Unveiling Fairness for the Consumer:The Law, Economics and Justice of Expanded Arbitration

In recent years, the US Supreme Court has rather controversially extended the ambit of the Federal Arbitration Act to extend arbitration’s reach into, inter alia¸ consumer matters, with the consequence that consumers are often (and unbeknownst to them) denied remedies which would otherwise be available. Such denied remedies include recourse to class action proceedings, effective denial of punitive damages, access to discovery and the ability to resolve the matter in a convenient forum.

The court’s extension of arbitration’s ambit is controversial. Attempts to overturn this extension have been made in Congress, but to no avail. In contrast to American law, European consumer law looks at pre-dispute agreements to arbitrate directed at consumers with extreme suspicion, and does so on the grounds of fairness. In contrast, some argue that pre-dispute agreements in consumer (and employment) matters are consumer welfare enhancing: they decrease the costs of doing business, which is then passed on to the consumer. This Article examines these latter claims from both an economic and normative perspective.

The economic analysis of these arguments shows that their assumptions do not hold. Rather than being productive of consumer surplus, the use of arbitration is likely to have the opposite effect. The industries from which the recent Supreme Court cases originated not only do not exhibit the industrial structure assumed by the proponents of expanded arbitration, but are also industries which exhibit features that facilitate consumer welfare reducing collusion.

The normative analysis addresses the fairness concerns. It is explicitly based upon John Rawls’ notion of “justice as fairness,” which can provide a lens to evaluate social institutions. This Rawlsian analysis considers the use of extended arbitration in consumer matters in the light of the earlier economic results. It suggests that the asymmetries present in the contractual allocation of rights serve as prima facie evidence that such arbitration–induced exclusions are prima facie unjust/unfair. However, as asymmetry is only a prima facie test, a generalized criticism of the arbitration exclusions (of the sort found in Congress and underlying the European regime) is overbroad.

Law in Northern Ireland

This is the latest edition of a book which is the standard introductory text for newcomers to the legal system of Northern Ireland. After explaining how law-making has evolved in Northern Ireland, particularly since the partition of Ireland in 1921, the book devotes separate chapters to the current constitutional position of Northern Ireland, to the making of legislation and case law for that jurisdiction, and to the influence of EU and European Convention law. It examines the principles of public law applying in Northern Ireland and outlines the role of some of the public authorities there. It then moves to chapters on criminal law and criminal procedure, followed by chapters on private law and civil procedure. It ends by examining the legal professions, legal education, the legal aid regimes and legal costs. There are also appendices with sample sources of law. Throughout the book, the focus is on conveying in comprehensible terms the essential features of this small, but historically very controversial, legal jurisdiction.

Professional Negligence, Solicitors: Recent Case Law, 2014

In preparation for this talk I have reviewed cases of interest in the High Courts and Courts of Appeal of England and Wales and Northern Ireland from the past two years or so on professional negligence and liability and principally relating to solicitors.

There are six topics of interest: the general duty of care demanded of solicitors in the carrying out of their professional obligations; whether there is a specific duty on a solicitor to warn or advise a client of any implied risk in, say, a commercial transaction; what is the scope of the duty on a solicitor to explain the content of or clauses in a legal document; a recent case of interest applying the White v Jones principle to a disappointed beneficiary seeking to make a claim against a solicitor who negligently prepared a will; the practical, limitation issue of how to pinpoint in a professional negligence claim when the damage was first sustained by the claimant; and finally some case law here and in England and Wales on the (costs) implications for solicitors relating to any failure to adhere to case management protocols or related court directions.

Does Cost-Effectiveness Analysis Have a Role in US Managed Care Drug Formularies? An Empirical Study of Utilization, Costs, Outcomes, and Elasticity of Demand of a Value-Based Formulary

Thesis (Ph.D.)--University of Washington, 2015

The law and economics of good faith in the civil law of contract

Good faith plays a central role in most legal systems, yet appears to be an intractable concept. This article proposes to analyse it economically as the absence of opportunism in circumstances which lend themselves to it. One of the objectives underlying the law of contract on an economic view is to curtail opportunism. In spelling out what this means, the paper proposes a three-step test: bad faith is present where a substantial informational or other asymmetry exists between the parties, which one of them turns into an undue advantage, considered against the gains both parties could normally expect to realise through the contract, and where loss to the disadvantaged party is so serious as to provoke recourse to expensive self-protection, which significantly raises transactions costs in the market. The three-step test is then used to analyse a set of recent decisions in international commercial transactions and three concepts derived from good faith: fraud, warranty for latent defects and lesion.

The Law and Economics of the Civil Law of Mandate

Présentation à la Annual Law & Economics Conference 2007, Université de Bologne.

Patent pools and competition law : an examination of the enforcement strategies of competition authorities

"Mémoire présenté à la Faculté des études supérieures en vue de l'obtention du grade de maîtrise en droit, option recherche"

The costs of alcohol, illegal drugs, and tobacco in Canada, 2002.

Objective: The aim of this study was to estimate costs attributable to substance use and misuse in Canada in 2002. Method: Based on information about prevalence of exposure and risk relations for more than 80 disease categories, deaths, years of life lost, and hospitalizations attributable to substance use and misuse were estimated. In addition, substance-attributable fractions for criminal justice expenditures were derived. Indirect costs were estimated using a modified human capital approach. Results: Costs of substance use and misuse totaled almost Can. $40 billion in 2002. The total cost per capita for substance use and misuse was about Can. $1,267: Can. $463 for alcohol, Can. $262 for illegal drugs, and Can. $541 for tobacco. Legal substances accounted for the vast majority of these costs (tobacco: almost 43% of total costs; alcohol: 37%). Indirect costs or productivity losses were the largest cost category (61%), followed by health care (22%) and law enforcement costs (14%). More than 40,000 people died in Canada in 2002 because of substance use and misuse: 37,209 deaths were attributable to tobacco, 4,258 were attributable to alcohol, and 1,695 were attributable to illegal drugs. A total of about 3.8 million hospital days were attributable to substance use and misuse, again mainly to tobacco. Conclusions: Substance use and misuse imposes a considerable economic toll on Canadian society and requires more preventive efforts.

The competitive dialogue procedure: Advantages, disadvantages, and its implementation into English and Dutch law

Competitive Dialogue (CD) is a new contract award procedure of the European Community (EC). It is set out in Article 29 of the 'Public Sector Directive' 2004/18/EC. Over the last decades, projects were becoming more and more complex, and the existing EC procedures were no longer suitable to procure those projects. The call for a new procedure resulted in CD. This paper describes how the Directive has been implemented into the laws of two member states: the UK and the Netherlands. In order to implement the Directive, both lawmakers have set up a new and distinct piece of legislation. In each case, large parts of the Directive’s content have been repeated ‘word for word’; only minor parts have been reworded and/or restructured. In the next part of the paper, the CD procedure is examined in different respects. First, an overview is given on the different EC contract award procedures (open, restricted, negotiated, CD) and awarding methods (lowest price and Most Economically Advantageous Tender, MEAT). Second, the applicability of CD is described: Among other limitations, CD can only be applied to public contracts for works, supplies, and services, and this scope of application is further restricted by the exclusion of certain contract types. One such exclusion concerns services concessions. This means that PPP contracts which are set up as services concessions cannot be awarded by CD. The last two parts of the paper pertain to the main features of the CD procedure – from ‘contract notice’ to ‘contract award’ – and the advantages and disadvantages of the procedure. One advantage is that the dialogue allows the complexity of the project to be disentangled and clarified. Other advantages are the stimulation of innovation and creativity. These advantages are set against the procedure’s disadvantages, which include high transaction costs and a perceived hindrance of innovation (due to an ambiguity between transparency and fair competition). It is concluded that all advantages and disadvantages are related to one of three elements: communication, competition, and/or structure of the procedure. Further research is needed to find out how these elements are related.

Regulating vertical relations in the presence of retailer differentiation costs

We discuss public policy towards vertical relations, comparing different types of contracts between a manufacturer and a maximum of two retailers. Together with (potential) price competition between the retailers, we study the role of a (sunk) differentiation cost paid by them in order to relax competition in the retail market and broaden the market potential of the distributed product. This non-price competition element in the downstream market is responsible for our conclusion that, unlike in standard policy guidelines and previous theoretical analysis, restrictions in intra-brand competition may deserve a permissive treatment even in the absence of inter-brand competition, if retailer differentiation is costly.

Information asymmetry and transaction costs in a cross-cultural business transaction

The intent of this paper is to provide a practitioners insight into the present and foreseeable future of problem of transaction cost economics related to culture and business etiquette that may increase the of complexity of business communication. We will also explore whether it impacts participant's mindsets regarding opportunistic or passive aggressive behavior. We will study the role of culture, ethics, information asymmetry, and legal systems regarding their importance towards the business contracts and lack of knowledge in local environments. We will make connections to contract theory strategies and objectives and recommend business practices. Furthermore, economic theory explores the role of the impossibility of the perfect contract. Historical and present day operational factors are examined for the determination of forward-looking contract law indications worldwide. This paper is intended provide a practitioners view with a global perspective of a multinational, mid-sized and small corporations giving consideration in a non-partisan and non-nationalistic view, yet examines the individual characteristics of the operational necessities and obligations of any corporation. The study will be general, yet cite specific articles to each argument and give adequate consideration to the intricacies of the global asymmetry of information. This paper defends that corporations of any kind and size should be aware of the risk of international business etiquette and cultural barriers that might jeopardize the savings you could obtain from engaging international suppliers.

Quantifying the Economics of Medical Malpractice - A View from a Civil Law Perspective

Life is full of uncertainties. Legal rules should have a clear intention, motivation and purpose in order to diminish daily uncertainties. However, practice shows that their consequences are complex and hard to predict. For instance, tort law has the general objectives of deterring future negligent behavior and compensating the victims of someone else's negligence. Achieving these goals are particularly difficult in medical malpractice cases. To start with, when patients search for medical care they are typically sick in the first place. In case harm materializes during the treatment, it might be very hard to assess if it was due to substandard medical care or to the patient's poor health conditions. Moreover, the practice of medicine has a positive externality on the society, meaning that the design of legal rules is crucial: for instance, it should not result in physicians avoiding practicing their activity just because they are afraid of being sued even when they acted according to the standard level of care. The empirical literature on medical malpractice has been developing substantially in the past two decades, with the American case being the most studied one. Evidence from civil law tradition countries is more difficult to find. The aim of this thesis is to contribute to the empirical literature on medical malpractice, using two civil law countries as a case-study: Spain and Italy. The goal of this thesis is to investigate, in the first place, some of the consequences of having two separate sub-systems (administrative and civil) coexisting within the same legal system, which is common in civil law tradition countries with a public national health system (such as Spain, France and Portugal). When this holds, different procedures might apply depending on the type of hospital where the injury took place (essentially whether it is a public hospital or a private hospital). Therefore, a patient injured in a public hospital should file a claim in administrative courts while a patient suffering an identical medical accident should file a claim in civil courts. A natural question that the reader might pose is why should both administrative and civil courts decide medical malpractice cases? Moreover, can this specialization of courts influence how judges decide medical malpractice cases? In the past few years, there was a general concern with patient safety, which is currently on the agenda of several national governments. Some initiatives have been taken at the international level, with the aim of preventing harm to patients during treatment and care. A negligently injured patient might present a claim against the health care provider with the aim of being compensated for the economic loss and for pain and suffering. In several European countries, health care is mainly provided by a public national health system, which means that if a patient harmed in a public hospital succeeds in a claim against the hospital, public expenditures increase because the State takes part in the litigation process. This poses a problem in a context of increasing national health expenditures and public debt. In Italy, with the aim of increasing patient safety, some regions implemented a monitoring system on medical malpractice claims. However, if properly implemented, this reform shall also allow for a reduction in medical malpractice insurance costs. This thesis is organized as follows. Chapter 1 provides a review of the empirical literature on medical malpractice, where studies on outcomes and merit of claims, costs and defensive medicine are presented. Chapter 2 presents an empirical analysis of medical malpractice claims arriving to the Spanish Supreme Court. The focus is on reversal rates for civil and administrative decisions. Administrative decisions appealed by the plaintiff have the highest reversal rates. The results show a bias in lower administrative courts, which tend to focus on the State side. We provide a detailed explanation for these results, which can rely on the organization of administrative judges career. Chapter 3 assesses predictors of compensation in medical malpractice cases appealed to the Spanish Supreme Court and investigates the amount of damages attributed to patients. The results show horizontal equity between administrative and civil decisions (controlling for observable case characteristics) and vertical inequity (patients suffering more severe injuries tend to receive higher payouts). In order to execute these analyses, a database of medical malpractice decisions appealed to the Administrative and Civil Chambers of the Spanish Supreme Court from 2006 until 2009 (designated by the Spanish Supreme Court Medical Malpractice Dataset (SSCMMD)) has been created. A description of how the SSCMMD was built and of the Spanish legal system is presented as well. Chapter 4 includes an empirical investigation of the effect of a monitoring system for medical malpractice claims on insurance premiums. In Italy, some regions adopted this policy in different years, while others did not. The study uses data on insurance premiums from Italian public hospitals for the years 2001-2008. This is a significant difference as most of the studies use the insurance company as unit of analysis. Although insurance premiums have risen from 2001 to 2008, the increase was lower for regions adopting a monitoring system for medical claims. Possible implications of this system are also provided. Finally, Chapter 5 discusses the main findings, describes possible future research and concludes.

A Law and Economics Analysis of Lobbying Regulation Towards an optimal structure through the Cost Indicator Index

This research primarily represents a contribution to the lobbying regulation research arena. It introduces an index which for the first time attempts to measure the direct compliance costs of lobbying regulation. The Cost Indicator Index (CII) offers a brand new platform for qualitative and quantitative assessment of adopted lobbying laws and proposals of those laws, both in the comparative and the sui generis dimension. The CII is not just the only new tool introduced in the last decade, but it is the only tool available for comparative assessments of the costs of lobbying regulations. Beside the qualitative contribution, the research introduces an additional theoretical framework for complementary qualitative analysis of the lobbying laws. The Ninefold theory allows a more structured assessment and classification of lobbying regulations, both by indication of benefits and costs. Lastly, this research introduces the Cost-Benefit Labels (CBL). These labels might improve an ex-ante lobbying regulation impact assessment procedure, primarily in the sui generis perspective. In its final part, the research focuses on four South East European countries (Slovenia, Serbia, Montenegro and Macedonia), and for the first time brings them into the discussion and calculates their CPI and CII scores. The special focus of the application was on Serbia, whose proposal on the Law on Lobbying has been extensively analysed in qualitative and quantitative terms, taking into consideration specific political and economic circumstances of the country. Although the obtained results are of an indicative nature, the CII will probably find its place within the academic and policymaking arena, and will hopefully contribute to a better understanding of lobbying regulations worldwide.

The Influence of Direct Democracy on Agency Costs: Lessons from Corporate Governance

This dissertation seeks to improve the usage of direct democracy in order to minimize agency cost. It first explains why insights from corporate governance can help to improve constitutional law and then identifies relevant insights from corporate governance that can make direct democracy more efficient. To accomplish this, the dissertation examines a number of questions. What are the key similarities in corporate and constitutional law? Do these similarities create agency problems that are similar enough for a comparative analysis to yield valuable insights? Once the utility of corporate governance insights is established, the dissertation answers two questions. Are initiatives necessary to minimize agency cost if referendums are already provided for? And, must the results of direct democracy be binding in order for agency cost to be minimized?