpretation raises the question of by whose judgment and values are
these two questions resolved. The classic answer, as provided by legislative legitimacy,
is that statutes should be interpreted by reference to the policy on which
117
they are based and thus by the judgments and values impounded in these policies. A
legislature represents the democratically determined will of the people and this should
prevail both in making statutes and in their interpretation.

Schools of thought located under the label ‘metademocracy’ assert that to be properly
democratic interpretation should be made by reference to values which flawed
representative democracy does not incorporate into legislation but should so incorporate.
An alternative argument proposed here, is that less damage is done by proceeding with
interpreting by reference to original intent and trying to make it work as best as possible,
than by having courts usurp the function of the legislature. Moreover, as discussion will
show, it is possible to supplement or offset some of the problems with legislative
legitimacy.

Meanings and Effects

There is a maxim that it is not possible to pick up just one end of a stick. This maxim
applies here in that the meaning of an ambiguous provision and the effects that it causes
or will cause go together. Therefore it is possible for a legislature to reveal its intention
by reference to either end of the policy stick:
(1) Original Meaning. It can nominate a meaning that it intends and the effect
follows. Some refer to this as the original meaning.
(2) Original Intent. It can nominate the effect that it wants and the meaning is
determined by inference as the meaning that causes this effect. Some refer to this as the
original intent.

Consequently a court that is interpreting the statute by reference to its intention can seek
legislative intention in either form. It can try to see what meaning the legislature
intended. Or it can try to ascertain what effect the legislature was trying to achieve.

It is also possible that the legislature has indicated both the meaning it intends a word or
phrase and the effect that it wants this meaning to achieve. In these circumstances, in the
best and simple case the meaning and effect are congruent. That is, where the legislature
has indicated its chosen meaning for a word or phrase, that meaning will cause the effect
that the legislature intended and communicated. However, the best and simple case may
not always be the actual case. It is possible that there is incongruence between meaning
and effect. That is, in the view of the interpreting court the intended

934 Chapter 19 Choice of Values

935 For analysis of how legislative intent might be ascertained and for justification of its use,
see Vogenauer (1997).
 370 Chapter 22 Social Choice: Interpreting Law
meaning is far less likely to cause the intended effect than another meaning that was not chosen
or intended by the legislature. What can the court do?

Reason suggests that a court should be true to the effect of a law rather than the meaning since
the real purpose of the law is to cause the intended effect - the meaning of the provision is
merely a means to bring about this end. Indeed, this was the way in which the United States
Supreme Court reasoned when the issue actually arose in United Steel Workers v Weber}1
That case had to interpret s703(a)(l) of the Civil Rights Act 1964 (US). This Act prohibited
employment-related discrimination on the grounds of ‘race, colour, religions, sex or national
origin’. The issue in this case was whether private affirmative action programs were made
illegal by this provision. There was strong evidence that the section was aimed at colour blind
hiring practices, whereby employment vacancies would be filled by reference to objective, job-
related criteria without reference to race or colour.

However, there was also evidence that the Civil Rights Act, with its colour blind approach, has
not brought about one of its intended purposes which was to eliminate racial imbalance in the
work force. For example in 1974, 10 years after the statute became law, only 1.83% of workers
in Kaiser Aluminium’s plant were African American, even though African Americans made up
39% of the workforce in the
area.936 937 938 939 To remedy the problem Kaiser Aluminium and United States Steelworkers
120
Union created the scheme that gave rise to the issue for consideration in Weber. Persuaded by
this evidence, the court held that private affirmative action programs were legal because they
advanced the overall objectives of the legislation, in contrast to the colour blind policy which
had failed dismally. The policy was blind to colour but also blind to the perverse outcome it
would create.

Sources of Meanings and Effects

It is crucial for legislative legitimacy that there are proper sources of the intended meanings and
effects of statutes. Sources of meanings and effect can be an express statement in the statute in
question, direct evidence of intent from policy documents and texts, inference from the
provisions of the statute or some reasonable presumptions of intent based on common sense or
general knowledge of policy options.

Statement of Intent
In the best case a statute should contain within its text a clear, consistent and
121
reasonably comprehensive statement of the policy behind the statute. In this context there is
great advantage in making such a statement because it will greatly assist interpretation. It would
also assist debate in the statute in the legislature and by the public, subsequent review of the
statute (by providing a benchmark) and the exercise

936 United Steel Workers v Weber (1979) 443 US 193

937 Graham (2002) p 112
938 United Steel Workers v Weber (1979) 443 US 193
939 Samuels (1998), Vogenhauer (1997)
 Chapter 22 Social Choice: Interpreting Law 371
of any discretion conferred by the statute. Legislatures, however, generally do not make
such a statement despite its substantial benefits. In denying courts the benefit of an
authoritative statement of legislative policy, the legislature is implicitly authorising a
court to decide on this intention by the best alternative means available.

Evidence of Intent
There may be evidence of intent from various documents formed along the policy trail
as the legislation was provisionally formulated, considered, drafted, debated and then
passed. These may indicate either the policy of the legislation or the meaning of a
specific provision.

Inference of Intent
Where policy is not expressly specified in a statute, or to the extent that policy is not so
specified, a court can divine the intent by inference. In doing this a court is guided by a
primary source constituted by the provisions of the statute.

It is possible that, read as a whole, a statute evinces a clear indication of its policy or of
the meaning of a particular provision. In addition, the local or immediate context of a
122
specific provision may reveal its intent.

Presumptions of Intent
There are two plausible and reasonable presumptions of original intent:
# Presumption of Endurance. A statute is intended to endure for some time.
That is, it is not enacted to perform one here and now task but to last for some
reasonable period of time.
# Presumption of Welfare. A statute is presumed to promote human welfare.
It is enacted to do good and in particular to promote human rights and community well
being.

Presumption of Endurance
After a statute is enacted, it is possible that with the passing of time either of two
changes occur to the words of the statute. One is that the meaning of a word changes.
For example, the word ‘decimate’ originally meant to take one out of ten and described
the Roman practice of executing one in ten mutinous soldiers. Now it possesses almost
the opposite sense since it mean to destroy or almost destroy. The other possibility is that
the basic meaning stays the same but its scope changes, usually because of some sort of
social or technological change. For example, before firearms were invented they would
not have been incorporated in the scope of the word ‘weapon.’ Once they had been
invented they were so included.

The possibility of these changes raises the question as to how courts should interpret
these words. Should their original meaning or scope be applied? Or should the
contemporary meaning or scope of the words be adopted as the proper legal 940

940 Indeed, the traditional maxim of interpretation, noscitur a sociis (a provision is understood
by reference to it context) urges a court to interpret in this way.
 372 Chapter 22 Social Choice: Interpreting Law
interpretation? If courts respond in this latter way they are interpreting the statute in a
way similar to that indorsed by supporters of pragmatism, and to this extent ousting the
need to resort to pragmatism to justify the ensuing interpretation.

In the first instance this question may be answered by the particular statute itself. It can
incorporate an express direction to courts on how to deal with change to the meaning
123
or scope of a word, or it can express this intention by overwhelmingly clear and
124
strong implication. Clearly this would settle the issue. However statutes do not often
contain provisions giving directions on these matters. Consequently the task of
answering the question commonly falls to the court interpreting the statute.

In the absence of significantly clear intention within the statute itself, the court has to
make up its own mind. In doing this courts sometimes claimed that they were drawing
on an implied intention of the legislature, but in reality courts were deciding according to
what they considered was the most reasonable view of the matter. In facing this question
courts have responded over time in two different ways.

In earlier times the common judicial view was that the legislature meant to use the word
only according to the meaning and scope that the words possessed when the
125
statute was passed. This willingness was captured by a presumption expressed in the
Latin maxim contemporanea expositio est optima et fortissima in lege - the best
interpretation is the original meaning of the words. When this approach operated, the
‘words of a statute [had to] be construed as they would have been the day after the
statute was passed’.941 942 943 944 945

Current approaches to statutory interpretation take a different view and rest on a

distinction between the two types of changes to a word that can occur over time as
delineated above - a change in substance and a change in scope. If the meaning of the
words has changed in substance rather than scope, the older meaning of the words is
127
used. One illustration, mentioned above, is the word ‘decimate’.

A second illustration in The Aerated Bread Company v Gregg involved the expression
‘fancy bread’ from the 1836 statute 6 & 7 William IV c 37. 946 There ‘fancy bread’ did
not refer to bread that was fancy, the court decided, but referred to a specific type of
bread. This was bread that was made from finer flour in the shape of a roll. Making this
type of bread had been common practice when the statute was passed in 1836. This

941 Smoker v Pharmacy Restructuring Authority (1994) 36 ALD 1, 3, where a 'guideline' was
taken to be binding because the statute said so.
942 Barrett v Thurling [1984] 2 NSWLR 683, holding that children did not include step-
children.
943 Commentary 22.17.
944 Sharp v Wakefield (1888) 22 QBD 239, 242
945 Babianis v Lutony Fashions (1987) 71 ALR 225, 240
946 The Aerated Bread Company v Gregg (1873) 8 LRQB 355
 Chapter 22 Social Choice: Interpreting Law 373
means the expression ‘fancy bread’ had an identifiable and quite specific meaning in
1836.
 374 Chapter 22 Social Choice: Interpreting Law
The second possibility is that the scope of a word, as distinct from its meaning or
substance, has changed over time. In these cases courts now tend to construe the word
according to the current scope of its meaning, not the scope it had when the statute was
first passed. In other words, a legislature is taken to use words in their generic or
evolving sense, rather than confine the word to the scope it had at the time when the
statute was first passed. In fact this is the approach that courts now commonly adopt.
129
In doing this they reject the contemporanea expositio maxim. In its stead they adopt the
notion that a ‘statute is usually intended to endure for a long time in a changing
130
world’. Therefore, as the formal phrase puts the position, a statute is taken to be
131
‘always speaking’. This is referred to as the presumption of endurance.

A word may have changed in scope but not in essentially meaning for a variety of
reasons. One possibility is that technological change has caused the change. In the
example above, a firearm is a weapon. Some further examples of a similar kind are
132
these. A bicycle constitutes a carriage, a hovercraft is a vehicle, an airplane can be a
129 134 135
vehicle, a locomotive is a car and a jet ski should in principle be a ship. Statutory
interpretation now becomes a travel brochure. As another possibility, some words are
socially defined by customs, practices, values and the like. Consequently, the current
scope of their meaning is determined by current social understanding. Examples are the
meaning of ‘obscenity’ and the definition and nature of ‘family.’947 948 949 950 951 952 953 954
955 956
Those who favour the pragmatic approach to interpretation are likely to analyse
cases on provisions such as these according to this approach. Here the point is stressed
that originalism provides a similar outcome by reliance on the endurance rule.

One illustration of how the endurance rule works in this way comes from the Braschi
137
Case. There, as has been said already, the legislation permitted a landlord to evict any
remaining occupant after the tenant died, unless they were a surviving spouse or member
of the deceased tenant’s ‘family’. In the case the court held that the tenant’s surviving
same sex life partner was a member of the deceased tenant’s family. What
138
constitutes a family depends to a large extent on social recognition. While a gay
relationship does not fit within the traditional or older conception of ‘family’ it did fit
within a view of the family widely accepted in the late 1980s.

947 Commentary 22.18.

948 Steyn (2002) p 15
949 Pearce(2001)p 96
950 Corkery v Carpenter [1951] 1 KB 102
951 McBoyle v United States 283 US 25 (1931). Commentary 22.19.
952 Johnson v Southern Pacific Co 196 US (1904). Commentary 22.20.
953 Commentary 22.21.
954 Braschi v Stahl Associates 543 NE 2d 49 (NY 1989)
955 Braschi v Stahl Associates 543 NE 2d 49 (NY 1989)
956 Commentary 22.22.
 Chapter 22 Social Choice: Interpreting Law 375
A second illustration concerns s212(a)(4) of the American Immigration and Nationality
Act 1952 (US) which required the exclusion of certain ‘aliens’ from the United States.
These included aliens ‘afflicted with psychopathic personality, or sexual
 376 Chapter 22 Social Choice: Interpreting Law
deviation, or a mental defect’. This reference to ‘sexual deviation’ was, at the time,
clearly intended to apply to homosexuals. However, by the end of the 1970s the Public
Health Service had taken the view that the provision did not authorise it to exclude
homosexuals.

One view is that this involves a construction based on pragmatism or reconstructionisn.

The other is that the provision itself by its wording allows this provision to move with
the times. A sexual deviate is one who deviates from some standard that is socially
regarded as the norm. What was socially regarded as the norm during the 1950s had
changed by the end of the 1970s so that homosexuality was no longer seen as deviant.

A third illustration comes from s24 of the Canadian Constitution Act 1867. It authorised
the Governor General to summon ‘persons’ to become members of the Senate. There
was historical evidence that the framers of the Constitution Act had not envisioned
women as members of the Senate. More than 60 ears later this provision came before the
Privy Council in Edwards. Despite the framers’ actual intentions, the Privy Council held
that ‘persons’ included women. Father time had eliminated the sexism in the founders’
intentions. Lord Sankey stated his reasoning in the following way: ‘The British North
America Act 1867 planted in Canada a living tree capable of
139
growth and expansion within its natural limits’. As Hogg puts it, a constitution ‘is not a
statute like any other: it is a ‘constituent’ or ‘organic’ statute which has to provide the
basis for the entire government of the nation over a long period of time’.
957 958

Despite Lord Sankey’s reliance on pragmatism, the decision in the case can be
adequately explained by the rule that one takes the current scope of a word. In 1867 the
word ‘person’ used in reference to a legislator was overwhelmingly a reference to male
persons. By 1930 times had changed so that the natural meaning of ‘person’ in the same
context incorporated both male and female persons. There is a useful parallel here with
the expression ‘rugby player.’ In 1900 a reference to rugby players was a reference to
males because then rugby was an all male game (much like politics); by 2000, however,
the expression included both males and females because women had started to play
rugby. 959 960

Presumption of Welfare
The second presumption concerns values that are directed towards individual and social
welfare. As Justice Brennan puts it: ‘All statutes are construed against a
142
background of common law notions of justice and fairness’ While there is no uniform
set of values on which there is total agreement, there is not total disagreement either.
Many values are widely shared. Consequently, some rules of interpretation seek to direct
courts to interpret statutes by reference to values which are assumed to be an

957 Edwards v Attorney General [1930] AC 124

958 Hogg (1997)
959 Commentary 22.23.
960 Kioa v West (1985) 159 CLR 550, 62 ALR 321, 365 per Brennan J
 Chapter 22 Social Choice: Interpreting Law 377
accepted part of the legal and social system, and thus reflect the likely policy behind a
statute. They assume that the intention of the legislature is more likely than not to be
961

supportive of the shared values of both our culture and legal system. These values
include protection of the weak, the vulnerable and the oppressed, provision of a
minimum decent standard of living for all, fairness, the fundamental equality of us all, a
commitment to freedom that both protects liberty and legitimises democracy, as well as 962

‘freedom, equality before the law, good faith and reasonableness’. A statute, therefore, 963

will not be interpreted to operate in conflict with these values ‘unless its language is
reasonably capable of no other construction’. 964 965

These presumptions concerning legal and economic justice, fairness and reasonableness
are of wide ranging operation. One significant area where they have
147
been invoked consists of protection of human rights. Some illustration of these rights
from decided cases concern personal rights and freedoms such as personal liberty (so
that any arrest or custody must be authorised by law), navigating a river, avoiding 966 967

deportation, refusing a blood test,

968
maintaining personal
969 970 971

152 153
privacy and exercising free speech; procedural rights as in retaining legal
representation, trial by jury and receiving a hearing before a possibly adverse
972 973

decision; property rights as in freedom to dispose of property, for example by

974 975

disposing of part of an interest in a lease by subleasing, and the right to exclude others
976

from entry to ones land; and finally protection of economic and commercial activities
977

as in carrying on ones business or trade, preparing goods for sale, selling goods,
978 979 980 981

authorising an agent to act on ones behalf, and the exercise of freedom of contract.
982 983

961 Kirby (1988B)

962 Commentary 22.24.
963 McHugh (1999) p 47
964 Sargood Brothers v Commonwealth (1910) 11 CLR 258, 279. Commentary 22.25.
965 This list of cases is taken, with some modification, from Pearce and Geddes (2001) pp
150-151
966 Re Bolton; Ex parte Beane (1987) 162 CLR 514, 70 ALR 225, 231-232
967 Fergusson v Union Steamship Co (1884) 10 VLR (L) 279
968 Minister for Immigration v Sciascia (1991) 103 ALR 307
969 O'Brien v Gillies (1990) 69 NTR 1
970 Tackiack v Commissioner of Australian Federal Police (1995) 131 ALR 319, 330
971 Brown v Classification Review Board (1998) 154 ALR 67, 76
972 Bell v Australian Securities Commission (1991) 103 ALR 689
973 Tassell v Hayes (1987) 71 ALR 480
974 Gladstone v Armstrong [1908] VLR 454; Barratt v Howard (2000) 170 ALR 529, 543
975 American Dairy Queen v Blue Rio (1981) 37 ALR 613
976 Re Shearer (1891) 12 LR (NSW) 24
977 Coco v R (1994) 120 ALR 415
978 Commonwealth v Progress Advertising and Press Agency Co (1909) 10 CLR 457
979 Committee of Direction of Fruit Marketing v Collins (1925) 36 CLR 410
980 Mudginberri Station v Langhorne (1985) 68 ALR 613, 621
981 Mudginberri Station v Langhorne (1985) 68 ALR 613, 621
982 Christie v Permean, Wright Co Ltd (1904) 1 CLR 693; McCrae v Coulton (1986) 7
NSWLR 644
983 Hayes v Cable (1961) 78 WN (NSW) 735
 378 Chapter 22 Social Choice: Interpreting Law
Reasons: Delegated Authority
Not infrequently statutes use wide and open term such as ‘just,’ equitable,’ or
‘appropriate’. Provisions such as these constitute the basis for a second strand of the
argument for revised originalism. This rests on the proposition that legislatures actually
delegate law making power to courts; in these cases the legislature actually charges the
courts with the responsibility of interpreting a wide and open provision in the light of the
particular case before the court, as well as the circumstances in which the case arose and
the then prevailing social values and conditions. Putting it shortly, as Professor Randal
has pointed out, courts keep such a provision up to date by interpreting and applying it
by reference to current criteria.984

In cases such as these, it is clear that the court has ‘the freedom to choose from an
almost infinite number of meanings that can be plotted along a continuum’985
Consequently, the court has to make a choice. While it must be guided by the broad
policy behind the legislation, with respect to this provision it is clear that the legislature
has no concluded view as to which cases should, and which cases should not, fall within
it; instead the legislature has delegated power to decide this question to the court. 986 It is
the legislature’s intent that the court makes the political choices involved in interpreting
and applying this provision.987

This process can be conceived as thick interpretation. It can also be conceived as

statutory common law in that interpreting a statute with wide and open terms constitutes
a simulated form of making common law. It is common law developed
170
from a statutory base, or risen from a statutory launching pad in that there is a brief
provision in a statute which has been subjected to large-scale judicial development and
171
interpretation.

Here, obviously, there can be no objection that a court is usurping the role of the
legislature for a simple and powerful reason. The legislature itself has authorised the
court to perform a legislative function. By authorising the court to exercise the power the
legislature is implicitly directing the court to do so when the appropriate circumstances
arise.

Commentary
Commentary 22.1 Footnote No 16
Originalism involves interpreting a statute by reference to the policy that underlies it,
being the original policy of the legislators who enacted the statute. One proposition (and
assumption) underlying originalism is that the legislature is perfectly democratic.

166. Graham (2002). This part of the chapter draws heavily on Professor Graham's article.
The author's indebtedness is gratefully acknowledged.
167. Graham (2002) p 119
168. Easterbrook (1983) p 544
169. Graham (2002) pp 121-130
170. Commentary 22.26.
171. See Kirby (1992).
 Chapter 22 Social Choice: Interpreting Law 379
Schacter (1995A) expands this proposition (p 597): ‘[T]the traditional approach treats as
uncontroversial the ‘democratic character’ of the legislative process as currently
constituted. In other words, once a statute is enacted and comes to the court for
interpretation, the democratic pedigree of the legislative process that produced the
statute goes unchallenged and unscrutinized’. An alternative approach to interpreting
statutes, metademocracy, seeks to overcome this alleged shortcoming.

Commentary 22.2 Footnotes No 31

The mischief rule was famously stated in Heydon’s Case (1584) 3 Co Rep 7a, 7b. Some
other cases asserting or applying the rule are Lincoln College’s Case (1595) 3 Co Rep
586, 596, and in more recent times Fothergill v Monarch Airlines [1981] AC 251, 272,
Pambula District Hospital v Herriman (1988) 14 NSWLR 387, 410, Mills v Meeking
(1990) 91 ALR 16, 30-31 per Dawson J and Maynard v O'Brien (1991) 78 NTR 16.

One of the broad propositions underlying the mischief rule is that a statute must be
enacted and interpreted to be pro bono publico and not pro privato commodo. Pro bono
publico means for the public good. In contemporary practice of law ‘pro bono’ refers to
doing public good by acting for a deserving but indigent client for no fee. Pro privato
commodo means for private or personal gain.

Commentary 22.3 Footnote No 36

All Australian jurisdictions have enacted statutory provisions along similar lines that put
the mischief rule on a statutory footing. Since these expressly or implicitly require a
court to interpret a statute by reference to its purpose or object the enacted rule is known
as the purpose and object rule.

These provisions are as follows - Acts Interpretation Act 1901 (Cth) s15AA, Acts
Interpretation Act 1954 (Qld) s14A, Interpretation Act 1987 (NSW) s33, Interpretation
of Legislation Act 1984 (Vic) s35, Acts Interpretation Act 1915 (SA) s22, Acts
Interpretation Act 1931 (Tas) s8A, Interpretation Act 1984 (WA) s18, Legislation Act
2001 (ACT) s138 replacing Interpretation Act 1967 (ACT) s11A, Interpretation Act
1979 (NI) s10C, Interpretation Act (NT) s62B.

Section 22(2) of the Acts Interpretation Act 1915 (SA) provides that s22 does not
operate to create or extend any criminal liability.

Section 21 of the Acts Interpretation Act 1915 (SA) and s8 of the Interpretation Act
1984 (WA) reinforce the object and purpose provision. In these provisions, the policy
underlying a statute is referred to as its ‘purpose and object’.

To facilitate this method of interpretation the Interpretation Acts also provide that courts
can have access to extrinsic material (also known as legislative history in the United
States and by the French expression travaux preparitoires) to ascertain the policy, that
is, the ‘purpose or object’ of the legislation. These provisions allowing
 380 Chapter 22 Social Choice: Interpreting Law
access to extrinsic material are as follows - Acts Interpretation Act 1901 (Cth) s15AB,
Acts Interpretation Act 1954 (Qld) s14B, Interpretation Act 1987 (NSW) s34,
Interpretation of Legislation Act 1984 (Vic) s35, Interpretation Act 1984 (WA) s19, Acts
Interpretation Act 1931 (Tas) s8B, Interpretation Act (NT) s62B, Legislation Act 2001
(ACT) s139 replacing Interpretation Act 1967 (ACT) s11B, Interpretation Act 1979 (NI)
s10C.

Commentary 22.4 Footnote 42

The text makes the comment that, on one view at least, there are some forces tending to
have judges not comply completely with the rational dictate of interpreting a statute by
reference to its policy or with any common law or statutory duty to that same effect. To
illustrate, Bell (1998) notes that some scholars and jurists advocate an ‘instrumentalist’
approach to statutory interpretation under which courts impose their own views, worthy
as they otherwise may be, of the function of statutory interpretation. For example, they
seek to encourage more precise drafting of statutes, more deliberation before passing a
statute, or, as Schacter (1995A) points out, more consideration of the interests of
‘discrete and insular minorities’. To state the obvious these listed items all fall within the
catchment areas of metademocracy.

Commentary 22.5 Footnote 43

The text says that there are formal rules which furnish and protect judicial independence
and which forbid a judge adjudicating on a case where the judge has a significant
interest. This is part of natural justice delineated by the Latin maxim, nemo debet esse
iudex in propria sua causa. Literally it says that no person should be a judge of their
own case. In popular terminology it is the no bias rule.

Commentary 22.6 Footnote 54

The text says: ‘Reconstructionist interpretation restores this fundamental equality where
it is lacking. Typically it is invoked to protect those who are silenced, marginalised,
oppressed or sidelined’. An illustration comes from Mashpee Tribe v Town of Mashpee
447 F Supp 940 (D Mass 1978), affirmed sub nom Mashpee Tribe v New Seabury Corp
592 F 2d 575 (1st Cir), 444 US 866 (1979). In this case the Mashpee Indians made an
unsuccessful land claim. Although they saw themselves as a tribe, their land claim was
denied because their ‘assimilation’ and ‘integration’ into the local community meant that
they were no longer a ‘tribe’.

Commentary 22.7 Footnote 57

The text says: ‘But reconstructionism does not just reconstruct democracy by outcomes,
it should also reconstruct democratic institutions and processes. Courts are not mere
ciphers, transmitting the policy wishes of a legislature. Instead they become gatekeepers
and auditors.’

In an article entitled ‘Judicial Sovereignty’ Ison (1985-1986) argues at p 4 that without

this redefinition of the judicial role by reconstructionism, courts are part of the
 Chapter 22 Social Choice: Interpreting Law 381
problem. The reason for this assertion is that the judicial process tends to have two
marked preferences:
(1) It tends ‘to prefer concentrated corporate interests over more dissipated public
interest’.
(2) It tends ‘to prefer short-term over long-term interests’.

Commentary 22.8 Footnote 58

The text says: ‘Courts restore democracy by seeking “to hear” in political and legal
discourse voices historically silent and to rectify the antidemocratic exclusion of
chronically disadvantaged groups from the theatre of politics’: Schacter (1995A) p 619.
An illustrative case is Braschi v Stahl Associates 543 NE 2d 49 (NY 1989). There the
relevant legislation permitted a landlord to evict any remaining occupant after the tenant
dies, unless they were a surviving spouse or member of the deceased tenant’s ‘family’.
In the result the court held that the tenant’s surviving same sex life partner was a
member of the deceased’s ‘family’.

Commentary 22.9 Footnote 67

There are two views on the capacity of courts to improve statute law by the way that
they interpret it they are capable of improving statute law or the are not capable.

Courts Can Improve Statute Law

The text says: ‘Indeed in some respects courts possess a “superior competence” [citing
Goldstein (1984) p 104], that assist them to produce “effective and coherent statutory
law”’: Schacter (1995A) p 627. In Professor Schacter’s words ‘courts enjoy structural
attributes that uniquely situate them to promote statutory efficacy and coherence’ (p
630).

In his book Dealing with Statutes Hurst (1982) p 52 notes a number of these advantages,
which in fact derive from the institutional limitations of legislatures: ‘Legislatures are
pragmatically-minded bodies, their members typically pressed by more business than
they have time to handle, buffeted by competing outside interests, as practising
politicians are never far from the thoughts of re-election and the bearing on re-election of
the positions they take. They never sit to pass laws out of a planned design to create a
single comprehensive scheme of legal order. Only rarely and after unusual, sustained
activity by interested groups do they adopt systematized patterns of law for broad sectors
of community life, such as the Uniform Commercial Code. Normally they act for limited
or at least specialized ends. The legislative process is cumbersome; inertia or delay
figures more easily in it than the pain of choosing policy; normally legislatures act only
when outside interests exert effective pressure on them to do something’.

Courts Cannot Improve Statute Law

In contrast to this Ison (1985-86) points out ways in which courts are not particularly
suited to the role of policy-makers. Their involvement is ‘only episodic’ when the
particular case comes before it (p 4). Further, ‘[intelligent policy-making’ often
 382 Chapter 22 Social Choice: Interpreting Law
‘requires co-ordination with budgeting and executive action’ and with ‘other agencies of
government;’ it also requires other activities that courts cannot properly undertake such
as ‘long term planning’ and ‘perception of consequences’ (p 4).

Commentary 22.10 Footnote 69

The text says: ‘Or when faced with a question of interpretation [a court] may face a
possible application of the statute that legislators just did not contemplate.’ McHugh
(1999), p 42 expresses this same idea in the following way: ‘[Legislators cannot foresee
all the circumstances which may call for the application of a rule. Because of this they
cannot formulate rules that are so exact and yet so comprehensive that they plainly cover
every dispute that comes to court’.

Commentary 22.11 Footnote 73

The simple point is that restrictive procedures that are hard to satisfy will make it
difficult for the legislature to pass the law in question. This is why there has been a
major issue regarding interpretation of the Commonwealth Constitution since
amendments must be approved by a majority of electors and by a majority of electors in
a majority of states (at least 4 out of 6).

Commentary 22.12 Footnote 81

Since a statute may remain on the statute books long after it has ceased to perform a
positive function Calabresi (1982) p 164 propounded the idea that a court should have
power to declare a statute obsolete. This echoes the judgment of Sir Edward Coke CJ in
Dr Bonham's Case (1610) 8 Co Rep 107a, 114a CP.

Commentary 22.13 Footnote 87

Dworkin’s ‘community of principle’ is not a community based on simple consensus as
in ‘I agree with you and with everyone else’. Rather he is drawing on the natural law
idea that there are underlying standards of behaviour that are universal and that can be
discovered by reason. These standards create this community of principle.

Commentary 22.14 Footnote 97

Rubin (1991), p 1, describes the ‘grim landscape’ where self interest is not just a vice of
legislators but prevalent in the community across most groups. Consequently the social
landscape is inhabited by ‘vote-maximizing legislators, rent-seeking interest groups,
budget-aggrandizing bureaucrats, and free-riding citizens’. (There are two noteworthy
things about this list. First, no one lacks self interest. Second, and no one is deprived of a
hyphen.

Commentary 22.15 Footnote 98

Wawro (2001) performed a study of ‘legislative entrepreneurship’ and concluded that
legislators are not always acting solely in their self-interest of re-election. They are also,
according to his study, motivated to enact good public policy by their desire to advance
to some prestigious position. In other words, ambition for high office seems
 Chapter 22 Social Choice: Interpreting Law 383
to be their dominant driving force. On this line of argument self-enrichment is relegated
to second place at best.

Commentary 22.16 Footnote 109

Schacter (1995A) p 645 comments on this that this ‘preference for private ordering’ of
human affairs by limiting the role of government as far as possible will ‘constrain the
dangerous forces of politics’.

Rubin (1991) attacks public choice theory by an argument containing two strands:
(1) Like other theories it is ‘bounded by pre-empirical assumptions and controlling
norms’ (p4) (and its proponents fail to recognise this). Hence it can be challenged by a
theory based on different presuppositions and norms.
(2) Other theories better explain legislative and judicial behaviour.

Commentary 22.17 Footnote 125

The text puts forward the proposition that in earlier times the common judicial view was
that the legislature meant to use the word only according to the meaning and scope that
the words possessed when the statute was passed. Here are two examples of this
approach. In Lake Macquarie Shire Council v Aberdare County Council (1970) 123
CLR 327, Windeyer J put, but did not finally indorse, the argument that ‘gas’ excluded
liquefied petroleum gas. In Wilson v Commissioner of Stamp Duties (1988) 13 NSWLR
77 the court held that the expression ‘motion picture films’ did not include a video
cassette.

Commentary 22.18 Footnote 129

There are many examples of this rule in practice. Here are two examples.
# R v Ireland [1988] AC 147, 158 held that ‘bodily harm’ in a Victorian
statute dealing with assaults included psychiatric injury.
# Chappell and Co v Associated Radio Co of Australia [1925] VLR 350 held
that public performance of music included radio broadcasting although radio
broadcasting was unknown when the Act was passed.

Commentary 22.19 Footnote 133

In McBoyle v United States 283 US 25 (1931) the court found that in the specific
statutory provision in s3 of the National Motor Vehicle Theft Act 1919 c89, 41 Stat 324,
US Code, title 18, § 408 the expression ‘vehicle’ did not include an airplane because the
context indicated otherwise. That however, did not answer the fundamental question. As
a matter of usage is an airplane a vehicle? The court dealt with this at p 25 and said it
was: ‘Etymologically it is possible to use the word [vehicle] to signify a conveyance
working on land, water, or air’.

Commentary 22.20 Footnote 134

In Johnson v Southern Pacific Co 117 Fed 462 (CCA 8th 1902) the court at first
instance held that a locomotive was a car. However, on appeal in Johnson v Southern
 384 Chapter 22 Social Choice: Interpreting Law
Pacific Co 196 US (1904), the court actually reversed the decision of the lower court on
this point.

Commentary 22.21 Footnote 135

The question as to whether a jet ski should in principle be a ship was discussed in R v
Goodwin [2005] EWCA Crim 3184. In the outcome, the decision rested on analysis of
the specific statutory definition of ‘ship’ in the Merchant Shipping Act 1995 (UK).

Commentary 22.22 Footnote 138

To give an illustration how perception of the family varies, Gilding (2000), p 21 reports
that in an informal survey in his lecture, a large number of students, particularly
Australian born students, indicated that their pet cat or dog was part of the family.

Commentary 22.23 Footnote 141

The general rule for interpreting a word whose scope has changed over time is that one
takes the current scope of a word. However, courts do not always reason in this way. A
Massachusetts statute passed not long after it became a State in 1788 defined the
qualification of a juror as being ‘a person qualified to vote’ for a representative to the
legislature. At that time, women did not have the right to vote. In 1920 the United States
passed Amendment XIX. This gave women the right to vote in State elections by
declaring as follows: ‘The right of citizens of the United States to vote shall not be
denied or abridged by the United States or by any State on account of sex. Congress
shall have power to enforce this article by appropriate legislation’. In 1930 a woman,
Genevieve Welosky was charged with a crime and faced an all male jury. Welosky
challenged this, arguing that the word ‘person’ in a constitutional statute such as the
statute providing qualifications for jurors must be interpreted in the light of current
attitudes, practices and laws. On this basis the word ‘person’, which prima facie included
women anyway, should be read so as to include them, despite what might have been the
position when the statute was passed. In Commonwealth v Welosky 276 Mass 398 (1931)
pp 402-406 the court denied her claim. It held that in the statute ‘person’ meant only
male persons.

Commentary 22.24 Footnote 144

Generally, when interpreting statutes courts display and implement a commitment to
freedom that both protects liberty and legitimises democracy. Consequently, statutes are
construed, if possible, so as not to deprive subjects of their rights and liberties. The spirit
behind this, namely that liberty is precious, is expressed in Re Bolton; Ex parte Beane
(1987) 70 ALR 225 where the court said that in the absence of statutory provisions, a
person in Australia who has not breached Australian law is entitled to his freedom.

Commentary 22.25 Footnote 146

The general rules of construction is that a statute will not be interpreted to operate in
conflict with widely accepted values ‘unless its language is reasonably capable of no
 Chapter 22 Social Choice: Interpreting Law 385
other construction’. In Sargood Brothers v Commonwealth (1910) 11 CLR 258 the High
Court stated this rule for Australian courts. Since then this rule has been stated and
indorsed in numerous other cases. Some of the many examples are Melbourne
Corporation v Barry (1922) 31 CLR 174, 206 per Higgins J and Pyneboard v Trade
Practices Commission (1983) 45 ALR 609, 617 per Mason ACJ, and Wilson and Deane
JJ.

Commentary 22.26 Footnote 170

The text refers to statutes with wide and open terms and states that they can also be
conceived as statutory common law because interpreting a statute with wide and open
terms constitutes a simulated form of making common law. The resulting judicial law is
common law developed from a statutory base. For further reading on this see Atiyah
(1985), Beaten (1997), Burrows (1980), Burrows (1976B), Calabresi (1982), Finn
(1992), Kelly (1986A), Kirby (1992), Rubin (1982). One place where statutory common
law flourishes is tax law, where according to Lehman (1984) it operates in a
mathematical culture.
Chapter 23 Precedent
Introduction
1. Nature of Precedent Preserving
Rules Preserving Policy
Preserving Adaptability and Continuity
2. Overruling Precedent Commentary

Yet this inconstancy is such That you too shall adore

I could not love thee near so much, Loved I not honour more.988

Introduction
In practice, courts use precedent (along with the rules of statutory interpretation) in
order to interpret law. On the surface this runs counter to our thesis that policy
constitutes the only rational and therefore permissible means to be deployed for
interpreting law. The solution to this dilemma, short of dispensing with precedent
entirely, is to reconceive precedent as a derivative of policy. In this way there is no
conflict with the argument that policy is everything when interpreting law since,
rationally conceived and properly viewed, precedent consists of packaged policy. The
chapter explains how precedent can be explained and used in this way both for making
common law and for interpreting law.

1. Nature of Precedent
Introduction
Precedent is the reason that a common law rule, once made, is followed in subsequent
cases. Precedent is also the reason that when interpreting law a court can interpret a
provision by applying a precedent that has interpreted the provision on a previous
occasion.

Nature of Precedent
Literally, precedent is something that precedes or has gone before. This ‘something’ is
a version of the law (when a court is making law) or a meaning of a provision (when a
court is interpreting law). Precedent, however, not only presents a version, it is also a
binding direction or persuasive suggestion to adopt that version.

Precedent has two dimensions. First, there is the part of an earlier case that a court
must follow or at least consider when making its decision. It is the principle or rule of
law on which the decision rests. This rule is called the ratio decidendi (meaning

1.
2.

Richard Lovelace (1649) To Lucasta on Going off to

War Commentary 23.1.

386
 387 Chapter 23 Precedent

literally the reason for the decision.) Ratio decidendi in a case is distinguished from
obiter dicta, things said in passing which are not directly on the issue and hence not
binding on subsequent courts. Second, there is a rule that a later court is bound by the
ratio decidendi. This rule is called stare decisis (meaning literally to stand by what has
been decided).

Precedent and Policy

On the surface, precedent is in sharp contrast to policy. Precedent is directed to a law
or meaning. It directs or suggests that a court follow a prior case where a court has
made or interpreted law. It should do this regardless of the effect that the law or
meaning actually causes. Policy by contrast is directly concerned with the effect of a
law or the effect of an interpretation of a law. A policy argument for a law or
interpretation says that the law or interpretation is as good as the effect that it causes.

Despite this apparent difference, there is a major relationship. Logically conceived,

precedent is derived from policy and so is not a fundamental type of reasoning in its
own right. Precedent is not directly concerned with the effect of a law or interpretation
because this has already been decided by the policy contained or encapsulated in the
precedent. This will become apparent as we consider ratio decidendi and stare decisis
and explain how both can be conceived as based squarely on policy.

Ratio Decidendi
A mouse is not a snail.989 990
Ratio decidendi is the legal rule in a case for which the case is a precedent. This rule
may be a common law rule or a rule stating the legally correct meaning of a provision
in a statute or common law. Because of precedent, this legal rule from a former case
can be used to decide a later case that is similar to the case in which the rule was
formulated.

What now follows is a definition of both of these versions of ratio decidendi.

Naturally, this is an explanation of what they are in principle. In practice, however, it is
common to find a judgment that is not clearly written in this regard so that the precise
formulation of the ratio of the case is a matter of conjecture.

Making a Common Law Rule

If a court is making a new common law rule (a rare event these days), the ratio will
naturally consist of a common law rule. This rule is made in a two stage process.991
First, the court takes the facts of the case and judges which facts are material. To
illustrate, if the court is creating a new cause of action the facts of the case can be
represented as Case Facts 1-n. The court determines which of these facts properly
describe the wrong, and possibly the circumstances of its commission, which should in
justice be the object of a cause of action. These facts are called the material, essential

989 Commentary 23.2.

990 Donoghue v Stevenson [1932] AC 562, 578 per Lord Buckmaster, dissenting.
991 Commentary 23.3.
 Chapter 23 Precedent 388

or relevant facts. These can be any of Case Facts 1-n; for example they may be Case
Facts 2, 4, 9 and 11. For making common law they are relabelled and designated as
Facts 1-n in accordance with our standard labelling system. So in the illustration, Case
Fact 2 would be Fact 1, Fact 4 would be Fact 2 and so on.

Second, the court generalises each material fact to create an element of the new
common law rule. To illustrate generalisation, when a court first made the law of
trespass to land, one of the material facts may have been that Black Adder had ‘walked
on’ Baldrick’s land. Perhaps then, and certainly later, the fact of walking was
generalised to become ‘entered’ land. Afterwards it was generalised to become that the
defendant had ‘interfered with’ the land.

To illustrate the overall rule making process in abstract form, assume that there are five
material facts, Facts 1-5. These become the basis of Elements 1-5 of the common law
rule. Element 1 is a generalisation of Fact 1, Element 2 is a generalisation Fact 2 and so
on. Having formulated the elements of the new rule, the court now has to determine the
consequences. For a new criminal offence, the consequences in general terms are that
the defendant is guilty and liable to punishment. Similarly, for a new civil wrong the
general consequences are standard - the defendant is liable for a remedy in damages,
and possibly some other established common law remedy as well.

Making a common law rule in this way can be illustrated by a diagram where the
material facts, consisting of Facts 1-n, are generalised to make Elements 1-n of the
legal rule:
Facts Legal Rule
Fact 1 Element 1
Fact 2 Element 2
Fact n Element n

Consequences
Figure 23.1 Material Facts and Elements

While it is a matter of fundamental logic that common law is made in this way, there is
no absolute guide as to how either of the two law making functions - determining which
facts are material and generalising each fact to make an element of the new rule - are
performed. So, it is always open in a later case for a party to dispute the way the former
decision was made. They may argue that some properly material facts were overlooked
or that some non material facts were selected as material. They may also argue that the
generalisation of an element was too wide or too narrow.6

Interpreting Law
If a court is interpreting law, the process of creating the new rule that becomes the ratio
decidendi is simple. The court assembles before it all of the meanings of the

6. Stone (1959)
 Chapter 23 Precedent 389

ambiguous provision. At the end of the reasoning process it chooses one of these
meanings as the legally correct meaning of the provision, or chooses two or more as the
correct legal meanings. So if an ambiguous provision, Provision X in Rule Y, has four
meanings, Meanings 1-4, the court may decide that Meaning 2 is legally correct. If it
does so, the ratio of the case to be deployed in future encounters with Provision X is
that Meaning 2 is the legally correct meaning of Provision X in Rule Y.

Stare Decisis
Once a rule has been established in this way, it is likely be followed and applied in
later cases because of the doctrine of stare decisis, meaning to stand by what has been
decided.

Stare decisis operates against a background - that in most jurisdictions courts are
arranged in a hierarchy so that a litigant who loses a case at one level in the hierarchy
may appeal to a court at the next level.992 993 Typically this hierarchy has three levels - a
court of first instance, an intermediate appellate court and a final appellate court.

Conventionally stare decisis is formulated in three propositions, which stated broadly

are as follows:
(1) Follow Prior Decisions. Courts normally follow their own prior decisions. 994
(2) Must Follow Decisions of Higher Courts. Courts must follow decisions of
higher courts, that is, courts above them in the hierarchy; 995 conversely, higher courts
can overrule decisions of lower courts.996 997
(3) Other Decisions Have Persuasive Value. Courts attach persuasive value to
decisions of major common law courts outside their jurisdiction and courts beneath
12
them in the hierarchy, although they are not technically bound by them.

Justification for Precedent

Je suis que je suis, mais je ne suis pas que je suis.998
There has been debate as to the status of the rules of precedent. 999 One view, now
widely rejected, was that precedent consists of a rule of law that finds its authority in
precedent itself. The problem with this notion is that it is akin to a person lifting
themselves by tugging on their own bootstraps.1000 Other views proposed are that
precedent is based on convention, custom or tradition.1001

992 Commentary 23.4.

993 Blackshield (1980A)
994 See Blackshield (1978), Blackshield (1980A) and Prott (1978).
995 See Blackshield (1980A). Lower courts, however, can be rebellious and not do so - see
Prott (1977).
996 See Carly (1981). Commentary 23.5.
997 Commentary 23.6.
998 This French conundrum is based on 'je suis' meaning both 'I am' and 'I follow'. It
translates on one view as: 'I am what I am but I am not what I follow'.
999 Evans, PJ (1982), Goldstein (1984) p 89, Evans, Jim (1984)
17. Commentary
1000 Commentary 23.8.
23.7.
1001 Goldstein (1984) p 91
390 Chapter 23 Precedent

While there has been debate about the status of the rules of precedent, this question
also inevitably has to engage with the question of the rationale for precedent. The
17
traditional view tends to rationalise it on the basis that courts have authority. This
book, however, takes a different approach. It takes the view that the only rational way
to use a system based on precedent is to conceive, formulate and operate precedent as a
system based on policy.

Analysis of precedent here starts with the premise that making and interpreting law
constitute purposive action. Purposive action is action taken to achieve an effect or
purpose. In doing this, a rational human will want the best effect. In fact, policy is the
reasoning process that determines in a particular situation which effect is best. Given
this, the only rational basis for adopting and maintaining a system of precedent is that it
is soundly based on policy. Consequently, discussion here attempts to formulate the
policy considerations which can justify precedent and to indicate what those policy
considerations have to say about the content of the rules of precedent, particularly with
regard to a decision by a court to follow or not follow a precedent.

Proceeding in this way, the essential justification for precedent is that it is able to
preserve a rule that is based on sound policy. This broad charter for precedent,
however, can be broken down into three specific functions.

First, precedent preserves the rule. This happens because once a rule is firmly
established, later courts will generally follow it.

Second, precedent preserves whatever policy effect the rule brings about. Precedent
does this even if this effect was unintended.

Third, precedent lessens the costs that would be entailed in changing the rule. This
enhances the value of the net benefit of the rule because when costs are reduced, the
value of the net benefit rises. However, this gain actually comes at a cost. To the extent
that precedent lessens the capacity of a court to change a common law rule it prevents a
court from changing a rule to increase the benefit that accrues from any enhancement
of the rule. In this way precedent potentially diminishes the value of the net benefit of
the rule.

In essence, precedent participates in an inevitable or inherent conflict between

continuity and adaptability:
(1) Adaptability. To the extent that precedent allows adaptability courts can increase
the value of the benefits caused by the rule by making the rule better, which increases
the net benefit that the rule delivers. But at the same time the court incurs costs due to
lack of continuity.
(2) Lack of Adaptability. To the extent that precedent does not allow a court to
change a rule it prevents the occurrence of the cost of discontinuity, which prevents
 Chapter 23 Precedent 391

diminution of the value of the net benefit of the rule. But at the same time the court
forecloses the opportunity to create a better version of the rule that would enhance the
benefit accruing from the rule and thus increase the value of the net benefit of the rule.

Preserving Rules
A precedent embalms a principle.18
Introduction
Precedent says that once a rule has been laid down it must be followed. In this way
precedent does for judge made law what supremacy of the legislature does for statutes
19 20 21 22
because it asserts judicial sovereignty, supremacy authority, and independence.
Precedent is thus the preservative that makes common law permanent. It provides a
core of consistency and constancy to judge made law. In doing so it also keeps in place,
as explained next, the policy which underlies the rule.

Precedent preserves three categories of rules found in and laid down by cases -
common law rules, the interpretation of common law and the interpretation of statute
law.

Common Law Rules

Once a common law rule is made the rules of stare decisis, which are part of precedent,
give it binding force. In other words, precedent operates to turn decisions of courts into
rules of common law. Moreover, its function here is almost taken for granted because
litigants generally do not challenge the existence of a rule. Typically questions of law
will arise over interpretation of common law and statutes so it is in these two spheres
where precedent is actively used as a source of reasoning. Except in those rare (but not
unknown) circumstances when a party asks a court to abolish an established common
law rule, precedent stands quietly behind common law rules ensuring that they are used
and applied without question. Thus, when a plaintiff sues for trespass to land there is
usually no reference to precedent to establish the tort. Its existence and continuance is
taken for granted. Parties will, however, produce and argue from precedents if a
question arises as to how aspects of the tort of trespass to land should be interpreted.

Interpretation of Statute Law and Common Law

When statute law or common law is ambiguous a court has to interpret it. In these
cases precedent, along with policy, is used as a major source of argument and authority.
We can usefully distinguish two cases where precedent is used for interpreting law.
These are two contrasting situations:
(1) Precedent is binding on a court.
(2) Precedent is not binding on a court. 1002 1003 1004 1005 1006

1002 Commentary 23.9.

1003 See Ison (1985-86) andCaldwell (1984).
1004 See Mendelsohn (1961).
17. Commentary
1005 Blackshield23.8.
(1980A)
1006 Commentary 23.10.
 Chapter 23 Precedent 392

First, there is the situation where a precedent is binding on a court. This happens when
two things occur. A court higher up in the hierarchy made the decision. And the
decision is ‘spot on’. It squarely and directly resolves the issue now before the court
because it involves the same provision and the same ambiguity. In these cases
precedent exerts its authority because it is generally followed.

There is, however a difference between common law and statute law in this regard.
Statute law has a fixed and definitive text. Hence it is generally easy for a precedent to
be ‘spot on’ in resolving an issue of interpretation. Thus, in these cases the precedent
will very likely carry the day. This is how precedent can give interpretation of statute
law a degree of certainty. Common law, by contrast, is fluid. When a court formulates a
rule it does not always do so in precisely the same way. This makes common law fuzzy
and for this reason it is not as easy as it is with statute law to judge that a precedent is
‘spot on.’

Second, there is the case where precedent is not binding. Here the precedent has no
direct authority. It merely constitutes an argument that the court can accept or reject as
it chooses.

Preserving Policy
Is the game worth the candle?2 Stare decisis shores up and
preserves not only the original rule, but the policy behind the rule. Precedent, as we
have said, is a preservative. Essentially precedent packages and preserves the policy on
which the original decision is based so that it can be deployed on subsequent occasions
- as the popular saying puts it, when you are on a good thing stick to it.

At least this is the surface view and the ideal. It is possible that the decision that is the
precedent does not achieve its intended policy objectives. In other words, the predicted
effect and the actual effect of the rule that constitutes the precedent are not the same,
either totally or partially.

So, it is necessary to refine the statement that stare decisis shores up and preserves the
original policy decision. Decision makers tend to assume that the law or interpretation
they enact or choose will bring about the policy results that they want. On this
assumption, stare decisis is meant to preserve this policy and its operation.

In reality, though, stare decisis preserves whatever effect the earlier decision causes,
whether good, bad or a mixture, and whether intended or not. This effect, however, also
constitutes a form of policy in that it fits the policy framework, except that it was not
the intended policy. But a policy is still is, and it is the policy that the precedent
impounds. It can be construed as an imputed policy or a shadow policy. And to
emphasise the position, this is the policy that precedent preserves.

23. This is a proverb.

 Chapter 23 Precedent 393

There are two important consequences that flow from precedent being a preservative of
policy. First, as a rule of law, a precedent is no better than the policy that it impounds.
Second, in turn, the policy that a precedent impounds is generally no better than the
analysis of the problem that preceded the making of the precedent.

Preserving Adaptability and Continuity

Introduction
In policy making there is a conflict between two desirable qualities. On the one hand
there is an advantage in having an approach that incorporate adaptability and flexibility.
This enables a court to respond by changing a rule when there are benefits in doing so.
On the other hand, there is also an advantage in having continuity and stability. These
avoid or limit changeover costs as the legal system switches from one rule to another.

This conflict can be resolved at either extreme. A legal system could be full on for
adaptability and flexibility by allowing any court to change any precedent as it saw fit.
Alternatively a legal system could be full on for continuity and stability by refusing to
allowing any change to a common law rule once it was made.

Clearly neither extreme is acceptable since it is a lopsided solution. It is therefore

necessary to find a solution that incorporates some level of both adaptability and
continuity, thereby preserving them. Before examining this solution it is necessary to
consider the benefits of each of these desirable attributes of law making.

Benefits of Adaptability
If or to the extent that courts can change common law rules, there is the possibility that
they improve the quality of common law by making better rules. In this way courts add
to the benefit component of the net benefit of the rule in question. In consequence they
enhance the value of net benefit.

Benefits of Continuity
It is vastly more advantageous that the law should be settled than that the decision of
the courts should be brought into the same class as a restricted railroad ticket, good for
this day and this train only.1007 1008
To the extent that courts comply with stare decisis, they furnish the benefits of
continuity. Continuity brings stability as it lowers the costs component of net benefit
and in this way enhances the value of the net benefit of the current rule.

Continuity involves the absence of change, so the benefits of continuity can be viewed
as the avoidance of changeover costs. These involve three instrumental costs -
predictability costs, transaction costs and adjustment costs - along with the symbolic
25
cost flowing from loss of uniformity. In allowing only a higher court to overrule a
lower court stare decisis puts greater store on continuity and stability for law than on

1007 Smith v Allwright (1944) 321 US 649, 669. Commentary 23.11.

1008 Chapter 11 Nature of Net Benefit
 394 Chapter 23 Precedent

adaptability and flexibility - it ups the value so to speak.1009 1010 1011 1012 1013 1014 These
costs have already
27
been discussed in the explanation of net benefit. However, they are of such major
importance here that the discussion merits restatement and the repetition that this
necessarily entails.

In a similar vein, in the United States there is a strand of thought that argues for a super
strong presumption against overruling precedents that interpret statutes. This also puts
great value on continuity.

Predictability Costs
28 29
Continuity brings desirable qualities to law, namely stability, certainty and
predictability. Consequently any change to a precedent diminishes this sense of the
30
law being steadfast. In other words, stare decisis enables law to keep faith with
established expectations. People know how to run their lives because they know what
rules will govern them. Abiding by precedent enables people to make plans for the
future with some confidence that the common law rules regulating them will stay the
same, something that is most important in a developed economy.

Transaction Costs
Stare decisis limits the range of courts that can overrule a prior decision and thus
reduce the amount of time courts spend in reconsidering prior cases. So much is this the
case that Thomas S Currier has argued that if cases were continually decided
31
without guidance from precedent ‘the judicial workload would be intolerable’.

By these means the continuity that stare decisis furnishes lessens the transaction costs
of a court. Once resolved, an issue does not have to be constantly argued and decided
again. Thus there is economy of decision making because a court does not have to
spend time considering whether to make a new rule.

Some jurisdictions have introduced other rules, over and above the rule of stare decisis,
that seek to further lessen transaction costs. There are at least two forms of this rule:
(1) Appeal. The rule requires that a party obtain leave of the court to have the court
hear an appeal from a lower court. Depending on the terms of the rule, leave may be at
the discretion of either of the two courts involved - the court from which the appeal is
taken or the court to which the appeal is to be taken.
(2) Argue for Change of a Precedent. The rule requires a party to have the

1009 Commentary 23.12.

1010 Chapter 11 Nature of Net Benefit
1011 Kingston v Keprose (1987) 11 NSWLR 404, 423
1012 McHugh (1999) p 48, 49
1013 Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J, Archer v Howell (1992) 7
WAR 33, Mason in Sheard (2003) p 9
1014 Currier (1965) pp 235-238
 Chapter 23 Precedent 395

permission of the court in order to argue that the court should change an established
precedent.
 396 Chapter 23 Precedent

The rationale for these rules obviously rests on a desire to ensure that the same issue is
not argued over and over again in the court. If courts allow this endless argument they
32
are increasing the transaction costs of the rule.

Adjustment Costs
Those affected by the present law stay with it and do not have to adjust to a new legal
rule. By staying under the present law those affected by it are not forced to change their
position. This is how continuity avoids adjustment costs.

Uniformity Costs
The symbolic aspect of continuity is that stare decisis brings ‘uniformity’ and
33
‘consistency’ to law. By this means like cases are treated alike. Each person is treated
in the same way. Hence we are all equal before the law, which is regarded as a highly
desirable ingredient of justice. It is enshrined in the maxim that ‘justice is blind’.

Resolving the Conflict

Adaptability and continuity are complementary. Consequently to resolve the conflict
between them it is necessary to determine the best combination of adaptability and
continuity that a legal system should have. In principle the rule for making the decision
should be to adopt the combination that yields the highest net benefit. There is a
problem, however. While this is the best answer in principle in practice there are many
difficulties involved.

One major problem will illustrate the impossibility of devising the net benefit of any
proposed rule. To work out the highest net benefit it would be necessary to predict how
each individual judge in the future would respond under each particular combination of
adaptability and continuity. A problem arises here because the rules of precedent do not
tightly control judicial behaviour since court can often wriggle out of a precedent that
they think is not good. This means that it is impossible to calculate the net benefit of
any combination of the two qualities since it would be necessary to predict how all
judges in the future would decide issues of law involving precedent.

Since it is not possible to apply the net benefit in the ordinary way the best that can be
done is to lay down a set of rules that seem to strike an appropriate balance and, to the
extent possible, monitor their operation with a view to making adjustments when they
seem justified. In all of this, though, what carries the system through is the good sense
and professionalism of the judges.

This last comment illustrates an interesting point. Ultimately the best course for a legal
system is to enshrine its ideals and principles in rules that will suitability carry them.
Unfortunately rules by their nature lack the flexibility to do the best justice. This is 1015
1016

1015 For examples of the rules at work see Proctor v Jetway Aviation [1984] 1 NSWLR 166
and Evda Nominees v Victoria (1984) 154 CLR 311.
1016 Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J
 Chapter 23 Precedent 397

why a good justice system requires good people to run it. As Schrader put it (in the
context of military justice although the comments apply to all justice systems): ‘Like all
non-mechanical systems, the military justice system is no better than the people who
are charged with the responsibility for its operation; like any institution, it is only as
sound as the character of the people who administer it.’1017

2. Overruling Precedent
introduction
Logically the doctrine of stare decisis must does have limits because there will be times
when the best outcome involves courts’ changing or modifying a common law rule. As
Lord Denning pertinently expressed it, the ‘doctrine of precedent does not compel your
Lordships to follow the wrong path until you fall over the edge of a cliff.1018 There are
two aspects to overruling a precedent - the case of common law (where the precedent
involves making or interpreting a common law rule) and the case of a statute (where the
precedent involves interpreting a statute).

Common Law
Since policy is the only rational basis for legal reasoning, logically the common law
rule for overruling a precedent for making or interpreting common law should be based
on comparing the net benefit of the old rule with the new rule as well as taking into
account the changeover costs in changing from one precedent to another. 1019 What the
court has to do here comes down to deciding whether society achieves a net gain or a
net loss in changing from one version of a precedent to another.

When deciding whether to overrule a precedent, a court is faced with two rules. There
is the original rule and existing rule, Rule 1, and the proposed new rule, Rule 2. To
decide if a precedent should be overruled a court should proceed as follows. First, it
should calculate the net benefit that Rule 1 causes. This is NB1. Second, it should
calculate the net benefit that Rule 2 will cause if the court uses it to replace Rule 1. This
is NB2. Third, it should calculate the costs of changing from Rule 1 to Rule 2. These
costs are labelled CC for changeover costs. These costs are both instrumental and
symbolic. The three instrumental costs are loss of certainty and predictability, the
transaction costs of overruling the precedent and the cost of society making necessary
changes to adjust to the introduction of Rule 2 and the absence of Rule 1. The symbolic
cost is the lack of uniformity and consistency, which is detrimental to our sense of
justice because like cases should be treated alike.

When a court has made these calculations as best it can, it then weighs the net benefit
of Rule 1 against the net benefit of Rule 2 and the costs of changing from Rule 1 to
Rule 2. For the change to be beneficial, two things must occur. The net benefit of Rule
1 must be greater than the net benefit of Rule 2, and the differences between the net

1017 Schrader (1972)

1018 Ostime v Australian Mutual Provident Society [1969] AC 459, 489 per Lord Denning
1019 There is some judicial support for this proposition that a court should take into account
change over costs when changing a precedent. Commentary 23.13.
 398 Chapter 23 Precedent
benefits of Rule 1 and Rule 2 must exceed the changeover costs. In symbolic form, this
entails that NB2 is greater than the sum of NB1 and CC, that is, NB2 > (NB1 + CC). In
plainer language, the benefit from the new rule, Rule 2 exceeds the benefit from Rule 1
by more than CC, which represents the costs of changing from Rule 1 to Rule 2.

Despite the overwhelming logic of this rule based on achieving the maximum net
benefit, courts have not explicitly articulated it. Nevertheless, the specific
considerations that constitute the component of net benefit and of the changeover costs
37
are articulated in some of the cases. In other words, the cases are aware of the parts of
the net benefit rule but do not articulate the whole rule. A probable cause of this is that
courts see precedent as a based on authority, a view displayed by the practice of
lawyers of referring to cases as ‘authorities’. Obviously, and to stress the point, the
analysis here rests on the premise that the real driving force of precedent is policy, even
though courts legally possess ‘authority’ to make binding rules of common law.

Statute
Introduction
By way of a refresher of earlier discussion, a court has three broad means of
interpreting a statute. These consists of the following:
(1) Legitimacy of the Legislature. The court interprets by reference to the policy of
the legislation.
(2) Metademocracy. The court interprets by reference to considerations of
metademocracy.
(3) Legitimacy of the Court. The court makes up its own mind on the basis that its
judges are elected.
These different approaches can require special consideration. This will be revealed as
the discussion unfolds.

General Rule
To the extent that a general rule can be formulated it says that courts should decide
whether to overrule a precedent by reference to the basis on which the precedent was
made. In more specific terms the rule says that a court should change a precedent if it is
not fulfilling its function. For example, where a court is interpreting a statute by
reference to the policy underlying the statute, it should change a precedent only where it
considers that that decision that became the precedent did not correctly identify the
legislative policy. In this case the court adjusts the precedent so that it does incorporate
what the court now thinks is the correct view of the policy. Obviously, similar
reasoning processes apply with approaches based on metademocracy and the legitimacy
of the court.

There is, however, a further consideration. Where a court considers changing a

precedent should it also take into account the changeover costs, as a court should do

37. Chapter 11 Nature of Net Benefit

 Chapter 23 Precedent 399

when it changes common law? Since the whole purpose of the exercise is to promote
the common good, there is a strong argument that a court should consider changeover
costs. On this basis it would not change the precedent unless the benefit derived was
greater than the costs incurred in making the change.

Special Case
There is a special case. It arises where a jurisdiction, of which Australia is an example,
has enacted a mandatory statutory rule that requires a court to interpret statutes by
reference to their policy, or purpose and object as the Australian provisions describe
38
it. These are referred to here as the policy rule. For jurisdictions such as these there are
two situations to consider:
(1) Cases decided after the policy rule was introduced into the relevant jurisdiction
(remembering that the rule was separately introduced to each jurisdiction).
(2) Cases decided before the policy rule was introduced.

Cases After the Policy Rule

When a legislature makes a statute, if it is acting rationally it legislates on a subject by
making the statute that yields the highest net benefit. However, when a court interprets
a statute it does not have the freedom to decide the best outcome for itself, in contrast to
a legislature enacting a statute. The court cannot decide which interpretation causes the
best outcome (that is yields the highest net benefit). Instead the decision as to how to
identify the best interpretation of a law has been already made for it by the relevant
policy rule, which the court must deploy to decide the case.

The policy rule precludes a court from making its own judgment as to the interpretation
that is best; in its place the policy rule requires a court to accept the judgment of the
legislature which made the statute as to the best interpretation causing the best effect.
All the court has to do is to ascertain the interpretation that causes the effect, or object
and purpose, that the statute envisaged and pronounce this as the legally correct
meaning of the ambiguous provision.

Consequently, where a court interprets a statute, the only basis for overruling a
precedent is that the precedent wrongly identified or applied the object and purpose of
39
the statute. To have a court overrule a prior decision (where it has authority to do so
under the rules of stare decisis), a party has to make out a case that the object and
purpose identified in the case that is the precedent is not the true object and purpose. In
doing this, strictly speaking, the court should not take into account changeover costs.
The legislative mandate is that a statute is interpreted according to legislative policy,
regardless of other considerations.

Cases Before the Policy Rule

It stands to reason, although it has not been judicially acknowledged, that the ordinary
rules of stare decisis do not apply to cases decided in a jurisdiction on the meaning of a
 400 Chapter 23 Precedent
1020 1021

1020 Chapter 30 Model for Forming Law

1021 Commentary 23.14.
37. Chapter 11 Nature of Net Benefit
 401 Chapter 23 Precedent
statute before the introduction of the policy rule. The policy rule provides a mandatory
and comprehensive means of interpreting statutes. It requires a court to interpret a
statute according to its object and purpose. Courts which decided cases before the
introduction of the policy rule were not under this constraint. Hence they have no status
as binding precedents, although in many cases they will be illuminating and even
persuasive.

United States Practice

In the United States there is a strand of thought that argues for a super strong
presumption against overruling statutory precedents.40 There are two justifications for
this approach. First, this proposed presumption puts a high value on stability and
continuity. Second, there is a question of constitutional propriety - it is the legislature’s
function to correct poor interpretation and it is generally not for the courts to do so. In
practice, however, Congress does not often enact a statute to overrule a precedent.

Commentary
Commentary 23.1 Footnote 2
In simple terms the ratio decidendi is the principle or rule of law on which the decision
in a case rests. Lord Campbell put this succinctly in Attorney General v Dean and
Canons of Windsor (1860) 8 HLC 369, 392; 11 ER 472 where he said that the ratio is
‘the rule propounded and acted upon in giving judgment’.

Commentary 23.2 Footnote 3

It will help the reader and avoid confusion to explain some of the Latin terminology:
(1) Ratio decidendi. Often ratio decidendi is referred to just as ratio. The plural of
ratio decidendi is rationes decidendi. Sometimes the plural is anglicised as ‘rations’
without reference to ‘decidendi’.
(2) Obiter dicturm. The plural of obiter dictum is obiter dicta. Often these are
referred to in short form just as ‘obiter’, ‘dictum’ (less common) or ‘dicta’.

Commentary 23.3 Footnote 5

This process of making a common law rule is explained in more detail in Christopher
Enright Legal Method Chapter 11 Common Law Rules and Chapter 17 Precedent.

Commentary 23.4 Footnote 7

In full this is a maxim stare decisis et non quieta movere. This maxim means to stand
by what has been decided and not to move what has been set down or set in place.

Commentary 23.5 Footnote 11

Typically when a court overrules a case it does so retrospectively in that the new rule
applies to the case before the court. There is, however, a good argument that it should

40. Barnes (2004), Eskridge (1988), Eskridge (1991), Eskridge (1994)

 402 Chapter 23 Precedent

be done only prospectively, since retrospectivity violates the rule of law which
requires, among other things, that the law that affects a person should be known in
advance. For discussion of this see Nicol (1976) and Mason (1988).

Commentary 23.6 Footnote 12

There is further reading on two aspects of courts using precedents from outside the
jurisdiction:
(1) For discussion of use of United Sates precedents by the High Court of Australia
see Von Nessen (1993).

(2) For deference to the Privy Council by Australian courts see Geddes (1978).

Commentary 23.7 Footnote 15

Jeremy Bentham justified precedent in the following way: ‘The deference that is due to
the determination of former judgments is not due to their wisdom, but to their
authority’. This was cited in Postema (1980) p 351. See Goldstein (1984) p 89, Evans,
Jim (1984) p 108 and Evans, PJ (1982). To emphasise the point, this book takes the
view that the only rational way to use a system based on precedent is to conceive,
formulate and operate precedent as a system based on policy.

Commentary 23.8 Footnote 17

For other accounts of the basis of the rules of precedent see Peters (1996) and Wesley-
Smith (1991). For both a theoretical and empirical account of precedent see Landes and
Posner (1976). For discussion of French judicial decisions see McArthur (1984), and
for discussion of decisions of the European Court of Justice see Moens and Tzoraras
(1992).

Commentary 23.9 Footnote 18

The text states that precedent embalms a principle. Lord Stowell, Attorney General of
the United Kingdom, allegedly said this in an opinion in 1788. Benjamin Disraeli also
said it in the House of Commons in his speech on the Expenditures of the Country,
Hansard 22 February 1848.

Commentary 23.10 Footnote 22

Guest (1980) and Barak (2002) discuss precedent and judicial independence. For
discussion of the influence of public opinion on independence see Mason (2002).

Commentary 23.11 Footnote 24

The text gives the following quotation from Smith v Allwright (1944) 321 US 649, 669:
‘It is vastly more advantageous that the law should be settled than that the decision of
the courts should be brought into the same class as a restricted railroad ticket, good for
this day and this train only’.

Sir Frank Kitto cited this quotation and added comment to the point that without this
continuity, each lawsuit is ‘no better than a new plunge of the hand into a lucky dip’ -
see Kitto (1992) p 798.
 Chapter 23 Precedent 403

Commentary 23.12 Footnote 26

One illustration of the notion that precedent brings the benefits of continuity and
stability comes from the United States where there exists a strand of thought that argues
for a super strong presumption against overruling precedents that interpret statutes. This
also puts great value on continuity. For readings on this see Barnes (2004), Eskridge
(1988), Eskridge (1991) and Eskridge (1994).

Commentary 23.13 Footnote 36

The following represent some judicial support for the proposition that a court should
take into account change over costs when changing a precedent. Sir Anthony Mason
declares that a judge is not merely ‘entitled’ but ‘bound’ to ‘examine and assess
relevant policy considerations’ when appraising a precedent - see Mason in Sheard
(2003) pp 9-11. Since reconsideration of a precedent needs this careful consideration it
should, according to Kitto (1992) p 798, generally not be done in an ex tempore
judgment.

This cost benefit approach to precedent contrasts with conventional accounts of

overruling. For discussion of these conventional accounts see Harris (1990), Horrigan
(1992) and Prott (1978).

Commentary 23.14 Footnote 39

On the analysis presented in this book a court would wrongly apply the object and
purpose of the statute if it misjudged causation, that is, it misjudged the effect that one
or more interpretations of an ambiguous provision would cause. That is, the court
predicted that Meaning X would cause or produce Effect A, whereas in the opinion of
an appellate court reviewing the decision Meaning X will in fact not cause Effect A but
will cause Effect B.
Chapter 24
Rules
Introduction
Identifying Meanings
Promoting Meanings
Commentary

Introduction
When legislatures and courts make and interpret law they should do so by reference to
policy. However, when interpreting statutes courts also have recourse to what are
loosely but conveniently referred to as rules of interpretation. While these rules of
statutory interpretation are based in common law, in some jurisdictions they receive
statutory indorsement, enactment or supplementation.1022 1023 These are really
interpretive aids of two kinds.

One category consists of rules in the strict sense. One example is the literal rule,
although it is commonly misstated. Another is the rule that a provision must be read in
context. There are in fact only a handful of rules in this strict sense. They are of general
application like the two examples just given. They are rarely contentious because they
are so general in their scope and are based on such obvious good sense. For this reason
they do not require further discussion.

The other category consists of presumptions, assumption, or suggestions. Rules in these

categories are referred to as maxims or canons of statutory interpretation.1024
Consideration of these occupies the rest of this chapter.

In practice courts use these maxims (or rules or canons) of statutory interpretation
(along with precedent) to interpret law. Using the maxims of statutory interpretation to
interpret statutes runs into the same difficulty that precedent encounters when used for
interpretation. It runs counter to our thesis that policy constitutes the only rational, and
therefore permissible, means to be deployed for interpreting law. One option for solving
this problem is to dispense with the rules of statutory interpretation altogether. A better
options, however, is to adopt an approach similar to that adopted for precedent. This
entails two things - conceiving the rules of interpretation as derivatives of policy and
using the rule only in the manner that this permits.

Status
Maxims of statutory interpretation are a judicial creation as part of the common law,
although sometimes they are enacted in or indorsed by statute.1025 But despite their

1022 Commentary 24.1.

1023 Chapter 25 Analysing Ambiguity
1024 For an account of or maxims or canons see Llewellyn (1950). Commentary 24.2.
1025 Commentary 24.3.

404
 Chapter 24 Rules 405

commonly being labelled as ‘rules,’ the maxims of statutory are not rules in the strict
sense of the term. They do not give inflexible directions as a proper rule does. Instead,
they are but presumptions, approaches or guidelines, stating a favoured, likely,
plausible, possible or even assumed view of the legislature's intention. Just how strong
this presumption is will vary according to both the particular rule in question and the
circumstances where it might be engaged.

Because the maxims of statutory interpretation are mere presumptions, they do not
always give a clear and simple result and in some cases the rules may conflict with one
another.1026 For these reasons they do not often point unequivocally, or even strongly, to
a particular outcome. Consequently, they do not bring a great degree of certainty to the
task of statutory interpretation.

Function
On the basis that all reasoning for interpretation should consist of policy, the maxims of
statutory interpretation need to be analysed from the perspective of policy. In the light
of this, they can be construed as performing a policy function by focusing on a likely or
plausible meaning of a provision, and promoting this meaning in two ways. First, they
identify the meaning and by this means bring it to the court’s attention. Second, they
urge a court to take it as the legally correct meaning of the provision.

Identifying Meanings
Introduction
While the function of a maxim is to promote one meaning over another, of necessity
maxims explicitly or implicitly perform a second function. In this second function
maxims identify both of the possible meanings of the provision in question, the
promoted meaning and the unpromoted meaning.

By identifying the two possible meanings of the provision the maxim is fulfilling part
of the requirement of Step 1 of the model for interpreting law. This involves identifying
all of the meanings of the ambiguous provision. (Step 1 also involves determining the
effect that each meaning will cause although this does not concern us here.)1027

Some advantage accrues when a maxim identifies these meanings for a lawyer. There
is a special advantage where at least one of the meanings may not be immediately
obvious, especially to the untrained eye. In less acute cases, the maxims render
advantage by reminding lawyers of these meanings if they have forgotten them or
pointing them out if they have overlooked them. To illustrate how maxims perform this
task, the text will consider four examples - noscitur a sociis, eiusdem generis, expressio
unius exclusio alterius est, and generalia specialibus non derogant, which will be
translated from the original Latin in the course of discussion.

1026 Llewellyn (1950). Commentary 24.4.

1027 Chapter 30 Model for Forming Law
 406 Chapter 24 Rules

Noscitur a Sociis
A word or phrase can be read on its own as it stands. However, the maxim noscitur a sociis (something is known by its associates)
proposes another possible meaning. Words and phrases next to and near the word or phrase in question might indicate a meaning that is not
apparent when the word or phrase is viewed on its own. In the obvious case the neighbouring words create an alternative meaning by
suggesting that words in question should receive a restricted scope.

As an example, in Prior v Sherwood the court held that a prohibition on bookmaking in any ‘house, office, room or place’ did not
extend to a public lane. Although ‘place’ is a word of potentially wide ambit, and could possibly cover a public lane, it was read down in that
context to mean a place that was akin to a house, office or room, that is, a place in a building.

Eiusdem Generis
Eiusdem generis (literally, of the same kind) is similar to noscitur a sociis. It is directed at the situation where an Act
lists a number of specific items then adds a more general one. At face value, the general word is to be read in its ordinary general sense.

But the eiusdem maxim points out and proposes another meaning. The legislature might actually intend that the general item should be
read to include only those of the same kind or genus as the specific ones. To use Pearce's example, if a ferry is allowed to carry horses, cows,
sheep and other animals it may be argued that ‘other animals’ should be read down to include only domestic farm animals and not, for
eiusdem generis rule. Essential to its operation is that there exists
example, tigers.1028 1029 It is this construction which is urged by the
a clear intention that the items are to be of the same genus or class. If this intention is lacking, eiusdem generis will not apply since,
like all presumptions, it reflects only one possible view of the legislature’s intention.

Expressio Unius
Expressio unius exclusio alterius est translates that an express reference to one thing is an exclusion of others. Behind
its operation is the fact that some of the force and operation of a statute may be determined by implication. 1030 Suppose, for example, there is a
statute which exempts fishmongers from a certain legal liability. Assume first of all that the statute says nothing about whether employees and
agents who act on behalf of fishmongers are also exempt. In that case the question would be open to dispute because there are two meanings
which the maxim highlights. On the one hand, it could be argued that by logical implication the statute intended to exempt employees and
agents, even though they are not specifically mentioned. This is an illustration of implied extension of a statute. 1031 On the other hand, it could
be argued that the statute does not refer to employees and agents and it therefore does not exempt them.

1028 Prior v Sherwood (1906) 3 CLR 1054

1029 Pearce(1988)p 40
1030 Christopher Enright Legal Method Chapter 10 Classifying Meanings
1031 Christopher Enright Legal Method Chapter 10 Classifying Meanings
 407 Chapter 24 Rules
Clearly there is no obvious way of deciding between these two arguments. There are merits on
both sides.

Now let us vary the position and assume that the statute has a section which specifically
exempts employees but makes no mention of agents. What is the position of agents? In such a
situation, the expressio unius presumption may apply. An express reference has been made to
employees but no mention made of agents. If expressio unius did apply, agents would not be
included within the exemption.

Thus, expressio unius operates in situations where some of the things which might have been
implied are in fact spelt out. Specification of these matters raises the presumption that the
legislature decided not to rely on implication but addressed its mind to all of the possibilities.
Therefore it spelt out those that it wanted to be covered, and those it did not mention it meant
to exclude.

In proposing this presumption, expressio unius is pointing out the alternate construction of
the statute. It is, however, just a presumption. Presumption, it must be remembered, is an
unruly beast, ridden by many but tamed by few, and the maxim is of uncertain application.
Therefore it must be used with great care.11

Generalia Specialibus
Generalia specialibus non derogant says literally that general things do not detract from
special ones. This presumption addresses the situation where there are two statutes covering a
case:
(1) An earlier statute regulating a specific part of the field.
(2) A later statute regulating the field in a general way.

If one applies the standard principle, there are two outcomes:

(1) The later statute prevails, and in doing so,
(2) The later statute repeals by implication the inconsistent earlier statute.

In contrast to this, the generalia maxim points out and promotes an alternate construction. It
suggests that one should not, or should only reluctantly, infer an implied repeal of an earlier
specific statute by a later general one. Behind this is the assumption based on the fact that the
legislature is now dealing with a topic generally. This assumption is that the legislature must
not necessarily be taken to have meant to deal with a special aspect of it that was already
covered by the earlier statute.

Promoting Meanings
Maxims of interpretation identify a particular meaning or a meaning of a particular type. They
then suggest that the court adopt the meaning as the correct legal meaning or press the court to
adopt it. In so doing they implicitly promote the effect that this meaning will cause; it is by this
means that the maxims are sources of policy. In fact

11. O'Sullivan v Farrer (1989) 89 ALR 71

 408 Chapter 24 Rules

this is the primary function of the maxims - to promote one policy outcome over
another. In this regard they operate in the sphere of Step 2 of the model for forming
law, which entails identifying arguments for the court to choose (or not choose) a
12
meaning as the legally correct meaning of the ambiguous provision.

However, while it is clear that the maxims encapsulate policy, on the surface this policy
is not the authentic policy of those who made the statute. Instead, the maxims of
statutory interpretation are a common law creation of the judiciary. How then can they
also constitute a source of policy made by the legislature?

There are two answers to this question; both of these draw on the status of the maxims
as mere guidelines or presumptions pointing out a favoured or plausible interpretation
of a provision, rather than rules in the strict sense that give mandatory directions to
court. First, by expressing and standardising presumptions about the likely or possible
intention of the legislature, the maxims promote economy in decision making.

The second answer invokes constructive notice. When a legislature enacts a statute, it
does so with the knowledge that courts will interpret the statute applying, or possibly
applying, the maxims. Each statute is presumed to operate in the context of these
maxims. Thus, the object and purpose of the statute is determined by reading the statute
according to the maxims of interpretation. If the legislature does not want the statute to
operate according to a particular maxim, then it can expressly or impliedly oust the
operation of the maxim by wording the statute in the appropriate way.

Commentary
Commentary 24.1 Footnote 1
Here are some examples of statutory indorsement, enactment or supplementation of the
rules or maxims of interpretation:
(1) Title 1 General Provisions of the United States Code has enacted some of these
rules.
(2) In three Australian jurisdictions the maxims of interpretation have statutory force
or indorsement. See Interpretation Act 1987 (NSW) s5(4), Interpretation of Legislation
Act 1984 (Vic) s4(2) and Interpretation Act 1979 (NI) s9.

Commentary 24.2 Footnote 3

Llewellyn (1950) lists 56 maxims or canons and their judicial source or citations.

Commentary 24.3 Footnote 4

In three Australian jurisdictions the common law rules or maxims of interpretation have
statutory backing or recognition as well:
# Interpretation Act 1987 (NSW) s5(4)
# Interpretation of Legislation Act 1984 (Vic) s4(2)
# Interpretation Act 1979 (NI) s9 1032

1032 Chapter 30 Model for Forming Law

 Chapter 24 Rules 409

Commentary 24.4 Footnote 5

Llewellyn (1950) list 56 canons or maxims and divides them into 28 pairs. Llewellyn
then analyses each pair and demonstrates that they are in conflict with each other, either
inherently or in some contexts. Sinclair (2006) provides commentary and analysis of the
canons or maxims. For a spirited defence of canons or maxims see Graham (2001).
Chapter 25
Analysing Ambiguity

Introduction
1. Ambiguity Identifying
Meanings Classification of
Ambiguity Scope of Ambiguity
Prevalence of Ambiguity
Relevance of Ambiguity
2. Limits to Interpretation General
Limits: Language Specific Limits:
Ambiguity Commentary

Introduction
Model for Interpretation
To assist readers to understand this chapter better and to appreciate its significance it is
necessary to introduce them briefly to the model for interpretation. Since this model is
developed later in this book a summary will suffice here.1033 The model has three steps.
These are Step 1: Options, Step 2: Reasons and Step 3: Decision.

Step 1: Options
This step identifies the options before the court. These consist of the various meanings
of the ambiguous provision and the effect that each meaning will cause if chosen as the
legally correct meaning. These meanings are designated Meanings 1-n and their effects
as effects as Effects 1-n. Meaning 1 causes Effect 1, Meaning 2 causes Effect 2 and so
on.

Step 2: Reasons
This step formulates reasons for and against each meaning of the ambiguous provision.
The aim of the reasoning process is to identify the meaning whose effect is the best. In
our analysis, this is the effect with the highest net benefit. The meaning that causes this
effect is the best meaning.

Step 3: Decision
Step 3 is a formality since it flows from Step 2. The reasoning process in Step 2
identified the best meaning. In Step 3 the court formally makes the decision that decrees
this meaning to be the legally correct meaning of the ambiguous provision. Obviously a
lawyer who is advising a client does not decide the correct meaning as the court does.
Instead they try to predict the meaning that the court will choose.

1033 Chapter 30 Model for Forming Law

410
 Chapter 25 Analysing Ambiguity 411
Analysing Language
There are two reasons for analysing language when working with law. Both are
connected to interpreting law. Analysing language is necessary for interpretation in that
a vital part of the method for interpreting law is to identify precisely the ambiguity,
including the meanings that constitute the ambiguity, in the provision in statute or
common law that makes interpretation necessary. Analysing language is necessary for
determining the limits of interpretation - in any given case it is necessary to know what
meanings are arguable and what meanings are not.

1. Ambiguity
Ambiguity creates the need for interpretation and yields the range of meanings that
confront a court. (These are represented as Meanings 1-n in our model). While there has
been some consideration of ambiguity by legal writers, given that ambiguity is so
fundamental to understanding interpretation there has been surprisingly little detailed
analysis of it. While most theories of interpretation address ambiguity in some way, the
treatment is often cursory rather than detailed. Conspicuously absent so far is a
classification of ambiguity to assist in detecting, understanding and resolving it.

This discussion seeks to rectify these problems at least in part. To start, it highlights the
relevance of ambiguity by explaining why it is so important to identify the various
meanings of an ambiguous provision when interpreting law.

Discussion then turns to techniques that lawyers can use to identify ambiguity.
Ambiguity comes in several forms so one technique involves using a classification
system for ambiguity as a check list and a guide. Since this classification is so
important, this chapter pays it considerable attention.

Then the discussion confronts two controversies. One concerns the scope of ambiguity,
which entails resolving a dispute as to whether ambiguity should be given a wide or a
narrow meaning. The text argues for a wide meaning on functional grounds. (Prior
discussion of identifying meanings and classifying ambiguity was premised on this
wide view of the scope of ambiguity.)

The second controversy concerns the prevalence of ambiguity. Is language fraught with
ambiguity on a pandemic scale, or is it something that happens sometimes? Our
argument is that it happens sometimes rather than most of the time.

Identifying Meanings
Introduction
When interpreting law it is necessary to analyse the ambiguous provision to identify the
meanings that constitute the ambiguity. It is not enough just to sense that the provision
is ambiguous. Step 1 in the model for interpreting law directs those who interpret law to
uncover these various meanings and then to frame them in the clearest 1034
2.

Commentary 25.1.
 412 Chapter 25 Analysing Ambiguity
possible way. In short, Step 1 requires precise identification of the meanings that
constitute and cause the ambiguity.

Because precise identification of the meanings is so crucial, lawyers need to develop a

technique for performing the task. Three techniques are explained here - using a
dictionary, reusing the words in another context and consulting a catalogue that
contains a classification of ambiguity.

Dictionary
A simple and highly useful means of ascertaining possible meanings is to look up the
word or words in a dictionary. A standard English dictionary will at least give the broad
sense of a word by indicating a commonly accepted range of meanings. In this regard,
dictionary definitions are a useful, almost necessary starting point for interpretation. Be
aware, though, of the limitations of a dictionary - for example, no dictionary is perfect
and words shimmy about. Moreover, some of the forms of ambiguity would not
ordinarily be captured or completely captured in the dictionary definition of a term.

Obviously a dictionary merely indicates possible or permissible meanings of word and

even than not infallibly. A dictionary describes only ‘how a word can be used’ but
emphatically does not describe how it is ordinarily used or which meaning should
prevail in a particular context.1035 1036

Reuse Words
Another method is to take the words under scrutiny and use them in another context.
This gives a fresh look at the provision. It also enables you to make a contrast between
two settings where the provision is used and in this way may enlighten you as to the
ambiguity and even as to its possible resolution.

There is a good illustration in Corkery v Carpenter1037 There, Corkery had been

charged with being drunk while in charge of a ‘carriage’ because he was pedalling his
bicycle while under the influence of alcohol. The issue, therefore, was whether a
bicycle was a ‘carriage’. To show popular usage, counsel recited a popular music hall
song. As far as relevant it went: ‘Daisy, Daisy, give me your answer true, I’m half
crazy, all for the love of you. It won’t be stylish marriage, I can’t afford a carriage, but
you’ll look sweet upon the seat of a bicycle built for two’.1038

Through the intensity of this marriage proposal readers can see how the song illustrates
that in popular usage the word ‘carriage’ is taken not to include a bicycle. Whether this
was the legally correct position was precisely the issue in this case. Unfortunately in the
case, the rhetoric of romance did not prevail and Corkery, the

1035 See Christopher Enright Legal Method, Chapter 14 Classifying Meanings.

1036 Smith v United States 53 113SCt 2050, 2061(1993) per Justice Scalia
1037 Corkery v Carpenter [1951] 1 KB 102
1038 Corkery v Carpenter [1951] 1 KB 102, p 103
 Chapter 25 Analysing Ambiguity 413
inebriated pedaller, was convicted. The court held that the core meaning of ‘carriage’
was something that carries things or people - in other words a form of conveyance.
Since a bicycle carried people it was a carriage.

Classification of Ambiguity
A catalogue of ambiguity is an aid to identifying ambiguity because it classifies
ambiguity. It does this by setting out various categories and subcategories of ambiguity.
A lawyer who is interpreting law can use these as a check list. These forms of
ambiguity are discussed in detail in another text and are summarised below. Some of
these move beyond the entries in a dictionary so that they include other ways in which
words can have two or more meanings.1039 1040

Classification of Ambiguity
Introduction
As just discussed, one of the ways to identify ambiguity is to use a catalogue or
classification of ambiguity as a guide. Analysing ambiguity in this way demonstrates
how ambiguity takes different forms and thus provides lawyers with a catalogue of
various types of ambiguity, which can function as a checklist to assist in analysing
ambiguity to identify all of the meanings of the ambiguous provision. This assists
readers in becoming more proficient at detecting ambiguity, understanding its nature
and framing arguments to resolve it. This is more so the case given that some forms of
ambiguity, for example ambiguity of implication, are not always obvious to an
untrained eye.

On the wide view of its scope ambiguity can be classified into five major types, most of
which contain sub types.1041 The five types are lexical ambiguity, relational ambiguity,
ambiguity of implication, ambiguity from competing versions of a rule and ambiguity
from a conflict between rules. Knowing these categories may assist in detecting an
ambiguity, understanding how it has arisen and in formulating arguments to resolve it.
These categories are fully explained in another text, so what now follows is just an
outline of these forms of ambiguity. This is followed by discussion of some cases that
are special because they can be contentious.

Lexical Ambiguity
Lexical or verbal ambiguity1042 is ambiguity within words themselves. A word can have
two or more distinct meanings.1043 1044 In the phrase ‘offensive behaviour’ does the
word
12
‘offensive’ mean aggressive (as in taking the offensive) or disgusting? A word can also
be wide or vague in its terms and hence uncertain in its reach. How high does a

1039 Christopher Enright Legal Method Chapter 14 Classifying Meanings

1040 Commentary 25.2.
1041 See Christopher Enright Legal Method, Chapter 14 Classifying Meanings
1042 Repatriation Commission v Vietnam Veteran's Association (2000) 171 ALR 523, 550 per
Spigelman CJ
1043 Ormond Investment v Betts [1922] All ER Rep 709 per Lord Buckmaster
1044 R v Smith [1974] 2 NSWLR 586
 414 Chapter 25 Analysing Ambiguity
person have to be to be ‘tall?’ How much is enough? With open-ended expressions like
these the best that a court can usually do is rule, in each particular case as it arises, on
which side of the line the item in question falls.

Relational Ambiguity
Ambiguity can lie in the structure of sentences. This can also be termed ‘syntactic or
13
grammatical ambiguity’. An example is the sentence: ‘The historic house was saved
from destruction by a developer’. It is not clear from this whether the developer saved
the house or was the person who threatened to destroy it. The concluding phrase ‘by a
developer’ could as a matter of syntax attach either to ‘saved’ or to ‘destruction’.

Implication
Ambiguity can arise from implication.1045 1046 There is an implication from the text that
the words might be read either more widely or more narrowly than their ordinary
meaning.1047 Something is effectively to be added to the text or something is to be taken
away from the text. Implication raises the question of whether the text should or should
not be read as subject to the implication. Justification for making the implication can be
found in the golden rule of interpretation (which is discussed below).

An example of implication is the rule written on the walls of stations in the London
underground rail system. It says: ‘Dogs must be carried on the escalator’. To analyse
this ambiguity it is necessary to divide those who might travel on the escalator into two
classes. Class 1 consists of those who have a dog with them while Class 2 consists of
those who do not have dog with them. Taken literally, members of both Class 1 and
Class 2 would have to carry a dog to ride the escalator. This means that members of
Class 2 would have to procure a dog by some means or not ride the escalator.

Common sense, however, suggests that the sign has to be read subject to an implied
qualification. Its purpose is to protect dogs from harm. So the implied qualification is in
all likelihood that the sign is meant to apply to people in Class 1 only being those who
have a dog with them.

Competing Versions of a Rule

Ambiguity of competing versions of a rule occurs only with common law. It arises
when, for example, one judge frames a rule with one set of words while another judge
frames the rule with another set of words similar to but not identical with the first.

Conflict Between Rules

In ambiguity based on conflict between rules (in common law or statute), one rule
regulates a situation in one way while a second rule regulates the situation in another
way.

1045 Repatriation Commission v Vietnam Veteran's Association (2000) 171 ALR 523, 550
1046 Commentary 25.3.
1047 Commentary 25.4.
 Chapter 25 Analysing Ambiguity 415
Special Cases
In this context special cases refer to situations where facts do not precisely fall within
the language of a statute but do so if the provision is stretched. There are at least three
cases. One involves open terms (a form of lexical ambiguity), a second involves partial
satisfaction (a form of lexical ambiguity) while a third involves implied qualification
and implied extension. These raise a question as to the scope of ambiguity, which is
why the text gives them special treatment.

Open Terms
This is a form of lexical ambiguity. Some terms are so vague, wide and subjective that
they effectively confer a discretion on a court. Common examples of such words in
statutes are provisions that authorise some authority to take action that must be
‘reasonable,’ ‘fit and proper,’ or ‘just and equitable’. These terms often raise a question
of degree, for example how just and equitable must it be to satisfy the requirement? The
scope of these terms is chronically wide. Therefore to make these terms more
manageable courts often develop criteria and guidelines to implement them. As a result
such terms, although contained in statute, give rise to a new common law as courts
endeavour to turn their open texture into more definite standards. This is referred to as
statutory common law. Clearly with this type of ambiguity there is no list of specific
meanings but an amorphous spectrum of possibilities.

Partial Satisfaction
Partial satisfaction is a form of lexical ambiguity. Sometimes a fact partially satisfies
the expressed or assumed requirements of a term. There is a literary example in Banjo
Patterson’s poem Clancy of the Overflow, which refers to a letter written by a shearer
with a ‘thumbnail dipped in tar’. Is this a ‘pen’? Or is an inverted wooden packing case
a ‘table’? This ambiguity is sometimes described by reference to words having an
umbra of certainty and a penumbra of uncertainty. Cases that definitely fall within the
term are the umbra. Cases on the fringe such as the thumbnail dipped in tar and the
inverted wooden packing case fall within a penumbra of uncertainty.

Implied Extension and Implied Qualification

Implication takes two forms, implied extension and implied qualification. This can be
explained as a statute’s having a central meaning, an umbra that is uncontentious, and a
possible or arguable wider meaning, a penumbra that is contentious:
(1) Implied Qualification. An implied qualification narrows the scope of a provision
by lessening the area that it covers. It narrows the umbra.
(2) Implied Extension. An implied extension does the reverse. It extends the scope
of a provision by extending the area that it covers. It creates or expands the penumbra.

Scope of Ambiguity
The cases of vague terms, partial satisfaction and implication are important because
they open up the question of the scope of ambiguity. According to a narrow view of
ambiguity these are not proper ambiguities. In the discussion here the text just marks
them for identification. The text discusses the question of the scope of ambiguity
 416 Chapter 25 Analysing Ambiguity
below and in doing so refers back to this description of these three disputed types of
ambiguity.

Scope of Ambiguity
Introduction
While ambiguity makes interpretation necessary,1048 1049 somewhat ironically the word
‘ambiguity’ is itself ambiguous or at least has been rendered so by lawyers. In their
wisdom, or more likely their lack of it, they have bestowed on it both a wide and a
narrow meaning. The question therefore is which meaning of ambiguity should courts
adopt. To appreciate fully discussion of this question it may be either helpful or
necessary for the reader to acquaint themselves with the five types of ambiguity -
lexical ambiguity, relational ambiguity, ambiguity of implication, ambiguity from
competing versions of a rule and ambiguity from a conflict between rules - by reading
17
again the outline of them that is located earlier in this chapter.

The wide meaning is that for legal purposes ambiguity includes all five types including
their sub-types. The narrower view of ambiguity is to a substantial extent determined by
inference because it is generally implied rather than expressed. 1050 It has two
components, which have been explained above. One component excludes meanings that
do not fall fully within the text of the law. This encompasses lexical ambiguity based on
partial satisfaction and ambiguity of implication. A second component excludes lexical
ambiguity based on vagueness.

Wide Meaning
The wide meaning is the basis of the analysis of language presented in this chapter. The
wide view is that there is ambiguity when ‘the intention of the legislature is for
whatever reason doubtful’ (which is why it fully includes all of the five types of
ambiguity).1051 This is plain logic. A provision is ambiguous for the purposes of legal
interpretation if there is some uncertainty about its meaning, leading to uncertainty as to
whether or not the provision applies to the facts of a case. On one view of the law it
applies, on another view it does not. So, ambiguity exists where by any stretch of the
imagination a provision could reasonably be interpreted and applied one way or
another. In other words, whatever generates the need for interpretation constitutes
ambiguity.

Glanville Williams also takes this view. As he put it, the proper test is to put the
question: Does the provision in the case apply or not apply to particular facts? If on a
reasonable view either a ‘yes’ and a ‘no’ is possible, there is ambiguity. On this line of
reasoning, a court can decide that there is no ambiguity on a point only if it decides in
the context of the case before it that ‘[any] alternative interpretation is impossible on

1048 R v L (1994) 122 ALR 464 at 468

1049 See Christopher Enright Legal Method Chapter 14 Classifying Meanings.
1050 For example, it is reflected in the drafting of s15AB of the Acts Interpretation Act 1901
(Cth) and its counterparts in other jurisdictions.
1051 Repatriation Commission v Vietnam Veteran's Association (2000) 171 ALR 523, 550
 Chapter 25 Analysing Ambiguity 417
the wording’. In other words, the court rules that the meaning that a party seeks to put
20
on a word or phrase is lexically untenable.

This wide view of ambiguity would include all of the five types of ambiguity discussed
above. Thus it encompasses lexical ambiguity, relational ambiguity, ambiguity of
implication, ambiguity form competing versions of a rule and ambiguity from a conflict
between rules.

Proposed Exclusion 1: Meaning not Fully Within Text of Law

One strand of the narrow form of ambiguity is based on a proposed meaning of a
provision not falling totally within the text of the ambiguous provision. There are two
specific types:
21
(1) Ambiguity of Implication. This is by far the most common exclusion, and
20 23 24
occurs in texts, legislation and cases. Yet despite this neglect of ambiguity of
implication in formal discussion, there is wide resort to this ambiguity in cases.
(2) Partial Satisfaction. This applies where the meaning falls partly within the
provision and partly outside.

Both of these forms of ambiguity raise the question of how far courts should allow
language to go. Must an item fall squarely with a word or phrase, that is, within the
umbra? Or is it enough that they fall fairly but not squarely or precisely within the term,
that is, within the penumbra?

An extreme literal approach would not countenance ambiguities of this kind. Either the
facts fit the words precisely or they do not fit them at all. This approach is referred to in
the United States as textualism, or in its latter day appearance, the new textualism. As
an illustration the United States Supreme Court decided a case where the relevant
provision provided a higher penalty for purchasing drugs in the case where the
purchaser ‘used’ a gun in the course of the purchase. In this case the purchaser sought
to barter the gun for drugs. Defence counsel argued an implied qualification so that one
‘used’ a gun for the purpose of the statute when one used it as a firearm. The Supreme
Court, however, refused to impose the implied qualification and so held that
25
the defendant ‘used’ the gun for the purchase.

An alternative approach takes into account that language is not an inherently precise
means of communication and that attempts to make it more precise will often cause a
legislature to use more rather than fewer words. Further, where the intention of the
legislature is obvious, rational and just, the legalism entailed in a strict reading of the
scope of words defies common sense and creates unnecessary disruption and disorder.
1052 1053 1054 1055 1056 1057

1052 Williams (1981A) p1129

1053 Williams (1981A) , referring to implication as the 'secondary' meaning of a provision.
1054 An example is Pearce (2001) p 25.
1055 Commentary 25.5.
1056 Commentary 25.6.
 418 Chapter 25 Analysing Ambiguity
A problem with this ambiguity is that judicial discussion is not very articulate. Lord
Diplock, for example, refers to judges who ‘invent fancied ambiguities’. As 1058 1059 1060

another example, Justice Dawson has drawn a strange distinction between ‘provisions
on their face [which] offer more than one construction’ and ‘determining whether more
than
27
one construction is open’.

Proposed Exclusion 2: Vagueness

The narrow view may exclude lexical ambiguity to the extent that it arises from words
that are vague or uncertain. For example, s15AB(1)(b)(i) of the Acts Interpretation Act
1901 (Cth) draws a distinction between a provision which is ‘ambiguous’ and one
which is ‘obscure’.

Dickerson also argues for this distinction in the following way: ‘Whereas ‘ambiguity’
in its classical sense refers to equivocation, “vagueness” refers to the degree to which,
independently of equivocation, language is uncertain in its respective application to a
number of particulars. Whereas the uncertainty of ambiguity is central, with an “either-
28

or” challenge, the uncertainty of vagueness lies in a marginal question of degree’.

Resolution
This chapter adopts the wider view. The best reason for taking the wider view is that
justice is generally better served by allowing courts to take the wider view. While it
may involve some damage to the proper use of language it is avoids unnecessary
complications with only minor cost.

There is some general judicial support for the wider view. The golden rule of
1061 1062 1063

interpretation also provides some support for the wider view in relation to ambiguity of
implication and ambiguity based on partial satisfaction. It applies where the literal sense
of a statute would ‘lead to some absurdity, or some repugnance or inconsistency’
30 31
with the rest of the statute. These, it should be noted are fairly extreme cases. When it
operates, the golden rule allows a court to depart from the ordinary meaning of the
language of a statute by bending the meaning of a provision by resorting to
32
implication 1064 1065
or by allowing a meaning that only partially fits within the words of the
statute.

1057 Smith v United States 53 113 SCt 2050 (1993)

1058 Duport Steels v Sirs [1980] 1 WLR 142, 157, [1980] 1 All ER 529
1059 Mills v Meeking (1990) 91 ALR 16, 30-31. Commentary 25.7.
1060 Dickerson (1964) p 10
1061 Commentary 25.8.
1062 Grey v Pearson (1857) 6 HLC 61, 106 per Lord Wensleydale
1063 Commentary 25.9.
1064 Commentary 25.10.
1065 Bermingham v Corrective Services Commission (1988) 15 NSWLR 292, 302
 Chapter 25 Analysing Ambiguity 419
Yet the spirit with which courts go beyond the literal scope of the words should be the
same in each case. A court cannot pluck something out of thin air and by this means
break free of the constraints of the words. It can, however, bend or stretch the words
33
but only up to a point. In the result it gives the words a permissible but ‘strained’ or
 420 Chapter 25 Analysing Ambiguity
‘ambulatory’ 1066 1067
construction, but this construction should be neither ‘unreasonable nor
35
unnatural’.

Prevalence of Ambiguity
How prevalent is ambiguity? Postmodernism, which is often invoked to explain legal
interpretation (sometimes referred to in the context of interpretation as
conventionalism), propounds the view that language is extremely open to
1068 1069 1070 1071

ambiguity.
37
Commonly its exponents refer to the ‘indeterminacy’ of legal language. Affiliated with
this is the notion that each of us is likely to take our own interpretation. As the
38
Latin proverb puts it, quot homines tot sententiae, that is, there are as many opinions as
there are people. Thus, Berns writes that ‘interpretation is a profoundly creative act
39
[because] to read a text is also to create that text anew,’ and Wald asserts that ‘language
is inherently indeterminate and will always depend upon both the writer and the
reader’s context to give it meaning’. In a similar vein Hart, a positivist we should add,
1072

says that language is ‘open textured’. 1073 1074

One can, however, test this view by going to the law reports and looking at any case
interpreting a statute or a common law rule. In such cases there is no suggestion or
concern that the ambiguous word or phrase has a multitude of meanings. Instead it has a
finite number of meanings, usually just a handful, or in the case of an open expression
such as ‘just’ or ‘fair’ an identifiable spectrum of meanings. What troubles the court is
how to decide between these meanings. Given that this is the approach frequently
adopted by courts, postmodernists’ views on the nature of language seem
42
both extreme and irrelevant.

A more conventional view is that ambiguity is common enough but not overwhelming.
Professor Julius Stone took this approach. Ambiguity provides choice but not open
slather. It merely gives a court ‘leeways of choice’ on some occasions, even if in some
1075

cases this ‘creative choice’ is ‘secret and even unconscious’. 1076

The view taken here is similar to Julius Stone’s. Language is potentially ambiguous but
is not always so in all contexts. Except in the case of a wide and open term with an

1066 R v Young (1999) 46 NSWLR 681, 687-688

1067 IW v City of Perth (1997) 146 ALR 696, 702. Commentary 25.11.
1068 Schanck (1990) pp 833-843
1069 See Greenwalt (1990); Endicott (1996) and Drahos and Parker (1991).
1070 Publius Terentius Afer (185 BC - 159 BC), a Roman comic dramatist (aka Terence)
1071 Berns (1993) p 63
1072 Wald (1990) p 302
1073 Hart (1961) p 125
1074 Commentary 25.12.
1075 Stone (1964) p 276, and see Queensland v Commonwealth (1977) 139 CLR 585, 603 per
Stephen J, 606 per Mason J.
1076 Stone (1964) p 241. See also Krygier (1986).
 Chapter 25 Analysing Ambiguity 421
identified spectrum of possibilities, there is a finite number of meanings. One side to
the case will present some meanings, the other side may present some and the court
 422 Chapter 25 Analysing Ambiguity
may present possible meanings that the parties have not conceived. Even if there are
other possible meanings, if they are not raised in court by one or other party or the
judge they do not count in the particular case (although they may be raised in a later
case). This finite list of the possible meanings of an ambiguous provision is the range of
options or possibilities before the court. The court can only choose from among this list
to come up with the correct answer.

Relevance of Ambiguity
Introduction
When a lawyer or court is confronted with a question of interpretation logically one of
the first things that they need to do is to identify the meanings of the ambiguous
provision and the effects that each will cause. As described above, this is Step 1 in the
model for interpreting law. For reasons given below, this is of major importance.
Unless one can analyse language to identify the various meanings of an ambiguous
provision it is not possible to interpret law either as a lawyer or a judge. Trying to
interpret law without identifying ambiguity in biblical terms is akin to building bricks
without straw.

While it might seem intuitively right to identify the meanings of the ambiguous
provision and their effects it will enhance the interpretive skills of readers if the reasons
for this are articulated. There are in fact three major reasons for identifying the options.
It defines the problem, it identifies the solution to the problem, and it enables reasons to
target the particular meaning to which they must be addressed.

Defining the Problem

Identifying all of the meanings of the ambiguous provision defines the problem. When
interpreting law the problem arises from a provision of a statute being ambiguous. Step
1 defines the problem by identifying each of the various meanings of this ambiguous
provision. The existence of these meanings generates the ambiguity. By identifying
these meanings the court knows precisely what the problem is. By identifying the
effects that each meaning will cause the court knows the significance of the problem.
When the court chooses one of these meanings as legally correct it is implementing the
effect that that meaning will cause. At the same time it is rejecting the effects that the
other meanings would cause if chosen as correct.

Thus, identifying the meanings and their effects makes clear what choice the ambiguity
has imposed on the court. It must decide which of several competing meanings of the
ambiguous provision is legally correct and by this means introduce into the world the
effect that this particular meaning will cause.

Identifying the Solution

If the lawyer or the court correctly identifies all possible meanings of the ambiguous
provision it also identifies the solution to the problem - it must be one or more of those
meanings. This is how the model seeks to ensure that the task is done comprehensively
so that nothing of relevance is overlooked. In consequence, one of
 Chapter 25 Analysing Ambiguity 423
the options must constitute the best available solution to the problem. 1077 Conversely, if not all options have been identified there is always the
possibility that the best outcome consists of an option that has not been identified - in consequence it will not be appraised by the court in Step
2 and therefore cannot be indorsed in Step 3 as the legally correct meaning of the provision.

Assisting the Reasoning Process

Identifying all of the meanings of the ambiguous provision is necessary for the reasoning process, which takes place in Step 2 of the model.
This reasoning consists of arguments addressed for or against options. Any reason or argument addressed to the court makes sense only if it is
directed to a meaning of the ambiguous provision. It seeks to persuade the court to accept or reject that meaning as the legally correct meaning
of the ambiguous provision. Obviously, it is not possible to formulate an argument for or against a meaning until the meanings have been
precisely identified.

2. Limits to Interpretation
Ambiguity provides an interpreting court with a choice. This choice, however, is not unlimited. Conveniently the limits can be stated in two
phases. There are general limits, which are imposed by the fact that any interpretation made by a court must fit broadly or reasonably within
the limits of the language used in the ambiguous rule. Within this broad limit there are specific limits imposed by the various types of
ambiguity. Each ambiguity confers a choice, while at the same time imposing limits on that choice.

This analysis of language is directly relevant to interpreting law. It is also relevant to any consideration of the contentious question of judicial
activism. Obviously the limits of interpretation set outer limits to the creative role of the courts when interpreting law (but not when making
common law). The question then is whether there are any ascertainable inner limits that define the proper creative role of a court.

General Limits: Language

[U]nless the statute plainly hands courts the power to create and revise a form of common law, the
domain of the statute should be restricted to cases anticipated by its framers and expressly resolved
in the legislative process 1078
Introduction
The proposition that language sets limits on interpretation flows from two other propositions. Here are all three of these propositions:
(1) Ambiguity as the Problem. Ambiguity is the source of a problem because it gives rise to the need for interpretation. An ambiguous
word or phrase has two or more meanings and a court must decide which is legally correct.
(2) Ambiguity as the Answer. Ambiguity, however, is also the source of the answer. The answer to the question of interpretation lies
within these meanings.

1077 Commentary 25.13.

1078 Easterbrook (1983) p 544
 424 Chapter 25 Analysing Ambiguity
(3) Limits of Language. Logically, a court can choose its answer to the question of
interpretation only from the meanings that the ambiguous word or phrase properly
yields up. This is how language sets limits on the function of interpretation. If the
language of the ambiguous law does not encompass a meaning of a provision then it is
not available as the legally correct interpretation.

This proposition that language sets limits on the task of interpretation is actually
framed in the literal rule of interpretation, which however, is one of the most misstated,
and in consequence, misunderstood and misapplied rules in the entire common law.
Stated simply in its conventional form, the rule says that words should
47
be given their literal meaning. As commonly understood, the literal rule is considered
to guide courts in the process of interpretation by pressing for the literal meaning of a
word or phrase as the correct legal meaning. By contrast, the view propounded here
1079 1080

is that this is not the proper sense of the literal rule. However, badly expressed as it is,
the only way to make sense of the literal rule is to see it as imposing a stricture on
interpretation. This stricture consists of a general requirement that any meaning that a
court chooses as legally correct must fall fairly (even if not totally squarely) within the
ambit of the ambiguous words that the court is interpreting.

Conventional Statement of the Rule

In its common formulation, the literal rule says that words should be given their literal
meaning. Other expressions besides literal are sometimes used such as natural,
1081 1082

ordinary and grammatical, but the effect is the same.

1083 1084 1085

While the literal rule specifically says words should be given their literal meaning
commonly it is taken to imply a further proposition, which has two connected parts:
(1) Part 1. Words possess just one literal meaning.
52
(2) Part 2. One can discover this literal meaning by objectively means. As the
53
Latin maxim puts it, lucet ipsa per se - the meaning comes shining through. Words, as
it were, mean what they say and say what they mean. 1086

Understood in this way, the literal rule has major implications for the practice of
interpretation. To interpret a statute a court just reads the words of a statute in their
plain, natural or literal sense, sees what they mean and in this way ascertain the answer
to any question of interpretation. In other words, someone does not have to be a
1087

1079 Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127 per Kirby P
1080 Commentary 25.14.
1081 Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127 per Kirby P
1082 Project Blue Sky v ABA (1998) 153 ALR 490
1083 Vacher v London Society of Compositors [1913] AC 107, 149. Commentary 25.15.
1084 Kirby (2003) in Sheard (2003) p 45
1085 Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers' Case) (1920) 28
CLR 129, 149
1086 Repatriation Commission v Kohn (1989) 87 ALR 111, 523 per Hill J. Commentary
25.16.
1087 Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127. Commentary 25.17.
 Chapter 25 Analysing Ambiguity 425
lawyer to interpret law - they only need to know how to read.
 426 Chapter 25 Analysing Ambiguity
Problem
There is a major problem with the literal rule when it is framed in this way because the
basic proposition that it is assumed to imply is not merely questionable but downright
wrong. It is taken to imply that each word has one, single, identifiable meaning which
can be ascertained in an uncontentious way. This is not the case for at least two
1088 1089

reasons. First, many words have more than one meaning as flipping through the pages
57
of a dictionary will reveal. This is called lexical ambiguity. Second, there are, as
already discussed, other forms of ambiguity besides lexical ambiguity.

So, for judges to look to just the words of a statute it is not really a means of resolving
ambiguity. Resort to the words of a statute via the literal rule is not a solution to the
problem, but is at best a restatement of it. Given this, as it is conventionally formulated
the literal rule is next to useless. This is why it is necessary to propose a reformulation
of the rule to express it in a coherent form that makes a genuine contribution to the task
of statutory interpretation.

Restatement of the Rule

The Constitution is not a living organism, it is a legal document. It says some things and doesn't
say other things.1090
Many words have not just one meaning, but a range of meanings. This easily makes
language loose, flexible and ambiguous. So, the only rational point to the literal rule is
not to assert that there is only one literal and identifiable meaning which answers any
issue of interpretation. Rather, it accepts that words can have several meanings but at
the same time asserts forcefully that the various meanings of a word depict its limits.
These meanings may themselves be fuzzy and require interpretation. Nevertheless, the
fact that a word has several meanings does not indicate that there are no limits to its
meaning. Rather, those meanings together set the outer limits for the scope of the word,
even if these meanings need to be clarified by interpretation. That is, for any particular
text there are limits ‘beyond which the words will not stretch’. In this way the rule
1091

both assumes and requires that the intention of the legislature is found only in ‘the
language in the statute as whole’. Words used in the text of a statute constitute ‘a
1092

constraint on the range of interpretive options available’. This is why a court must not
1093

do ‘violence’ to ‘the language of an Act so as to bring within its terms articles which
are not expressly included’. 1094

Thus it is a fundamental rule that a court may give a meaning to words only if these
words are ‘reasonably open to such a construction’; in this way the language of the
particular law sets limits to interpretation, and does so for the good and simple reason

1088 Commentary 25.18.

1089 Commentary 25.19.
1090 Justice Antonin Scalia (2006)
1091 FCT v Trustees of Lisa Marie Walsh (1983) 48 ALR 253 at 278. Commentary 25.20.
1092 Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers' Case) (1920) 28
CLR 129, 161-162, per Higgins J. Commentary 25.21.
1093 Eskridge (1990) p 626
1094 Corkery v Carpenter [1950] 1 KB 102, 106
 Chapter 25 Analysing Ambiguity 427
that construction of an Act ‘must be text based’.1095 As Lord Steyn succinctly put it,
‘the primacy of the text is the first rule of interpretation’ 1096 so that the text becomes
‘the formal focus of interpretation’.1097

Putting all this in its plainest form, any meaning that a court adopts as the legally
correct interpretation of a provision must fall reasonably within the scope of the words
in the statute. A court should not choose a meaning of a provision as legally correct if
this meaning is not found within the ordinary meaning of the words, grammar and
syntax used by the statute.1098 Consequently, those who criticise the interpretation might
say that it is not the best interpretation, but they should never be able to say that the
interpretation chosen by the court was not open to being so chosen. If they can
truthfully assert that this interpretation was not available, it is deeply flawed.

Rationale: Supremacy of the Legislature

Opposition to violence committed on statutory language by courts is based on the
supremacy of the legislature. It is for the legislature and not the courts to change the
language of a statute.1099 This is why it is fundamental that all of the legitimately
possible meanings of an ambiguous provision ‘must be found in the words of [the
legislature]’.1100 That is, the ‘mandated point of departure’ or commencement when a
court starts out on the road to interpretation ‘must be the text itself’.1101 1102 1103 1104 1105
1106

Notwithstanding the supremacy of the legislature, there is an argument that a court can
or should depart from the literal meaning of the words of a statute when doing so
implements the obvious but unstated intention of the legislature. But compelling as this
case is, a court should not do violence to language, even if its aim is to achieve an
70
established or assumed intent of a legislature. A court cannot add words to a statute or
rewrite it when, through oversight or inadvertence, the clear intention of the
71
legislation has not been translated into the text of the law. Interpretation is deciding
which of two or more meanings is legally correct. It is not ‘a warrant for redrafting
72
legislation nearer to an assumed desire’ of the legislature. As Easterbrook neatly puts it,
in these cases a court should say to a litigant: ‘Too bad, but legislative intentions are

1095 R v Young (1999) 46NSWLR 681, 687-688

1096 Steyn (2002) p 5
1097 Eskridge (1990) p 626
1098 Corkery v Carpenter [1950] 1 KB 102, 104, Federal Commissioner of Taxation v Trustees
of Lisa Marie Walsh (1983) 48 ALR 253, 278
1099 R v The Judge of the City of London Court [1892] 1 QB 273, 301-302 per Lopes LJ
1100 Trevisan v FCT (1991) 101 ALR 26, 31
1101 Steyn (2002) p 5
1102 Pearce (2001) pp 20-22
1103 Brennan v Comcare (1994) 50 FCR 555; 122 ALR 615
1104 Trevisan v FCT (1991) 101 ALR 26, 31
1105 Easterbrook (1983) p 534
1106 Indeed the English word 'literal' is derived from the Latin word littera, a letter.
 428 Chapter 25 Analysing Ambiguity
73
not legal rules’. One sticks to the letter of the law, and must not depart from it in
74
pursuit of the supposed spirit or purpose of the legislation. Putting it simply, law is the
language and the language is the law.
 Chapter 25 Analysing Ambiguity 429
Another possibly compelling reason for departing from the literal meaning of the words might
be that it furnishes a means of avoiding a result that is undesirable, for
75
example because it is ‘inconvenient or impolitic or improbable’. Again, though, there is the
standard reply. It is for the legislature not the court to judge how wise, or just or useful a
provision is.1107 1108 1109 1110 1111 A court must still not do violence to the language of a statute;
instead it must give effect to the words of a statute, no matter how ill conceived it may
77 78
be. In any event, a policy is not ill conceived because a judge disagrees with it.

Moreover, while the literal rule generally confines a court to meanings that properly fall within
the language of the statute, it is worth emphasising that within these confines there are
presumptions that strain towards doing justice. While a court should seek to implement the
intention of the legislature, the legislature is assumed to intend to legislate in a way that is fair,
just, reasonable and respecting of human rights. Consequently a court will endeavour to
interpret a statute to achieve these outcomes unless the language of the provision clearly
indicates a contrary intention or somehow precludes the statute from being interpreted in this
way.

Exceptions
In prior discussion in this chapter we considered two special types of ambiguity - ambiguity
based on partial satisfaction and ambiguity based on implication. In both of these cases courts
accept as proper meanings the meaning derived from partial satisfaction and implication where
the meaning fitted fairly but not squarely within the words of the provision. These operate as
exceptions or qualifications to the literal rule.

Comment
Relevant to our analysis is that many lawyers are not fully conscious of implied qualification
and implied extension to a statute. Consequently, they fail to know and appreciate the only
meaning of the literal rule that makes sense. This failure to
79
recognise qualification or extension of a statute explicitly occurs in texts, cases and
legislation,1112 despite widespread resort implication in cases. Confusion ensues, and this
confusion generates a substantial amount of muddled comment about the nature of statutory
interpretation.

Specific Limits: Ambiguity

As has just been discussed, the words of the common law or statutory rule that is ambiguous
set outer limits to the scope of the statute. These limits are stated in the fundamental notion that

1107 Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers' Case) (1920) 28

CLR 129, 161-162, per Higgins J. Commentary 25.22.
1108 Phosphate Co-op v Environment Protection Authority (1977) 18 ALR 210
1109 Davies v Deverell (1992) 1 Tas R 214, Shire of Arapiles v Board of Land and Works
(1904) 1 CLR 679
1110 McCawley v The King (1918) 26 CLR 9, 24 ALR 413
1111 Commentary 25.23.
1112 Commentary 25.24.
 430 Chapter 25 Analysing Ambiguity
the language is the law and the law is the language, which
 Chapter 25 Analysing Ambiguity 431
leads to the proposition that a court may give a meaning to words only if these words
are ‘reasonably open to such a construction’.1113 1114

Within this broad limit there are further limits imposed by the various types of
ambiguity. According to the classification deployed in this book, there are five types of
ambiguity:
# lexical ambiguity
# relational ambiguity
# ambiguity of implication
# ambiguity from competing versions of a rule
# ambiguity from a conflict between rules.
Each form of ambiguity confers a choice on a court. At the same time they define and
impose limits on that choice.

These forms of ambiguity are outlined above. They are discussed in detail in another
text, which also explains both the leeway that they furnish for interpretation and the
82
limits that they impose.

Commentary
Commentary 25.1 Footnote 2
For consideration of ambiguity by writers see Evans (1989), Drahos and Parker (1991),
Maher (1984), Endicott (1996), Slattery (1996), Bennion (1980), Bennion (l981A) and
Bennion (1981B).

Commentary 25.2 Footnote 8

Empson ‘Seven Types of Ambiguity’ (1930) is a classic text. It deals with ambiguity
from a literary perspective, showing how ambiguity of feeling creates imagery and
affects our senses. It is not, however, of specific or direct relevance to legal
interpretation.

Commentary 25.3 Footnote 14

Some examples of ambiguity of implication are found in KP Welding Construction Ltd
v Herbert (1995) 102 NTR 20, 40-41 and Peninsula Group v Registrar-General of the
Northern Territory (1996) 136 FLR 8, 12.

Commentary 25.4 Footnote 15

There is a special case for ambiguity of implication that occurs where there is
ambiguity of competing rules. This is a special case because it is created by the
legislature in making two inconsistent rules. The court has to resolve the conflict by
doing two things. It reads down (that is reduces) the scope of one or both rules to allow
both to operate. In doing so it imposes an implied qualification on the scope of the rule
or rules that it reads down.

1113 R v Young (1999) 46NSWLR 681, 687-688. Commentary 25.25.

1114 Christopher Enright Legal Method Chapter 14 Classifying Ambiguity
 432 Chapter 25 Analysing Ambiguity
Commentary 25.5 Footnote 23
Section 15AB(1)(b) (i) and (ii) of the Acts Interpretation Act 1901 (Cth) reflect this
distinction between the wide and narrow meaning of ambiguity. Section 15AB(1)(b)(i)
reflects the wider meaning as it refers to a provision that is ‘ambiguous’.
Section15AB(1)(b)(ii) reflects a narrower meaning as it refers to a provision whose
‘ordinary meaning’ leads to a result that is ‘manifestly absurd’ or ‘unreasonable’.

Commentary 25.6 Footnote 24

In relation to ambiguity of implication note in Mills v Meeking (1990) 91 ALR 16, 30-
31 Dawson J drew a distinction between ‘provisions on their face [which] offer more
than one construction’ and ‘determining whether more than one construction is open’
(which is a roundabout way of referring to ambiguity of implication). A similar attitude
was expressed in two cases cited by Dawson J, Miller v Commonwealth (1904) 1 CLR
668, 674 and Wacal Development Realty Development Pty Ltd (1978) 20 ALR 621,
630. For other judicial use of this approach see CIC Insurance Ltd v Bankstown
Football Club Ltd 141 ALR 618, 634-635 per Brennan CJ, Dawson, Toohey and
Gummow JJ; Isherwood v Butler Pollinow (1986) 6 NSWLR 363, 368 and Attorney
General v Prince Ernest Augustus of Hanover [1957] AC 436, 461.

Commentary 25.7 Footnote 27

Mills v Meeking (1990) 91 ALR 16, 30-31 makes this strange distinction between
‘provisions on their face [which] offer more than one construction’ and ‘determining
whether more than one construction is open’. This distinction appears in two cases cited
by Dawson J, Miller v Commonwealth (1904) 1 CLR 668, 674 and Wacal Development
Realty Development Pty Ltd (1978) 20 ALR 621, 630.

Commentary 25.8 Footnote 29

There is some general judicial support for the wider view in Repatriation Commission
v Vietnam Veteran’s Association (2000) 171 ALR 523, 550 per Spigelman CJ and in
Bowtell v Goldsborough Mort & Co (1996) 3 CLR 444 at 456-457, per O’Connor J. Sir
Samuel Griffith neatly put support for implication as a form of ambiguity in Nicol v
Chant (1909) 7 CLR 569, 581, in saying: ‘There is no word the primary meaning of
which may not be modified by the context’.

Commentary 25.9 Footnote 31

As the text says, the golden rule applies where the literal sense of a statute would ‘lead
to some absurdity, or some repugnance or inconsistency’ with the rest of the statute.
This means that the golden rule should not be deployed where the meaning is clear but
the result is not as just as the court would have it. Here, the operative maxim is stant in
claris (literally, they rest in clarity), that is, when the meaning is clear look no further.
The maxim applies the principle of Occam’s razor to statutory interpretation.

Commentary 25.10 Footnote 32

There are rules for determining when an implied qualification or extension is
permissible - see Christopher Enright Legal Method Chapter 14 Classifying Meanings.
 Chapter 25 Analysing Ambiguity 433
Commentary 25.11 Footnote 35
In Luke v Inland Revenue Commissioners [1963] AC 557, 577 Lord Reid expressed a
similar sentiment to IW v City of Perth (1997) 146 ALR 696, 702. There he intimated
that the outer limit of interpretation was when the words in the legislation were
‘absolutely incapable’ of a proposed meaning. Up to this point, the meaning was
legitimate (although whether it was the legally correct meaning of course is a separate
question).

Commentary 25.12 Footnote 42

Greenwalt (1990) argues that ‘law often yields determinate answers’ and in so doing
adopts ‘a fairly strict interpretation’ of what constitutes a determinate answer (p 2).

Commentary 25.13 Footnote 45

When interpreting law, a comprehensive statement of all of the meanings of the
ambiguous provision will be an organising framework on the basis that courts do not do
violence to language. They must not give the words a meaning that they cannot
reasonably bear. This in fact, is the proper meaning of the literal rule despite much
common misunderstanding to the contrary.

Commentary 25.14 Footnote 48

For conventional accounts of the literal rule see Bennion (1980A), Williams (1981A)
and Williams (1981B). For comparison between literal and purposive interpretation see
Edit (1981). In the application of the literal rule to the Commonwealth Constitution see
Coper and Williams (1997B), Craven (1992A) and Craven (1992B).

Commentary 25.15 Footnote 51

For cases discussing the literal rule see Australasian Temperance and General Mutual
Life Assurance Society v Howe (1922) 21 CLR 290, 302 and Project Blue Sky v ABA
(1998) 153 ALR 490.

Commentary 25.16 Footnote 54

There are three connected propositions here:
(1) The comment that words mean what they say and say what they mean was made
by Justice Hill in Repatriation Commission v Kohn (1989) 87 ALR 111, 523.
(2) This echoes what the court said in Connecticut National Bank v Germain 112 S
Ct 1146, 1149 (1992): ‘[I]n interpreting a statute a court should always turn to one
cardinal canon before all others - courts must presume that a legislature says in a statute
what it means and means in a statute what it says there’.
(3) These statements reflect the statement already made on several occasions in this
chapter: ‘The language is the law and the law is the language’.

Commentary 25.17 Footnote 55

This discussion of the commonly alleged but deeply flawed meaning of the literal rule
brings to mind a comment by a non-lawyer critic of a distinguished judge who
 434 Chapter 25 Analysing Ambiguity
espoused a legalistic approach to interpretation. The critic commented that the judge
was regarded as great only because he could read a dictionary.

Commentary 25.18 Footnote 56

The argument that the words of a statute can yield an objective meaning, it is worth
pointing out, is in sharp contrast to looking at the policy of the statute. In adopting this
‘objective meaning’ approach courts eschew the actual intention of the makers and look
to the words themselves. The problem with this approach is that proceeding in this way
will rarely solve a question of interpretation.

Commentary 25.19 Footnote 57

There is a good illustration of how words have multiple meanings in London and North
Eastern Railway Co v Berriman [1946] AC 278. There, all five members of the House
of Lords said that the meaning of an Act was plain, but the plain meaning was one thing
for two of the law lords and another thing for the other three. See also Maunsell v Olins
[1975] AC 373, 385-386 per Lord Wilberforce.

Commentary 25.20 Footnote 59

For some famous cases where the literal rule was invoked see Re Rowlands [1963] 1
Ch 1, Magor and St Mellons v Newport Corporation [1951] All ER 839, and Whiteley v
Chappell (1868-1869) 4 LQRB 147.

Commentary 25.21 Footnote 60

The text asserts the proposition that the true meaning of a provision of a statute must be
properly found in or justified by the words of the statute. A similar view was expressed
in Caminetti v US 242 US 470 (1917) which asserted that ‘the meaning of a statute
must, in the first instance, be sought in the language in which the act is framed’.

Commentary 25.22 Footnote 75

For an extreme implementation of the literal rule see Higgins v O’Dea [1962] WAR
140.

Commentary 25.23 Footnote 79

An illustration is Steyn (2002) pp 3-4, where His Lordship said: ‘The purpose of
interpretation is sometimes mistakenly thought to be a search for the meaning of words.
This in turn leads to the assumption that one must identify an ambiguity as a pre-
condition to taking into account evidence of the setting of a legal text’. See also Pearce
(2001) p 25 and Steyn (2001).

Commentary 25.24 Footnote 80

Dawson J, for example, in Mills v Meeking (1990) 91 ALR 16, 30-31 drew a
distinction between ‘provisions on their face [which] offer more than one construction’
and ‘determining whether more than one construction is open’ (which is a roundabout
way of referring to ambiguity of implication). A similar attitude was expressed in two
cases cited by Dawson J, Miller v Commonwealth (1904) 1 CLR 668, 674 and Wacal
 Chapter 25 Analysing Ambiguity 435
Development Realty Development Pty Ltd (1978) 20 ALR 621, 630. See also CIC
Insurance Ltd v Bankstown Football Club Ltd 141 ALR 618, 634-635 per Brennan CJ,
Dawson, Toohey and Gummow JJ; Isherwood v Butler Pollinow (1986) 6 NSWLR
363, 368; Attorney General v Prince Ernest Augustus of Hanover [1957] AC 436, 461,
Newcastle City Council v GIO (1997) 149 ALR 623, 639-643, citing Lord Diplock in
Jones v Wrotham Park Estates [1980] AC 74, 105 and Sarasawati v R (1991) 100 ALR
193, 207, per McHugh J.

Commentary 25.25 Footnote 81

Section 15AB(1)(b) (i) and (ii) of the Acts Interpretation Act 1901 (Cth) reflect this
distinction. Section 15AB(1)(b)(i) refers to a provision that is ‘ambiguous’ while
s15AB(1)(b)(ii) refers to a provision whose ‘ordinary meaning’ leads to a result that is
‘manifestly absurd’ or ‘unreasonable’. Thus s15AB(1)(b)(i) invokes the narrow view of
ambiguity, while s15AB(1)(b)(ii) refers to the circumstances when resort to ambiguity
of implication is permissible.
Chapter 26
Observing Facts
Introduction
Observation by a Witness
Observation by Equipment
Observation by an Institution
Observation by the Court
Commentary

[There is a] remarkable degree of fallibility in the basic fact-finding processes on

which we rely in criminal cases.1115

Introduction
Humans are capable of observing facts. They may observe facts purely by the unaided
use of their own senses, namely sight, sound, touch, smell and taste. They may observe
with assistance of scientific instruments such as a microscope or a telescope. They may
observe by use of technology. Here the technology makes the initial observation (for
example a surveillance camera) and records this observation in some way. Then
humans can view the record of the observation.

Reliance on Observation
Humans constantly rely on observation in order to know. Observation can be made by
any of the five senses - sight, hearing, touch, taste and smell. Reliance on observation is
based on the notion that our observation can be trusted, as expressed in the notion that
‘seeing is believing’. A person observes something then reasons: ‘I have seen this with
my own eyes and therefore it is true’. (They make similar claims regarding the other
four senses.) This involves a refutation of the claims of sceptics and postmodernists that
our senses are tools of deception rather than truth, while at the same time conceding
that observation may sometimes be flawed and hence unreliable. That is, in principle
we can trust our senses, but not always. For our purposes there are two main types of
observation, which is based on one of the five senses, namely seeing, hearing, tasting,
touching and smelling:
(1) Witness. There is a witness who observes some of the facts of a case.
(2) Expert Witness. An expert witness commonly observes facts as part of the
process of investigating and reporting.

Proof of a Fact
Observation is used in law to prove facts. A witness is allowed to give testimony of
what they observed. In contrast to observation by scientists, observation by a witness

1.
2.
3 Judge Jed Rakoff, US District Court, The Sydney Morning Herald July
. 2002 Commentary 26.1.
Commentary 26.2.

436
 Chapter 26 Observing Facts 437
does not typically take place in circumstances where the design of a process facilitates
accuracy and completeness. Instead, incidents and events happen and it is often only
when the incident or event is underway that observers appreciate its significance. For
these and other reasons such as bias and the frailty of human memory observation in
proof of facts is fraught with uncertainty. This is why the bulk of discussion in this
chapter focuses on observation for proof of fact.

Means of Observation
Observation to prove facts can be made by any of several means. It can be made by a
witness, by equipment, by the court (a judge or jury) or by an organisation.

Need for Observation

Observation (and other means of presenting evidence) are necessary because a court
did not observe the facts of a case for itself as they happened. In these cases the court
does not have any ‘first-hand knowledge of the events or situations’ about which it has
to decide what happened.1116 Consequently, to find truth, even as a matter of
probability, the court cannot rely on its own observation. This is the reason why it has
to rely on evidence of witnesses. This evidence of witnesses, based on their
observation, is incorporated into the process of finding facts that also utilises causation
and probability.1117

Neglect of Fact Finding

Study of fact finding has been much neglected by lawyers. Part of the reason is
historical. For much of the history of common law fact finding was performed by a jury
which was ‘as inscrutable as the Sphinx’1118 1119 because its processes were neither
visible nor otherwise generally known. There were two specific prohibitions:
(1) Judges could not interrogate juries for their reasons.1120
(2) Generally the law forbade investigation of the reasoning process by which juries
reached their decisions.1121
This meant that is was difficult for researchers to examine and report on how juries
function in the important process of finding facts.
This, however, has now changed. Juries are now little used in civil cases. In their place
judges must find fact and give reasons, and in those reasons explain how they arrived at
their conclusion.1122

A second reason derives from a widespread belief that fact finding is a task that is not
readily susceptible to experimentation or scientific study since it is an inner process of
the human mind. As Justice Michael Kirby commented, ‘some of the issues raised by a

1116 Twining (1984) p 68

1117 Christopher Enright Legal Method Chapter 25 Model for Proving Facts
1118 Ward v James [1966] 1 QB 273, 301; see Mackenzie v The Queen (1996) 190 CLR 348,
365.
1119 Kirby in Sheard (2003) pp43-44
1120 Mourani v Jeldi Manufacturing (1983) 57 ALJR 825, 826, Newbury v Bristol Tramways
and Carriage Co (1912) 107 LT 801, 804
1121 Commentary 26.3.
1122 Kirby in Sheard (2003) p 45
 438 Chapter 26 Observing Facts
reflection on judicial reasoning and decision-making are puzzling to judges themselves.
Hence, perhaps [there is a] lack of many authentic explanations and expositions about how the
functions are actually discharged’.11 This state of affairs is
reflected in one frank judicial acknowledgment of how it happens - finding facts can
12
entail ‘a blinding flash of light’.

Proof of a Causal Law

Observation is used in scientific experiment and investigation. Support, even if not outright
proof, for the existence of a causal law is derived from the observation of behaviour, along
with logical inferences from the occurrence of two or more related sets of behaviour. For
example, a scientist observes a subject under one set of conditions then changes one condition,
Condition X. The scientist then observes any changes to the behaviour of the subject. If there
are changes, they are logically attributable to Condition X since nothing else changed.

It is part of the lore of scientific investigation that observation must be conducted with
maximum care and with the absence of bias. While these ideals are not always achieved,
generally researchers earnestly strive for them. In part they do this through attitude and
commitment. In part they do it because scientific investigation is designed to minimise the
possibility of errors of observation. For these reasons observation is not a source of problem in
science to the extent that it is in law. In consequence it is not further discussed.

Observation by a Witness
Ordinary Observation
When we observe something we know it. As the popular phrase goes, already noted, ‘seeing is
believing’. For example, if Jan sees a book on the table Jan knows that there is a book on the
table. In most of these cases, in ordinary circumstances anyway, the observer believes that they
have certain knowledge.

This is why the law permits a witness to give testimony of what they observed. This evidence
has two constituents. First, it is an account of the facts related by a witness. Second, this
account includes some claim by the witness that the facts that they recount are true because the
witness knows of the fact through observation by their
13
sense of sight, sound, taste, smell or touch. In the process of deciding the facts of a case a court
will, implicitly at least, assign a probability to these claims that evidence is a true account of
the facts. It is here that the frailty of human testimony can dominate the process.

To illustrate observation, assume that Sally makes the following statement in evidence: ‘I was
standing next to John. I saw John pour a liquid from a bottle into a cup. The 1123 1124 1125

1123 Kirby in Sheard (2003) p 46

1124 Kitto (1992) p 792
1125 Hodgson (1995) p 733
 Chapter 26 Observing Facts 439
liquid smelt like methylated spirits’. Here, the factual part of the evidence is: ‘John
pour[ed] methylated spirits from a bottle into a cup’. The claim to truth comes from
Sally seeing what John was doing and smelling methylated spirits. She said: ‘I saw
John’ doing what he did and ‘the liquid smelt like methylated spirits’.

Assisted Observation
While the obvious case of observation is unaided observation by the senses,
observation can be assisted by technology. Here the technology assists or enhances
observation by the senses. Examples are spectacles, hearing aids, telescopes,
microscopes and stethoscopes.

Observation by Equipment
Observation can also be made by technology. Obvious examples are cameras, video
equipment and audio equipment. In some cases technology can enable us to observe
things that the senses could not observe. Examples are X-rays and magnetic resonance
imaging (MRI). Typically this technology stores the observation for later recall and use.

Potentially recorded observation is extremely accurate and avoids the problem of

human frailty. For example, a video camera ‘sees’ everything at which it is directed,
then records it comprehensively and accurately. This is collected in the phrase ‘the
camera does not lie,’ which is an upgraded version of the notion that seeing is
believing.1126

There are, however, some problems or qualifications. (i) This type of evidence needs to
be verified. It is necessary, if the point is contested, that there is human testimony to
indicate how and where the equipment was deployed. (ii) This type of evidence is
capable of being altered. If a challenge is made it is necessary to give evidence that the
equipment has not been interfered with. (iii) Evidence in the form of recorded
observation may also be open to interpretation, especially in the light of other
evidence.1127

Observation by an Institution
Institutions such as government departments, statutory bodies and business firms
typically keep records of their financial and other activities. In practice these records
are usually made by the employees of the firm or by its contractors. Lord Haldane LC
explained the organic theory of the corporation, which logically applies to any
institution, on the basis that the people within the institution (most obviously employees
and contractors) are acting as the institution itself when they create and maintain these
records.1128 Just as a body has organs that perform various functions,1129 so

1126 Commentary 26.4.

1127 Agbaba v Witter (1977) 14 ALR 187
1128 Lennard's Carrying Cov Asiatic Petroleum Co [1915] AC 705, 713-714 per Lord
Haldane
1129 Commentary 26.5.
 440 Chapter 26 Observing Facts
does an institution.1130 Hence the person performing those functions does so for and on
behalf of the institution. Consequently, the state of mind, the observations and actions
of these persons are the state of mind, the observations and actions of the institution. In
other words these agents of the institution become the institution for the purpose of
exercising its legal personality.

Under the general principles of the law of evidence these records are considered
hearsay. However, official records of an institution constitute an exception to the
hearsay rule.1131 This exception provides that documents created in the course of a
trade, occupation, profession or public office can be used as evidence of the facts that
they state. There are three requirements for this exception to apply.
(1) The information in the document must itself be admissible evidence.
(2) The person who supplied the information must have had personal knowledge of
it (or can be reasonably supposed to have had).
(3) Everyone else through whom the information was supplied must have also been
acting in the course of business.

Once these records come into evidence they constitute prima facie proof of the facts
that they incorporate. In many cases this is sufficient proof. However, it is possible that
through reasons such as human error, deception practiced by the giver of information or
deception practised by the recorder of the information, the records are not totally
correct. In these cases the court has to resolve the issue by further evidence.

Observation by the Court

introduction
While the most obvious form of observation consists of observation by a witness or by
equipment, a court can observe some things for itself directly. In these cases, obviously,
it does not need to rely on the observation of an intermediary. Observation by the court
involves four items - real evidence, facts about a witness, facts that happen in court and
commonly observed facts that can be proved by judicial notice.

Real Evidence
Real evidence is a type of physical evidence. It is the thing itself. It consists of objects
and places that were involved in a case or actually played a part in the incident or
transaction in question.

A party who seeks to use real evidence must generally tender it to the court as
evidence. Unless the other party successfully objects to the evidence or there is some
other problem the court will accept the evidence. The court can then scrutinise this
evidence in any of three ways depending on circumstances:
(1) Possession of an Object. Where the physical evidence is an inanimate object and is
not too large the party who tenders it actually physically hands over the object

1130 HL Bolton v TJ Graham [1957] 1 QB 159 per Denning LJ

1131 Commentary 26.6.
 Chapter 26 Observing Facts 441
to the court. This means that the court, the other party, and where relevant the jurors,
can actually examine the object itself. Examples of evidence that might be handed over
20
in this way are a weapon, such as a gun or a knife, a piece of clothing or a document.
(2) Inspecting an Object or a Place. A court may inspect an object or a place such as
a building (for example a place that is the scene of a crime, or is the subject of the
dispute). In these cases the party who tenders the object or place will usually provide
some representation of it to assist the court. Some obvious forms of representation are a
plan, a diagram or a photograph.
(3) Representational Evidence. Representational evidence constitutes evidence that
represents in some significant way something that is put in evidence. There are two
levels on which it operates:
(i) Convenience. Where a party tenders into evidence a place or a building
the court, the other party and witnesses may need to consider something about the
place. They can of course visit the place, but a simpler way for many purposes is to
construct an appropriate representation, such as a photograph, a video or diagram, and
put it before the court.
(ii) Necessity. It is not possible to put some forms of evidence before the
court in real form. An example is trace evidence of fingerprints or firearm residue.
Consequently a party must, of necessity, tender this evidence in representational form.

Obviously real evidence requires appropriate verification. Verification is based on

doing two things:
(1) The witness needs to explain the item’s connection to the case.
(2) A witness needs to give evidence that the item has not been altered in any way.
Proving this involves establishing the chain of custody for the item as a background for
establishing that at no time or place on this ‘chain’ did anyone or any event alter or
interfere with the item.

Clearly, once it is verified, real evidence is highly reliable. Most importantly it is not
affected by the frailties of human testimony. It is first hand evidence present in court.
As its name indicates, it is the real thing.

Facts About a Witness

A court can observe facts about a witness that may be relevant to a case. For example it
can observe their height. Another example is the demeanour of a witness, which is
sometimes used, although controversially, to determine if the witness is telling the truth.

Facts that Happen in Court

A court obviously observes anything that happens in the court. For example, where a
person is alleged to have committed contempt in the face of the court the court has
usually observed the alleged contempt for itself. That said, it is always possible the
court has not properly observed what was done nor hear clearly what was said. 1132

1132 Commentary 26.7.

 442 Chapter 26 Observing Facts
Judicial Notice
Judicial notice is a special case of observation that is covered by a special rule. It
allows some facts to be proved on the basis that any judge is taken to know that they are
true. Facts in this category are facts that are so well known that it would be ludicrous to
require that they be proved.

The reasoning behind judicial notice is that it is wasting time for parties and the court
to prove something that is already widely known. Hence the test under common law as
21
to whether a fact can be subject to judicial notice is that it is ‘sufficiently notorious’
22
or so commonly known that it is part of the ‘knowledge of the ordinary man’. Some
examples are that a fortnight is too short a period for human gestation, that cats are kept
for domestic purposes, and that Christmas falls on 25 December.

By its nature judicial notice is a reliable form of evidence. There is also a procedural
safeguard. If a party contends that the item is not as the court believes because of its
‘notice’ they can put in evidence an alternative account. When this happens, the court
will usually have to abandon attempts at notice and engage in resolving the party’s
contention.

Commentary
Commentary 26.1 Footnote 2
The Roman Poet Horace (Horatius Flaccus, 65 BC - 8 BC) may have been the
originator of this notion that seeing is believing. In his poem Ars Poetica (The Art of
Poetry) he said: ‘What we hear, / With weaker passion will affect the heart, / Than
when the faithful eye beholds the part’. (Segnius irritant animos demissaper aures, /
Quam qua sunt oculis subjecta fidelibus.)

Commentary 26.2 Footnote 3

It is not surprising that the tantalising fact that humans use sensory and cognitive
processes that sometimes reveal the truth and sometimes do not has received scholarly
attention. See, for example, Tiller and Schum (1991).

Commentary 26.3 Footnote 9

Cases supporting the rule that it is forbidden to investigate the reasoning processes by
which juries reach their decisions are R v Wooler (1817) 6 M&S 366, Boston v WS
Bagshaw [1966] 1 WLR 1135, 1137, Otis Elevators v Zitis (1986) 5 NSWLR 171, 204-
205. There are also statutory prohibitions, for example the Jury Act 1977 (NSW)
s68A(3).

There may also be problems also with findings of fact by juries. As Kirby (1998) p 120
et ff points out, one factor that may affect fact-finding by a jury is that trials involve
lengthy presentations of oral evidence. 1133 1134

1133 State Superannuation Board v FCT (1988) 82 ALR 63, 75

1134 Brisbane City Council v Attorney General (1978) 19 ALR 681, 686
 Chapter 26 Observing Facts 443
Commentary 26.4 Footnote 14
It is not clear where the expression that ‘the camera does not lie’ originated. One
possibility is a play by the American writer, Dion Boucicault, The Octoroon. It was
written in 1859 some 20 years after photography had been invented. In this play there is
an unattended camera. By magic it takes and self-develops a photograph. This
photograph reveals the identity of the killer of a child and in consequence prevents the
lynching of an innocent Native American.

Commentary 26.5 Footnote 17

This idea of the people in a corporation being its organs as they perform different
functions on its behalf is reflected in the popular saying ‘up there for thinking [said
when pointing to the head] and down there for dancing [said when pointing to the
feet]’.

Commentary 26.6 Footnote 19

However, if one takes the organic view of the organisation - that the people within an
organisation are its human organs - these records are really the memory bank of the
organisation. On this line of analysis they should not be treated as hearsay but as a
record of the direct observation of the organisation.

Commentary 26.7 Footnote 20

With regard to physical evidence it is important to note that documents are a special
case because documents can perform several functions. In one sense a document is
physical and thus can become physical evidence. A document can also take on other
functions depending on its content. For example it can be a record of an event rather
than real evidence.
Chapter 27
Irrationality
Introduction
Psychology
Sociology
Economics
Philosophy
Situational Factors
Commentary

Each of our inner lives is such a jungle of thoughts, feelings, fantasies and impulses
that civilisation would be impossible if we expressed them all, or if we could all read
each other's minds. Just as social life would be impossible if we expressed all our
lustful, aggressive, greedy, anxious or self-obsessed feelings in ordinary public
encounters, so would inner life be impossible if we tried to become wholly persons
whose thoughts, feelings and private behaviour could be safely exposed to public
view.1135 1136 1137

Introduction
Life is a comedy for those who think, and a tragedy for those who feel.
Discussion so far has tried to show how working with law can be a rational
undertaking. It is, however, evident even from casual observation, that much behaviour
is to a considerable extent, and in some cases, to a total extent, non rational. Our point,
nevertheless, is still valid - there are good arguments, including social expectations, that
law should be made and used in a rational way. Rationality is a worthwhile aspiration.
At the same time, however, it is necessary to understand irrational behaviour to see how
and why working with law may deviate from the dictates of rationality.

This chapter seeks to provide illustration of and explanations for irrationality.

However, it must be emphasised, there is no strict definition of irrationality. For
example, the theories of Karl Marx are considered in this chapter, yet the point to much
of Marx’s writing was to show that explanations for capitalist that appeared to be
rational were spurious. They were merely describing appearances. Below the surface,
the rationality did not hold up. In other words, rationality is subject to debate.

Factors that cause decision-making to be irrational are many and varied. This
discussion considers several explanations of irrationality coming from psychology,
sociology, economics, and philosophy. Irrationality can also arise from factors that are
political, personal or situational. It is also manifest in ideology which involves a

1135 Thomas Nagel Times Literary Supplement August 1998, cited in Lewis (1998)
1136 Horace Walpole
1137 For discussion of irrationality see Nedelsky (1997) 101-103

444
 Chapter 27 Irrational Thinking 445
commitment to values and beliefs about how the world functions combined with a strong
unwillingness to countenance alternative views. Irrationality can also be covered up by
rhetoric, since rhetoric is the antithesis of reason. 1138

Psychology
Emotions can be more easily manipulated than our intellect.1139
Introduction
Human behaviour . . . is not under the constant and detailed guidance of careful and accurate
hedonic calculations, but is the product of an unstable and unrational complex of reflex actions,
impulses, instincts, habits, customs, fashions and hysteria.1140 1141
Our analysis of irrational behaviour draws on several sources by way of illustration:
(1) Sigmund Freud. Sigmund Freud was a major promoter of the notion that humans have
an innate capacity and tendency to behave in an irrational way.
(2) Neuroscience. A scientific approach for explaining both rational and irrational
behaviour draws on recent advances in neuroscience, and in particular on the increased
capacity of scientists to examine the functioning of the brain.
(3) Causes of Error. This approach starts at the beginning. It examines specific causes of
error that make thinking irrational.
(4) Judicial and Political Behaviour. This is an empirical approach. It considers two
relevant types of behaviour - judicial and political - from the perspective of irrationality.

Sigmund Freud
A culture which leaves unsatisfied and drives to rebelliousness so large a number of its members
neither has a prospect of continued existence nor deserves it.
According to Sigmund Freud (1856-1939), humans, including infants, are driven by innate and
powerful biological urges that must be satisfied. There are two major forces, which Freud
labelled Eros and Thanatos. Eros is the life instinct, driving such things as the demand for
food, drink, shelter and sex. Thanatos is the death instinct that prompts such things as
aggression, fighting, violence, murder and masochism.

While these urges are often unconscious they also need to be expressed. Yet society often
disapproves of, or punishes, their expression. Hence a person has an inner conflict between the
need to express these urges and the fear of social disapproval and punishment if they do
express them. Therefore, to some extent at least, these urges must be restrained or controlled.

The starting point to explain how humans try to control these urges is that each individual has
a fixed amount of psychic energy. This is divided among three aspects of personality - the id,
the ego and the superego. The id is the part that drives our biological urges. The ego is formed
when energy is diverted from the id to energise

1138 Commentary 27.1.

1139 Spence (2006) p 9
1140 Viner (1925) pp 373-374
1141 Sigmund Freud (1927) The Future of an Illusion
 446 Chapter 27 Irrational Thinking
cognitive processes such as perception, learning and reasoning. The ego must on the
one hand block the impulses from the id. On the other it must find outlets for these
impulses. Thus it is both servant and master to the id. The superego develops from the
ego. It internalises moral standards and seeks perfection rather than an outlet for
pleasure or aggression.

There is potentially conflict between these three aspects of the personality. The id
communicates basic needs and the ego seeks to restrain the id or to find an acceptable
outlet. The superego judges whether the ego is doing a good job. An emotionally
healthy person can handle the conflict and even feed off it. A person who is not
emotionally healthy cannot do this because their fixed amount of psychic energy is
unequally distributed among the three aspects.

Quadrant Analysis
Colin Camerer, George Loewenstein and Drazen Prelec
Camerer, Loewenstein and Prelec present the following analysis of decision making. 1142

First, they fully concede that ‘deliberation is always an option for human decision
making’. Hence rational decision making is a possibility. Nevertheless, the brain is so
constructed that it also has non deliberative, that is, non rational, processes. There are
automatic processes ‘which are faster than conscious deliberation and which occur with
little or no awareness or feeling of effort’. Moreover, a person ‘has little or no
introspective access to, or volitional control over them’. Further, ‘our behaviour is
under pervasive and often unrecognised influence of finely tuned affective (emotion)
systems that are localised in particular brain regions’.1143

This can be captured in a general theory. This is represented by a four quadrants

analysis based on two pairs of dimensions - controlled and automatic processes on the
one hand, and cognitive and affective behaviour on the other. ‘Most behaviour’ the
1144

authors argue ‘results from the interaction of all four quadrants’ while leaving open the
possibility that only one, two or three quadrants are involved. 1145 1146 1147

Quadrant I consists of controlled cognitive behaviour. This is rational calculating

behaviour of the type that underlies the model for forming law. There are, however,
12
limitations to human cognition, and consequent difficulty of making a rational choice
13
under conditions of great uncertainty. In consequence, an actor’s decision making may
be limited in two ways - they have limited rather than complete information so they are
not fully informed, and they have limited ability to process the information that they do
have. While this inhibits their ability to make a fully rational decision, a person can still
make a decision that is good enough rather than a decision with the

1142 Camerer, Loewenstein, and Prelec(2003)

1143 Camerer, Loewwnstein and Prelec (2003) p 3
1144 Camerer, Loewwnstein and Prelec (2003) p 3
1145 Camerer, Loewwnstein and Prelec (2003) p10
1146 Ulen (1997)
1147 Ford (1987), Davis (1970)
 Chapter 27 Irrational Thinking 447
highest payoff. The ensuing decision is bounded because there are limits and it is
rational because it potentially reaches as far as these limits will allow - this is why it has
been labelled bounded rationality.1148 Another way to express the compromise is to refer
to those making decisions under these limitations as satisficing, rather than maximising
their wellbeing or utility.1149

Quadrant II involves controlled affective behaviour. This is illustrated by method

actors who ‘get into the skin’ of the character that they are portraying, and so better
convince the audience that it is all for real.1150 1151 They put on a face and they put on an
act.

Quadrant III involves automatic cognitive processes. Basic learnt human movement
17
fits into this category. An example is returning serve while playing tennis.

Quadrant IV involves automatic affective behaviour. An example is that we jump when

someone says ‘Boo’.1152

Allan Snyder: Quadrant III

Professor Allan Snyder poses one explanation for some types of automatic behaviour
as occurs in Quadrant III. This behaviour benefits humans because they have to survive
and flourish in a world which is complex and potentially hostile. This requires us to
make decisions quickly. To do this we ‘make assumptions about what is most likely’.
These assumptions become a mindset that ‘facilitates rapid decision making’. Thus if
we see a snake we get out of the way quickly and instinctively so that we do not get
bitten. In these circumstances our mindsets protects us, but it may not always work for
the good. Our mindset is formed as we live, it has its basis in our genetic make up and it
is influenced by our experiences, for example training, conditioning and activities. To
form our mindset we select, analyse and evaluate our experience. We make our best
judgment as to the way that the world usually is. But however enlightened and rational
this may be, our mindset enables us to see only ‘a filtered version of the world’. Our
view of the world is limited and therefore distorted by our mindset. What we take to be
truth may true in whole or in part but it may also be just illusion or assumption (which
may be the basis of prejudice).1153 1154

Robert WLevenson: Quadrants II and III

Professor Robert W Levenson proposes an explanation for why affective behaviour
20
can be either controlled (as per Quadrant II) or automatic (as per Quadrant III).
Emotions, which involve affective behaviour, perform two major functions - they assist
in determining whether something in the environment is a threat, and they gear

1148 Conlisk (1996), Lipman (1995).

1149 Pinfield (1986)
1150 Camerer, Loewwnstein and Prelec(2003) p10
1151 Camerer, Loewwnstein and Prelec(2003) p10
1152 Camerer, Loewwnstein and Prelec(2003) p10
1153 Snyder (1999)
1154 Levenson (1999)
 448 Chapter 27 Irrational Thinking
the body to behave so as to ward off this threat. Emotions are the product of two
interacting systems, the core system and the controlling system.

Emotional responses of the core system are common to all species and assist in
surviving threats from the external environment. They assist us by creating ‘a high
probability of dealing successfully with certain prototypical situations that have
21
significant implications for our well being and survival’. Unless influenced by the
control system, the response by the core system is automatic, swift, invariant and
adaptive.

Emotional responses of the control system are, by contrast, more complex. They
develop throughout a lifetime, probably through learning. They modify core emotions
either by inhibiting or exciting them. They do this by mechanisms that perform two
functions. One mechanism deals with our perception and cognition. It changes ‘the
ways we appraise incoming information’ that makes likely an ensuing alteration in
22
response. It may interpret the information as more or less threatening than would
otherwise be the case. The other deals with behaviour that might ensue from an
emotion. It inhibits ‘the transition between tendencies to respond in a given way and
23
the actual response we produce’. The control system is ‘highly flexible’ and ‘much less
predictable’ than the core system. It is also able to be altered by learning, unlike the
core system which is hard wired. Levenson's point for our purposes is that ‘interplay
between these two emotion systems’ may explain ‘the battle between
24
rationality and passions’. In short, people are more or less rational depending on the
state of their control system.

Causes of Error
Research into relevant fields such as cognitive science and social psychology has
provided plausible support for a number of behavioural tendencies that can influence
decision making adversely, in that they constitute causes of error. Three will be
considered - world view, cognitive miseration and ego boosters.

World View
Most people have a world view or schema based on their upbringing, their experience
and their belief of the way in which the world operates. Judges (and juries) can readily
use their world view as a benchmark for estimating the likely truth of a version of
25
facts. This is a ‘recognitional model’ for finding facts. Judges and juries make their
finding of facts by comparing the evidence to their world view. Basically, the closer the
facts suggested by the evidence are to their world view, the more likely they are to think
that the facts are true. The point, of course, is that the view of the world may be
distorted, incomplete, not valid on the particular occasion or just plain wrong. This 1155
1156 1157 1158 1159

1155 Levenson (1999)p 486. Commentary 27.2.

1156 Levenson (1999)p 488
1157 Levenson (1999)p 488
 Chapter 27 Irrational Thinking 449
problem, it must be stressed, is not a judicial problem but a human problem that arises
in the context of having to decide facts in the face of conflicting evidence.1160 1161 1162

Cognitive Miseration
A major reason for error is that people are cognitive misers. They wish to expend the
least energy possible in making a decision. Consequently, they use cognitive short cuts,
called heuristics. These short cuts bring quick results but often cause error. All of these
errors can, for example, adversely affect decision making such as fact finding. Some
prominent examples of these errors that can affect any human are the following:
(1) Hindsight Illusion. This consists of believing that what happened was bound to
happen. In court this can create a bias in assessing the veracity of a witnesses who did
not believe that a relevant event was bound to happen.
(2) Framing Bias. How the question is put tends to affect how the question is
answered. Is the glass half full, or is the glass half empty? Is one parent awarded
27
custody or does the other parent lose the child. Do countries such as the United States
and Australia have a black problem or a white problem?
(3) Anchoring. This is a bias that arises because people use an inappropriate anchor
or reference to fix their belief in place. An example is judging the fair value of a house
28
by reference to its listed price.
(4) Representative Heuristic. This involves assuming that something is true because
we believe that statistically it is likely, rather than taking evidence as to what is really
the case.
(5) Availability Heuristic. Humans give more weight to what is there with them and
what they can remember than to other information and considerations which might
29
be ascertained by proper inquiry and careful thought.1163

Ego Boosters
Some errors seem to be motivated by a desire to boost or preserve our ego or sense of
worth. Some examples are the following:
(1) Overconfidence. Facing a difficult task can make people overconfident.
(2) False-Consensus Bias. This involves a tendency by people to believe that others
share their views and feelings more than is the case, possibly brought on by a tendency
to keep company with like minded souls who think and feel the way that they do.
(3) Attribution Error. This is constituted by a tendency to attribute other people’s
behaviour to their internal state (he is a bad man) than to their external circumstances
(he was severely provoked). This may, for example, affect a personal injury case
through a tendency to attribute a motor vehicle accident to the driver rather than
external circumstances such as the state of the road.

1158 Levenson (1999)p 492

1159 Hodgson (1995)p 7313
1160 Commentary 27.3.
1161 Mason in Sheard (2003) p 37
1162 Mason in Sheard (2003) p 38
1163 Mason in Sheard (2003) p 38,and see Posner (2001) pp 245-246, 256-257
 450 Chapter 27 Irrational Thinking
(4) Actor-Observer Error. This is a tendency for people to do two contrasting
things:(i) They attribute another’s faulty behaviour to internal causes. (ii) They attribute
their own faulty behaviour to external causes. This is also an example of a
 Chapter 27 Irrational Thinking 451
self serving bias - when things go wrong for me it is external causes, when they go
wrong for others it is their fault (for example, the undeserving poor).
(5) Overcompensation. Assume that a judge is concerned about not showing bias on
the basis of race or colour. This may cause them to overcompensate.1164 They do this by
giving undeserved favourable treatment to people from other races or with different
skin colours.1165

Judicial Behaviour
Having just discussed some theories in psychology for explaining irrational behaviour,
it is worth looking at some common wisdom and practices that are invoked to analyse
and explain judicial behaviour that may be considered irrational. The relationship
between irrationality and judicial behaviour is neatly captured by something that the
dean of law at the Islamic National University told a seminar in Kuala Lumpur. He said
that ‘judges should not give rulings when they were ‘angry, very hungry or thirsty,
greatly sad or happy, ill, sleepy, very hot or very cold’1166

As the legal realists so emphatically declared, judges are individuals as well as judicial
officers so that their decisions will be affected and will differ because of factors that
33
are variously labelled personality, temperament, idiosyncrasies, 1167 the human factor,
‘individual predispositions’1168 and ‘personal preference’.1169 Whatever the tag, the result
will be something that distinguishes one judge from others. This something is given a
variety of labels - leanings, prejudice in its literal sense of prejudging something,
prejudice in its more common sense of not liking someone or something,
predisposition, predilection, preconception and mindset. But whatever the label, the
point is that it makes the judge respond to an argument differently from the way other
judges respond. As Lord MacMillan has said: ‘The ordinary human mind is a mass of
prepossessions inherited and acquired, often nonetheless dangerous because
unrecognised by their possessor. [Therefore] every legal mind is apt to have an innate
susceptibility to particular classes of arguments’.1170 1171

However, as much as some jurists are aware of these irrationalities, judges and
legislators are not always aware of their own leanings. Factors that affect their decisions
can involve ‘assumptions’ that ‘are so ingrained’ in their ‘minds that they are
37
generally unrecognised and taken completely for granted’. These are individual
differences. None of us is free from them. No two people are exactly alike and most
people differ from other people in a variety of ways. This is pertinent in that judges will
differ in how they appraise a law. As Brett Walker SC commented: ‘No magic or
surgery can stop a person knowing enough about the law to be a useful judge from also

1164 Mason (2003) in Sheard (2003) p 39

1165 See, for example, Bracy v Gramley 520 US 899 (1997)
1166 Baker (1996)
1167 Allen (1964) p 350, citing Scrutton J in Hill v Aldershot Corporation [1933] 1 KB 259
1168 Wilson v Minister for Aboriginal Affairs (1996) 189 CLR 1, at 43 per Kirby J
1169 Walker (2002)
1170 Lord MacMillan, cited in Winters (1975) p 62
1171 Schanck (1990) p 824
 452 Chapter 27 Irrational Thinking
38
regarding some laws as socially better than others’. Judges, then, like many other
humans will have an opinion on how good or how bad laws are. While these opinions
are not necessarily infallible they often arise from first hand observation from the bench
as to how the law functions. In other words, forming views on the efficacy of laws is a
natural by-product of holding judicial office.

Personal factors lead to decisions based on or affected by ‘hunches’1172 1173 or

‘intuition’.1174 In extreme form personal factors amount to prejudice, which can be overt
and deliberate. A classic illustration involved three cases in the House of Lords
concerning trade unions, Allen v Flood,1175 Quinn v Leathern1176 and the Taff Vale
Railway Case.1177 In each case the Lord Chancellor, Lord Halsbury, who had anti trade
union views, tried to stack the bench with like minded judges. He succeeded in doing
this in two of these cases, Quinn and Taff Vale1178

Political Behaviour
Since there is no inherent force that contains irrationality it has a capacity to influence
political behaviour. In a ground breaking book, Professor Drew Westen examined the
influence of emotion on voting in elections for a legislature. 1179 His conclusion is that
emotions are good predictors of ‘what happens on election day’ because 50 years of
research suggests that emotions ‘are far more powerful determinants of how people cast
their ballot than [are] the issues’; nevertheless, there is ‘some hope for the rationally
inclined’ because policies are relevant although not directly. Policies count to the extent
that they bear on the voters’ emotions.1180 1181 While this study is directed at political
behaviour, the results may throw some light on judicial and legislative behaviour.

Comment
Erroneous ways of thinking as described above adversely affect legislative and judicial
behaviour. This can be illustrated from one of the most important tasks that a court
undertakes, fact finding. Here, erroneous thinking can adversely affect assessment of
47
evidence and the consequent fact finding. They can cause a judge to violate the
fundamental rule that they must approach fact finding with ‘an open rather than a
closed or destructive mind’.1182 This can cause a court to be selective in the evidence on
which it relies, or to make an idiosyncratic use of evidence. In this way finding facts

1172 Walker (2002) p 11

1173 Allen (1964) p 350, citing Scrutton J in Hill v Aldershot Corporation [1933] 1 KB 259
1174 Hutcheson (1928)
1175 Allen v Flood [1898] AC 1
1176 Quinn v Leathem [1901] 1 AC 495
1177 Taff Vale Railway Co v Amalgamated Society of Railway Servants (Taff Vale Railway
Case) [1901] AC 426
1178 Commentary 27.4.
1179 Westen (2007B)
1180 Westen (2007A)
1181 Commentary 27.5.
1182 Mason in Sheard (2003) p 4. Commentary 27.6.
 Chapter 27 Irrational Thinking 453
can easily be unfairly influenced by preconceived ideas of the court as to how the
world works.

This subjectivity in finding facts is a major problem for the legal system and probably
one of the major causes of injustice. Therefore it is necessary to inquire if there is
anything that a court or the justice system can do to avoid or reduce this problem?
There are at least three options to consider.

One option, for the justice system, is to commission scientific study into credibility so
that judges can draw on properly done empirical research to guide them.1183 This would
find out whether the behavioural rules which courts commonly apply stand up to
scientific examination. It would indicate which types of questions were more likely than
others to yield truth. It would also indicate which tactics by counsel on a witness,
especially in cross examination, will help a court to find the truth. For example, does it
help to elicit truth if a witness is flattered, bullied, tricked, cajoled or worn down?

There is also a question surrounding the practice in cross examination of the lawyer
insisting that a witness just answer ‘yes’ or ‘no’ and not be allowed to explain. Part of
the problem is functional. If the lawyer gets their way they prevent the court from
hearing evidence that is potentially relevant.

Part of the problem is legal. The basis for this derives from the common form of oath
that a witness takes. When a witness takes the oath in court they answer ‘yes’ to the
question: ‘Do you swear to tell the truth, the whole truth, and nothing but the truth, so
help you God?’ Assume now that a trial lawyer asks a question. The witness attempts to
include in their answer an explanation. The lawyer then seeks to silence the witness by
saying: ‘Just answer “yes” or “no”.’ The witness, however, presses on with their
explanation. In response, the judge interrupts and insists that the witness just answers
‘yes’ or ‘no’. If the witness does what the lawyer insists upon and the judge commands
they are not being true to their oath. They are not telling the ‘whole truth’ as they swore
to God they would do. In this case is the witness guilty of the criminal offence of
perjury? Are the lawyer and the judge guilty as accessories to the perjury of the
witness?

A second option, already used, is the jury system. Where a trial is by jury, assessment
of credibility does not formally depend on one person as it does with trial by a single
judge but on the views of 12 people. To an extent there is safety in numbers. Trial by
jury makes it less likely, but not impossible, that a person is convicted as a result of
extreme prejudice or fanciful views on how the world works. However, the safety of
numbers which a jury potentially provides can be undermined by procedural rules
which allow parties to select jurors who may be partial to the case they will present
even if the evidence for this version of the facts is thin.1184

1183 There may, however, be difficulties in conducting such research - see Ross and
Blumenthal (1975).
1184 Commentary 27.7.
 454 Chapter 27 Irrational Thinking
A third option, which is available for an individual judge, is to be conscious of their
leanings. There are, however, two problems with this.

One problem is that it is hard for most of us to be aware of our personal views and to
be able to displace them. While judges may strive against this personal views can
operate below the threshold of consciousness.

The other problem is this. If a judge does want to displace their personal views, what
do they replace them with? Ideally they need a scientific view of how the world works.
This, however, will not be possible where the requisite research has not been done.
Failing this, a judge could try to take a general and widely shared view of the way that
the world works, but this also has difficulties. It is not always easy to gauge commonly
shared beliefs, especially on a particular question of credibility. Furthermore, what is to
say that this view is better than that of the judge? It may, in the extreme case, be
prejudice or the result of a heavy campaign in the media to change public opinion on
the point.

Sociology
Culture is what people do when no one is watching.1185 1186
Introduction
52
Social factors affect decisions because all of us are socialised. Galanter points out that
individual ‘actors are members of groups’ and groups help to form values, perceptions
and attitudes as they subject us to ‘group interaction’ and various ‘informal means of
social control’; hence, how we make decisions may be influenced by social factors such
as internalised norms of cooperation’1187 or ‘social bonds’.1188

Groups can be based on any distinguishing feature, for example place of origin,
ethnicity, religion, political allegiance, school, university, occupation, sporting interests
and cultural activities. Social groups, however, vary enormously in such features as
their size, ease of entry and affect on beliefs and behaviour.

For legal decision making, the point is simple. Any social bond can affect a judge or
legislator’s decision. As Lord Scrutton said: ‘[T]he habits you are trained in, the people
with whom you mix, lead to your having a certain class of ideas;’ consequently ‘when
you have to deal with other ideas, you do not give as sound and accurate judgment as
you would wish’.1189 As a result of these social factors individual choices are shaped by
a number of factors such as class, culture, political allegiance and ideology. 1190 The
influence of these factors will depend on circumstances. It will be less noteworthy when
influence is based on widely shared social values and beliefs, but

1185 Lou Gerstner, Former CEO, IBM

1186 Commentary 27.8.
1187 Galanter (1997) p 385. See also Bensusan-Butt (1980).
1188 Galanter (1997) p 386, citing Ashford (1997)
1189 Lord Scrutton, cited in Winters (1975) and Mahoney and Martin (1987)
1190 See Ferguson (1977), Galanter (1997) p 386, Sward (1989).
 Chapter 27 Irrational Thinking 455
will be significant when values are not shared throughout society but are of a narrower
scope. For example, they are shared among a particular stratum of society.
57
As an obvious example, the fact that judges are trained as lawyers and part of an
ancient profession steeped in tradition1191 1192 undoubtedly affects their decisions.1193
Further, judges are likely to feel pressure to make a decision conforming to professional
expectations, and they may be influenced by how other lawyers will think of them and
rate their professional performance.

While the existence of socialisation and social pressure is undeniable, there is no direct
path to predict a judicial decision by analysing a judge’s socialisation. Socialisation will
not affect everyone in the same way or to the same degree. Not all of us have the same
socialisation, but even where we do it will have different effects. Some will take this bit
on board, some will take another. Some will take more of it than others. Some will
modify or adapt it. Some will reject it. Some will react to it in their own way. Each of
us is unique and therefore different. Hence these influences can be absorbed in different
ways and with different results.

Politics
Political forces, that is, the desire for a government to be re-elected, fairly obviously
will influence law making.1194 Leigh takes up this line of thinking. Rationally speaking,
‘policy proposals should be subject to random trials before funding’ because the ‘cost
of a policy mistake is surely greater than that of a small-scale random trial’. Politicians,
however, generally do not do this because they fear ‘that with real evidence, voters
might discover that reality does not match political rhetoric’.1195

Culture
One of the major sociological factors is culture. Culture exists in a variety of forms,
being national, religious, ethnic, occupational and so on. Culture can cause a decision to
be less rational.1196 Most of us are the product of several cultures whose experiences
and responses will shape the way we perceive and behave. Often with the best of
intentions we will see things in deeply ingrained and habitual ways. Culture is able to
cause these distortions because it is both pervasive and subliminal.

FK von Savigny (1779-1861) and Sir Henry Maine (1822-1888) articulated a theory
that law was essentially a product of national culture.1197 Culture can affect values,
predictions of causation and how people respond to law. On this view law making is not
a totally rational activity, but is moulded by the prevailing culture, and thus will

1191 Commentary 27.9.

1192 Commentary 27.10.
1193 See Paterson (1974).
1194 See Nakamura and Smallwood (1980), Marsh (1983) and Kirby (1988A).
1195 Leigh (2003)
1196 Commentary 27.11.
1197 Commentary 27.12.
 456 Chapter 27 Irrational Thinking
vary from culture to culture. This is in sharp contrast to the natural law view that law
derives from universal reason. Indeed Savigny used his view to oppose, successfully,
the codification of German law. He used cultural sentiment to oppose rational
organisation of law.

One of the philosophical influences on the cultural view of law was Johann Gottfried
von Herder (1744-1803). Herder rejected the view that society had universal features.
Instead he argued that each nation had its own spirit, the Volksgeist, which was unique
to it. This gave the nation an individual stamp with its own character and qualities. This
means, as Freeman says, ‘law is not an abstract set of rules simply imposed on society,
but is an integral part of that society having deep roots in the social and economic
habits and attitudes of its past and present members’. Legislators and judges ‘form part
of the society in which they live and have their being,’ and ‘reflect many, if not all, the
basic habits and attitudes of their society’. The result is that ‘the development of the
law, so far as it rests in their hands, will probably conform in a broad and general way
to the patterns of behaviour which are widely approved or at least accepted in that
society’.1198

This view had a major consequence for forming law. Because of ‘the impersonal
powers to be found in the people’s national spirit’1199 the choices that may otherwise be
open to judges and legislators will be severely curtailed. Legal decisions, therefore, will
have a strong cultural leaning.

One obvious weakness in this theory is that it ascribes a higher degree of unity to
society than is generally the case. One may see something like this in closely knit
communities that fit the Gemeinschaft model of society, but it is hard to the see the
people of a nation having this degree of unity in belief, custom, outlook, experience and
all the other things that make up the Volksgeist.1200

Organisations
Organisations present a strange contrast. On the one hand, they are, as their label
indicates, organised in order to assist them to achieve their goals. In this sense they are
highly rational in form. On the other hand, they seem able to perpetrate some of the
most irrational action and dysfunctional behaviour. As Weber puts it, they lack
substantive rationality.

This irrationality is widespread, so much so as Elwell points out, that ‘the irrationality
of bureaucratic institutions is a major factor in understanding contemporary society’. A
vivid and extreme illustration comes from the extermination camps in Nazi Germany
prior to and during World War II. Their stated goal, which was achieved, was to murder
millions of men, women and children. Yet the ‘men and women who ran the
extermination camps were, in large part, ordinary human beings. They were not

1198 Freeman (1994) p 787

1199 Freeman (1994) p 785
1200 Commentary 27.13.
 Chapter 27 Irrational Thinking 457
particularly evil people. Most went to church on Sundays; most had children, loved
animals and life’.1201

One possible explanation for this capacity of organisations for irrationality is ‘that
individual officials have specialized and limited responsibility and authority within the
organization’. While the organization has its purpose, its individual members have only
their responsibilities. Consequently, ‘they are unlikely to raise basic questions regarding
the moral implications of the overall operation of the organization’. 1202

Social psychology offers another explanation, although it is consistent with the first. As
Vaughan and Hogg explain it ‘[p]eople usually refrain from exercising their basically
impulsive aggressive and selfish natures because of their identifiability as unique
individuals in societies that have strong norms against ‘uncivilised’ conduct’. 1203 1204 1205 1206 1207

This tendency, however, can be disrupted when a person enters a large groups or an
organisation, such as a bureaucracy. This happens because a process called
deindividuation occurs. The person becomes less of an individual and more of a
70
member of a group. During this process, as Zimbardo explained it, becoming a member
of ‘a large group provides people with a cloak of anonymity that diffuses personal
responsibility for the consequences of ones actions. This leads to a loss of identity and
reduced concern for social evaluation: that is, to a state of deindividuation that causes
behaviour to become impulsive, irrational, regressive and disinhibited
71
because it is not under the usual social and personal controls’.
72
In this way, organisations take on an ‘impersonal character’. As C. Wright Mills puts it
so eloquently: ‘It is not the number of victims or the degree of cruelty that is distinctive;
it is the fact that the acts committed and the acts that nobody protests are split from the
consciousness of men in an uncanny, even a schizophrenic manner. The atrocities of
our time are done by men as ‘functions’ of social machinery - men possessed by an
abstracted view that hides from them the human beings who are their victims and, as
well, their own humanity. They are inhuman acts because they are impersonal. They are
not sadistic but merely businesslike; they are not aggressive but
73
merely efficient; they are not emotional at all but technically clean-cut’.

Economics
Conventional economics is often portrayed as the way humans make rational decisions
about production and distribution of resources in the face of scarcity. One political
economist, however, Karl Marx (1818-1883) saw things differently. If one can capture
Marx’s approach to social analysis in a single phrase it is that appearances are

1201 Elwell (1996). Commentary 27.14.

1202 Elwell (1996)
1203 Vaughan and Hogg (1998) p253
1204 Zimbardo (1970)
1205 Vaughan and Hogg (1998) p253
1206 Elwell (1996)
1207 Mills (1958) pp 83-84. This was cited in Elwell (1996).
 458 Chapter 27 Irrational Thinking
deceptive because things are not always as they seem on the surface. Adam Smith
(1723-1790) in his monumental text Wealth of Nations had described capitalism as a
giant engine of production based on freedom of choice creating wealth for the whole
nation. Marx, claimed that this was but the outward form of capitalism. In substance,
capitalism was a form of enslavement for an alienated working class as it toiled hard on
low wages to provide wealth for its capitalist masters.

Moreover, the economic institutions and forces were major determinants of the
structure and operation of a society. As Engels put it: ‘The final causes of all social
changes and political revolution are to be sought, not in men's brains, not in man's
insight into internal truth and justice ... but in the economies of each epoch.’1208 1209

To arrive at this conclusion, Marx argued that economic forces did not arise from the
wishes of producers and consumers freely expressed. Instead Marx expounded a
deterministic and comprehensive view of the nature of society and the historical reasons
for social change. This explained economic forces in terms of historical determinism at
the same time as it demonstrated how deeply ideology influences the tasks of making
and interpreting law. In short, the behaviour that conventional economics says is
conscious, voluntary, individual and rational is, according to Marx, unconscious,
determined, social and irrational. Things, according to Marx, are not as they appear to
be (or not as they appear to be through ideologically ingrained means of viewing them).

Despite the breadth of his interest, though, Marx did not set out his views on law in a
75
separate publication. Hence they ‘must be pieced together from his writings’ and in
some cases gleaned by inference. Moreover, given the breadth of his interest and the
long period over which he wrote it is not surprising that Marx changed his ideas (in
some cases apparently contradicting or retracting earlier assertions), put the same ideas
in different ways, and was both unclear and incomplete. This makes it hard to extract a
simple, clear and dogmatic statement about legal reasoning that is authentically
Marxist.

Nevertheless we can, for our purposes here, select and concentrate on some features or
strands of ideas that come directly or by inference from his writings. Moreover, neo
Marxists have renovated Marx, and a cadre of critical legal scholars have scrutinised
law from a devout Marxist position. But given the complexity and confusion with much
of Marx’s writing, this account is inevitably highly simplified and a bit speculative.

Marx argued that society has three related components. These consist of a base, a
superstructure and an ideology. First, there is the base. Society has an economic base.
The basic determinants of society and social order are the means and system of
production and exchange. These have two components. One consists of economic

1208 Friedrich Engels (1882) Socialism - Utopian and Scientific p54

1209 Freeman (1994) p 856
 Chapter 27 Irrational Thinking 459
forces or modes of production (for example labour, equipment, skills, technology and
raw materials). The other consists of economic relations or relations of production (for
example lord and serf, master and servant, creditor and debtor). These are the
foundation of society. What is produced, how it is produced and how it is exchanged,
determine the distribution of products, that is the distribution of revenue. In turn this
determines the divisions of society into classes or estates. Thus, for every mode of
production there is a set of relationships of production which determine the classes in
society. A class is a group of individuals who find themselves in a similar position with
respect to their place in the economic order and the degree of personal freedom which
they enjoy. Marx regarded industrialised society as divided into two major classes, the
capitalists or bourgeoisie who owned the means of production, and the proletariat or the
working class who worked for the capitalists.

Second, there is the superstructure. On this economic base society erects a

superstructure consisting of institutions such as family, government, religion, law, the
education system and the media. This superstructure is determined by, and mirrors, the
economic foundations on which it is raised.

Third, there is an ideology which is a product of the superstructure. Ideology covers an

array of things, including philosophy, religion, social science, custom, popular ideas
and prejudices. The ideology purports to explain the base and the superstructure. In
reality, Marx points out, it misstates them in order to support and legitimise them.

This means that the content of law is ultimately determined by the economic base of
the society in which it operates. In a capitalist state, therefore, law is the will of the
ruling class, the bourgeoisie. As Marx put it, ‘the executive of the modern state is but a
committee for managing the common affairs of the bourgeoisie’. 1210 1211 1212 Hence
legislation ‘never does more than proclaim [or] express in words, the will of economic
77 78
relations,’ and juridical relations are ‘but the reflex of the real economic relations’.
Economic relations involve domination of the working class by the capitalist class.
Consequently, law ‘is an instrument used by the economic rulers to keep the masses in
subjection’1213 since the state itself is ‘an instrument of class oppression’.1214 Thus, there
are ‘assumptions underlying most legal interpretations’ which ‘reflect dominant
Western political ideologies and economic interests,’ with the result that the ensuing
judicial decisions will ‘reinforce capitalist economic interests’.1215

Law, however, is not just a collection of rules but incorporates ideas and values. Law,
therefore, also has an ideological function. For example, law expresses the notion of
equality of all before the law, but in doing so obscures the fact that full freedom of

1210 Karl Marx, The Communist Manifesto

1211 Karl Marx, The Povertyof Philosophy
1212 Karl Marx, Capital, Vol1
1213 Dias (1973) p 456
1214 Freeman (1994) p 854
1215 Schanck (1990) pp 824-825. Commentary 27.15.
 460 Chapter 27 Irrational Thinking
contract, to use an important example, is illusory since the parties do not have equal
82
economic bargaining power. By ‘obscur[ing] power relations’ law hides the true nature
of the economic order, and in this way gives legitimacy to the state where legitimacy is
not warranted. Indeed, as Collins explains it, legal institutions ‘are some of the most
important purveyors of the dominant ideology,’ and they do this in at least two ways.
One way is that ‘judges operate as articulate mouthpieces for the dominant ideology’.
The other is that ‘the whole of legal discourse expresses concepts such as private
ownership which become inculcated in the values of every citizen through their
constant exposure to legal rhetoric,’ using appealing but ultimately false concepts such
83
as liberty, the rule of law and the equality of all before the law.

Such ideological bending of the rules of justice takes place more because of ignorance
than intent. Assumptions generated by capitalism are ‘so ingrained in most judges’
minds that they are generally unrecognised and taken completely for granted’. From the
judges’ perspectives ‘they are acting objectively and professionally, with no political
motivations, whereas, they are actually deciding the case on the basis of these
underlying assumptions’.1216 1217 1218

In summary, the account of Marxism above is a hard line and extreme determinist view
about law. Essentially this says that judges and legislators are compelled by
overwhelming economic forces to make and interpret laws in the interest of the ruling
class, the capitalists. At the same time they make the system seem legitimate by
articulating attractive ideas and values which are not only false, but also obscure the
real power relations that exist. These appealing but deceptive concepts portray liberty
and equality instead of capitalist dominance. Yet the ever uncertainty with Marx’s
writings mean that we cannot take this preceding account as all embracing and without
exception. As JW Harris says: ‘It is far from clear how specific Marx and Engels
believed the determination of law by relations of production to be’.1219
Thus the determinism may not be as rigid as it has been so far presented. Our view of a
hard line determinism suggesting that legislative and judicial decisions are
compulsively and compulsorily made in the interest of the capitalists is most likely a
simplification or an overstatement of Marx. A more realistic account would be that
there is an underlying tendency, even if at times a strong one, for laws to be made and
interpreted in the interest of the ruling class.

Philosophy
Father McKenzie, writing the words of sermon that no one will hear.1220
Within philosophy, postmodernism, probably more than any other theory, has directly
attacked the notion that humans are capable of thinking rationally. Postmodernism does

1216 Freeman (1994) p 856

1217 Collins (1982) p 91
1218 Schanck (1990) pp 824-825
1219 Harris (1986) p 253
1220 Eleanor Rigby, words and music by John Lennon and Paul McCartney
 Chapter 27 Irrational Thinking 461
this in a fundamental way by contending that there is no such thing as good and
 462 Chapter 27 Irrational Thinking
objective reason. As Frederich Nietzsche put it, ‘there is no such thing as ‘rationality’
87
other than that contextually defined by the practices of a group’. Postmodernism can
trace its origin at least as far back as scepticism propounded by the Greek philosopher
Pyrrho (circa 365-270 BC). One version of postmodernism, called poststructuralism,
has been developed or propounded by philosophers such as Frederich Nietzsche (1844-
1900), Martin Heidegger (1889-1976) and Jacques Derrida (1930-2004).1221 1222 Another
version, called pragmatism, was developed by Charles Sanders Peirce, William James
and John Dewey and has current exponents in philosophers such as Richard Rorty and
Stanley Fish.

Premises
Truth is dead, and that’s the truth.1223
For the purposes of our general account, postmodernism involves several premises.1224
First, there is no objective reality and there are no foundational principles. Second,
since there is no objective reality, there is no certain knowledge. There is nothing to
know. Hence what many regard as objective means of acquiring knowledge - scientific
method based on empirical investigation and philosophical inquiry - are mere illusions.
Third, because neither reality nor knowledge is objective, language cannot describe or
convey reality. Fourth, given these propositions it follows that arguments about
something being true or a course of action being morally right are not measured by any
external or objective constraint. Instead ‘arguments are mere tools of influence, without
any better sort of claim to our allegiance;’ hence ‘when contradictory claims are
asserted there is no rational way to adjudicate between them’.1225 1226 1227 Instead arguments
succeed because of their capacity to persuade other members of the community. We are
socially conditioned to think that they are true.
92
Hence all arguments ‘are rhetorical in nature,’ that is they persuade by emotion
93
rather than reason. This communal mindset is the substitute for values. What gives
them force is that members of the community believe in them wholeheartedly.
But how can postmodernism account for the fact that many people think otherwise and
act accordingly - they believe in objective reality and that it can be ascertained by
science and philosophy and communicated by language? Proponents offer two
explanations.

First, in place of objective truth there is subjective, instrumental or consequential truth.

If we take something as true, and it works, then it is true for us. Second, and closely
related to the first point, there is faith. All purported knowledge is based on belief or
consensus. If enough people believe something it is taken to be true. People will have
similar beliefs because they have a conditioned response due to having a similar social

1221 Rorty (1990) p 232

1222 The work that is most complete is J Derrida (1976) Of Grammatology
1223 John Shakespeare (caption on a cartoon), The Sydney Morning Herald, 5 August 1999.
1224 For a very readable account see Schanck (1992).
1225 Nussbaum (1994) p 716
1226 Schanck (1992) p 2551, citing Fish (1989) pp 294, 297.
1227 Commentary 27.16.
 Chapter 27 Irrational Thinking 463
and cultural background.
 464 Chapter 27 Irrational Thinking
These propositions differ from both the common assumptions of ordinary people and
the assumptions that many scholars make. The more traditional view is that reality is
objective even if complex and hard to fathom, that we can know and understand, even if
tentatively and incompletely, something of that reality, and that we can convey that
knowledge and understanding to others, even if imperfectly, by the medium of
language.

Criticism
If you don't know where you are going, any road will get you there.1228
Several criticisms are commonly made of postmodernism. First, if knowledge is so
uncertain, how can postmodernists push their own theory with any confidence, because
they claim that their theory is also knowledge? Indeed their own views are propounded
on at least one elaborate claim to have knowledge, the impossibility of objective truth.

Second, and this is a subset of the first point, there is the problem of infinite regression
common to all those who put forward a style of argument that behaviour, including
belief, is a conditioned response. It may be all very well to say that belief is based on
conditioning, but this raises another question. How do we become conditioned to
believe? Eventually, for a full explanation it is necessary to know how the process of
conditioning works to produce the response. The explanation cannot be a further
reliance on a process of conditioning because that leads to the further question of how
this further process of conditioning works. Eventually there has to be an explanation for
conditioning which is based on some sort of certain knowledge (which postmodernism
asserts does not exist anyway). If there is not, postmodernism is just speculation.

Third, in the Western tradition, our two main tools of knowledge, thinking and
observation, have in a very practical sense been shown to be reliable. I am not here
claiming that they are free from error, misunderstanding and deception. What I am
claiming is that if you look how Western society operates it is clear that our
technological progress, social structures, economic system and means of government
are built on communication of knowledge over both space and time. Our means of
acquiring knowledge may not be perfect but in many instances they are more than
adequate.

Situational Factors
We will all get it wrong if we legislate when people are convulsed by emotion, outraged in anger,
and thirsting for revenge1229
There may be situational factors which affect a decision. For example a judge making a
decision may be pressed for time, which may be for a good or bad reason. A bad reason
is the situation (featuring in many lawyers’ anecdotes) of a judge on a country circuit
rushing a case to be back in the city for a social engagement. A good reason is a

1228 Lewis Carroll

1229 David Kennedy The Sydney Morning Herald 26 September 2001, Commentary 27.17.
 Chapter 27 Irrational Thinking 465
judge with a crowded criminal list with defendants in custody awaiting trial - while it is
important to do justice to the case in hand, it is important that people not be held in
custody too long while awaiting trial.

So for either reason, the judge spends less time on the case than it needs. This will
possibly produce a different outcome than would a longer consideration of the matter.

Situational factors can take many forms. Let us consider some examples. First, political
pressure can deflect both judges and legislators from rational consideration of
legislation and cases.1230 This pressure comes from many sources and in many ways.1231
It can be particularly intense in acute circumstances such as the cold war.1232 Second,
judges may be affected by something in the environment. It may be as simple as the
failure of the air conditioning. Third, in the extreme case legislators and judges are
responding to threats or bribes, or they are otherwise pressured or influenced in a
particular case. Fourth, a judge or legislator may be subject to stress that distorts their
judgment and reasoning.1233 Fifth, with judicial decisions on an appellate bench and
with members of a legislature it is possible that an arrangement may be made among
themselves for a trade, for example ‘You come my way on this point, I will go your
way on that one’. A similar trade off can be made, and is often made, by legislators.
Sixth, some seemingly innocuous factors may be influential. For example
administrative arrangements within the court may affect decision-making.1234

Commentary
Commentary 27.1 Footnote 4
Factors Causing Irrationality
The factors that can generate irrational decisions are many and varied. For discussion
of these factors see Fogg (1992) and Easterbrook (1994).

Economic Analysis of Class Actions

Rubenstein (2001) poses an interesting analysis of contemporary class actions based on
economic analysis of the motives of the participants. He argues that there are more
business deals conducted in a business forum than adversarial disputes. As summarised
in the Abstract (from which excerpts below are produced verbatim), class actions are
better explained in terms of transacting a business deal:
(1) Defendants purchase a commodity - finality. They buy from the plaintiffs’
representative the plaintiffs’ rights to sue.
(2) The attorneys’ activities are primarily business-oriented, not legal, in nature. They
negotiate and structure large financial arrangements. Traditional litigation work - client
meetings, legal research, discovery, motion practice, brief drafting, oral argument, trial
- is of secondary importance.

1230 Devlin (1978), Hanks (1987), Devlin (1979), Woods (1978)

1231 Cretney (1984). Commentary 27.18.
1232 See Maher (1993) and Williams (1993).
1233 Kirby (1995), Kirby (1997B), Kirby (1997C), but for a contrary view see Thomas
(1997).
1234 See Solomon (1993).
 466 Chapter 27 Irrational Thinking
(3) The familiar signposts of adjudication - pleading, discovery, and trial - are of minor
importance. Pleadings often do not initiate adjudicatory activity, but rather succeed the
finalization of the transaction, and rarely do they frame the nature of the dispute as
much as they reflect the nature of the deal. Huge transactions take place based on
discovery from other cases, or no discovery at all. Trial is rarely contemplated.
(4) Judges broker deals, they do not adjudicate cases or even simply manage
settlements.
(5) The desire for nationwide deals and global peace has displaced familiar sovereign
boundaries on the judicial capacity and function.

Political Behaviour
While many people dislike or even despise political behaviour of a deceitful or
manipulative kind, it may be a means to achieving a good end. This is perhaps why
politics has been defined as the art of the possible.

In this regard, Button (2006) referred to the huge efforts of the British Prime Minister
Tony Blair in bringing about a political agreement in the troubled Northern Ireland. In
doing so he referred to the ‘complexity ... of politics’, which he describes as ‘a dark art
that can be bent to an enlightened outcome’.

Ideology
For discussion of ideology see Ferguson(1977) and Groenwegen (1990).

Rhetoric
For discussion of rhetoric see Maher and Evans (1984), Mason (1989A), Nussbaum
(1985), Saunders (1994), Wald (1995B).

Commentary 27.2 Footnote 21

Max Weber’s fourfold classification of social action includes affective action. As
Elwell (1996) describes it, this comprises action that ‘is based on the emotional state of
the person rather than weighing of means and ends’.

And the point of course is that a decision based on emotion rather than reason is
irrational.

Commentary 27.3 Footnote 26

(1) Cognitive Filters. For further analysis of cognitive filters see Moore (19891990).
(2) World View. Reasoning to conclusions about truth of facts based on ones world
view by amounts to reasoning by induction. See Chapter 6 Induction.

Commentary 27.4 Footnote 44

See Heuston (1964), Paterson (1974) and Griffiths (1981). Devlin (1978) provides a
counter to this argument of judicial prejudice.
 Chapter 27 Irrational Thinking 467
Commentary 27.5 Footnote 47
For discussion of erroneous thinking and fact-finding see Guthrie, Rachlinski and
Wirstrich (2001) p 780. There the authors say that ‘the very nature of human thought
can induce a judge to make consistent and predictable mistakes in particular situations’.

Commentary 27.6 Footnote 48

Ideally judges will approach decision making with an open rather than a closed mind.
In reality there are factors that can sway a judge from this ideal approach as the
following discussion reveals:
(1) There are judicial comments on the effects of personality on judicial decisions in
Onassis v Vergoittis [1968] 2 Lloyds Rep 403, 431 per Lord Pearce; Lord Bingham
(2000) pp 6-10 and Nicolson (1994).
(2) Other factors that might affect judicial decisions are matters that are personal to
the particular judge, most obviously their personality, the state of their health or their
personal disposition at the time they are making the crucial decision. Legal realists took
up this notion. One of their catchcries was that physiological facts such as ‘what the
judge ate for breakfast’ and the ‘state of the judge’s digestion’ could significantly
influence judicial decisionmaking. (The origins of this expression about the state of the
judicial digestion is not definitely established but one real possibility is an article by
Roscoe Pound [Pound (1905) p21] where he commented on the arbitrariness of Cadi
justice in referring to their ‘administering justice at the city gate by the light of nature
tempered by the state of his digestion’.) Some empirical research has been done on this
issue. Danziger, Levav, and Avnaim-Pesso (2011) wrote up some research in their
paper ‘Extraneous factors in judicial decisions’. Their conclusion was as follows: ‘We
have presented evidence suggesting that when judges make repeated rulings, they show
an increased tendency to rule in favour of the status quo. This tendency can be
overcome by taking a break to eat a meal, consistent with previous research
demonstrating the effects of a short rest, positive mood, and glucose on mental resource
replenishment ... Although our focus has been on expert legal decisions, we suspect the
presence of other forms of decision simplification strategies for experts in other
important sequential decisions or judgments, such as legislative decisions, medical
decisions, financial decisions, and university admissions decisions. Our findings add to
the literature that documents how experts are not immune to the influence of extraneous
irrelevant information. Indeed, the caricature that justice is what the judge ate for
breakfast might be an appropriate caricature for human decision making in general. ’

Commentary 27.7 Footnote 50

A good illustration of the process of jury selection to enable a prosecution or defence to
obtain a favourable jury, although fictional, is found in the novel by John Grisham
(1996) The Runaway Jury Doubleday: New York. This was the basis of a movie
Runaway Jury (Director Gary Fleder, New Regency Pictures, 2003). There are reviews
of the movie by David Gates: ‘Review of The Runaway Jury’ Newsweek 1213.22 (27
 468 Chapter 27 Irrational Thinking
May 1996): 68, and John Skow ‘Review of The Runaway Jury’ Time 1413.22 (27 May
1996): 85.

Commentary 27.8 Footnote 52

Social factors, as the text says, affect decisions because all of us are socialised. An
example is economic decision making in the market, which is affected by several social
factors. For discussion of this see Rogers (1988). Paterson (1974) considers whether
judges are a political elite. See also McCormick and Greene (1990).

Commentary 27.9 Footnote 57

Not surprisingly there is literature on the effect of legal education, and the legal culture
that it is likely to engender, on decision-making. See for example Elkins (1983),
Gutman (1992-93) and Pongle (1989).

Commentary 27.10 Footnote 58

Since lawyers are part of an ancient profession steeped in tradition their culture is
likely to be strong. Consequently a dominant aspect of lawyers’ practice such as the
adversarial system can influence outlook in a significant way. See Sward (1989).

Commentary 27.11 Footnote 62

As an illustration of how culture can cause a decision to be less rational, Max Weber’s
four-fold classification of social action includes traditional action. Here, as Elwell
(1996) describes it, the action is ‘guided by custom or habit’. People ‘engage in this
type of action often unthinkingly, because it is simply ‘always done’.

Commentary 27.12 Footnote 63

For a contemporary presentation of this view that law is a product of national culture
see Laster (2001). In a similar vein, according to Ferguson (1977) the commercial law
codes have strong social origins.

Commentary 27.13 Footnote 66

Max Weber made a relevant point in his analysis of the ways in which modern societies
differ from those in the past in relation to their reliance on culture and tradition. One
significant difference was that, as Elwell (1996) describes it, ‘behaviour had come to be
increasingly dominated by goal-oriented rationality (zweckrational) and less by
tradition, values or emotion’.

Commentary 27.14 Footnote 67

Elwell (1996) illustrates the irrationality of bureaucratic institutions by referring to
‘economic bureaucracies in pursuit of profit that deplete and pollute the environment
upon which they are based; political bureaucracies, set up to protect our civil liberties,
that violate them with impunity; agricultural bureaucracies (educational, government,
and business) set up to help the farmer, that end up putting millions of these same
farmers out of business; service bureaucracies designed to care for and protect the
elderly, that routinely deny service and actually engage in abuse’.
 Chapter 27 Irrational Thinking 469
Commentary 27.15 Footnote 81
Part of the Marxist view of law is that there is a strong tendency for judicial decisions
to reinforce capitalist economic interests. One proposed method of interpretation, public
choice, endeavours to mitigate this problem by having courts interpret a statute against
the interests of powerful groups who may have promoted the statute and in favour of
those who possess lesser power. See Chapter 22 Social Choice: Interpreting Law.

Commentary 27.16 Footnote 93

For discussion of rhetoric see Maher and Evans (1984), Jeff Mason (1989), Nussbaum
(1985), Saunders (1994), Wald (1995B).

Commentary 27.17 Footnote 95

David Kennedy, a historian, is quoted as saying: ‘We will all get it wrong if we
legislate when people are convulsed by emotion, outraged in anger, and thirsting for
revenge’. When saying this he was commenting on the United States Congress passing
legislation in the wake of the terrorist attack on New York on 11 September 2001.

Commentary 27.18 Footnote 97

Political pressure on judicial decisions may, for example, come from public opinion -
see Mason (2002) and Abella (2003).
Chapter 28
Legal Method
Introduction Absence of
Method Need for Method
Nature of Method
Commentary

Introduction
Preceding chapters have explained what it means to work rationally with law and what
it means to work irrationality. Now in Part 4 Method the book builds on this by using
our understanding of rationality to devise methods for working with law that are based
on reason.

In outline, this chapter proceeds in the following way. To start there are two significant
things about the present state of the common law world that require comment. First,
there is the absence of effective method for working with law and in many cases the
absence of any method at all. Second, there is an overwhelming need for method. Then,
having demonstrated the need to devise a method for working with law discussion turns
to explaining the form or nature that this method should have. This provides
background for an explanation of this method in the remaining chapters of the book.
The core of this method is captured in three major models, which are as follows:
# Model for Organising Law
# Model for Forming Law1235 1236 1237
# Model for Using Law
This explanation, however, is brief since the legal method proposed here is fully
3
explained in another text.

Absence of Method
Introduction
Lawyers, it is argued here, generally lack developed, effective and efficient methods
for performing the fundamental tasks in working with law.1238 This has happened
because, for the most part, lawyers have failed to investigate the way they should
perform the various tasks in working with law.1239 Lawyers are skills averse in the
central tasks of working with law. This lack of method can be demonstrated in several
ways -

1235 This combines two similar and related models, the model for making law and the model
for interpreting law.
1236 This combines two similar and related models, the model for litigation and the model for
transactions.
1237 Christopher Enright Legal Method
1238 Commentary 28.1.
1239 See, however, Luhmann (1995).

470
 Chapter 28 Legal Method 471

the lack of explanations for how to work with law, the lack of instruction in method in
law schools, admissions by lawyers that they lack method and finally, both the
existence and the promulgation of a delusion that law is complex.

Lack of Explanation
Let us make a comparison between lawyers and doctors. Take 10 surgeons and ask
each individually how they perform a particular type of operation, for example removal
of an appendix. Their answers would be coherent - you could follow what they were
saying. Their answers would also be congruent - they would all say much the same
thing.

Now take 10 appellate lawyers (judges and counsel) and ask each to explain how to
interpret law. Measured by the things that lawyers say about interpretation, both in and
out of court, their answers would be neither coherent nor congruent.1240 1241 As Professor
Glanville Williams put the position, ‘judicial statements on the principles of
interpretation are often misleading half-truths, or are useless guides because they beg
the question’.

Lack of Instruction
Search the syllabus of any law school, where lawyers and judges receive their training,
and it is likely that you will not find any account of a effective methods which lawyers
and judges should use for working with law. Go to a law class and listen for proper
explanations of legal skills and all that you will hear is the sounds of silence. Law
schools generally do not actively and explicitly teach an effective legal method.1242
Instead, one of two things happens. Law students are taught methods that do not
work.1243 Or legal method is taught by ‘immersion,’ by ‘osmosis’ or by some other
‘implicit models of learning’.1244 As Ernst Freund bluntly put it with regard to statutory
interpretation: ‘While [at law school a student] learns something about interpretation,
his view of this most important phase of jurisprudence is just as unsystematic as is that
of any student of any legal subject who becomes acquainted with it in the course of
practice, without comprehensive or scientific study’.1245 1246 Mark Duckworth is
similarly
blunt in relation to legal writing, asserting that ‘[v]ery few lawyers are taught how to
12

write legal documents. It is something they are meant to pick up on the way’.

Admissions Against Interest

Lawyers generally do not lack knowledge, commitment or intellect. Therefore, the only
feasible explanation for why they have so much trouble working effectively with law is

1240 Kirby (2003) in Sheard (2003) pp 46, 52

1241 William (1981A) p 1128
1242 Commentary 28.2.
1243 Commentary 28.3.
1244 Laster (2001) p vii
1245 Ernst Freund A Course in Statutes (1916). Commentary 28.4.
1246 Duckworth in Sheard 2003, p 96
 472 Chapter 28 Legal Method

lack of method. The problem of lack of method is both identified by critics and
 Chapter 28 Legal Method 473

acknowledged by lawyers. The problem has two aspects - the absence of any accepted
methods for performing legal tasks such as resolving questions of law and questions of
13
fact as a judge must do to decide a case, but also the absence even of possible
explanations for how these tasks might be performed.1247 Thus, there is not
disagreement over method, there is a total absence of method.1248

One frank admission about lack of method comes from Justice Michael Kirby, who
points out the absence of ‘authentic explanations and expositions about how the
functions [of judges] are actually discharged’.1249 1250 This has happened, according to
Kirby, because ‘some of the issues raised by a reflection on judicial reasoning and
17
decision-making are puzzling to judges themselves. In consequence, as His Honour
goes on to say, when they interpret law, lawyers ‘are truly upon an untracked ocean of
decision-making’.1251 In a similar vein, Sir Anthony Mason expresses the view that
there
is ‘an absence of uniform judicial methodology,’1252 while Lord Steyn describes
20
interpreting statutes as an ‘intractable problem’.

Lack of proper method for interpreting statutes is obviously a problem enough itself.
However, it gets worse because this problem grows to become a problem in writing
judgments. In an article in a law journal, Sir Frank Kitto, a former justice of the High
Court of Australia, confessed that a considerable time ago he ‘imagined or rather hoped,
that given time one could get into the ways of writing judgments and that the
way would prove easier as the years went by. It was not so. The years proved only that
21
there was no way of writing judgments’.

In fact, the problem from lack of method affects all tasks involved in working with law,
including writing law. Indeed, with legal writing the problem is visible to the
naked eye since legal writing is often so hard to read. Consequently, complaints are
22
commonplace. As Professor Rodell succinctly put it more than 70 years ago, ‘the two
23

13. Kirby (2003) in Sheard (2003) p45

14. Kirby (2003) in Sheard (2003) p46
15. Commentary 28.5.
16. Kirby (2003) in Sheard (2003) p46
17. Kirby (2003) in Sheard (2003) p46
18. Kirby (2003) in Sheard (2003) p52
19. Mason (2003) in Sheard (2003) p5
20. Steyn (2002)
21. Kitto (1992) p 787
22. Rodell (1936-37), Stork (1984), Lyons (1977). Commentary 28.6.
23. Rodell (1936-37) p 38
24. Duckworth (2003) in Sheard 2003, p 94, citing Mellinkoff (1963) p 293. See also Stark
(1990).
25. Bennion (1983), p 8
 474 Chapter 28 Legal Method

things wrong with almost all legal writing are its stye and content’. In a similar vein,
Mark Duckworth complains that the ‘language of the law is in fact wordy, pompous
24
and dull’. Francis Bennion remarks how strange it is that ‘free societies should thus
arrive at a situation where their members are governed from cradle to grave by texts
25
they cannot comprehend’.
 Chapter 28 Legal Method 475

Criticism of legal writing also extends specifically to judgments. As Justice

1253 1254 1255 1256

Shelter says it:‘Many important judgments of our greatest judges are largely
27
incomprehensible to most readers’. Gerard Henderson echoes this in saying of a
28
judgment, that ‘[l]ike many High Court judgments, this is not easy to read’.
Judgments, it has been said, ‘do not speak in a language or style that people readily
29
understand’. In a similar vein Duckworth points out that law reports ‘are not filled with
pages of great prose’. 1257 1258 1259 1260

Merritt makes a string of criticisms especially of the part of the judgment where judges
give their reasons, which constitutes the ‘critically important part of most judgments’.
In ‘many cases, the chain of legal reasoning that underpins sentencing decisions may as
well be written in Urdu’. By directing their judgments to other judges the judiciary has
accomplished three undesirable outcomes. In the minds of members of society, they
have created ‘an odd outcome and a thicket of jargon’. By ‘communicating with other
judges in mind, they have frequently vacated the field and made it almost inevitable that
odd decisions will be left unbalanced by a judge's reasoning’. Judges fail ‘to persuade
the community that [when they] are making difficult decisions [they
31
are] using sound techniques’.

Criticism such as this is not new. In the time of Henry VI (1422-1461), Chief Justice
Fortescue remarked that ‘we have several set forms which are held as law, and so held
32
and used for good reason, though we cannot at present remember the reason’.

All of this testifies to a large gap in legal learning, caused by the absence of any
33
accepted method for performing the tasks necessary for working with law. Indeed, to
emphasise the point, there is not just a lack of agreement as to proper methods, there is
virtually a total lack of method. For lawyers, legal method constitutes bona
1261

vacantia. 1262

Delusion of Complexity
Law is sometimes seen as a complex and mysterious phenomenon. As Sir
1263 1264 1265

Garfield Barwick, a former Chief Justice of the High Court of Australia, made the

1253 Campbell (2003), Davies (1987)

1254 Sheller (1996) p 4
1255 Henderson (2002) p 11, Commentary 28.7.
1256 Mason (1993A) pp 186-187
1257 Duckworth (2003) in Sheard 2003, p 94
1258 Merritt (2010)
1259 Chief Justice Fortescue, in the reign of Henry VI, cited in Mellinkoff (1963) p 11
1260 Kirby (2003) in Sheard (2003) p 45
1261 Kirby (2003) in Sheard (2003) p 46
1262 Commentary 28.8.
1263 Abernathy (1983), Wilson (1974)
1264 Commentary 28.9.
1265 Barwick (1958) p 14
 476 Chapter 28 Legal Method

point: ‘We are practised in what is, in very truth, an ancient mystery and those who
have mastered
38
its intricacy have indeed great power in their hands’. This view of the law, it is
 Chapter 28 Legal Method 477

suggested, comes from lacking proper method for working with law. Leam the
methods, and learning law is easy. Complexity in law largely derives from lawyers
giving poorly organised accounts of legal rules and little or no coherent explanation of
legal method.

Need for Method

Introduction
The preceding section argued that lawyers lack proper methods for working with law.
That lawyers lack rational and effective methods for performing the various tasks for
working presents at least two problems. First, it undermines the legitimacy of the legal
system. Second, it detracts from the effectiveness and efficiency of the legal system so
that there is a problem with standards.

To remedy this problem it is necessary to understand it more. The key to this

understanding is the distinction between explicit and implicit knowledge.

Explicit and Implicit Knowledge

In one sense the problem is that lawyers as a class lack methods for working with legal
materials. However, the problem can be framed more precisely. Lawyers lack an
explicit knowledge of method. (This, by the way, is why they cannot explain what they
do - if you are not explicitly aware of something you cannot explain it to someone else.)
In substitution for explicit instruction in legal method lawyers acquire by osmosis some
crude and implicit knowledge of method.

There is, not surprisingly, a crucial difference between implicit and explicit knowledge
39
of a method. When a person knows something explicitly as distinct from implicitly,
they possess the major benefit of awareness or consciousness. They are aware of the
outcome that they need to achieve. They are aware of the method that they need to use
to achieve the desired outcome. As part of this awareness, they possess a framework to
guide and measure their performance. This enhances their level of skills in several
ways, which will now be explained.

Personal Improvement
When a method is explicit each person can measure and improve their own
performance. Because of their explicit knowledge they are consciously aware of the
way in which a task must be done. They can see clearly whether their own work comes
up to the standard. And where the methods are straightforward (as is the case with law)
occupants of a profession or calling generally have a large capacity to rectify their own
defects.

Improvement of the Method

When a method is explicit any capacity for the method to be improved is likely to be
realised. It may be that the method as originally stated was wrong or not the best. It 1266

1266 McShane (2000) pp 40-41

 478 Chapter 28 Legal Method

may be that changes in circumstances make the method wrong, totally or partially
inappropriate or inefficient. Whatever the defect, trial in the workplace will eventually
fix it. Since practitioners know the method, they will be conscious of what they are
doing, why they are doing it and what it should achieve. If they see that their efforts
done purportedly according to the method fall short of a promised, desired or
achievable result they are in a good position to remedy the defect. In some cases they
may be able to do this on their own, but in any event there is typically ample
opportunity for professionals to share their experiences with one another, informally in
conversation and formally in journals and seminars. This means that defects will be
exposed and remedies will be devised. It may take several goes, but eventually each
method will be improved, quite likely to its most attainable levels of efficiency and
effectiveness.

Teaching the Method

It is a simple matter to teach explicit methods to those entering the field. Explicit
methods are literally outspoken since they can be voiced, written, and demonstrated.
Therefore those who seek to teach the method can articulate it and explain it to their
students.

In a similar vein, those who seek to learn the method have considerable advantages.
Since they are presented with a specific method they have something tangible to grasp.
They also have two avenues for monitoring their performance and seeking assistance.

First, they possess some capacity to monitor their own performance by reference to the
statement of the method that they have been given. They can be self correcting.

Second, if after this a student needs further assistance they can seek appraisal and
direction from their teacher (or someone else in the field). When a student approaches a
teacher for assistance, they can usually articulate the right question. It is also easy for a
teacher to view or hear the performance or understanding of the student and then, by
reference to the stated method, indicate where the problem is and how to fix it. This,
however, is not the case if the method is implicit because one is jousting with ghosts.

Raising ofPerformance Standards

Taken together, each of these ways in which explicit knowledge of legal method
enhances the level of skills creates a collective effect of raising and maintaining
standards. Stated simply, any capacity for improving the method will probably be
realised, so standards go up. Any public statement of these methods pressures
practitioners to perform according to best practice. A public statement of methods
provides a constant and confident benchmark against which the performance of one
practitioner can be measured by other practitioners and by clients. In this way it
imposes both public and peer pressure on lawyers to acquire and preserve standards.
Consequently, the situation can be achieved where the cause of any departures from
proper standards in all likelihood lies not in the methods that lawyers deploy but
somewhere else such as human frailty or a shortage of resources.
 Chapter 28 Legal Method 479
Summary
A method or technique is more effective when it is formally or explicitly articulated
than when it is only implicitly understood. Our task in subsequent chapters is to
articulate an explicit method.

Several advantages accrue when a method is explicitly known. Those who use it can
call it in at any time as a guide, so that they improve their understanding. It creates a
common reference point for communication so a teacher can transmit the method to
students to enhance their understanding and quicken their acquisition. Flaws in the
method can be detected and eliminated. Any capacity for the method to be developed or
improve is likely to be realised. Its full array of uses can be known and availed of. All
of this produces an overall increase in standards of performance of law students, law
teachers and practising lawyers.

Problems with Standards

Discussion so far has explained why the legal profession now has a major problem with
standards. Since methods for working with law have not been made explicit, law
teachers and lawyers have not been able to teach effective skills to students or fellow
lawyers. This is why lawyers of any ilk - judges, academics and practitioners - do not
fully understand what they are doing with law because they do not have explicit
methods for working with it. Consequently, they work with law far less effectively and
efficiently than they would if they had an explicit, rather than merely an implicit,
understanding of legal method. To put it bluntly, to a significant extent lawyers are
unskilled workers.

Problems with Legitimacy

Defects in the standard of legal work brought on by lack of effective methods for
working with law undermine the legitimacy of the legal system. On the one hand law is
a major civilising force, while on the other those who work with law are unskilled. Part
of legitimacy comes from doing the job properly. So, when the job is seen not to be
done properly, legitimacy suffers in consequence.

Transmission of Problems
By its very nature - ignorance of method - this problem is professionally transmitted to
the next generation. Not possessing an explicit understanding of methods for working
with law, lawyers cannot teach methods to those entering the profession. This means
that generation after generation of students receive no worthwhile instruction in
method.

Nature of Method
Introduction
If lawyers are to have effective and efficient methods for working with law it is
important to know the nature of these methods. In order that methods for working with
law are simple both to use and to explain, methods should be embedded in models.
These models provide a simple explanation for basic legal processes. They also require
 480 Chapter 28 Legal Method

several necessary features - they need to be rational, simple, adaptable, systematic,

comprehensive and manageable. Finally, as it often turns out, the models can be represented in
diagrams.

Rationality
Most of all, methods must be rational. They must impound the rational way of proceeding with
the tasks for which they are used. Rationality is highly prized. Rationality is highly functional
because to be effective and efficient, methods for working with law must be solidly grounded
on the rationality which underlies the task in question. Moreover, knowing the rationale for a
method makes it easier to improve the method and to adapt it to new and difficult
circumstances.

Indeed, this book was written to further the quest for rationality. In earlier discussion the book
has explained the specific forms that the reasoning processes in law can take, such as
conditional statements, policy, deduction, induction, abduction, observation, and probability.
This final part of the book now demonstrates how these reasoning processes are needed for the
various tasks in working with law.

Simplicity
These models provide a simple explanation for basic legal processes. Making the models
simple emphasises fundamental principles and relationships. This is because the basic function
of a model is to be a viewing platform that shows up the major features of the landscape.

Adaptability
Since models portray the fundamentals, it is usually possible to build upon these simple
models to include greater detail and complexity. In this way they are a foundation for a more
detailed explanation, and also a guide because they enable the reader to put the details in their
proper place. Thus, even when the details are complex the model will still be a point of
reference and an organising framework. Therefore, the models should be used sensitively,
flexibly and adaptively. In a new context it might be necessary to go back to the basic model,
and work from there by making any necessary variation, development or expansion.

Systematic: Algorithms
Legal method can be portrayed with models that are algorithmic in outward form. In
consequence, these models enable a user to work with law in a methodical or systematic way
because they break each task into a number of steps. This happens because the way in which
the steps are constructed enables them to achieves three significant goals:
(1) Steps follow one another in a logical order.
(2) There is no overlap between the steps. That is, they are mutually exclusive.
(3) When every step has been taken the task has been fully done.
However, the methods are not pure algorithms. Frequently the content of steps in a model is
not cut and dried but involves a judgment that is not purely scientific.
 Chapter 28 Legal Method 481

Ultimately there is a degree of speculation or guesswork. So, although the ideal is to

have a method that is totally definite, in the nature of things this is just not achievable.

Comprehensiveness
As just explained, the models are constructed on the basis that when every step in the
model has been taken the task has been fully done. Constructing the models in this way
ensures that the task in question is done comprehensively so that nothing of relevance is
overlooked.

To emphasise the proposition, the models are comprehensive because they require a
user to make a systematic and exhaustive consideration of all possibilities. This happens
at several points. For example, it happens in determining the parties to a matter that
might give rise to litigation (either in real life for advising a client or in a problem
questions in the class room) because all possible parties must be considered. If any
permutation of parties is overlooked to that extent the ensuing advice or answer to a
problem question will be defective - something that might happen to affect the overall
outcome has not been considered.

It also happens in making and interpreting law. When making law on a subject all
possible versions of a law are considered. When interpreting law all possible meanings
of the ambiguous provisions (that makes the interpretation necessary) must be
identified. There are several reasons for this.

First, it identifies the problem - the question before a legislature is which of these
several versions of a law it should choose, and the question before the court is which of
several competing meanings of the ambiguous provision is legally correct.

Second, it is necessary for the reasoning process, which takes place in the second step
of the model. This reasoning consists of arguments addressed for or against each option.
Obviously, it is not possible to formulate an argument for or against an option until the
options have been precisely identified.
Third, reasoning by reference to policy (as is the case for making and interpreting law)
involves selecting the best option (which consists of the option which yields the highest
net benefit). To be confident that the best option is eventually chosen, it is necessary
that all options are considered. If this does not happen there is always the possibility
that an omitted option may in fact constitute the best option.

Fourth, it identifies the answer because a court or legislature can choose only from
among these options - the meanings of the ambiguous provision, the possible law, and
their effects. (However, for a legislature in practice, politically the number of options
may be limited.)

Examining these reasons together indicates how a comprehensive statement of options

creates an organising framework for making and interpreting law:
# All options are identified and assembled.
 482 Chapter 28 Legal Method
# Arguments are addressed to these options looking for the best.
# Since no option has been overlooked, the best of the options before the
legislature or court is the best of all possibilities, that is, the absolute best. Put another
way, identifying the options not only defines the problem, it locates the solution since
the solution must be constituted by one of the options.1267

This notion of exhaustive consideration probably has a forbidding and tedious

appearance for the reader. Nevertheless, such a method is the only way to ensure that no
possibility is overlooked. Fortunately the amount of work that an exhaustive
consideration of all possibilities entails is far less than it appears at first sight because,
with experience, many of the possibilities can be dismissed after minimal consideration.

Still, readers are urged not to pass over them with a closed mind, and with no
consideration at all. At the very least they must consciously and deliberately consider
whether each possibility is relevant to the task that they are doing.

Manageability
Steps in the models break each process down into a series of small tasks. This brings at
least two major advantages:
# Easy to Manage. Small pieces for a task are easily managed. Think of these
as bite sized pieces. These make the whole task so much easier to do.
# Psychological Advantage. Small pieces have a psychological advantage.
They make the whole task so much less daunting for all users, especially a beginner.
The core point is that any major task when conceived as a whole is daunting. This
applies as much to building a house as it does to doing major tasks with law.
There is a major pay off for making the task much less daunting. It replaces the fear
factor with the confidence factor. Confidence now rules and fear slinks away.
Confidence stimulates high performance while fear retards performance.

Commentary
Commentary 28.1 Footnote 4
As an example of the neglect of skills and how it leads to ignorance and uncertainty,
the MacCrate Report attempted to define skills for lawyers and really became lost in the
attempt - see American Bar Association (1992). For further official discussion of legal
skills see Lord Chancellor's Advisory Committee on Legal Education and Conduct
(ACLEC) (1996).

Commentary 28.2 Footnote 8

Perhaps this is the basis of the comment, in Laster (2001) p v, by Professor David
Weisbrot, President of the Australian Law Reform Commission, that ‘law students
thrive in spite of, rather than because of, the education they receive in Australian law
schools’.

1267 Commentary 28.10.

 Chapter 28 Legal Method 483

Commentary 28.3 Footnote 9

A good example of a popular method that does not work is the method for answering
problem questions described by the acronym IRAC, or some similar acronym. It misses
the major tasks in answering problem questions. In consequence it deprives law
students of valuable training in some of the major skills needed in litigation. For an
alternative account of how to answer a problem question see Christopher Enright Legal
Method Chapter 28 Answering Problem Questions.

Commentary 28.4 Footnote 11

A copy of an advanced print of Ernest Freund A Course in Statutes (1916) is held at the
Harvard University Law Library on the subscriber website http://www.galeuk-
.com/moml.

Commentary 28.5 Footnote 15

For general discussion of statutory interpretation see the following - Bennion (1980B),
Cardozo (1921), McHugh (1999), Bryson (1992), Bell (1983), Cross (1987), Burrows
(1984-1985), Evans (1989) and Macrossan (1984).

Commentary 28.6 Footnote 22

In consequence of the complaints about how badly many lawyer write, there are
attempts to improve legal writing. See, for example Willis (1978).

Commentary 28.7 Footnote 28

Henderson (2002) p 11 made this criticism of how hard it is to read most judgments of
the High Court. In the cited article he referred to the judgments in Muin v Refugee
Review Tribunal [2002] HCA 30 and Lie v Refugee Review Tribunal [2002] HCA 30

Commentary 28.8 Footnote 35

A person who has goods may lose them or abandon them.

Lost
Goods
General
Rule
(1) When someone loses or mislays goods the general rule is that the finder has good
title against all of the world except the true owner: Armory v Delamirie (1722) 5 Stra
505; 93 ER 664.
(2) When an owner actually abandons the goods a finder acquires good title as against
the world.

Special Case: Occupier’s Claim

In both of these cases, though, if the goods are found on premises the occupier of those
premises has a better claim to the goods than the finder in either of two circumstances:
(i) The goods are sufficiently attached to the premises.
(ii) The occupier can show an existing intention to possess the goods.
[See Parker v British Airways Board [1982] 1 QB 1004; Waverley Borough Council v
Fletcher [1995] 4 All ER 75.]
 484 Chapter 28 Legal Method

Abandoned Goods: Bona Vacantia

If there are good which no one claims as owner or finder (for example a person dies
without a lawful heir) the goods are termed bona vacantia. This means vacant goods. In
simpler language it is the legal name for ownerless property. Under English common
law goods that are bona vacantia pass to the Crown - see Dyke v Walford (1848) 5 Moo
PCC 434; 13 ER 557.

Commentary 28.9 Footnote 37

The author’s opinion is that much of the complexity with law is not inherent but is
introduced by lack of proper methods that lead to a general lack of an ability to state
legal doctrines clearly and simply. Here are two other views:
(1) According to Boorstin (1958) complexity is introduced when laws are made.
(2) According to Twining and Meirs (1999) the complexity occurs when working
with law.

Commentary 28.10 Footnote 40

When interpreting law, a comprehensive statement of all of the meanings of the
ambiguous provision will be an organising framework on the basis that courts do not do
violence to language. They must not give the words a meaning that they cannot
reasonably bear.

This, in fact, is the only rational meaning of the literal rule despite much common
misunderstanding to the contrary. The author explains and defends this revisionist
account of the literal rule in Chapter 25 Analysing Ambiguity.
Chapter 29
Model for Organising Law
Introduction Macro Analysis Micro
Analysis Commentary

Introduction
Law needs to be organised at two levels. These involve an external or macro analysis
that considers the relation that a rule has to some other legal rules and an internal or
micro analysis that considers the structure of a rule.1268

Macro Analysis
Macro analysis aims is to put some shape or structure on a whole area of law or the
entire content of a statute. This is a useful if not necessary prerequisite to working with
the law in more detail. It is based on the fact that any legal rule generally has some
relationships to other legal rules in the area of law or the statute.

To the extent that there is a skill for identifying the overall shape of an area of law
there are two basic pieces of advice. The relationships between rules can either be
formal or functional. Generally if you look for these relationships they will be readily
apparent. Just examining the elements and consequences of the rules should reveal
them.1269 1270

Micro Analysis
Introduction
Micro analysis entails organising an individual rule of law in order to work with it in
some way such as use it, understand it, remember it, interpret it or write about it. The
method for the micro analysis of law builds on the earlier explanation of how each legal
rule constitutes a conditional statement. This conditional statement incorporates and
integrates the two components of the rule, the elements that determine its scope and the
consequences that determine its legal effect.1271

This has two consequences:

(1) The model for organising law consists of the division of law into its elements
and consequences.
(2) Using the model properly is based on an understanding that legal rules constitute
conditional statements.

1268 Chapter 3 Structuring Legal Rules

1269 See Christopher Enright Legal Method Chapter 5 Organising Law: Macro Analysis
1270 Chapter 3 Structuring Legal Rules
1271 Commentary 29.1.

485
 486 Chapter 29 Model for Organising Law
Advantages
Being able to identify this structure brings many advantages - indeed the skill of
organising law is indispensable. It is an essential part of the following tasks:
(1) Using Law. As is explained later, there is a model for using law in litigation or
transactions where the first of its three columns consists of the setting out of a legal rule
by division into its elements and consequences. The key proposition is that a legal rule
must be structured as a conditional statement constituted by elements and consequences
if it is to be used to regulate society by means of litigation and transactions.
Specifically, the legal rule on which litigation or a transaction is based forms the major
premise of the syllogism that underpins the application of law to facts, which is an
integral part of both litigation and transactions.1272
(2) Interpreting Law. In a disputed case, the best way to ascertain whether and
where a legal rule is ambiguous is to check the elements systematically against the
facts.
(3) Writing, Reading, Understanding and Remembering Law. Writing law and
reading law should utilise the model for organising law in the task of describing a legal
rule. There will rarely if ever be a simpler and more useful way of describing a rule
than by reference to its elements and consequences.1273 1274 For this reason organising
law is also of great assistance for understanding and remembering law.

Elements
A legal rule has to identify the facts or events in the world that it wants to regulate. The
elements of the rule perform this task.

Nature of Elements
The facts which a legal rule regulates are delineated by the elements. Elements
describe the required facts, that is, the facts that must exist for the rule to apply. Each
element of a rule describes a specific class or type of fact. For convenience, in the
model for the micro analysis of law and in the model for using law elements are
labelled Elements 1, 2, 3 and so on. Collectively the elements can be depicted as
Elements 1-n.

Nature of Subelements
Elements can be divided into various levels of subelements as the law creating the
cause of action requires. These levels create a hierarchy. To illustrate this, let us take
Element 2 as an example, and see how it could divide into subelements. If Element 2
was divided into n subelements, these could be labelled Element 2.1, Element 2.2 and
Element 2.n, constituting the range Element 2.1-2.n.

Moreover, the rule may require further division. It is possible to represent this in the
model because a subelement at any level can always be further subdivided, so that the
division and subdivision create a more elaborate hierarchy. For example, Element 2.3

1272 Chapter 5 Deduction

1273 Christopher Enright Legal Writing. Commentary 29.2.
1274 Commentary 29.3.
 Chapter 29 Model for Organising Law 487
might divide into Elements 2.3.1-2.3.n. This process of subdividing elements continues
until the law constituting the cause of action is fully and faithfully represented in the
hierarchy.

Consequences
The whole point of making a law is to prescribe consequences for various forms of
conduct. Elements of a rule identify the type of conduct to which the rule applies. The
other part of the rule describes the consequences which the rule brings to that type of
conduct. Thus tort law prescribes damages payable by the defendant to the plaintiff as a
common consequence, while criminal law visits a guilty person with punishment. In the
model, the part of the rule which regulates facts is labelled in the model Consequences.
(In full form this is written Consequences 1-n but this extended form is necessary only
when attention is directed to the details of consequences, which is not the case here.)

Conditional Statement
As already stated, with few exceptions legal rules take the form of conditional
statements. This conditional statement takes the following form: If the facts of a case
fall within the categories of facts delineated by Elements 1-n, Consequences apply to
those facts. Thus the conditional statement integrates the elements and consequences by
legally imposing the Consequences on the type of facts that the elements delineate.1275

Diagram
Organising law can be represented in a diagram. This diagram is described and
explained in the earlier discussion of conditional statements.1276

Commentary
Commentary 29.1 Footnote 4
As was noted the vast majority of rules possess these three standard components -
elements, consequences and conditional statements. There are two additional points to
make:
(1) There is an exception to this standard structure of a rule. The exception consists of
a rule that creates a body. For example a rule says: ‘The Supreme Court of XYZ is
established’. This rule is unconditional not conditional and contains only consequences,
not elements. It is unconditional because it is not regulating part of the world as
ordinary legal rules do but is creating part of the world (in the illustration this is a
court).
(2) Lawyers are familiar with the notion that a cause of action, be it criminal or civil,
can be divided into elements and consequences. However, the importance of this
concept has not been fully emphasised, nor have its analytical foundations and potential
uses been fully developed. This natural structure for law provides the template for
organising law by dividing a rule into elements and consequences. This

8.
9
.
Chapter 3 Structuring Legal Rules
Chapter 3 Structuring Legal Rules
 488 Chapter 29 Model for Organising Law
notion is of great use because many legal skills depend on organising law in this
fashion.

Organising law in this way should be an essential part of the process of using law in
litigation and transactions, and also has benefits for the tasks of reading, writing and
learning law.

Commentary 29.2 Footnote 6

Put shortly, the model for organising law should constitute a major part of the overall
structure of a text that is describing legal rules. This is explained in Christopher Enright
Legal Writing Chapter 4 Legal Structure of a Text.

Commentary 29.3 Footnote 7

While the general practice is that each element of a rule describes a specific class or
type of fact, it is possible, for a provision in a statute to apply to a specific person or
body or situation. An obvious example is a provision that establishes a body, which is
in the form: ‘This section now establishes a corporation named the Schools
Commission’.
Chapter 30
Model for Forming Law
Introduction
Step 1: Options
Step 2: Reasons
Step 3: Decision
Justification of the Model
Application of the Model
Commentary

Introduction
Forming law consists of two similar and related processes - making and interpreting law. 1277 Statute law is made by a legislature, such as a
congress or parliament, while common law is made by courts. Courts also interpret law, both common law and statute law. This chapter
proposes a model for forming law. It is a combination of two similar and related models, the model for making law and the model for
interpreting law.

Making Law
Enactment of a statute is a means by which a government can spontaneously intervene to change some feature of society. Indeed statute law is
potentially a means of bringing about vast social change when a legislature so desires. Once made, a statute is administered by the executive
arm of government. If the law consists of a cause of action it may be invoked by action in the courts (or in a tribunal or before some official)
brought by a governments, a corporation or an individual. If the law authorises a transaction it may be invoked by anyone who seeks the
outcome that the transaction provides.

Interpreting Law
Ambiguity of language or expression creates the need for interpretation. Ambiguity occurs when a word or phrase possesses more than one
meaning.1278 This creates a problem because in a particular case, the legal consequences of the facts are not clear - does the rule apply to a party
or not apply? Thus with ambiguity a user of the law may be in doubt as to the legal position. For example, in a litigious matter it may not be
clear whether the person is liable or not liable to be sued by another.

To explain how ambiguity causes this uncertainty consider the example of a cause of action with Elements 1-n where there is ambiguity within
one element, Element 2. Assume that in this case the plaintiff can establish each element of the cause of action except for Element 2 where
there is uncertainty. This uncertainty arises because

1277 See Bauman (1989)

1278 Chapter 25 Analysing Ambiguity
489
 490 Chapter 30 Model for Forming Law
Element 2 has two possible meanings, designated Element 2 Meaning 1 and Element 2
Meaning 2. Conveniently these can be compressed into the form Element 2M1 and
Element 2M2. Element 2M1 is satisfied by Fact 2M1 which is proved by Evidence 2M1.
In a similar way, Element 2M2 is satisfied by Fact 2M2 which is proved by Evidence
2M2. We can set out this information in the following table, which is an extended
excerpt from the model for litigation:1279
Element 2M1 Fact 2M1 Evidence 2M1
Element 2
Element 2M2 Fact 2M2 Evidence 2M2
Figure 30.1 Effect of Ambiguity on Litigation

Now consider the situation from the plaintiff’s position (which will logically also reveal
the defendant’s position). For the plaintiff there are four possibilities with regard to
establishing Element 2:
(1) Case 1: Evidence 2M1. The plaintiff possesses only Evidence 2M1 and so can
prove Fact 2M1 but not Fact 2M2. Thus they can satisfy only Element 2M1 but not
Element 2M2. In this case the plaintiff’s action succeeds if the court finds that Element
2M1 is the correct interpretation, but will fail if the court finds that Element 2M2 is
correct.
(2) Case 2: Evidence 2M2. The plaintiff possesses only Evidence 2M2 and so can
prove Fact 2M2 but not Fact 2M1. Thus they can satisfy only Element 2M2 but not
Element 2M1. In this case the plaintiff’s action succeeds if the court finds that Element
2M2 is the correct interpretation, but fails if the court finds that Element 2M1 is correct.
(3) Case 3: Neither. The plaintiff possesses neither Evidence 2M1 nor Evidence 2M2
and so can prove neither Fact 2M1 nor Fact 2M2. Thus they can satisfy neither Element
2M1 nor Element 2M2. In this case it does not matter to the plaintiff how the court
would interpret Element 2. Their action fails regardless.
(4) Case 4: Both. The plaintiff possesses both Evidence 2M1 and Evidence 2M2 so
they can prove both Fact 2M1 and Fact 2M2. Thus they can satisfy both Element 2M1
and Element 2M2. In this case it does not matter to the plaintiff how the court might
interpret Element 2. They satisfy Element 2 regardless.

This information can be set out in the following table:

Case 1 Case 2 Case 3 Case 4
One Other Neither Both
X X Element 2M1 Fact 2M1 Evidence 2M1
Element 2
X X Element 2M2 Fact 2M2 Evidence 2M2
Figure 30.2 Analysis of the Effect of Ambiguity

This table uses ticks (") and crosses (x) to indicate whether an element is or is not
satisfied, which allows the table to show the four possible outcomes, being Cases 1-4:
3
.

Chapter 31 Model for Using Law

 Chapter 30 Model for Forming Law 491
(1) A tick (!) indicates that an element (that is Element 2M1 or 2M2) has been
satisfied
(2) A cross (x) indicates that an element (that is Element 2M1 or 2M2) has not been
satisfied

Analysing ambiguity in this way shows that ambiguity can create uncertainty about
whether a law applies to a set of facts, but does not do so in every case. As illustrated by
Cases 1 and 2, ambiguity matters only where on one meaning of the provision it applies
to the facts while on another meaning it does not apply. Alternatively, as illustrated by
Cases 3 and 4, despite the ambiguity, in some cases it does not matter which meaning is
used and applied to the facts because the result would not be any different.

When a law, that is a legal rule, is ambiguous, initially those affected by the law or their
legal advisers must interpret the law for themselves.1280 Obviously, the best that they can
do is to make a reasoned guess as to the correct legal meaning.

It is possible, but not inevitable, that the matter requires official resolution. Logically,
one might think, legislatures should interpret law since interpretation is a legislative
process, even if on a reduced scale, but conventionally in common law jurisdictions
courts interpret law.1281 Courts determine which meaning of the ambiguous provision is
the correct legal meaning. This is, it must be stressed, the correct legal meaning of the
provision because a court of proper authority has so determined it. Whether it is the best
interpretation is another question.

By making an official interpretation of a provision a court brings certainty to the law.

They determine how the statute or common law rule that contains an ambiguous
provision will alight on and affect the citizen.1282

In practice it is common to speak of lawyers interpreting law when they advise a client.
Clearly lawyers do not interpret law in the final sense of determining authoritatively the
correct meaning of an ambiguous provision. Instead a lawyer advising a client tries to
predict how the relevant court will interpret the law if and when the question comes up
for decision.

Statement of the Model

The model for forming law has three steps:
# Step 1: Options
# Step 2: Reasons
# Step 3: Decision
These steps or components of the model possess two contrasting characteristics. The
basic processes involved are non negotiable because they are founded on an inexorable

1280 Re O'Reilly; Ex parte Bayford Wholesale (1983) 181 CLR 557 per Dawson J
1281 Bauman (1989)
1282 See Easterbrook (1984)
 492 Chapter 30 Model for Forming Law
logic which underlies the processes of forming law. But, despite this fixed foundation,
performance of the tasks which these processes entail is not generally scientifically
determined; in practice it tends to involve human as well as scientific judgments, even if
the human judgments can be made based on some good reason.

Step 1: Options
[T]he anticipated impacts of the proposed action and of each alternative should be stated and
presented in a way that permits a comparison of the costs and benefits.
Introduction
Forming law is purposive action that seeks the best outcome when a decision maker is
confronted with a number of options.1283 1284 This is why Step 1 of the model for forming
law requires a legislature or court to identify its options or choices. Ultimately the aim
of the legislature or court is to choose the best option, but it can be sure that a particular
option is the best only if it has located and appraised the full range of options.

This is why identifying all possible options, as Step 1 requires, is such an important
task. To state the obvious, if some options have not been identified it is always possible
that one of these options which has been overlooked is best; consequently, there is no
guarantee that a legislature or court has decided upon the best of all if it does not have
all options before it.

Options have two parts:

(1) Law. This encompasses the following:
(i) All the possible statutes that a legislature might pass on a subject. Logically the
possibilities are infinite since even a change of a comma creates a new and different
statute. In practice the realistic range is limited.
(ii) All the possible common law rules that a court can make on a subject. The
comments above about the infinite range of statutes in theory and the practical
proposition that there are only usually a few contenders apply to common law as well as
to statute law.
(iii) All of the meanings of an ambiguous provision.1285
(2) Effect. This encompasses the effect which each version of the statute or rule will
cause if enacted or made, and which each meaning will cause if chosen by a court as the
correct legal meaning of the ambiguous provision. This said, it is necessary to explain
two matters of terminology:
(i) Causing. Reference to a statute, a common law rule or a meaning of an
ambiguous provision ‘causing’ an effect is shorthand to mean the effect that it is
predicted to cause.
(ii) Effect. To speak of ‘an effect’ as we do is also shorthand. It refers to the
total effect that a statute, common law rule or meaning causes, which typically consists
of a large number of individual effects. Often these are part of a network or chain

1283 Subordinate Legislation Act 1989 (NSW) Schedule 2, clause 2. Commentary 30.1.
1284 Chapter 10 Policy
1285 As Bennion (1980A) p 1156 says, right on this point: 'First, let the interpreter ascertain
exactly what causes the doubt'.
 Chapter 30 Model for Forming Law 493
reaction that can spread out and intermix or combine with other causal forces. Effects
can continue for as long as the statute is in force and even into a time long after it is
repealed.

Nature of Options
introduction
Options, as just explained, have two aspects. One aspect is the desired end or effect,
which provides the motivation for taking purposive action. The other aspect consists of
the means to achieve this end or effect, which in this context consist of the possible
versions of a statute or common law rule on a topic for a legislature or court that is
contemplating making law, and the various meanings of an ambiguous provision for a
court that is about to interpret this provision. Means and ends (or effects) are linked by
one of the important concepts in policy making, causation.

Means and Ends

[O]nce there is agreement on certain goals and values, one can argue rationally about the means
by which these objectives may be obtained.1286
A legislature making law has a wide range of ends or effects that may be desirable. The
range is wide since there is a vast array of outcomes that a society might seek according
to the needs and wants of its citizens. It makes the model proposed here easier to
understand if the reader thinks of some desired end or effect in broad terms. For
example society wants an adequate and caring health system, a vigorous high standard
educational system and an effective and efficient transport system.

Once an end is sought a legislature must identify the means to achieve this end, which
will, in this context of course, consist of a statute. Typically there exists a number of
means of achieving these ends where each means represents a different version of a
statute. On the surface the difference between each statute consists of the provisions that
seek to bring about the desired end. On close analysis the point is that each statute will
bring about the chosen ends to a different degree or in a different form, while at the
same time generating different costs.

Where a court is making common law, considerations similar to statute law apply,
although there is one significant difference. A court making common law is generally
constrained by the facts that are before it. Consequently it has less scope for choosing
the content of a rule than does a legislature contemplating making a statute.

A court interpreting law is initially confronted with an ambiguous provision, and faces
the question as to which meaning it should declare as legally correct. To answer this
question the court has to identify the effect that each meaning will cause since these
effects constitute the second part of the options before it. The point is that the purpose of
enacting a statute is to achieve some desired effect. If the legislature does not want to
change the way things are there is no point in enacting a statute.

1286 Einstein (1950) p 12

 494 Chapter 30 Model for Forming Law
There is, however, a problem that arises for a court due to the dual composition of
options for interpretation - the meanings and the effects that they cause. This problem
arises when a court seeks to interpret a statute by reference to its original policy. It can
happen that the court has before it the legislative intention as to both meanings and their
effects. If the court judges that the meanings will truly cause the effects that are
predicted there is no problem. If, however, the court judges that the meanings will not
cause the predicted effect, it has a dilemma. This question is discussed in the context of
interpretation as social decision making.1287

Causation
At the end of the first step the legislature has identified all the possible statutes that will,
broadly, accomplish the desired goal, while at the same time doing so in different ways,
in different measures and with different costs. It has also identified the effect that each
statute will cause. In a similar way, a court has identified the range of common law rules
it might make and the effect that each version will cause. And a court that has to
interpret an ambiguous provision in a law has identified all of the possible meanings of
the provision along with the effect that each meaning will bring about.

Here the point is to emphasise that causation is the link between the two parts of the
options that arise in forming law. Causation in this context, however, does not mean
demonstrated causation but expected or predicted causation. Before a law is passed or
interpreted a legislature or court cannot be certain as to the effect that each version of
the law will cause or that each meaning of the ambiguous provision will cause. At best
the legislature or court can only attempt to predict the effect of a law or a meaning of a
law based on the information available to it.

Making Law
For a legislature, one part of the options consists of the possible version of a statute on a
subject that might be enacted. Conveniently these can be labelled Statute 0, Statute 1,
Statute 2 and so on, with the range being represented as Statutes 0-n. Statute 0 is the
option not to enact a statute while the other statutes represent possible versions of a
statute that deal with the subject in question.

The other part of the options consists of the effect, that is, the entire collection of
effects, that each statute is predicted to cause. These can be set out in a diagram:
Statutes Effects
Statute 0 Effect 0
Statute 1 Effect 1
Statute 2 Effect 2
Statute n Effect n
Figure 30.3 Statutes and Effects

1287 Chapter 22 Social Choice: Interpreting Law

 Chapter 30 Model for Forming Law 495
In this diagram the range of effects consists of Effects 0-n to correspond with Statutes 0-
n, so that Statute 0 causes Effect 0, Statute 1 causes Effect 1 and so on. Effect 0 is the
null option. It is the option not to enact a statute. Thus Effect 0 represents ‘things as they
now are’ being the effect that Statute 0 causes.)
A court that is contemplating making a common law rule has a similar set of options
before it, as portrayed by the following table, where Rules 0-1 represent the possible
versions of a proposed common law rule:
Rules Effects
Rule 0 Effect 0
Rule 1 Effect 1
Rule 2 Effect 2
Rule n Effect n
Figure 30.4 Rules and Effects

Interpreting Law
Introduction
For a court interpreting law there are two parts to the options:
(1) Meanings. They include of all of the meanings of the ambiguous provision that
gives rise to the need for interpretation. For these the range can be represented as
Meanings 1-n.
(2) Effects. They include the effects that each meaning will cause if a court
pronounces it as the legally correct meaning of the ambiguous provision.

Meanings
Meanings before a court that has to interpret law consist of Meanings 1-n. These arise
from the nature of the ambiguity in the provision that the court is now interpreting.

While the options for a legislature include Statute 0, the option not to pass a statute,
there is not an equivalent option (Meaning 0) for meanings. The point is that a
legislature has the option not to pass a statute, represented by Statute 0, while a court
faced with an ambiguous provision that needs to be interpreted to decide a case usually
has no such option - it must interpret the provision. These options presented to a court
by the range of meanings of the ambiguous provision can be set out in a table in the

Meanings __________
Meaning 1 ________
Meaning 2 ________
Meaning n ________
Figure 30.5 Meanings
following way:

Effects
The second part of the options for meanings consists of the effect that each meaning is
predicted to cause if declared by the court to be legally correct. This range of effects
 496 Chapter 30 Model for Forming Law
consists of Effects 1-n to correspond with Meanings 1-n on the basis that Meaning 1
causes Effect 1, Meaning 2 causes Effect 2 and so on as the table shows:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 30.6 Meanings and Effects

Discussion of the effects of statutes indicates that the effects of a whole statute are
typically one or more chains, networks or series of effects. While these start with the
direct operation of the law when it is utilised, they can extend well beyond this and
12
incorporate various down-the-line effects. While the same is potentially true for the
effects of a meaning, there are two qualifications. First, the effect of a meaning is a
marginal effect. Before the court interprets Statute X it is causing an effect that we can
label Effect X1. After the court interprets the statute it now causes Effect X2. The
marginal effect of the court interpreting the statute is Effect X2-Effect X1. Second, in
practice lawyers often ignore the down-the-line effects and just focus on how each
possible meaning changes, widens or narrows the scope of the rule in which it is located.
Thus the key effect often consists of the people, actions and events that will or will not
be brought within the scope of the rule by a particular meaning of an ambiguous
provision that is located within the rule.

Rationale
This first step in the policy model (as it is deployed for legal reasoning), identifying the
options before a court or legislature, is of fundamental importance because it makes the
process rational in several ways. It identifies the problem. It identifies all of the possible
solutions. It specifies the items to which reasons should be addressed to resolve the
problem. For these three reasons it enhances the likelihood that the best option is chosen
to resolve the issue.

Step 2: Reasons
[I]t is essential for the judiciary to identify the values which are being recognised in individual
13
cases.
Introduction
Reasons
Step 2 in the model for forming law consists of formulating reasons, as far as this can be
done, for and against the options that the legislature or court faces. Policy is logically
the only proper form of reasoning. Policy seeks the best outcome. To repeat the
justification for this approach - a legislature should seek to be rational and it is rational
to seek the best and irrational to seek anything less.1288 1289 1290

1288 Chapters 13-16

1289 McHugh (1999) p 42
1290 Chapter 10 Policy
 Chapter 30 Model for Forming Law 497
However, in law as practised, as distinct from law as rationally conceived, two other
methods of reasoning are used for interpreting law, precedent and the rules of
interpretation. These are discussed later in the chapter and in that discussion both of
these forms of reasoning are brought within the policy fold as being derivatives of
policy, and not as stand-alone sources. Indeed, it is a simple task to reconceive these
forms of reasoning in this way.

To commence discussion of reasoning with policy we go back to Step 1 of the policy

model. In Step 1 the legislature or court identifies its options, consisting of the possible
outcomes and the means which might achieve them. In Step 2 the legislature or court
evaluates each set of options.

There is good reason for proceeding in this way. Rationally conceived, the purpose of
law is to change the world because each law or interpretation of a law causes an effect
or outcome (and these effects have been identified in Step 1). Hence, the best law or
interpretation is the law or interpretation that causes (is predicted to cause) the best
effect compared to the effect that any other law or meaning might cause.

Determining which law or meaning is best entails evaluation. Obviously which meaning
is ‘best’ is potentially contentious when fully considered. In practice, of course, what is
best is determined by the particular values that are used in the process of forming law by
the legislature or court in question.

Thus the reasoning for making and interpreting law rests on the fact that each version of
a law causes an effect if enacted, and each meaning of an ambiguous provision causes
an effect if chosen by the court as the legally correct meaning of the provision. As has
been said, the term ‘effect’ is shorthand for the range or spread of individual effects that
a law or an interpretation of a law will cause.

Each of these individual effects caused by a version of a statute or by the meaning of an

ambiguous provision possesses two connected and important characteristics - it is either
a cost or a benefit and it has a value. This value is positive for a benefit and negative for
a cost. This value may or many not be able to be expressed in monetary terms and may
or may not be capable of being accurately measured or expressed in some other way.

These characteristics of effects are the basis of reasoning with policy. It is possible in
principle (but often not feasible in practice) to add up all benefits, add up all costs, then
subtract total costs from total benefits. The result is the net benefit of the total effect of
the law or interpretation, and thus of the law or meaning itself. In short, net benefit is a
single measure of the value of a law or an interpretation of law.

Thus, this step is very much about what a legislature or court does and does not value -
whether they treat something as a cost or benefit and how much they value it. To restate
and emphasise the basic proposition, with purposive action, the rational way to
 498 Chapter 30 Model for Forming Law
proceed is to identify each component of each effect of a statute or a meaning and then
do two things - determine whether it is a cost or benefit and evaluate it. For each option
it is then necessary to add up benefits and costs to obtain total benefits and total costs.
Finally, for each option total costs are subtracted from total benefit to yield the net
benefit, which conveniently constitutes a single measure of the value of each option.

However, there may be uncertainty about whether an outcome will eventuate.

Consequently, it is necessary to factor in this uncertainty when calculating net benefit.
Uncertainty can be catered for in several ways. Some examples are using expected
values instead of nominal values to determine the net benefit, reviewing legislative and
judicial decisions after they are made and proceeding in small cautious stages according
to the dictates of disjointed incrementalism.1291

Values
By definition what people seek is what they value. It is a revealed preference.
Consequently, the question arises whether and how people can rationally determine the
goals that they should seek. There are two major views on this - values are unified,
objective and ascertainable on the one hand, or diverse, subjective and chosen on the
other.

This question is examined earlier, so for now a summary of the position will be
sufficient.1292 1293 Natural law theory argues the first position, that values are unified,
objective and ascertainable. According to the theory, reason enables humans to know
comprehensive, universal and unvarying values that should guide or control our
conduct. Moreover, in the event of a conflict between these values there is a natural
hierarchy that determines which value should take precedence. So, if this view is
17
correct, rationality entails adopting the value that natural law provides for the task.

However, the more widely accepted view, and the one adopted here, is that ultimately
values are not rationally ascertainable. Instead they are diverse, subjective and freely
chosen because there is no way that reason can divine a set of standards by which we
should live and a set of goals that we should pursue. As the Latin proverb firmly
reminds us, de gustibus non disputandum - there is no argument about taste. And as
Albert Einstein pointed out ‘it is a hopeless undertaking to debate about fundamental
value judgments’.1294 The point is that there is no agreed yardstick, nor are there agreed
criteria, by which to measure and assess values.

But although there is not a universal and objective set of standards for all humans, there
are still areas of broad agreement. Not all members of society will agree on all values,
but there will be many values that are widely shared in any community, even if

1291 Chapter 15 Cause: Responding to Uncertainty

1292 Chapter 19 Choice of Values
1293 Commentary 30.2.
1294 Einstein(1950) p 12
 Chapter 30 Model for Forming Law 499
there are different degrees and different slants. While individuality pushes towards
variations in values, social forces will push towards some sharing of values. A
prominent example of such shared standards consists of the wide global respect
accorded to human rights, evidenced by the United Nations proclaiming a Universal
Declaration of Human Rights in 1948.

In the absence of a rationally and objectively determined set of values, a legislature or a

court has to determine the values that it will use in making and interpreting law by
making a social choice. As discussed earlier, social decision making as performed by a
legislature or court draws on democracy to determine values to be applied in making and
interpreting law.1295 1296 1297 1298

In making this social choice, there is one logical constraint. These chosen values must
20
not seek ‘inconsistent ends’ or outcomes. There are two ways in which inconsistency
can happen. (i) If outcomes A and B are inconsistent, it is irrational to want them both;
an actor can only have A without B, or B without A. (ii) Inconsistency can be caused by
lack of transitivity. If a person is rational their values will be transitive - so, if they
prefer A to B and B to C, then they will prefer A to C. Conversely, having preferences
that are not transitive is irrational. This means that if an actor prefers A to B and B to C
yet prefers C to A, they are being irrational.

Net Benefit
Nature
Net benefit is the measure of the value of an option. Net benefit and the net benefit
rule are discussed in detail in an earlier chapter, so here there is just a mention
21
sufficient to carry the discussion forward. The starting point is that each option causes
an effect. However, each ‘effect’ is typically a spread, a chain or a range of individual
effects. Each individual effect can achieve benefits and incur costs. In principle
(although it is typically difficult or even impossible in practice), the costs and benefits
for each action can be totalled. Total costs can be subtracted from total benefits to yield
a single measure of the value of the goal, its net benefit.

Using the Net Benefit Rule

Utilising the net benefit rule entails choosing the outcome with the highest net benefit.
This is the rational way to proceed because it constitutes the means for a decision
maker to optimise or maximise their position so that they achieve ‘the best outcomes
22
according to their preferences’.

Comparison of Step 1 and Step 2

Finally, it is worth noting here a similarity and a distinction between Step 1 and Step 2
in relation to evaluation. Each involves evaluation, but the steps entail different but

1295 Chapters 17-22

1296 Scruton (1982) p 392
1297 Chapter 11 Nature of Net Benefit
1298 Abercrombie (2000) p286
 500 Chapter 30 Model for Forming Law
complementary aspects of evaluation. In Step 1 the legislature or court determines what
they value because they make it their goal, whereas in Step 2 they determine how much
value it yields if it is implemented by law.

Making Law
The choice of the right rule ‘will rightly depend upon the relative weights of the social and economic
advantages which will finally turn the scales of judgment in favour of one rule rather than another 1299
The process for determining the net benefit for each legislative option can be set out in a
table where the net benefit of each effect is inserted in a column next to the effects. For
statutes the table is as follows:
Statutes Effects Net Benefits
Statute 0 Effect 0 Net Benefit 0
Statute 1 Effect 1 Net Benefit 1
Statute 2 Effect 2 Net Benefit 2
Statute n Effect n Net Benefit n
Figure 30.7 Statutes, Effects and Net Benefits

Here the legislature, which wants to legislate on some area such as health care,
environmental protection or industrial relations, is faced with an array of statutes on the
topic, Statutes 0-n. Each statute causes an effect, and each effect possesses a net benefit.
A rational legislature will enact the statute that yields the highest net benefit. Therefore
the legislature compares the net benefits of the possible statutes, Net Benefits 0-n, to
determine which yields the highest value. It then enacts the statute that causes this net
benefit. For example, if Net Benefit 2 yields the highest value the legislature would
enact Statute 2. Statute 2 causes Effect 2 and Net Benefit 2 is the net benefit of Effect 2.

interpreting Law
Introduction
Five questions require attention for interpreting law by reference to net benefit. (i)
Nature of the Process. Although the case for the net benefit rule is overwhelming
logical, there has still been debate about the proper means for interpreting law. (ii)
Judicial Attitude to Policy. While policy is the rational way to interpret law there has
been judicial reluctance to embrace it. (iii) Meanings and Effects. When a court
interprets law by reference to policy it has a choice to proceed directly by selecting the
meaning that it wants, or by selecting an effect choosing as legally correct the meaning
that causes this effect. (iv) Judging Net Benefit. When using net benefit, there is also the
question as to who judges which meaning yields the highest net benefit. (v) Other
Sources of Reasoning. (a) Precedent and Maxims. If policy and net benefit are the only
legitimate tools for interpreting law, the question arises as to the role of precedent and
maxims of interpretation, which are conventionally used for interpretation. The answer
is to treat them as derivatives of policy. On this basis they are not stand-alone sources

1299 Stone (1936) p 20

 Chapter 30 Model for Forming Law 501
of reasoning but packaged policy. (b) Secondary Sources. Courts sometimes cite
secondary sources in their judgments. These are used for guidance or to formulate a
principle for convenience. Properly considered they are not a source of reasoning.

Nature of the Process

There is an absence of an agreed method for interpreting law. Debate on this question
rests on the axis as to whether interpreting law is an objective or subjective process. If
interpreting law should be and can be an objective process, then it is based on the
deductive process that constitutes a syllogism. Arguments for this view are considered
24
in earlier discussion of deduction.
25
Legal realists assert that legal interpretation is a subjective process. Essentially their
argument is that ambiguity in law generates an inescapable need for choice 1300 1301 1302 1303
1304 1305 1306
between
27 28 29
‘feasible interpretations’ or ‘competing solutions’. Ambiguity is ‘inescapable,’ so,
30
in the absence of precise rules, there is ‘unavoidability of choice’.
This book approaches interpretation using a different axis. To restate our oft repeated
theme, interpreting law (and making law) constitute purposive action. To perform these
tasks rationally it is necessary for the maker or interpreter to choose the option that
yields the highest net benefit.

In this sense making and interpreting law are done according to rules. However, there
will be times, which may occur frequently, when it is not clear which outcome yields the
highest net benefit, so in this instance the maker or interpreter has a choice.

Judicial Attitude to Policy

Since the argument expounded here is that statutes should be interpreted by policy and
by policy alone (precedent and the rules of interpretation being relevant only to the
extent that they encapsulate policy,) it is instructive to consider judicial attitudes to
deploying policy for interpreting law. Obviously attitudes are not uniform, but there are
nevertheless identifiable strands of thinking. Two of these involve downplaying the full
role that policy deserves:
(1) Reluctance. Courts are reluctant to utilise policy.
(2) Qualified Recognition. Courts recognise policy but not its full importance.

One such strand, the extreme case, consists of a fear or reluctance to engage in
consideration of policy. Courts, especially in previous times, did not readily admit that

1300 Chapter 5 Deduction

1301 See Fisher, Horowitz and Reed (1993). Commentary 30.3.
1302 See Kirby (2003) in Sheard (2003) p 45
1303 Steyn (2002)p 7
1304 Steyn (2002)p 6
1305 Kirby (2003)in Sheard (2003) p44
1306 Kirby (2003)in Sheard (2003) p45
 502 Chapter 30 Model for Forming Law
they have a choice between differing interpretations, nor was the policy on which the
 Chapter 30 Model for Forming Law 503
31
choice was based freely and frankly discussed by them. In consequence, counsel were
not often encouraged to argue policy matters. So much was this the case that a few lines
of stray dicta in an unreported case sometimes carried more weight before a
32
court than a carefully reasoned argument based on policy. Consequently, in these cases
a large amount of consideration of policy was made covertly and in denial, rather
33
than with open and rational consideration.
A second strand involves admission that policy is relevant without conceding it the
primal and exclusive relevance accorded to it by this text.1307 1308 1309 1310 1311 Even a jurist
as distinguished as Julius Stone seemed to regard policy as a residual class of reasoning
when asserting that ‘if existing law does not compel, sound judgment must finally
35
attend to policy’.
Another illustrative example is Sir Anthony Mason, a former Chief Justice of the High
Court of Australia. While indorsing the use of policy, he also views it as a secondary
form of reasoning to be resorted to only after ‘logical and analogical reasoning’ have
been given their opportunity to resolve the issue. Nevertheless, once these have been
exhausted as sources of legal reasoning, a judge can have regard to ‘relevant policy
considerations,’ involving ‘a close eye to the just, practical and convenient operation of
the rule which is formulated,’ and proper acceptance of the role that values play in the
judicial process. Even here, although Sir Anthony embraces policy, he does so as a
method of last resort, whereas our argument is that policy is the first and only resort. 1312

Meanings and Effects

When a court has to interpret an ambiguous provision it is faced with two or more
meanings from the range constituted by Meanings 1-n. Each of these meanings, if
chosen as the legally correct meaning of the provision, will cause an effect. These
effects can be labelled Effects 1-n to correspond with Meaning 1-n, as shown in the
following table:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 30.8 Meanings and Effects

Thus, each meaning of a provision is a means to an end, the end being the effect that it
causes. This brings two connected consequences for interpreting law:
(1) Choice. The court has a choice between meanings and effects (means and ends).

1307 Metal Manufacturers v Lewis (1988) 13 NSWLR 315 per Mahoney J. See Bell (1983).
1308 Commentary 30.4.
1309 For a discussion of judicial use of policy see Bell (1983) and Richardson (1985).
1310 Lord Bingham (2000) p 28
1311 Stone (1968) p 236
1312 Mason (2003) in Sheard (2003) p 5, citing McHugh (1999) p 46. Commentary 30.5.
 504 Chapter 30 Model for Forming Law
(2) Converse. The court can choose only one or the other. This proposition is the converse
or the proposition that the court has a choice between meanings and effects.

Existence of a Choice
To interpret a provision a court has a choice. It can identify a meaning as correct, for example
Meaning X, and then let this meaning take whatever effect it will, this effect being labelled
Effect X. Alternatively, the court can decide which of the possible effects in the range Effects
1-n is the most desirable, for example Effect Y, and the effect that the interpretation should
bring about. In this case the court identifies as the legally correct meaning the meaning which
will cause this effect, that is, Meaning Y.

Choice of One Not Both

The choice that the court makes is not optional but inevitable. Consequently, since the means
causes the end, when a court is interpreting law, it is not possible to select both means and ends.
It is possible to select only one or the other. Thus if it wants Effect 3 it can choose Meaning 3
which is the meaning that it judges will cause Effect 3. If, on the other hand, for some reason a
court is fixed on having Meaning 2 it cannot separately choose the effect. It is stuck with the
effect that will flow from Meaning 2, namely Effect 2.

Judging Net Benefit

If net benefit is the sole criterion for interpreting law the question arises as to who judges
which outcome yields the highest net benefit. Answers to this question fall into one of three
categories:
(1) Legislative Legitimacy. A court can draw legitimacy by the elected nature of the
legislature and interpret a statute by reference to its original intention, that is, to the policy
behind the provision as devised by the legislature. In this way the court defers to the judgment
of the legislature. This is referred to as the elected legitimacy of the legislature or just
legislative legitimacy.
(2) Judicial Legitimacy. If judges are elected they can seek to draw on that as a basis for
exercising their own judgment as to the best interpretation - this is labelled elected legitimacy of
the court or judicial legitimacy.
(3) Metademocracy. A court can seek legitimacy by seeking an interpretation that
37
rectifies defects in the democratic process - this is labelled metademocracy.

Legislative Legitimacy
Under this approach to interpretation, which is also labelled originalism, the court refrains from
exercising its own independent judgment as to the best effect based on the court’s calculation of
net benefit; instead the court abides by the interpretive choice expressly or implicitly revealed
by the legislature when debating and enacting the
38
statute. As has been discussed above, there are two basic ways in which a legislature can
express this interpretive intention. It can identify a meaning as legally correct 1313 1314

1313 Chapter 22 Social Choice: Interpreting Law

1314 Chapter 22 Social Choice: Interpreting Law explains originalism or legislative
legitimacy. It also argues the case for it in the face of competing methods of interpreting law.
 Chapter 30 Model for Forming Law 505
(Meaning X) or it can identify an effect that it wants the relevant provision (often the entire
statute) to achieve (Effect Y). These options can be set out in a revised version of the table of
options:
Legislative Intent Meanings Effects Legislative Intent
Meaning X = Meaning 1 Effect 1
Meaning 2 Effect 2 = Effect Y
Meaning n Effect n
Figure 30.9 Elected Legitimacy of the Legislature

In this diagram, for the sake of the illustration, it is assumed that Meaning X equates with
Meaning 1 and that Effect Y equates with Effect 2. This diagram now enables us to examine the
three possibilities that a court might face:
(1) The legislature expresses an intention for a particular meaning. This is illustrated by
Meaning X in the diagram, which equates with Meaning 1. In this case the legislature can be
taken to have judged and approved of the effect that this meaning will cause (Effect 1 in the
diagram). The court, therefore, interprets the provision by choosing as legally correct the
meaning that the legislature itself has chosen.
(2) The legislature expresses an intention for a desired effect. This is illustrated by Effect Y
in the diagram, which equates with Effect 2. In this case the court should seek to interpret the
provision in a manner that brings about this effect. This leaves it for the court to judge which of
the possible meanings of the ambiguous provision will cause this effect or best cause it - it is
Meaning 2 in the diagram.
(3) The legislature expresses an intention for both a meaning and an effect. This presents no
problem if, in the court’s view, the chosen meaning causes the chosen effect. If it does not the
court has a dilemma. To the extent that there can be a general rule for resolving this dilemma,
the rational view is based on the premise that the purpose of a law is to cause an effect.
Therefore, ordinarily, a court should accept the legislature’s choice of effect, and use its own
judgment as to which meaning will cause this effect.1315

Judicial Legitimacy
Instead of deferring to the judgment of the legislature as to how to interpret a statute, a court
can as it were be sui juris (its own authority) and exercise its personal judgment as to the best
meaning. Logically this is the meaning which the court assesses will yield the highest net
benefit which is determined by the values that the court deploys for interpretation. A court can
lay some claim to legitimacy if it acts in this way when the people have elected the judges of
the court.

When a court proceeds in this way, the court identifies from the table of options the effect that
is best, being the effect that yields the highest net benefit. It then makes a pronouncement as to
the legally correct meaning of the ambiguous provision that is

39
.

An illustration is United Steel Workers v Weber (1979) 443 US 193.

 506 Chapter 30 Model for Forming Law
before it. It pronounces the meaning that causes this best effect as the legally correct
meaning of the provision. This process whereby a court exercises its own judgment as to
the effect that yields the highest net benefit, can be illustrated by the following table:
Meanings Effects Net Benefit
Meaning 1 Effect 1 Net Benefit 1
Meaning 2 Effect 2 Net Benefit 2
Meaning n Effect n Net Benefit n
Figure 30.10 Meanings, Effects and Net Benefits

Once the court has decided which net benefit possesses the highest value it observes
which effect yields this net benefit. Then the court identifies the meaning that causes
this effect. This meaning is then declared by the court to be the legally correct meaning
of the provision. To illustrate this, assume that Net Benefit 2 possesses the highest net
benefit. Net Benefit 2 is the Net Benefit of Effect 2. Meaning 2 causes Effect 2.
Consequently, the court pronounces Meaning 2 as the legally correct meaning of the
ambiguous provision.

Metademocracy
Where a court believes that the statute it now has to interpret was not fully
democratically enacted it may interpret the statute by reference to notions of
metademocracy.1316 Here the court seeks to interpret the statute in a way that it believes
will restore at least some of this forsaken democracy. Some jurists refer to his approach
as metademocracy.

This approach can be represented in a diagram. Assume that the statute has an original
intent that is labelled Effect OI, and an effect that the legislature would have sought has
it acted in a truly (meta) democratic way, which is labelled Effect MI. As this diagram is
set up Effect 2 equates with Effect OI and Effect 3 with Effect MI:
Meanings Effects Legislative Intent
Meaning 1 Effect 1
=
Meaning 2 Effect 2 Effect OI
=
Meaning 3 Effect 3 Effect MI
Meaning n Effect n
Figure 30.11 Meanings, Effects and Legislative Intent

If a court is interpreting by reference to original intent it will choose Meaning 2 as the

legally correct meaning of the provision. There are two propositions underlying this
decision:
(1) Meaning 2 causes Effect 2.
(2) Effect 2 matches the original legislative intent namely Effect OI.

1316 Chapter 22 Social Choice: Interpreting Law

 Chapter 30 Model for Forming Law 507
If, however, the court interprets by reference to considerations of metademocracy, it
will choose Meaning 3 as legally correct. Meaning 3 causes Effect 3, which matches the
imputed metademocratic legislative intent, Effect MI.

Other Sources of Reasoning

Courts often resort to three other sources of reasoning. These are precedent, maxims of
interpretation and secondary sources.

Precedent and Maxims

On the surface, reasons for interpreting law fall into three categories - policy, precedent
and the rules or maxims of statutory interpretation. In truth, policy is the only rational
source of reasoning both for making law and interpreting law.1317 1318 Despite the
enormous reverence and devotion of common law for precedent, its only rational
42
justification is, as explained earlier, that it is squarely and entirely based on policy. A
similar argument is put concerning the rules of statutory interpretation. 1319 Like
precedent, properly understood the rules of statutory interpretation are just packaged
policy.

Secondary Sources
Courts also sometimes refer to secondary sources when giving their reasons for a
decision. These, however, are a source of illumination not reason.1320

Step 3: Decision
Introduction
Step 3 in the model for forming law consists of making the decision to choose one of
the options. A rational choice involves choosing the best. Because all options have been
identified and valued, the best option is before the legislature or court. The best option is
the one with the highest value, which of course is the one that possesses the highest net
benefit. This option was identified in Step 2.

The final decision can take one of three forms:

(1) Legislature. Making Law. The final decision of a legislature in the legislative
process consists of enacting of a statute.
(2) Court. Making Law. For a court, the final legislative decision consists of making
of a common law rule.
(3) Court. Interpreting Law. For a court that is interpreting law the final decision
consists of interpreting the ambiguous provision. To do this the court declares that one
meaning from the range Meanings 1-n is the legally correct meaning of the ambiguous
provision. To do this the court publishes a judgment that contains this decision and the
reasons for it. Generally this decision becomes a precedent for later courts.

1317 Chapter 10 Policy

1318 Chapter 23 Precedent
1319 Chapter 24 Rules
1320 Christopher Enright Legal Method Chapter 15 Secondary Sources
 508 Chapter 30 Model for Forming Law
Step 3 is the final step in the model for making and interpreting law. To enable the
reader to see how Step 3 flows from the previous two steps, and how the model works
overall, discussion will briefly review Step 1 and Step 2. In doing so it will show how
the three steps relate to each other.

Making Law
Making law will be illustrated by reference to a legislature making statute law.
However, the underlying process for a court making common law is much the same.

A legislature that is proposing to legislate on a topic has before it a range of statutes that
will deal with the topic in some way. Each statute will cause an effect and the value of
each effect can be measured as a net benefit. These options were identified in Step 1 of
the model for forming law. In summary, Statutes 0-n cause Effects 0-n.

In Step 2 the legislature first determines the net benefit of each option. These are
labelled Net Benefit 0-n. Thus, Statutes 0-n cause Effects 0-n, which yield Net Benefit
0-n. This can be set out in the following table:
Statutes Effects Net Benefit
Statute 0 Effect 0 Net Benefit 0
Statute 1 Effect 1 Net Benefit 1
Statute 2 Effect 2 Net Benefit 2
Statute n Effect n Net Benefit n
Figure 30.12 Statutes, Effects and Net Benefits

Once the legislature has determined the net benefit of each option, it has to determine
which net benefit possesses the highest value. It has to do this because this involves
reasoning by reference to policy, which is the logical form of reasoning to use, since
policy aims to procure the best outcome.

To explain the reasoning process further, assume that the net benefit with the highest
value is Net Benefit X. Net Benefit X is the net benefit of Effect X, while Effect X is
cause by Statute X. Therefore, the legislature should enact this statute because it will,
according to prediction, attain the best possible outcome. There are two axiomatic
propositions that justify this approach. It is rational to want the best. Conversely, it is
irrational to want anything that is less then the best.

Step 3 is largely a formality because it entails implementing the conclusion reached in

Step 2. The legislature enacts the chosen statute, which in our illustration was Statute X.
This now goes onto the statute books and changes the state of the world.

Interpreting Law
Where there is an issue of interpretation a court resolves it by deciding that one
meaning rather than another is legally correct (or that two or more meanings are
 Chapter 30 Model for Forming Law 509
legally correct.) Where a lawyer is interpreting law their task is to advise their client. To
do this, lawyers have to predict how a court will make the decision.

A court that is contemplating interpreting law has before it some options consisting of
the meanings of the ambiguous provision and the effect that each will cause if chosen as
the legally correct meaning. These options are identified in Step 1 of the model for
forming law. They consist of all the possible meanings of the ambiguous provision,
namely Meanings 1-n, along with the effect that each will cause if the court chooses it as
the legally correct meaning of the ambiguous provision, namely Effects 1-n. These
options can be set out in a table in the following way:
Meanings Effects
Meaning 1 Effect 1
Meaning 2 Effect 2
Meaning n Effect n
Figure 30.13 Meanings and Effects

Step 2 of the model for forming law entails a court deciding on the best. There are at
least three basic means that can be used - the court makes its own judgment as to the
best meaning, the court adopts the meaning that the legislature intended or the court
chooses the meaning that represents the most democratic outcome.1321

Step 3 is just the implementation of the conclusion reached in Step 2. In its judgment
the court declares the best meaning as legally correct. This statement that one particular
meaning is correct constitutes the ratio decidendi of the case and become a precedent for
future cases.

Justification of the Model

Justification for this model has been made in preceding chapters, and in summary, the
argument propounded there is as follows.1322 Making and interpreting law constitute
purposive action that is designed to change the world. Consequently, a law should be
made and interpreted by reference to how well or how badly it will change the world.

Therefore the best law or the best interpretation of a law consists of the law or
interpretation which changes the world in the best possible way. This constitutes the
basic decision making rule - a legislature should pass the law, and a court should choose
the meaning, which causes the best effect; this is the effect which yields the highest net
benefit. There is no other way to proceed if society wants to make and interpret law in a
rational manner. This method of reasoning is called policy, and is based on the processes
of causation and evaluation. It is impounded in the model for forming law presented
above. This model analyses making law, namely a legislature making statute law or a
court making common law, and logically applies to all

1321 Chapter 22 Social Choice: Interpreting Law

1322 Chapters 10-25
 510 Chapter 30 Model for Forming Law
jurisdictions. It also analyses a court interpreting law, which constitutes making law
47
but on a reduced scale.

Application of the Model

These models for making and interpreting law, which constitute the model for forming
law, are very helpful in working with law. Used properly, they can guide the tasks of
making and interpreting law,1323 1324 as well as associated tasks such as writing and
reading law.1325

Commentary
Commentary 30.1 Footnote 7
A little explanation is required about Subordinate Legislation Act 1989 (NSW)
Schedule 2, clause 2. Section 5(1) of the Subordinate Legislation Act 1989 (NSW)
requires the making of a legislative impact statement before a major statutory rule is
made. Clause 1 of Schedule 2 provides, in a little detail, that this statement will include
something that amounts to a cost benefit analysis. Clause 2(2) then requires that costs
and benefit should be measured. If this is not possible, it goes on to provide, as quoted in
the text, that ‘the anticipated impacts of the proposed action and of each alternative
should be stated and presented in a way that permits a comparison of the costs and
benefits’.

Commentary 30.2 Footnote 17

There are some more specific theories than natural law that have large components of
rationality that it built into a founding assumption. An example is John Rawls theory of
distributive justice. See Rawls (1971).

Commentary 30.3 Footnote 25

An influential publication by a judge that admitted that interpretation was subjective
was Cardozo (1921). See also Goldsworthy (1989).

Commentary 30.4 Footnote 32

Julius Stone puts the position regarding courts’ use of policy in the following way in
Stone (1968) p 236: ‘Counsel are likely to fare better with holdings sub silentio [that is,
silent or implicit holdings], tenuous dicta, verbal analogies, and syllogistic deductions,
than with straightforward argument based on social facts to be regulated and the policies
applicable thereto’.

Commentary 30.5 Footnote 36

Values
For judicial discussion of values see Onus v Alcoa (1981) 149 CLR 27, 42, McFarlane
v Tayside Health Board [2000] 2 AC 59, 82 per Lord Steyn, and Mabo v Queensland

1323 Commentary 30.6.

1324 Christopher Enright Legal Method
1325 Christopher Enright Legal Writing
 Chapter 30 Model for Forming Law 511
(No 2) (1992) 175 CLR 1, 42 per Brennan J. For analysis of the decision making of one
particular judge in relation to values, Justice Antonin Scalia, see Holloway (1995).

Policy
If policy is the primary means of reasoning the question arises as to what use if any
should be made of other forms of reasoning such as analogy. The obvious answer with
regard to analogy is that it brings two advantages:
(1) It is a way of identifying a relevant value from a case that is in some way like the
case in hand.
(2) It creates consistency in that cases that have likenesses without complete similarity
are treated in a similar manner or something approaching a similar manner. This
implements the notion that justice should be blind and universal. Like cases should be
treated alike. Cases that have some likeness should be treated in a manner that has some
likeness.

Commentary 30.6 Footnote 47

Note, however, with regard to the claim that the author makes for the model for forming
law, that Sir Anthony Mason, a former Chief Justice of the High Court of Australia
expressed the view that there is ‘an absence of uniform judicial methodology’ - see
Mason (2003) in Sheard (2003) p 5.
Chapter 31 Model
for Using Law
Introduction
1. Legal Position
2. Syllogism
Major Premise
Minor Premise
Conclusion
3. Model
Structure of the Model
Uses of the Model
Commentary

Introduction
Lawyers use law to advise and to act for their clients. To understand what using law in
these ways entails, it is necessary go back to a basic point. Law is made for only one
purpose - to change the world. The obvious and direct way in which this happens is that
legal rules apply to facts to bring legal consequences to the parties involved. This is the
rationale for using law in litigation and transactions.

This chapter develops a model for using law. This model covers both tasks, litigation
and transactions. In fact the models for litigation and transactions are identical except
for the task of establishing the truth of facts - in litigation parties prove facts with
evidence, while in a transaction parties create facts by following processes.

Because of this similarity, much of the explanation focuses on litigation. This can be
done because what applies to litigation generally applies to transactions. Obviously
when discussion reaches the task of establishing facts litigation and transactions need to
be separately treated.

1. Legal Position
A person’s legal position is determined by the various laws that apply to them. A law
can apply to a person in a passive way in that they fall within the law but without an
official or formal act. For example, a person who steals another person’s property has
committed theft. A law applies to a person in an active sense when the law is invoked
and enlivened in litigation or a transaction. For example, a person who steals another
person’s property is tried in court and convicted of theft.

To understand what using law in these ways entails, it is necessary to be familiar with
some basic propositions that define a person’s legal position. First, a person's legal
position is determined by the legal rules that apply to them at any time. These laws
have consequences, and these consequences define the person's legal position. This is

512
 513 Chapter 31 Model for Using Law

illustrated by the model for using law It displays in a diagram the two key relationships
in litigation - that each element of the cause of action is satisfied by a material fact and
that each material fact in dispute has to be proved by evidence.

Second, logically every law in existence either does or does not apply to a person, but
in practice a lawyer usually considers only a few laws at most because the possible
consequences of these laws are the reasons that the person now seeks the help of a
lawyer.

Third, when lawyers use law they affect people’s legal position in some way:
(1) Litigation makes one person a winner and another person a loser. A plaintiff
who wins has vindicated a right and receives a legally indorsed remedy. A defendant
who loses is liable to provide or suffer that remedy. This is in addition to the costs of
the winning party that the loser typically has to pay.
(2) A transaction changes the position of the party or parties involved. This can be
explained with examples. (i) Before making a will Penelope is intestate. After the
transaction, and as its consequence, she has a valid will. Therefore, Penelope is now
testate. (ii) In a sale of land the vendor relinquishes title to the land (in return for the
purchase price) while the purchase acquires the title.

2 Syllogism
Introduction
The core of the model for using law consists of a syllogism that embraces the tasks that
are involved. This syllogism operates when the initiating party (the plaintiff or
prosecutor) wins the case. This syllogism rests on the fact that a legal rule that alters the
rights of parties must be framed as a conditional statement. This conditional statement
forms the major premise of the syllogism. The occurrence of the condition in the
conditional statement constitutes the minor premise.

To explain this further assume that there is a rule and there are facts to which the rule
applies:
(1) The rule contains Elements 1-n that cause Consequence X.
(2) The facts to which the rule applies consist of Facts 1-n. (Since these facts fit the
elements they are referred to after the event as material facts.)
On this basis the syllogism can be set out in the following diagram:
Major Premise Facts that fall within the categories designated by Elements 1-n
cause Consequence X.
Minor Premise Facts 1-n in this case fall within the categories designated by
Elements 1-n.
Conclusion Facts 1-n cause Consequence X.
Figure 31.1 Syllogism _ for Applying Law to Facts

When a legal rule is used successfully it brings consequences to the parties. A rule does
this when the syllogism involved is sound. A syllogism is sound when three
 Chapter 31 Model for Using Law 514

requirements are met. These requirements concern the truth of the major premise, the
truth of the minor premise and the logical relationship between the two premises and
the conclusion:
(1) The major premise is true in fact.
(2) The minor premise is true in fact.
(3) The conclusion follows logically from the combined operation of the major
premise and the minor premise.

Major Premise
Introduction
In the syllogism that underlies litigation the major premise consists of the rule that
creates the cause of action and is the basis of the litigation. The nature of the syllogism
entailed in applying law to facts is such that this rule must be framed as a conditional
statement. This is the cradle for the syllogism.

This conditional statement takes the following form: ‘Facts that fall within the
categories of facts designated by Elements 1-n cause Consequence X’.1326 1327 It is
relevant to the logic of the syllogism whereby the major and minor premises logically
give rise to the conclusion. This logic is explained below in the discussion of the
conclusion to the syllogism.

For the syllogism to deliver a truthful conclusion (and hence be valid) there is a simple
requirement for the major premise. It must be true.

Truth of the Major Premise

For a syllogism to be valid, the major premise must be true. Logically the major
premise is true when it represents a correct statement of the law. This happens when
three requirements are met:
(1) A duly authorised legislature has made the rule. If the validity of a statute or
piece of delegated legislation becomes an issue, the court resolves the question by
interpreting the provision that authorises the making of the statute or the delegated
legislation.
(2) The rule is correctly formulated. If there is doubt about the correct formulation
of a rule (which realistically happens only with common law) there is ambiguity
constituted by the existence of two or more possible versions of a rule. When this
occurs the court resolves the question by interpreting the rule to ascertain the correct
version.
(3) Where the rule is ambiguous, the relevant court has correctly interpreted by the
rule.

So, in each case where there is an issue as to whether the major premise represents a
correct statement of the law the court resolves the issue by interpretation. This is done

1326 Commentary 31.1.

1327 Christopher Enright Legal Method
 Chapter 31 Model for Using Law 515

as part of resolving the case. Consequently, when deciding a case a court has to defer
operating the syllogism until all questions of law have been resolved. Then it can apply
the law to the facts to determine the outcome of the case.

When the court interprets law, it pronounces one of the meanings of the ambiguous
provision as the legally correct meaning (or possibly two or more meanings as legally
correct). This chosen meaning remains the official and legally correct meaning until the
decision of the court is overruled by a later decision by a court of competent authority
to do so under the prevailing rules of stare decisis.

Interpreting Law
There is a model that explains the process of interpreting law. This has three steps -
options, reasons and decisions. It is explained in an earlier chapter.

Minor Premise
Introduction
The minor premise is represented by the relationship between Elements 1-n and the
material facts of a case, which are labelled Facts 1-n. It takes the form: ‘The facts of
this case, Facts 1-n fall within the categories designated by Elements 1-n’.

Now for this premise to be true, two requirements must be satisfied. First, as the minor
premise specifically requires, Facts 1-n must fit or fall within the categories designated
by Elements 1-n. This entails the task of applying law to facts.

Second, it is a logical or implicit requirement that Facts 1-n are actually true. This
invokes the task of proving facts. This means that the syllogism operates fully in
practice only after the court has made its finding of facts. However, prior to that, the
syllogism can operate conditionally. A lawyer can apply the law to the facts before they
are actually proved (and lawyers do so in practice) but apply them conditionally on
their being proved. In effect they are saying to their client: ‘If these facts can be proved,
your legal position is that you can (or cannot) be sued or that you are (or are not) guilty
of a criminal offence’.

Applying Law to Facts

Introduction
The minor premise explicitly requires that Facts 1-n must fit within the categories
designated by Elements 1-n. This requirement can also be framed from the reverse
perspective where it says that Elements 1-n must apply to Facts 1-n.

Rules
There are two basic rules for determining when a legal rule applies to a set of facts to
bring legal consequences. Rule 1 involves satisfying the elements while Rule 2 asserts
the irrelevance of surplus facts.
3 Chapter 30 Model for Forming Law
.

4. Commentary 31.2.
 516 Chapter 31 Model for Using Law

Rule 1: Satisfying the Elements

Rule 1 says that the set of facts must contain specific facts that are delineated by and
satisfy each of the elements, that is, Elements 1-n. Each element (with no exceptions)
must be satisfied by a fact that falls within the set of facts that it defines. This is the
case because the overall class of facts to which a rule applies is constituted by an
aggregation of all of the subclasses of facts delineated by the elements. (As is explained
below, it makes no difference that this overall category contains other subclasses
besides those designated by the elements because the rule still applies.)

To explain satisfying elements in philosophical terms, first consider the status of one
element. Satisfying one of several elements is a necessary but not sufficient condition
for the Consequences to follow. Thus Element 1 is saying that one condition for the
Consequences to follow is that Element 1 is satisfied by the appropriate fact. Element 2
is saying a similar thing and so on for each of the other elements. (If one wished to
emphasise how each element represents a necessary condition it would be possible to
label the elements as Condition 1, Condition 2 and so on.)

Consider now the significance of this when all of the elements have been satisfied by
appropriate facts. When this has happened, each of the necessary conditions for the rule
to apply has been satisfied. There is no need to do anything more because what has
been done is sufficient.

This can be formally stated in two propositions. Each element prescribes a necessary
condition for the legal rule to apply - the element must be satisfied by the appropriate
type of fact. Taken together, all of the elements prescribe both the necessary and the
sufficient conditions for the rule to apply.

Rule 2: Irrelevance of Surplus Facts

Rule 2 says that it does not matter that the set of facts contains facts additional to those
designated by the elements of the legal rule, as it almost surely will. These surplus facts
do not vitiate the application of the rule.4

Illustration
To illustrate these rules, assume that a legal rule has four elements, designated as
Elements 1-4. Each of these elements delineates a category of facts. There is a category
delineated by Element 1, a second category delineated by Element 2, a third category
delineated by Element 3 and a fourth category delineated by Element 4.

Assume now that a set of facts contains a fact that falls within the category delineated
by Element 1, a fact that falls within the category delineated by Element 2, a fact that
falls within the category delineated by Element 3 and a fact that falls within the
category delineated by Element 4. In this case the rule applies to the set of facts
because the set contains facts that satisfy each of the four elements. Conveniently these
 Chapter 31 Model for Using Law 517

facts can be designated in a corresponding manner to the categories and elements, so

that Fact 1 is the label for a fact that falls within or satisfies Element 1, Fact 2 the label
for a fact that falls within and satisfies Element 2 and so on. Thus Facts 1-4 are the
labels for facts that fall within and in consequence satisfy Elements 1-4.

Assume that this set of facts also contains other facts that fall within other categories.
These facts can be labelled Fact 5, Fact 6 and so on to the last fact, Fact n, with these
other facts collectively being designated Facts 5-n.

In these circumstances, the application of a legal rule consisting of Elements 1-4 to this
set of facts can be conveniently represented in a table in the following way:
Elements Facts
Element 1 Fact 1
Element 2 Fact 2
Element 3 Fact 3
Element 4 Fact 4
Fact 5
Fact n
Figure 31.2 Rules for Applying Law to Facts

This table illustrates how Rules 1 and 2 apply. Rule 1 is satisfied because this set of
facts contains facts, Facts 1-4, that fall within and thus satisfy the categories designated
by Elements 1-4. Rule 2 presents no problem. It asserts that it makes no difference that
the set of facts contains facts additional to the facts that satisfy the elements, Facts 1-4.
The presence of other facts, here labelled Facts 5-n, cause no direct consequences for
the legal rule - no matter what these other facts are the rule still applies.

Checking Elements Against Facts

An element delineates a category of facts. Thus, in abstract form, Fact X is the label
given to a fact that satisfies Element X. Fact X will satisfy Element X when it falls
within the class of facts that Element X delineates.

Whether a fact falls within the class of facts delineated by an element in many cases is
determined by simple inspection. Each element is a generalisation of a fact so it is
usually obvious when there is a fact in the case that satisfies an element. It will be
obvious to the naked eye that the fact does or does not fit within the category. The
quick test for whether a fact does fall within a designated category is by labels. Element
X delineates a category of facts that bear the label X. If a fact can unquestionably bear
the label ‘X’, it fits within the category.

While in most cases this is clear, in some cases it is not so clear. In these cases it
cannot be unquestionably and unhesitatingly said that the fact fits the category. This
occurs because there is some doubt about the scope of the label applied to the facts

4. Commentary 31.2.
 Chapter 31 Model for Using Law 518

delineated by the element. Questions of this kind involve interpretation of the element.
However, once this particular element in the legal rule has been interpreted, the doubt
is resolved. It should then be clear whether the fact does or does not satisfy the element.

Establishing Facts
For the minor premise to be true, it is necessary that Facts 1-n are legally true. In
litigation this means that a court cannot invoke the syllogism until it has resolved any
questions of fact. When the court has done this it has determined that the facts are
legally true. In a transaction, parties create the material facts by following processes.
This tends to be uncontentious.

Establishing Facts in Litigation

In an ideal world a court would find that one version of the facts of a case was true
with total certainty. In reality, this is often not possible. Consequently there is a rule,
labelled the standard of proof, which determines the level of probability to which a
party must make out their case.

This rule bears heavily on the method for proof of facts where facts are contested in
litigation.5 This method consists of four steps:
# Step 1. Starting Point. At the outset the legal system has to determine
who is responsible for proving a case or parts of it. This covers the rule of law known
either as the burden of proof or the onus of proof. This rule is also referred to in this
book as the starting point rule. At common law the genera rule is that in both civil and
criminal cases at the outset of a case nothing is taken to be proved, so the plaintiff or
prosecution has it all to do.
# Step 2. Versions of Truth. Each party presents their version of the facts to
the court. They present what they assert are the true facts of the case.
# Step 3. Probability of Truth. The court assesses how probable it is that
each version if true. The court does this for individual facts then for overall facts. In
this task the court is potentially aided by submissions from parties.
# Step 4. Finishing Point. Previously in Step 3 the court has determined the
probability that each party’s version of the facts is true. Here in Step 4 it measures that
probability against the probability depicted by the standard of truth required by law.
This standard is referred to in law as the standard of proof. This is the finishing point. If
an initiating party (such as a plaintiff or prosecutor) has made out the required standard
of proof they win their case - they have made it to the finishing point. If they have not
made it up to the standard, they lose.

Establishing Facts in Transactions

Introduction
Litigation deals with past facts that have to be proved. Transactions, by contrast, deal
with facts that are not yet in existence when the matter starts. These facts are created in

5. Commentary 31.3.
 Chapter 31 Model for Using Law 519

present time by the parties’ following processes. Consequently, the model for
transactions, which is incorporated into the model for using law, shows the combined
action of law, facts and processes.1328 1329 In this model, Processes 1-n create Facts 1-n.

So, in contrast to litigation where parties seek to prove past facts by means of evidence,
in a transaction parties create facts in present time by means of processes. These
processes involve doing whatever is necessary to create facts to satisfy the elements of
the relevant law.

Because facts are established by following processes there is an important

consequence. A lawyer can normally control what is done so there is a high degree of
certainty to the task. They can make it happen for their client by bringing about the
desired result. This is why in a transaction a lawyer can alter a client’s legal position,
whereas in litigation a lawyer can only help to clarify and alter their client’s legal
position because the ultimate power rests with the court.

Illustrations
Processes can be anything that the applicable law requires. There are, however, some
common types of processes, which we will mention by way of illustration:
(1) Expressions of Intention. Some transactions involve a party doing something of
their own volition. Examples are making a will or a contract. In these cases, for the
transaction to be effective, it is necessary that the parties express their intention
sufficiently clearly.
(2) Requirements of Writing. These can take several forms:
(i) Some transactions must be evidenced by a written note.
(ii) Some transactions must be entirely in writing. Where a document has to
be in writing there may be some additional procedural requirements. Some examples
are:
(a) The document has to be a deed.1330
(b) The document has to use some set formula.
(c) The document has to be in some special form. This is commonly
the case for processes in dealing with the government, for example incorporating a
company or registering title documents to land.
(d) The document must be in writing of a certain minimum size. Such
a requirement is often imposed on contracts to protect consumers from terms hidden in
the fine print.
(3) Signature and Witness. Where a document is required for a transaction, there is
often a further requirement that the party or parties sign the document. There may also
be requirement for the signatures to be witnessed. In some cases any adult can witness
the signature. In other cases the witness might have to fall within some special
category. For example they might have to be an attorney, a solicitor, a barrister, a
justice of the peace or a notary public.

1328 Commentary 31.4.

1329 Commentary 31.5.
1330 R v Morton (1873) LR 2 CCR 22
 520 Chapter 31 Model for Using Law

(4) Notice. Sometimes a party who is about to enter a legal transaction, or has
entered the transaction, is required to give notice to another party or to some
government agency.
(5) Registration. A very common procedural requirement when dealing with a
government agency is to lodge or register a form or document with the agency.

Conclusion
Syllogism
To commence discussion of the conclusion it is helpful to restate the syllogism. This,
the reader will recall, explains how litigation and transactions function:
Major Premise Facts that fall within the categories designated by Elements 1-n
cause Consequence X.
Minor Premise Facts 1-n in this case fall within the categories designated by
Elements 1-n.
Conclusion Facts 1-n cause Consequence X.
Figure 31.3 Syllogism _ for Applying Law to Facts

One requirement for a syllogism to be valid is that the reasoning process incorporated
within it is sound. In practical terms this means that the major and minor premises taken
together lead to the conclusion. In other words, the conclusion logically follows from
the two premises. This generates a further consequence that prescribes the
circumstances when a syllogism is valid: when the major and minor premises are true,
the conclusion must be true. Above we explained the circumstances when the major and
minor premises are true. Here we explain the logical link between them and the
conclusion.

Fortunately, this logical connection can easily be seen. To help us in this regard we can
represent the major and minor premises by abstract proposition that shear off the detail
and capture their essence. On this basis the syllogism is represented in the following
way:
Major Premise If A happens then B also happens.
Minor Premise A has happened.
Conclusion B has also happened.
Figure 31.4 Syllogism in Simple Form

This presentation of the syllogism in pared down, sparse and simple form displays the
core logic of the syllogism. That it is valid is now visible to the naked eye. If A, then B.
A has happened therefore B has also happened. This reveals that the three parts,
expressed in logical and abstract form, are as follows:
(1) When a condition is met something further happens.
(2) The condition is now met.
(3) So something further happens.
If anything, the simplicity is overwhelming.
 Chapter 31 Model for Using Law 521

Conditional Statement
In this context it is worth revisiting one of the basic truths about law. It is a matter of
necessity that a legal rule is constructed as a conditional statement. Subject to minor
exceptions the formal purpose of a legal rule is to bring legal effects when certain types
of facts occur. Elements depict the type of facts. Consequences define the legal effects.
Then the conditional statement gives the rule legal force - it provides that when the
facts depicted by the elements occur, the consequences delineated in the rule
a
pply.1331
As has just been explained, this legal effect is underpinned by a syllogism. This
syllogism is based squarely on the conditional statement embodied in the legal rule,
since the conditional statement constitutes the major premise of the syllogism for
applying law to facts.

3 Model
Discussion so far has explained how litigation, when viewed from the perspective of a
successful plaintiff or prosecutor rests on the reasoning process that is syllogistic. It
also explained how a transaction functions. This discussion also examined the three
components of a syllogism, the major premise, the minor premise and the conclusion. It
explained what was required for these components if the syllogism was to function to
produce a valid result. Against this background the chapter now seeks to impound the
core of this understanding into a model for litigation. This will be a brief account that
focuses on the transformation of our understanding of litigation as a syllogistic process
into a model, since the model is more fully expounded in another publication.1332

This model has five columns. Column 1 contains the law in the form of the elements
(Elements 1-n) and consequences (Consequences) of the legal rule that constitutes the
cause of action. Column 3 contains the material facts, Facts 1-n, being the facts that
satisfy Elements 1-n. For litigation, Column 5 contains the evidence, Evidence 1-n,
which can be used in an attempt to prove Facts 1-n. For transactions, Column 5
contains the processes, Processes 1-n, which can be used in an attempt to prove Facts 1-
n. Columns 2 and 4 contain arrows indicating the relationships between the columns.

Structure of the Model

Introduction
Using law involves litigation and transactions. In composing the model we will work
with litigation first then move to transactions. Using law as, has been constantly
declared in this chapter, is based on a syllogism. Therefore there are two steps:
(1) First Step: Demonstrating how a syllogism is at the core of the model by
focusing on the relationship between law and facts.

1331 Commentary 31.6.

1332 Christopher Enright Legal Method
 522 Chapter 31 Model for Using Law

(2) Second Step: Finishing the model by inserting a column for evidence and
showing its relationship to the facts.

Syllogism
The syllogism is portrayed in two stages. The first stage is a full portrayal, which
shows the part of the model for using law that houses the syllogism and emphatically
displays its syllogistic nature. Once the reader understands from this how the syllogism
is embedded in the model for using law some of the syllogistic display can be removed
since it is no longer necessary. This allows the model to be portrayed in leaner and
simpler form.

Full Portrayal
Part of the process of using law in litigation entails applying the law to the facts to
determine the legal consequences of those facts. The core of this process is our
syllogism. This can be represented by a diagram containing three columns:
1 Major Premise 2 Minor Premise 3 Conclusion
Elements Facts
Element 1 Fact 1
Element 2 Fact 2
Element n Fact n

Consequences Consequences
Figure 31.5 Syllogism for Applying Law to Facts B

This diagram portrays the following:

(1) Major Premise. Column 1 describes the major premise of the syllogism. In the
first column there is a rule, which is composed of Elements 1-n and Consequences. The
arrow between the Elements and Consequences portrays the legal rule as a conditional
statement. As has been said several times there is a good reason that most legal rules,
including those that are the foundation of litigation and transactions, are formulated as
conditional statements. It is only if a rule has this form that it can apply to facts. When
the rule does apply to facts, the process is deductive logic in the form of a syllogism.
The legal rule, as a conditional statement, forms the major premise of this syllogism. If
it was not a conditional statement, it could not be part of the syllogism and could not
apply to facts to bring legal consequences to them.
(2) Facts. Column 3 sets out the material facts of the case, namely Facts 1-n.
(3) Minor Premise. The arrow in Column 2 between Columns 1 and 3 represents the
minor premise. In short form it indicates that Facts 1-n satisfy Elements 1-n. In
expanded form it portrays how Fact 1 satisfies Element 1, Fact 2 satisfies Element 2
and so on through the list of facts to Fact n satisfying Element n. Obviously, if the set of
facts did not include all of the facts in the range Facts 1-n the rule would not apply to
the set of facts and the syllogism would not operate.
(4) Conclusion. Because the rule applies to Facts 1-n, it brings Consequences to
those facts. This is the conclusion of the syllogism. It is indicated in the diagram by
 Chapter 31 Model for Using Law 523

two means. (a) There is an arrow at the bottom of the Column 2 showing the
consequences moving from the first to the third column. (b) There is an arrow beneath
Facts 1-n in the Column 3 pointing to ‘Consequences’ at the bottom of the column
showing how these facts cause Consequences as delineated in the legal rule.

Modified Portrayal
Since the reader will now understand how the model for litigation embeds the
syllogism the model can be shorn of some of the syllogistic prompts. By doing so we
can portray the first three columns of the model for litigation in the form in which they
are represented in this book. Here is the simplified form:
Elements Facts
Element 1 Fact 1
Element 2 Fact 2
Element n Fact n
Consequences
Figure 31.6 Part of the Model_ for Litigation

As would now be obvious to the reader, Column 1 portrays the legal rule consisting of
Elements 1-n and Consequences, impounded in a conditional statement. Column 3
portrays the material facts of the case, Facts 1-n. Column 2 contains a reverse arrow,
which indicates that Facts 1-n satisfy Elements 1-n.

Model for Litigation

Readers will recall that one of the requirements for the syllogism to be sound is that the
minor premise is true. Part of this requirement is that Facts 1-n are true. Facts become
true in a legal sense, which is the sense that counts here, when the court finds that they
are proved by the evidence.

To portray the proof of facts, and to complete the model for litigation, it is necessary to
add two columns that incorporate evidence into the model. When this is done, we have
the full model as represented by the following diagram:
Elements Facts Evidence
Element 1 Fact 1 Evidence 1
Element 2 Fact 2 Evidence 2
Element n Fact n Evidence n
Consequences
Figure 31.7 Modef for Litigation

Column 5 contains evidence. Evidence 1-n is the evidence for Facts 1-n. Evidence 1 is
the evidence for Fact 1, Evidence 2 is the evidence for Fact 2 and so on (as the arrow in
Column 4 indicates). Before the case is heard, Evidence 1-n consists of the available
evidence that is capable of proving Facts 1-n, although there is no certainty that this
attempted proof will be successful when the case is tried.
 524 Chapter 31 Model for Using Law

Model for Transactions

The model for transactions shares the first three columns with the model for litigation,
which has been explained above. The real difference lies in the fifth column because of
differences about establishing facts. In litigation facts from the past are proved by
evidence. In a transaction facts are created in present time by following appropriate and
legally designated processes. Because facts are established in this way, from a legal
perspective parties to a transaction typically can achieve their desired and agreed
outcome with little fuss and bother.

The model for transactions is represented by the following diagram:

Elements Facts Processes
Element 1 Fact 1 Process 1
Element 2 Fact 2 Process 2
Element n Fact n Process n
Consequences
Figure 31.8 Model for Transactions

Column 5 contains Processes. Processes 1-n are the processes for establishing Facts 1-
n. Process 1 is the process that creates Fact 1, Process 2 is the process that creates Fact
2 and so on.

Model for Using Law

For analytical, teaching and learning purposes it can be convenient to amalgamate the
model for litigation and the model for transactions into a single model for using law. As
we now present the model in this combined format, a new part is introduced. This
involves subdividing Consequences into their components, Consequences 1-n, and
portraying how each version of the consequences may be satisfied by the appropriate
facts, labelled ConFacts 1-n, which in turn are established by ConEvidence 1-n in
litigation and ConProcesses 1-n in a transaction:
Law Facts Evidence/Processes
Element 1 Fact 1 Evidence/Process 1
Element 2 Fact2 Evidence/Process 2
Element n Fact n Evidence/Process n
Consequences
Consequences 1 ConFact 1 ConEvidence/Process 1
Consequences 2 ConFact 2 ConEvidence/Process 2
Consequences n ConFact n ConEvidence/Process n
Figure 31.9 Model_ for Using Law

This diagram uses one single model to explain the basic principles that underlie using
law. These principles are as follows:
(1) To obtain the desired legal consequences, a person must establish or satisfy each
element of the legal rule. In the model the rule consists of Elements 1-n and
Consequences 1-n. For the law to apply, therefore, the person must satisfy each of
 Chapter 31 Model for Using Law 525

these elements, Elements 1-n, to obtain the consequences, Consequences 1-n.. If they
fail to do this, even on just one element, the law does not apply.
(2) How does a person satisfy the elements? By facts. They satisfy Element 1,
Element 2, and Element n by establishing Fact 1, Fact 2 and Fact n.
(3) How do they establish facts? Facts are proved by evidence (in litigation) or
created by processes (in transactions), so that Fact 1, Fact 2 and Fact n are established
by Evidence 1 or Process 1, Evidence 2 or Process 2, and Evidence n or Process n.

When each of the elements is satisfied, consequences designated by the relevant legal
rule follow. Consequences are divided into elements that are labelled Consequences 1-
n, although sometimes discussion of the model refers to Consequences, which is just a
convenient shorthand. Consequences 1-n cover two things:
(1) There may be more than one consequence for litigation or a transaction. For
example, a successful plaintiff in trespass to land is entitled to damages and may be
awarded an injunction.
(2) A consequence may have parts. For example, damages, which are awarded as a
lump sum have a number of components, and there are rules for calculating the amount
of each component.

Uses of the Model

The model for using law has a number of functions. Most obviously it explains the
nature of litigation and transaction. Consequently, it is a guide to conducting a matter,
whether it be litigation or a transaction. It is also a guide to any task in reading and
writing which involves using law. Here we just give some major examples, since there
is more detailed treatment in another text1333 1334:
(1) The part of the model which involves organising law should be used for writing
legal text that describes an area of law.
(2) The overall model as it applies to litigation should be used to write an opinion
for a client, conducting litigation and to write a judgment in so far as it deals with
12
questions of fact.
(3) The overall model as it applies to transactions should be used to write a practice
manual for areas of law that involve transactions.

Commentary
Commentary 31.1 Footnote 1
The conditional nature of the statement ‘Facts that fall within the categories of facts
designated by Elements 1-n cause Consequence X’ can be better seen when it is
reframed, without any loss of meaning or effect, in the following form: ‘If facts fall
within the categories of facts designated by Elements 1-n they cause Consequence X’.
This conditional statement, of course, comprises the major premise of the syllogism that
represents the process of applying law.

1333 Christopher Enright Legal Method

1334 For an explanation of how this could be done see Christopher Enright Reforming Civil
Litigation.
 526 Chapter 31 Model for Using Law

Commentary 31.2 Footnote 4

Some might wish to argue that these surplus facts might contain facts that raise a
defence in law. The answer to this objection is that all of the defences, exemptions,
exceptions and exclusions are already incorporated into the elements of a legal rule.

Commentary 31.3 Footnote 5

There is an outline of the model for proof of facts in Christopher Enright Legal Method
Chapter 25 Model for Proving Facts. There is a more detailed discussion of it in
Christopher Enright Proof of Facts.

Commentary 31.4 Footnote 6

It is possible to have a matter that is a hybrid in that some facts are created by
processes while some are proved by evidence. In this case, the model for transactions is
modified by substituting ‘Evidence’ for ‘Process’ in the appropriate column.

Commentary 31.5 Footnote 7

This requirement was imposed, for example, by the Statute of Frauds 1677 (UK) on a
number of contracts. These include a contract of guarantee for a debt, a contract for the
sale of land and a contract for the sale of goods (although part performance by vendor
or purchaser will exempt the need for written evidence of a contract for the sale of
goods).

Commentary 31.6 Footnote 9

While lawyers are familiar with the notion that a cause of action, be it criminal or civil,
can be divided into elements and consequences, the importance of this concept has not
been fully emphasised. Nor have its analytical foundations and potential uses been fully
developed.
Chapter 32
Summary
Introduction
1. Rationality and Irrationality
2. Methods of
Reasoning Logical
Reasoning Policy
Analysing Ambiguity
Observing Facts
3. Tasks with Law
Structuring Law Forming
Law Using Law
Commentary

Introduction
Benefits of a Summary
This last chapter provides a summary of the book. A summary confers a benefit
because it highlights both the key concepts and the relationships between them. This
benefit may be needed since the subject of this book is hard wrought. Readers may
benefit from this summary at any of three stages - before, during and after reading the
book or part of it:
# Before Reading. Before reading the book the summary indicates the shape
and rationale of what is to come
# During Reading. If during the course of reading the reader is overcome by
detail it may settle the structure and benefit their understanding to read the summary.
# After Reading. When a reader has finished the book reading a summary is
a way of refreshing and recapping.

Methods of Reasoning and Legal Tasks

Methods of reasoning are use for performing tasks with law. From a structural
perspective it would be simple if each task had its own distinctive method of reasoning.
Unfortunately this is not the case. Some methods of reasoning apply to more then one
task, while some tasks incorporate more than one method of reasoning.

1. Rationality and Irrationality

To entitle a book Legal Reasoning connotes a distinction between the rational and the
irrational, although the distinction may not be hard and fast and is contestable:
# Chapter 1 Outline and Chapter 2 Rationality make some attempt to deal
with rationality. At the same time they make some mention of irrationality, as a way of
introducing it before fuller discussion in Chapter 27.

527
 528 Chapter 32 Summary
# Chapter 27 Irrationality presents some alleged manifestations of, and
reasons for, irrationality in the world.

2. Methods of Reasoning
There are several methods of reasoning involved in law:
# Logical reasoning
# Policy
# Analysing ambiguity
# Observing facts

Logical Reasoning
Introduction
Chapter 3 explains conditional statements. Chapters 4 outlines the other major forms of
logical reasoning, which are explained in subsequent chapters. The basic forms of
logical reasoning are conditional statements,1335 deduction,1336 induction,1337
abduction,1338 analogy1339 and probability.1340 1341

These forms of reasoning bob up and down in various places on the map of legal
reasoning. Each of the chapters describing these forms of reasoning indicates the places
where they are used. This chapter now provides an outline of their fundamentals.

Conditional Statements
A conditional statement takes the form ‘If A occurs then B subsequently occurs’. Most
legal rules are conditional statements. They take the form: ‘If facts of a designated kind
occur, these legal consequences follow.’ This is an extremely important analytical tool
for working with law.

Deduction
Deduction is a logically perfect form of reasoning. Deduction involves a form of
reasoning called a syllogism.1342

This has three parts, a major premise a minor premise and a conclusion that follows
from the two premises. The major relevance of deduction is in the process of using law
when law applies to facts to generate legal consequences:
# Major Premise. The major premise is constituted by the legal rule that creates
the cause of action. This, as stated above, consists of a conditional statement.

1335 Chapter 3 Structuring Law. Commentary 32.1.

1336 Chapter 5 Deduction
1337 Chapter 6 Induction
1338 Chapter 7 Abduction
1339 Chapter 8 Analogy
1340 Chapter 9 Probability
1341 Chapter 3 Structuring Law
1342 Chapter 5 Deduction
 Chapter 32 Summary 529
The major premise accordingly says: ‘If facts of a designated kind occur, these legal
consequences follow.’
# Minor Premise. The minor premise says: ‘Facts of this designated kind
have occurred. ’
# Conclusion. The conclusion says: ‘The consequences designated by the
rule now apply’.

This syllogism can be set out in a table:

Components Relationships
Major Premise If facts of a designated kind occur, these legal consequences
follow.
Minor Premise Facts of this designated kind have occurred.
Conclusion The consequences designated by the rule now apply.
Figure 32.1 Syllogism for Applying Law to Facts

Induction
A simple example will illustrate induction. We observe, directly or indirectly, that the
sun has risen every day of our lives and for many days before that. Given this we may
include from these observations that the sun always rises. This shows how induction
works. Essentially when many observations of things happening in a certain way with
no exceptions it suggests that things always happen in this way. Induction can be
formally set out in the following way:
Premise In all observed instances something, called X, occurs when Y
Conclusion There is a rule, Rule R, which says: ‘X always occurs when Y
occurs.
occurs. Figure 32.2 Form of Induction

Abduction
Abduction seeks explanations for events.1343 Let us assume that B has occurred.
Assume also that there are four identifiable possible explanations (or hypotheses) for
the occurrence of B, namely X causes B, Y causes B, Z causes B and A causes B.
Investigation suggests that the most likely or plausible explanation is that A causes B.
Observation B has occurred
Explanation There is a rule, Rule R, that says ‘A causes B’.
Strength of Explanation No other explanation explains B as well as Rule R.
Conclusion Therefore, Rule R that ‘A causes B’ is probably
correct.
Figure 32.3 Form of Abduction

Probability
Probability has a descriptive function. It describes how certain we are about the truth of
something. For example, when we require reassurance about something we ask: ‘Are
you 100% sure?’
9
.

This explanation of abduction is taken directly from Chapter 4 Logical Reasoning.

 530 Chapter 32 Summary
Probability also has a derivative function, which is how it operates as a form of
reasoning. When one or more probabilities are known and quantified, further
probabilities can be derived by rules based on deduction. For example, if there is a 60%
chance that an event will happen we can use the complementarity rule to devise the
probability that the event will not happen. The probability of an event not happening is
the complement of the probability that it will happen. In the example the probability of
the event not happening is (100-60)% namely 40%.

Policy
Frequently humans engage in purposive action, where they take action to achieve a
purpose. Making and interpreting law constitute purposive action. Those engaging in
purposive action make a rational decision where they identify and choose the option
that achieves the best result in terms of both costs and benefits. This is the outcome
with the highest net benefit. This means that the outcome is as successful as human
endeavour can make it. It is impossible to do better than this or to be more rational than
this.1344 Law changes the world so for making and interpreting law, the desired outcome
is to change the world in the best possible way.

Policy involves two difficult tasks:

(1) Causation. Policy makers have to predict the outcome that each option will
cause.
(2) Evaluation. Policy makers must have an available set of values to evaluate each
option to determine the best, which is the one that causes the best outcome.

Analysing Ambiguity
When a court interprets law it needs to identify all of the meanings of the ambiguous
provision. To do this a court needs the skill of analysing ambiguity.1345 1346 The task can
be
12
made easier by using a classification of ambiguity as a tool of analysis.

Observing Facts
Observing facts is really the prelude to the reasoning process here. The reasoning is that
seeing is believing. This is widely accepted as true, but with a qualification. Sometimes
we do not see what we think we see. There is an additional problem in practice. The
notion of ‘seeing is believing’ underlies a witness’s giving evidence in court of what
they have seen and also what they have observed with their other senses. The additional
problem is that the court hearing this evidence cannot be sure that the witness is telling
the truth.

3. Tasks with Law

There are four tasks with law to consider:
# Structuring Law

1344 This explanation of policy taken directly from Chapter 10 Policy.

1345 Chapter 25 Analysing Ambiguity
1346 Christopher Enright Legal Method Chapter 14 Classifying Meanings
 Chapter 32 Summary 531
# Forming Law
# Using Law
# Writing Law

As the text explains these tasks it will indicate the types of reasoning that they
incorporate.

Structuring Law
Unfortunately the concept of structuring or organising or analysing legal rules is
unfamiliar to many lawyers, yet it is the key to numerous other tasks. There are two
13
aspects to structure - micro structure and macro structure.

Micro Structure
With a few exceptions that do not matter, all legal rules have a common structure
(called the micro structure because it applies to particular rules and not a whole area of
law). There are two basic components - (i) elements that determine the type of facts to
which the rule applies and (ii) the consequences that the rule brings when it does apply.
The third part of a rule is really its overall shape or nature. It consists of a conditional
statement that says as follow - when the elements of a rule apply to the facts of a case
the consequences designated by the rule apply.

The following diagram portrays the format for the micro structure of a legal rule. It
portrays Elements 1-n. It depicts the Consequences. It represents the conditional
statement by an arrow that joins elements to consequences. This is saying that when the

Law ______________________________
Element 1 _______________________
Element 2 _______________________
Element n
! ~

Consequences ______________________
Figure 32.4 Model_ for Organising
Law
right types of facts satisfy the elements, the consequences apply:

Macro Structure
There are three key propositions:
# Any area of law or a legal subject has an overall or macro structure.
# But unlike the situation with individual legal rules there is not a standard
structure that applies to all rules but a variety of structures (although some structure are
shared among a few areas of law).
# There is no standard technique for finding the overall structure but in
practice it is not difficult. Look for the relationships between the various parts of the
subject, which are generally not difficult to find, especially if a person does two things:
 532 Chapter 32 Summary
1347

1347 Chapter 3 Structuring Legal Rules and Chapter 29 Model for Organising Law
 Chapter 32 Summary 533
(1) Think. They think carefully about the area of activity that the subject regulates.
(2) Look. They look with a fierce intent.

Benefits of Structuring Law

Structuring law is a gateway to heaven because proper performance of every other
major task with law depends on it. These tasks include making law, interpreting law,
using law in litigation, using law in transactions, reading law, writing law, teaching law
and studying law.

Two specific comments will highlight the problem caused by the neglect of the skill of
organising law.
(1) Teaching Law. Teaching law is diminished. It is sad to see the efforts of
dedicated and knowledgeable teachers squandered to a significant extent by lack of
knowledge of the reasoning processes requires to structure law. In the biblical phrase it
is akin to making bricks without straw.1348
(2) Writing Law. There is a feasible argument that the widely recognised problem of
the poor quality of legal writing is not really a plain English problem but a
manifestation of the fact that most lawyer do not understand how to structure law. In
other words it is an organisational problem that is easily solved - teach lawyers how to
structure law and it is likely that you will teach them how to write more clearly.

Forming Law
Introduction
Introduction
Forming law is a collective name for two similar and connected tasks, making law and
interpreting law.

Making Law
Making law happens in three ways:
# a legislature enacts a statute
# some official or body makes delegated legislation pursuant to power
conferred on them by statute
# a court makes a new common law rule or amends a common law rule

Interpreting Law
When a court interprets law it decides which of two or more possible meanings of an
ambiguous provision is the correct meaning of the ambiguous provision. This law, may
be statute law, delegated legislation or common law.

Methods of Reasoning
Policy
This book argues that policy is the only rational way to make and interpret law. There
is a summary of policy below.

1348 Commentary 32.2.

 534 Chapter 32 Summary
Other Methods
Four other methods are used, or in the view of some are used, for interpreting law.
These are deduction, precedent, maxims of interpretation and secondary sources.

Policy
Introduction
The word ‘policy’ can be ambiguous. In one sense it is a set way of doing things as in
the statement: ‘We have a policy of checking all applicants carefully.’ A second
meaning is the one used here where it refers to a method of reasoning that seeks the best
outcome. Policy is used for making law and interpreting law.

Nature of Policy
Any law or any interpretation of a law will cause some outcome or effect. The
controlling proposition is that it is rational to want the best and irrational to want
anything less than the best. Consequently reasoning with policy involves identifying
then choosing and implementing the version of a law or the interpretation of a law that
is predicted to cause the best outcome.

In order to choose the best it is necessary to identify all possibilities. To illustrate this,
assume that a legislature is contemplating making a law on a subject such as consumer
protection, industrial regulation, housing or education. The possible statutes are labelled
‘Statute’ and numbered for identification. Statute 0 is the option not to pass a statute.
Statutes 1-n are the possible versions of statutes on the topic. Now each statute will
cause an effect, although prior to passing a statute the best a legislature can do is to
predict its likely effect. Since policy is concerned with the best outcome it is necessary
to measure the outcome. Net benefit is the way to go. It consists of total benefit minus
total costs. All of this can be conveniently represented in a table in the following way:
Statutes Effects Net Benefit
Statute 0 Effect 0 Net Benefit 0
Statute 1 Effect 1 Net Benefit 1
Statute 2 Effect 2 Net Benefit 2
Statute n Effect n Net Benefit n
Figure 32.5 Statutes, Effects and Net Benefits
Let us assume that the net benefit with the highest value is Net
Benefit 2. This is the net benefit of Effect 2. Effect 2 is the
predicted effect of Statute 2. This means that Statute 2 is the best
statute to enact since it is predicted to cause the best outcome -
Effect 2, which yields Net Benefit 2.

Similar reasoning applies to interpreting law. Assume that a provision (a word or a phrase) in a
legal rule is ambiguous such that it may or may not apply in a particular case. The court must
identify all possible meanings of the ambiguous provision. The possible meanings of this
ambiguous word or phrase are labelled Meanings 1-n. There is generally not a Meaning 0
because a court normally does not have an option when faced with ambiguity - it cannot
 Chapter 32 Summary 535
decline to interpret the provision. Each meaning causes an effect
so that collectively Meanings 1-n are predicted to cause Effects 1-
n. Each effect yields a net benefit so that Effects 1-n yield Net
Benefits 1-n. These relationships can be set out in a table in the
following way:
Meanings Effects Net Benefit
Meaning 1 Effect 1 Net Benefit 1
Meaning 2 Effect 2 Net Benefit 2
Meaning n Effect n Net Benefit n
Figure 32.6 Meanings, Effects and Net Benefits

At one level policy is simple. However, there are some major uncertainties that arise
within or around the process of making policy decisions. There are two core issues that
pervade the process:
(1) Causation. A legislature or court has to determine or predict what Effect
(meaning a batch of effects) a statute or a meaning of an ambiguous provision will
cause.
(2) Evaluation. A legislature or court has to evaluate each effect to establish its net
benefit. There are two issues here:
(i) Values. There is a question as to the nature of values:
(ii) Incommensurability. There is a problem of measuring net benefit, which is
labelled incommensurability.

There are two additional problems:

(1) Social Choice. The choice to determine the questions of causation and evaluation
is a social choice. The problem is how to make this choice in a representative way, that
is, in a manner such that the ensuing choice represents the wishes of the individuals
who make up the society in question.
(2) Analysing Ambiguity. To identify the meanings of an ambiguous provision
(Meanings 1-n) when interpreting law it is necessary to be able to analyse and
understand ambiguity.

Problem 1. Causation
When a legislature is enacting a statute ideally it has before it all possible versions of
the proposed statute. These are labelled Statutes 0-n. Since the legislature is reasoning
by reference to policy it needs to predict as best it can the effect (shorthand for batch of
effects) that each statute will cause.

Once the court has predicted these effects it then calculates the net benefit of each
effect. This enables it to enact the best statute, being the statute that causes (is predicted
to cause) the effect that yields the highest net benefit.

When courts interpret a statute they are likely to engage in a similar process to making
law. They identify all of the meanings of the ambiguous provision. Then they seek to
predict the effect that each meaning will cause if a court declares it to be the legally
 536 Chapter 32 Summary
correct meaning of the provision. (This enables it later to attempt to measure the value
of each effect by determining its net benefit.

How should a legislature or court go about the task of predicting causation? The answer
is one or both of two broad possibilities. There is some causal law that makes predicting
causation scientific, or there is the absence of such a law so that law-makers and
interpreters need to rely on non scientific means.

Scientific Means: Causal Law

In the simple and ideal case there is a causal law that enables a legislature or court to
predict the effect that a statute or a meaning of an ambiguous provision will cause.
Natural science, and often social science, ascertains and attempts to prove the existence
of causal laws by several processes,1349 which use various methods of logical reasoning:
(1) Hypothetico-Deductive Model. This uses a mixture of deduction and
induction.1350 1351
17
(2) Experimental Method. This uses a mixture of deduction and induction.
(3) Correlation Method. This uses a mixture of induction and abduction.1352

Non Scientific Means

There are two reasons why legislators and judges will not always deploy scientifically
based behavioural laws when making and interpreting law.1353 1354

First, behavioural science is incomplete. It can explain some things but not everything.

Second, legislators and judges are generally not trained in behavioural science.
Consequently, even if there is a relevant causal law, they may not know of its existence.

For both of these reasons, legislators and judges are sometimes forced to rely on causal
laws that are not properly grounded in science. In truth, these are assumptions. These
assumptions may be derived from sources such as hunch, guesswork and impression,
20
all being processes which are not ‘readily susceptible of precise analysis’.

Problem 2. Evaluation
The operative maxim that underlies policy is the seemingly tautological statement ‘best
is best’. Essentially legislatures and courts should seek the best outcome because this is
the only rational way to proceed. While the notion that legislatures and courts should
seek the best outcome is logically impeccable, there is an issue of evaluation.

1349 Chapter 13 Cause

1350 Commentary 32.3.
1351 Chapter 5 Deduction and Chapter 6 Induction
1352 Chapter 6 Induction and Chapter 7 Abduction
1353 Chapter 13 Cause
1354 Federal Commissioner of Taxation v Chubb (1995) 128 ALR 489
 Chapter 32 Summary 537
The issue is how one determines the value or values by which legislatures and courts
should judge which outcome is really the best. There are three possible views on the
nature of values:
(1) Unity of Values. According to this view there is a comprehensive, universal and
binding set of values that applies to all people at all times (as natural law proclaims).
The problem with this view is that there is so far no way that the existence and binding
force of these values can be discovered by reason. Deduction, induction and abduction
are of no assistance - there is no method of reasoning that can establish the existence of
a comprehensive, universal and binding set of values. However, it is possible to use
analogy to make new common rules derived from similar and appropriate values in an
21
existing common law rule.
(2) Diversity of Values. In extreme form this view sees values as highly diverse
with little agreement as to what values should underpin society. This extreme view
22
does not hold up since there is a significant amount of values being shared.
(3) Mixture of Unity and Diversity of Values. This view is that a society and even
the world at large will exhibit some degree of unity of values and some degree of
diversity. Since this view is founded on widespread observation it is the view taken by
23
the author and the basis for any consequential analysis of policy.

Problem 3.1 Social Choice: Making Law

An individual can decide and act by reference to any values that they choose. However,
there is a problem when a choice has to be made by society as distinct from being made
by an individual. How can society make a choice in a manner that truly represents the
preferences of the individuals who compose that society? Traditionally
24
the answer both in theory and practice comes from representative democracy.
Parliament represents the people because they vote for it and any choice that parliament
makes is perfectly representative of the wishes of the people, which are underpinned by
their values.

Despite the superficial appeal of this solution, there is one problem in principle and a
second problem in practice. The problem in principle was discovered by Kenneth
Arrow and described in his impossibility theorem. It is impossible for a representative
body such as a legislature to reflect perfectly the preferences of voters. The answer to
this objection is three fold. The legislature is still representative to some significant
extent. A government can compensate for defects in representation by participatory
democracy in the form of public debate and consultation with people affected by a
proposal. There is no more representative way of making a social choice for enacting
legislation.

The problem in practice is that the function of representative democracy can be marred
by failure to take sufficient steps to implement democracy. These involve, for 1355 1356
1357 1358

1355 Commentary 32.4.

1356 Chapter 19 Choice of Values
1357 Chapter 19 Choice of Values
 538 Chapter 32 Summary
example, providing as full access to government information as can be achieved and a
free media, especially with regard to radio and television broadcasting.

Problem 3.2 Social Choice: Interpreting Law

When reasoning by reference to policy the logical approach is to identify the meaning
of the ambiguous provision that causes the best effect and to make this the legally
correct meaning of the provision. The best effect is the one that possesses the highest
2
5
net benefit. There is, however, debate as to who should judge what is the best effect.
There are three major sides to this debate, which are here labelled judicial legitimacy,
legislative legitimacy and metademocracy. There will now be a brief explanation of
these approaches to interpretation.1359 1360 1361

Judicial Legitimacy
Judicial legitimacy is feasible in jurisdictions where judges are elected. Because of
their election the judges have some claim to legitimacy in making their own assessment
as to which effect is best. On this basis, each judge forms their own opinion as to which
meaning yields the highest net benefit.

Legislative Legitimacy
Legislative legitimacy arises because the people elect the legislature. In this case the
court refrains from exercising its own independent judgment as to the best effect based
on the court’s calculation of net benefit. Instead it yields to legislative intent on the
basis that a statute ‘should be construed according to the intent of the [legislature]
27
which passed the Act’. The court interprets the statute in the way that the legislature
wanted it to be interpreted as it defers to the judgment of the legislature for determining
the most desirable outcome.

Metademocracy
Instead of deferring to the judgment of the legislature as to how to interpret a statute, a
court might interpret a statute by taking into account the defects in representative
democracy both in principle and in practice. This approach is called metademocracy. It
involves interpreting the statute in the way it would be interpreted if the legislature
were composed and functioning in a proper way so that it were truly democratic
(instead of the partially formed democracy that now exists). Obviously to interpret by
this means the court has to somehow divine an imputed popular intent by determining
what the people would have wanted. This is no easy task and may involve a substantial
degree of guesswork or speculation. Consequently, the result will not possess a high
degree of certainty in its claim to be the best meaning.

Table of Options
These options are set out below in the table below. Column 1 lists the meanings of the

1358 Chapter 21 Social Choice: Making Law

1359 Chapter 21 Social Choice: Interpreting Law
1360 See Christopher Enright Legal Reasoning Chapter 22 Social Choice: Interpreting Law.
1361 Sussex Peerage Case (1844) 11 Cl & F 85, 143; 8 ER 1034, 1057
 Chapter 32 Summary 539
provision. Column 3 lists the actual predicted effect of each meaning. Column 5 sets
 540 Chapter 32 Summary
out the three schools of thought - legislative legitimacy, judicial legitimacy and
metademocracy - on the desired effects that a court should achieve when it interprets a
statute. These are the options for the court to use in the task of interpretation. They are
put in square brackets to show that they are not at this stage actually matching one of
the actual effects. They are simply the options for matching depending on how the court
chooses to interpret the provision. This is the diagram:
Meanings Actual Effects =/” Desired Effects
Meaning 1 Effect 1 [Legislative Legitimacy]
Meaning 2 Effect 1 [Judicial Legitimacy]
Meaning n Effect 1 [Metademocracy]
Figure 32.7 Meanings, Actual Effects and Desired Effects

Problem 4. Analysing Ambiguity

To interpret law a court must identify the various meanings of the ambiguous
28
provision that gives rise to the need for interpretation. These meanings can be
designated Meanings 1-n. Identifying Meanings 1-n performs three valuable functions:
(1) The Problems. They represent the problem - which of them is the legally correct
meaning?
(2) The Answer. The range contains the answer - one of them must be the legally
correct meaning (or two or more are legally correct).
(3) The Focus. They create the focus for arguments put to the court - any argument
must be directed towards a meaning either to promote it as being the legally correct
meaning or to unpromote it as not being the legally correct meaning.

There are three techniques for analysing ambiguity to detect correctly the various
meanings that it embraces:
(1) Consult a reputable English dictionary.
(2) Try out the word in various contexts.
29
(3) Use a developed classification of ambiguity to assist.

Other Methods
Introduction
30
Policy is arguably king in the field of making and interpreting law. It is the only
legitimate means of interpreting statutes since it identifies and indorses the best
achievable outcome. Nevertheless there are some other claimants to the throne. These
are deduction, precedent, rules or maxims of interpretation and secondary sources all of
which can be put forward as possible ways of interpreting law.
Deduction
To analyse the argument that interpreting law is rationally and objectively based on the
process of deduction it is necessary to identify the form that the relevant syllogism 1362
1363 1364

1362 Chapter 25 Analysing Ambiguity

1363 Christopher Enright Legal Method Chapter 14 Classifying Meanings
1364 Chapter 30 Model for Forming Law
 Chapter 32 Summary 541
would take. It is a syllogism involving propositional logic. For the syllogism to be
sound there must be a rule, that is labelled Rule X, which provides a specific and
correct answer for cases of interpretation of a designated kind, labelled Category Y.
This syllogism takes the following form:
Major Premise Rule X provides a specific and correct answer for cases of
interpretation in Category Y.
Minor Premise This particular case falls into Category Y.
Conclusion Therefore, Rule X applies in this case and so provides a specific and
correct answer.
Figure 32.8 Syllogism for Interpreting Law

Clearly, this syllogism depends on the content of Rule X. If Rule X provides one, and
only one, identifiable and correct answer to the question of interpretation, the process is
syllogistic. There are in fact four possibilities for Rule X:
Possibility (1). Rule X is an objective rule of interpretation. The problem with this
possibility is that the rules of interpretation are rarely determinative since they are
generally mere presumptions or guidelines.
Possibility (2). Rule X is a word having a fixed literal and undisputable meaning. The
problem with this possibility is two fold. Words rarely have a fixed literal and
undisputable meaning. Not all forms of ambiguity arise within words. For example
some arise from syntax or the order of words.
Possibility (3). Rule X is a rule that requires a court to interpret law by reference to a
clearly identified unambiguous policy that has already been formed by the legislature.
In this case the process is, at least on the outside, syllogistic. However, to illustrate one
problem with this possibility, when viewed from another perspective interpreting law in
this way does not constitute a perfect syllogism. Instead, the court is adopting and
transmitting a choice that was made earlier in the legislative process when the common
law was made or the statute was enacted. So at best it is a soft form of deduction.
Possibility (4). Rule X is a rule that requires a court to interpret law by reference to a
precedent that has already interpreted the law. In this case the process is, at least on the
outside, syllogistic. But as with interpreting law by reference to preformed policy, the
view changes dramatically when looked at with greater breadth. While in the short
terms the court is applying the precedent, the precedent itself is based on a choice. So,
as is the case with Possibility (4), at best Possibility (3) is a soft form of deduction.

Precedent and Rules

27 32
Ostensibly courts use precedent and rules or maxims of interpretation when interpreting
statutory and common law rules. This creates an apparent conflict with the notion that
policy is the only rational way to make and interpret law. The way out of this dilemma
is based on the fact that both precedent and the rules of interpretation are really
packaged policy. Viewed in this way they are not a denial of the role of policy 1365 1366

1365 Chapter 23 Precedent

1366 Chapter 24 Rules
 542 Chapter 32 Summary
but an affirmation of it. The law has manufactured two devices to implement policy.
Precedent implements policy at the same time as it puts a high value on continuity and
stability as against adaptability and flexibility. Maxims of interpretation package and
present some presumptions that guide courts and save them from retreading the ground
on which earlier courts formulated these presumptions. Later courts inherit the wisdom
of earlier courts.

Secondary Sources
Secondary sources may state arguments or cast an understanding light on an issue of
interpretation. However, they can never be an authoritative source for determining the
issue.

Using Law
Law is made to be used in litigation and transactions. To explain the reasoning
processes the text will build up a model in stages - a model for structuring law, a
33
model for applying law to facts and a model for using law.

Structuring Law
Structuring a legal rule by micro analysis involves identifying the parts of the rule that
comprise the elements, the consequences and the conditional statement that imposes the
consequences when the rule is applied to facts that satisfy the elements. The model for
structuring a legal rule by micro analysis can be set out in a diagram in the following

Law ______________________________
Element 1 _______________________
Element 2 _______________________
Element n
! ~

Consequences ______________________
Figure 32.9 Model_ for Organising
Law
way:

Elements 1-n describe the categories of facts to which the rule applies. When the rule
does apply it brings Consequences on the parties. This bringing or causing of
Consequences is designated by the arrow in the diagram that joins Elements 1-n and
Consequences.

Applying Law to Facts

There are two key propositions:
# Each legal rule is made to apply to the types of facts designated by its
elements. There are two key propositions:
# When a rule applies to facts it imposes the consequences that are set out
in the rules. 1367

1367 Chapter 31 Model for Using Law

 Chapter 32 Summary 543
The process of applying law to facts can be explained by a model for applying law.
This model is an extension of the model for structuring law. It is set out in the following
diagram: ^__________
Law Facts
This model is built on Element 1 Fact 1 the proposition that
elements of a legal rule Element 2 Fact 2 apply to facts.
Consequently the Element n Fact n model for applying law
is constructed by adding two columns to
the model for Consequences structuring law with
micro analysis: Figure 32.10 Model_ for Applying
(1) Column 3. Law Column 3 contains
Facts 1-n.
(2) Column 2. Column 2 contains an arrow pointing from Column 3 to Column 1
demonstrating the relationship of Facts 1-n to Elements 1-n. This relationship can be
expressed in either of two ways:
(i) Elements 1-n apply to Facts 1-n.
(ii) Facts 1-n fit within or satisfy Elements 1-n.

Applying law to facts is a deductive process based on a syllogism. This syllogism for
applying law to facts takes the following form:
Components Relationships
Major Premise Facts that fall within the categories designated by Elements 1-n
cause Consequences.
Minor Premise The material facts in this case, Facts 1-n, fall within the categories
designated by Elements 1-n.
Conclusion Facts 1-n cause Consequences.
Figure 32.11 Syllogism for Applying Law to Facts

Litigation and Transactions

Introduction
Using law in litigation and transactions can be analysed and explained by a model for
using law that is formed by extending the model for applying law. This extension is
needed to explain how facts are established, in litigation by proving them by evidence
and other means and in transactions by creating them by following processes. This
model for using law can be set out in a diagram:
Law Facts Evidence/Processes
Element 1 Fact 1 Evidence 1/Process 1
Element 2 Fact 2 Evidence 2/Process 2
Element n Fact n Evidence n/Process n
 544 Chapter 32 Summary
Consequences
Figure 32.12 Model_ for Using Law

Columns 1-3
Columns 1-3 reproduce the model for applying law. This is explained above.
Columns 4-5
Columns 4-5 portray two functions, which are explained below:
(1) Proving facts in litigation.
(2) Establishing facts in transactions.

Columns 4-5: Proving Facts

In litigation parties establish disputed facts that occurred in past time by proving them
to the satisfaction of the court according to the operative standard of proof. There are
four reasoning processes used in proving facts - induction,1368 deduction,1369 observation
(seeing is believing)1370 and deeming provisions1371 1372. The aim is to convince the court
of the truth of facts to a degree of probability that is called the standard of proof. There
are two major standard for the positive elements of a case: the standard for a civil case
and the standard for a criminal case.

Civil Case
At common law in a civil case the standard of proof is the balance of probabilities,
which equals 51%. The policy behind this is pure abduction. To the extent that a
minimum standard of proof to a degree of 51% is required for both civil and criminal
38
cases the reasoning is purely abductive. Abductive reasoning says that one treats as
true the proposition or conclusion that is most probable. A standard of 51% is the
minimum standard for an outcome to be the most probable because, by application of
the complementarity rule, the next best possibility can be no more than 49%.

Criminal Case
At common law in a criminal case the standard of proof is proof beyond reasonable
doubt. While this is not commonly expressed as a numerical percentage it is clearly in
excess of 51% (and is in excess to a substantial extent). Obviously, though, we can
represent this and any other standard in excess of 51% as (51 + X)%. As just argued, to
the extent that the standard is 51% it is based on abduction as is the standard of proof in
civil cases.

With the 51% explained, what about the excess of 51%, namely the X%? The
justification is found in the precautionary principle. This is a special means of coping
with uncertainty. It deals with cases where there are at least two outcomes and one

1368 Chapter 6 Induction

1369 Chapter 5 Deduction
1370 Chapter 26 Observing Facts
1371 Commentary 32.5.
1372 Chapter 7 Abduction
 Chapter 32 Summary 545
outcome yields a highly unacceptable state of affairs. In this context, the highly
unacceptable outcome is that an innocent person will be convicted. Generally jurists
have regarded the conviction of an innocent as a far greater wrong than the acquittal of
a guilty person. Here the reasoning is that a higher standard of proof makes it less likely
that an innocent man will be convicted, although more likely that some guilty people
will be acquitted.

It is possible to explain the precautionary principle in simple policy terms. It applies

when drastically negative consequences may follow or are more likely to follow if those
in control do not take proper precautions. While the precautions may seem extravagant
when viewed in isolation, they are not disproportionate when measured against the
severity of the harm that will or might ensure if the precautions are not taken. This is
expressed in the popular maxim ‘desperate times call for desperate measures’.

Columns 4-5: Creating Facts

In transactions parties establish the relevant facts in present time by following or
carrying out the processes laid down by the rules governing the transaction. For
example the rules for the sale of land may require that the seller hand to the purchaser a
signed transfer form for the piece of land that is the subject of the sale. To create this
fact the seller prepares the transfer form in the format that the law requires, signs it and
hands it to the purchaser. The fact that parties to a transfer create the required facts in
present time by following processes causes a major consequence - it explains why
transactions are so often successful because there is commonly no uncertainty from the
need to prove past facts.

Commentary
Commentary 32.1 Footnote 1
Figure 3.3 in Chapter 3 represents this conditional statement for a legal rule in a
diagram.

Commentary 32.2 Footnote 14

In the Bible, Exodus 5: 1-23 Pharaoh punishes the Israelites by telling his supervisors,
‘Ye shall no more give the people straw to make brick, as heretofore: let them go and
gather straw for themselves’ (Exodus 5:7). Straw is needed to make bricks because it
causes the clay to dry more quickly so that the bricks harden sooner.

Commentary 32.3 Footnote 16

The hypothetico-deductive model and the way in which it used both deduction and
induction is explained in Chapter 6 Induction. See also Chapter 5 Deduction.

Commentary 32.4 Footnote 21

Chapter 19 Choice of Values draws on the types of reasoning discussed in:
# Chapters 5 Deduction # Chapter 6 Induction
# Chapter 7 Abduction # Chapter 8 Analogy.
 546 Chapter 32 Summary
Commentary 32.5 Footnote 37
Deeming provisions, along with other means of proving facts are discussed in
Christopher Enright Proof of Facts.
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Index

A
a dicto simpliciter ad dictum secundum quid 72
abduction Chapter 7
causal laws 75-76
explanatory conclusion 76
nature 30,73-74
proving facts 74-75
strength of reasoning 74
uses 74-76
algorithms 440-441
ambiguity of implication 385,397
analogy Chapter 8
a priori 87
Battle Hymn of the Republic, The 87
confidential information 83
contributory fault 83-84
contributory negligence 83-84
de similis idem est judicium 87
fiduciary relationships 83
in consimili casu, consimile debet esse redium 80-81
in pari material 80
legal professional privilege 84
making common law 80-86
miscellaneous examples 84-86
nature 30-31,78-80
proportio 78
rules, arguing from 82-86
similibus ad similia 81
statutes, analogy with 88
values, arguing from 82
wrongful death, action for 89
ambiguity, analysing Chapter25
ambiguity 382-392
classification of ambiguity 384-387
ambiguity of implication 385,397
competing versions of a rule 385
conflict between rules 385
implied extension 385,386
implied qualification 385,386
lexical ambiguity 384-385
open terms 386
partial satisfaction 386
relational ambiguity 385
special cases 386-387
dictionary, use of 383
identifying meanings 382-384

576
 Index 577
limits to interpretation 392-397
limits from ambiguity 396-397
limits from language 392-396
literal rule 393-396, 399, 400
lucet ipsa per se 393
model for interpretation 381
occam’s razor 398
prevalence of ambiguity 390-391
reasons for analysing language and ambiguity 382
relevance of ambiguity 391-392
assisting the reasoning process 392
defining the problem 391
identifying the solution 391-392
scope of ambiguity 387-390
proposed exclusion: meaning not fully within text of law 388-389
proposed exclusion: vagueness 389
resolution 389-390
wide scope of ambiguity 387-388
words, reusing 383-384
analysing ambiguity - see ambiguity, analysing
Arrow’s impossibility theorem 308-309
attainder, acts of 24-25

B
Battle Hymn of the Republic, The 87
Bayes Theorem 106-108
bounded rationality 309
Burke’s principle 319
butterfly effect 217

C
cause Chapter 13
ceteris paribus 172
compatabilism 159-160
correlation method 164-165
determinism 158-160
effects 158
experimental method 162-164
hidden causes 169-170
hidden effects 170-171
hypothetico-deductive method 160-162
independent and separate causes 167-168
joint interacting causes 168-169
nature 157-158, 166-171
non scientific approach 165-166
outline 157, 158
science 160-166
separate and independent causes 167-168
voluntarism 159
 578 Index
cause, explanatory theories for Chapter 14
accidents, cause of 195-196
adaptive behaviour 192-194
adaptive capacity 193
behaviourism 175
butterfly effect 217
catastrophe theory 191-192
catastrophic change 191-191
chaos 189-191
chaos theory 188-191
complex behaviour, theories of 177-199
complex systems, see complex systems 177-188
complexity 195
continuous and discontinuous change 191
cybernetics 194
decretinism 217
euler’s number 217
experimental archaeology 204, 219
experimental economics 204, 219
exponential relationships 189
felicific calculus 220
field, concept of 197
force field diagram 199
forces 197-198
general theories 174-177
hedonic calculus 220
high reliability organisations 196-197
homo economicus 16, 220
internal conflict 197-199
issues 198
law reform commissions 218
linear relationships 188
marx, karl 175-176
maslow, abraham 174-175
resolving issues 198-199
self organisation 193-194
system accidents 194-197
theories of legal compliance, see compliance with laws
tight coupling 195
weber, max 176-177
ceteris paribus 172
chaos theory 188-191
communis error non facit lex 145
compatabilism 159-160
competing versions of a rule 385
complex systems 177-188
changing complex systems 185-188
coherence 181
dynamic process, product of 181
 Index 579
emergent behaviour 180-183
information processing 184
macro level existence 181
memory 184
nature of 177-179
nesting 179-180
openness 184
ostensiveness 182
supervenience 182
uncertain boundaries 184
unpatterned connections 184
compliance with laws, theories 200-216
about
compliance, explanations for 207-216
cooperative behaviour 213
data gathering 207
decisions down the line 206-207
experimental law 204
field studies 203-204
forces of irrationality 205-206
legislative impact analysis 200-207
legislative marksmanship 200-202, 217-218
nudge approach 214-215
personal morality 212-213
personality differences 213-214
rational choice 208-210
social factors 210-211
conditional statements 20-22
conflict between rules 385
consequences 20
contemporanea expositio est optima et fortimissa in lega 347, 348
contra proferentem rule 340
correlation method 164-165

D
de similis idem est judicium 87
decision theory 339-340
decretinism 217
deduction chapter 5
applying law 38-43
causal law, ascertaining 49
interpreting law 43-49
literal meaning 46-47
nature 28-29, 35-38
objective rules of interpretation 46, 55
precedent 48-49
preformed policy 47-48
proving facts 49-54
scientific evidence 51-54
strict and complete legalism 55
580 Index

syllogism 35-38, 45-

values, ascertaining 46 49 110
defendant’s fallacy 234 331-
defensive design 332 158-
deference determinism 160 171
diet of worms 338-340
disciplinarianism 230-232
disjointed
incrementalism E
5
effects of laws and meanings direct 5-6
indirect Chapter 16
effects of laws and interpretation of 255 240
laws decretenism effects, continuation 246-250
of effects, function of economics 246-248
liberty symbols effects, operation of 248 248-
adjustment effect derived effect direct 250 240-
effects rule as written rule in operation 246
ulterior effect effects, prediction of 244- 2
options outline 45
streisand effect 245- 2
unintended consequences 46
eiusdem generis elements 240- 2
emotional intelligence (eq) 41
esoteric knowledge 241- 2
evolutive constructionism 43 243-
ex tempore judgments 244
expected value 244 250-
experimental law 253 237-
experimental method 239 236-
expressio unius exclusion alterius est 240 255
extremis malis extrema remedia 250, 254
377 18-19
17
felicific calculus fiat justitia et ruant 276-
caeli forming law, model for 278
336
374
221-
223
204
162-
164
377-
378
144-
145
F
220
 Index 581

267
Chapter 30
 582 Index

interpreting law 449-452

making law 449
model for forming law 451-452
model, applications of 468-469
model, justification of 468
outline 449-452
Step 1 options
causation 454
interpreting law, options for 455-456
making law, options for 454-455
means and ends 453-454
nature of options 453-454
outline 452
Step 2 reasons 456-466
interpreting law, reasons for 460-465
judicial legitimacy 464-465
legislative legitimacy 463-464
making law, reasons for 460
maxims 466
meanings and effects 462-463
metademocracy 465
net benefit 459-460
net benefit 463-465
outline 456-458
policy, judicial attitude to 461-462, 469
precedent 466
secondary sources 466
values 458-459, 469, 470
Step 3 decision 466-468
interpreting law 467-468
making law 467
outline 466
freud, sigmund 411-412
functionalism 278

G
gemeinschaft characteristics 283
generalia specialibus non derogant 378
gesellschaft characteristics 283
goods, lost and abandoned 443-444

H
handsome is as handsome does 13
hard cases make bad law 143, 146
hedonic calculus 220
homo economicus 16, 220
homo sapiens 15
homo sentiens 15
hypothetico-deductive method 160-162
 Index 583

I
implied extension 385,386
implied qualification 385,386
in consimili casu, consimile debet esse redium 80-81
in gremio iudicium 72, 277, 296
in gremio judicis 296
in gremio legis 296
in pari material 80
induction Chapter
6
a dicto simpliciter ad dictum secundum quid 72
ascertaining causal laws 62-63
ascertaining values 59-62
common errors 70-71
common law rules, creating 72
declaratory theory 60-62
deduction 62
in gremio iudicium 72
nature of induction 29-30, 56-
58
negligence, integrating specific rules into 71
overarching principle, gathering disparate rules under 71-72
popular illustrations 57
proving facts 63-70
secundum quid 72
strength of induction 57-58
use of induction 58
inter arma leges sunt silentia 263,267
interest group theory 339
IRAC method for answering problem questions, problems with 443
irrationality Chapter 27
outline 410-411
economic analysis of class actions in court 428-429
economics 422-425
nature of 16-17
marxism 422-425
philosophy 425-427
psychology 411-419
causes of error 414-416
cognitive miseration 415
comment and analysis 417-419
ego boosters 415-416
freud, sigmund 411-412
judicial behaviour 416-417,430
outline 411
political behaviour 417-417
quadrant analysis 412-414
world view 414-415
political behaviour 429
postmodernism 425-427
 584 Index

situational factors 427-428

sociology 419-422
culture 420-421
organisations 421-422
outline 419-420
politics 420
ius gentium 276

J
judicial behaviour 416-417, 430

L
learning curve 234-235
legal method Chapter 28
absence of method 433-437
admissions against interest 434-436
delusions of complexity 436-437, 444
lack of explanation 434
lack of instruction 434
IRAC method for answering problem questions, problems 443
with
MacCrate Report, problems in describing skills 442
nature of method 12, 439-442
adaptability 440
algorithms 440-441
comprehensiveness 441-442
manageability 442
rationality 440
simplicity 440
systematic 440-441
need for method 437-439
explicit knowledge 437-439
implicit knowledge 437-439
performance standards, raising 438
standards, problems with 439
transmission of problems 439
outline 433
legal reasoning, nature of 1, 2-12
actions cause consequences 3-4
application of a legal rule 9
best is best 6
causation 7
changing the world 8
consequential value of actions 4-6
comparison between types 31-33
evaluation 7
intrinsic value of actions 4
litigation 9-11
nature of 1, 2-12
 Index 585

net benefit as measure of best 6

propositions underlying 3-6
structure of a legal rule 8
summary 13, 34
transactions 11-12
using law 8-12
legal tasks 1-2
lexical ambiguity 384-385
literal meaning 46-47
logical reasoning chapter 4
Lord’s Prayer, The 159
lucet ipsa per se 393

M
MacCrate Report, problems in describing skills 442
markets 291-295
marxism 422-425
metademocracy 323, 330-340
metademocracy 465

N
natural law 271-272
necessitas non habet legem 260, 266-267
neminem opportet esse sapientiorem legibus 277
nemo debet esse iudex in propria sua causa 353
net benefit chapter 11
benefits 136
blind justice 146
changeover costs and benefits 136-141
communis error non facit lex 145
components of net benefit 133-134
costs, adjustment 137-139, 145
costs, economic 136-137
costs, predictability 139-140
costs, symbolic 140-141
desperate times call for desperate measures 131
determining net benefit 135
extremis malis extrema remedia 144-145
hard cases make bad law 143, 146
illustration of net benefit 144
measurement, problem of 135
net benefit rule 131-136
operating costs and benefits 142-144
options 131-132
per incuriam 141
restating the net benefit rule 134-135
rule 132-133
use of net benefit 136
net benefit, measurement of chapter 12
 586 Index

alleviating the problem of measurement 151-154

conclusion 154-155
distribution of income 152
gini coefficient 152, 156
gini index 152
gross domestic product 151-151
individual, choosing for 153-154
integrative scales 153
interval scale 148-149
measurement devices, constructing 151-153
methods of measurement 148
nominal scale 148
ordinal scale 148
outline 147-148
popular sayings 150
poverty, measurement of 151
problem of measurement 150-151
ratio scale 149
nominal scale 148
non sub homine, sed sub deo et lege 273-274
noscitur a sociis 346, 376, 377
nudge approach 214-215

O
observing facts chapter 26
observation by a witness 404-405
observation by an institution 405-406
observation by equipment 405
observation by the court 406-408
facts about a witness 407
facts that happen in court 407
judicial notice 408
real evidence 406-407
observation, using it for proving a causal law 404
observation, using it for proving facts 402-404
reliance on observation 402
Occam’s razor 398
open terms 386
ordinal scale 148
organising law, model for Chapter 29
macro analysis 445
micro analysis 445-447, 447-448
advantages 446
conditional statement 447
consequences 447
diagram 447
elements 446-447, 448
outline 445
 Index 587

partial satisfaction per P

incuriam policy 386
administering law 141
basis of policy best Chapter 10
outcome cause 128- 1
cause and effect changing 29 119-
the world choosing an 120
option consequentalism 120
derivatives of policy effect 121
evaluating options guns or 121-122
butter identifying options 119- 1
importance of policy 20 125,
incremental model 128
interpreting law law, as 129
regulatory choice levels of 129 121-
policy 122
location of policy in one statute 125, 126-127
making law 129- 1
market, as regulatory choice 30 124-125,
mixed scanning model model 126
for policy nature of policy 116- 1
opportunity cost outline 17
precedent, basis in policy 123- 1
rational model regulatory 24 125-
choice 128
rules of interpretation, basis in policy 116
scope for policy making uncertainty of 117- 1
cause and effect values post ergo propter 19
postmodernism pragmatism precautionary 124
principle precedent ex tempore judgments 124- 1
justification for precedent benefits of 25 114-
adaptability benefits of continuity 115
preserving policy preserving rules 124
resolving adaptability and continuity 123-129
120- 1
21
13
0
113- 1
14
129
123
114- 1
17
129
123124 122
122 234 425-
427 334-338
232-233
Chapter 23
374
588 Index

362-364, 373
366 366-368
365- 3
66 364-
365
366- 3
69
 Index 589

nature of precedent 359-369

outline 359
overruling precedent 369-372
common law 369-370
interpretation of statutes 370-372
net benefit rule 369-370, 374
precedent embalms a principle 373
ratio decidendi 359-360, 360-362, 372
stare decisis 359-360, 362
stare decisis et non quieta movere 372
terminology 372
presumption of endurance 346-349
presumption of welfare 349-350
pro bono publico 297, 327, 328, 340, 352
pro privato commodo 297, 327, 340, 352
probability Chapter 9
applying probability 96-98
assigning probability 98-101
bayes theorem 106-108
causal law, truth of 100-101
complementarity rule 101
defendant’s fallacy 110
deriving probability 101-109
expected value 108-109
fallacies in probability 109-111
finding facts 91-93
frequency 97-98
function of probability 31, 93-94
happening of an event 98-100
likelihood 97-98
making law 91
measuring probability 95-96
multiplication rule 101-105
numerical formulas 95-96
product rule, see multiplication rule
prosecutor’s fallacy 109-110
sally clark case 110-111
sum rule 105-106
symmetrical evidence 100
truth 97
uncertainty with probability 94-95
uses 90
verbal formulas 95
prosecutor’s fallacy 109-110
proving facts by induction 63-64
character 66
general behaviour 67-70
individual behaviour 65-67
objective probability 68-70
 590 Index

patterns of behaviour 64-65

personality 66
repetition of behaviour 66
subjective probability 67-68
tendency 65-66
pursuit of happiness 289-291, 299

R
ratio scale 149
rationality and irrationality, 17
distinguishing
rationality, nature of 15-16
reconstructionism 332-334
relational ambiguity 385
rule of law 24-25
rules of interpretation Chapter 24
conflict between rules 376, 380
eiusdem generis 377
expressio unius exclusion alterius est 377-378
function of rules 376
generalia specialibus non derogant 378
identifying meanings 376-378
noscitur a sociis 376, 377
outline 375-376
promoting meanings 378-379
status of rules 375-376
statutory indorsement, enactment or supplementation of 375, 379
rules
S
Sally Clark case 110-111
secundum quid 72
similibus ad similia 81
social capability 299
social choice Chapter 20
interpreting law 303
making law 301-302
outline 300-301
rational legal authority 304
social choice for interpreting law Chapter 22
judicial legitimacy 323, 341
legislative legitimacy 322-323, 323-330
agency costs 329-330
foundational propositions 324-327
illustration of legislative legitimacy 329
legislative legitimacy in law 327-329
legislative legitimacy in principle 324-327
mischief rule 327-328, 352
outline 323-324
pro bono publico 327, 328, 340, 352
pro privato commodo 327, 340, 352
 Index 591

statutory requirements for interpreting with policy 328-329 323,

legislative legitimacy reinterpreted contemporanea 341-351 347,
expositio est optima et fortimissa in lega meanings and 348
effects meanings and effects, sources noscitur a sociis 344-345
options outline 345-350
presumption of endurance presumption of welfare 346
reasons based on delegated authority reasons based on 342- 3
legislative legitimacy metademocracy contra 43 341-
proferentem rule decision theory deference 342
disciplinarianism evolutive constructionism interest 346- 3
group theory legislative misbehaviour outline 49 349-
pragmatism reconstructionism remedy 350
verba chartarum fortius accipiuntur contra proferentem 351
nemo debet esse iudex in propria sua causa outline 343- 3
nemo debet esse iudex in propria sua causa social choice 50 323, 330-
for making law Burke’s principle deliberative democracy 340
direct democracy outline 340
representative democracy Arrow’s impossibility theorem 339-340
bounded rationality domination by majority domination 331-332
by oligarchy double entrenchment operation 338-340
oppression of the minority problem of agency problem 336
of aggregation problem of domination problems slavery 339
social democracy summary as conclusion stare decisis et 339- 3
non quieta movere 40 330-
331
334-338
332-334
339
340
353
322-323
353
Chapter 21
319 317, 320
306- 3
07 305-
306
307-316, 319
308-309 309
312-316
316
312-314, 320
307- 3
08 314-
316
311-312
308-311
312- 3
16 308-
316
314-316
316 317-
318
372
 592 Index

structuring legal rules Chapter 3

attainder, acts of 24-25
conditional statements 20-22
consequences 20
elements 18-19
legal rules, relationships between 25-26
macro analysis 25-26
micro analysis 18-25
outline 18
rule of law 24-25
syllogism 22-23
stupid is as stupid does 13
summary of this book Chapter 32
ambiguity analysing 497
ambiguity, analysing 489
applying law to facts 499-500
brick, making without straw 502
causation 493-494
deduction 498
evaluation 494-495
facts, observing 489
forming law 491-499
introduction 486
irrationality 486-487
judicial legitimacy 496
law, macro structure 490-491
law, micro structure 490
legislative legitimacy 496
litigation 500-502
logical reasoning 487-489
Lord’s Prayer, The 159
metademocracy 496
methods of reasoning 487
policy 489
policy 492-497
precedent 498-499
rationality 486-487
rules 498-499
secondary sources 499
social choice for interpreting law 496-497
social choice for making law 495-496
structuring law 490-491, 499
structuring law, benefits 491
tasks with law 489-490
transactions 500-502
using law 499-502
S
syllogis 22-23, 35-38, 45-
m
 Index 593

46
 594 Index

T
The Ten Commandments (movie) 296

U
ultra vires 27
uncertainty of causation, responses to it Chapter 15
defensive design 234
disjointed incrementalism 230-232
expected value 221-223
learning curve 234-235
outline 221
post ergo propter 234
precautionary principle 232-233
review of judicial decisions 229-230
review of legislation 223-229
staged review of legislation 225-227
United Nations Declaration of Human Rights 276
(1948)
using law, model for Chapter 31
applying law to facts 474-476
checking elements against the facts 476-477
conclusion 479-480
conditional statement 480, 484
establishing facts 477-479
establishing facts in litigation 477
establishing facts in transactions 477-479
legal position 471-472
major premise 473-474
minor premise 474-479
model (for using law) 480-484
model for litigation 482
model for transactions 483
model for using law 483-484
structure of the model 480-484
uses of the model 484
outline 471
outline 472-473
rules for applying law to facts 474-478
syllogism 472-480, 481-482
utilitarianism 286-287

V
values Chapter 17
importance of values 258-259
nature of values 256
use of values 257-259
values, choice of Chapter 19
agreement about rights 288-289
choice of values 295
 Index 595

compromise - mixture of shared and diverse 283-

values deduction 295
disagreement about rights distributive justice 273
diversity of values arguments for diversity 289
explanations for diversity observation outline 293-
reason esoteric knowledge functionalism 295
gemeinschaft characteristics 278- 28
gesellschaft characteristics 3
in gremio judicis 279- 28
in gremio judicium 2 282-
in gremio legis 283
individual rights 279- 28
induction 0 278-
innate knowledge 279
ius gentium 280- 28
markets 1 276-
natural law 278
neminem opportet esse sapientiorem legibus 278 283 283 296
non sub homine, sed sub deo et lege outline 277, 296 296
productive efficiency public interest public 287-289 272-
values pursuit of happiness rawls, john reason 273, 295-296
revelation 274-276
the ten commandments (movie) united nations 27
declaration of human rights (1948) unity of 6
values utilitarianism values, classification of 291- 29
absolute values categorical values consequential 5 271-
values deontological values fiat justitia et ruant 272
caeli freedom of speech high noon hypothetical 276 273-274
values inherent values instrumental values inter 270- 27
arma leges sunt silentia 1
292- 29
3 285-
287
285- 28
6 289-291,
299
293- 29
5
27
2
273-
274
29
6
27
6
271- 27
8
286- 28
7 Chapter
18
263-
266
26
0
26
 596 Index

intermediate values 260

intrinsic values 260
means and ends 267
necessitas non habet legem 260,266-267
necessity 260
relative values 263-266
rights, identification of 267-268
teleological values 260-262
terminal values 260
ultimate values 260
verba chartarum fortius accipiuntur contra proferentem 340
voluntarism 159
W
Wertrational 17
Wife of Bath’s Tale 13
Z
zweckrational 17
 LEGAL REASONING
Lawyers perform many tasks. This book focuses on the core tasks with law. The core tasks
are as follows:

♦ Structuring law
♦ Making law
♦ Interpreting law
♦ Using law in litigation and transactions, which involves two major tasks, namely applying law to facts
and proving facts

This book:

♦ examines the concepts of rationality and irrationality

♦ describes the reasoning processes that should underlie the core tasks that lawyers perform. These
reasoning processes should ensure that each task is done effectively and efficiently. The main reasoning
processes are as follows - conditional statement, deduction, induction, abduction, analogy, probability,
policy, analysing ambiguity and observation.
♦ explains how an understanding of the reasoning processes that should be used becomes a basis for legal
method since it is the basis for constructing models for working with law. However, it explains these
only briefly since there is a full discussion of these models in a companion book Legal Method.

Maitland Press

www.legalskills.com
.au

9 78 987 071 09