The Influence of the Economy

That economic factors have affected the law is more or less obvious. This group will examine the ways in which they have done so. These factors may be short-term or long-term; the latter might be expected to bring about structural shifts, the former perhaps not.

The types of factor identified preliminarily include the growth of insurance, especially liability insurance; the rise of corporations and other defendants sufficiently large to be able to absorb losses and spread them across a field of activity; shifts in the nature of capital markets conducing to this; and changes in corporate form.

Equally relevant is the economics of the legal process, notably such things as the use of ex gratia payments and out of court settlements as well as the obvious features of the cost of bringing an action and the availability of legal aid.

Economic factors might also impinge upon the perceived function of tort law in different areas, particularly in explaining what appears to have been a swing from analysis in terms of the defendant’s wrong to analysis focused on the injury suffered by the victim.

The group should also take account of the development of an explicit law-and-economics theory, to the extent that it affected the development of the law-in-practice, though the primary consideration of this would fall to the Legal and Social Philosophy Group.

Outcome

The dynamics of different legal actors provides some kind of insight into the complexity of relationships between internal legal forces and the external forces for change. It is probably best to consider the economy as a background condition which will often generate problems to be resolved by the law. Social situations then arise from the economic developments, but they may have a life of their own and a range of ethical and non-economic concerns. Many of these concerns are demonstrated within regulatory law, rather than in private law. If such groups have standing in the judicial or legislative process, they can be influential in shaping the way law responds to economic change. The diversity of approaches in Europe suggests that the particular way in which a legal system responds to economic change is determined as much by the social system, as by the economic system itself. The position of the legal community as a sub-set of the social system mirrors that latter point. The different parts of the legal community have their own dynamics. But the most reflective parts (doctrinal writing and lobby groups) will have available ideas and solutions (often based on comparative law) upon which the more short-term interests of those who plead in court or who advise legislators can draw.