LEGAL REASONING

Legal Reasoning

Lawyers perform many tasks. This book focuses on the core tasks with law. The core tasks
are as follows:
U
U
U
U

This book:
U
U

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.

Legal Reasoning

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

Maitland Press

www.legalskills.com.au

Christopher Enright

making law simple

Christopher Enright

Legal Reasoning
!"#$%&'(")#*+,#$-"&*

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
Warabrook
NSW 2304
Email: info@legalskills.com.au
Tel: 612-67715167
Web: www.legalskills.com.au
Copyright
This publication is copyright
2011 Maitland Press
ISBN 9780987071361 (ebook: pdf)
National Library of Australia Cataloguing in Publication Entry
Author: Enright, Christopher, 1947Title: 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
authors 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 authors 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.

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 DAgostino, 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 DAgostinos 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 ODonohue 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..................................................................................................
Labels ...................................................................................................
Table of Legislation ..........................................................................
Table of Cases....................................................................................

v
xiv
xviii
xxi

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

1
1
1
2
12
13
13

Part 2 Rationality
2.1: Introduction
Chapter 2 Rationality ........................................................................
Introduction ............................................................................................
Thinking Rationally ................................................................................
Thinking Irrationally...............................................................................
Commentary ...........................................................................................

14
14
15
15
17

2.2: Structuring Law

Chapter 3 Structuring Legal Rules ...............................................
Introduction ............................................................................................
Structure: Legal Rules ............................................................................
Structure: Relationships Between Legal Rules ......................................
Commentary ...........................................................................................

18
18
18
25
26

2.3: Logical Reasoning

Chapter 4 Logical Reasoning .........................................................
Introduction ............................................................................................
Deduction................................................................................................
Induction .................................................................................................
Abduction ...............................................................................................
Analogy ..................................................................................................
Probability ..............................................................................................
Comparison.............................................................................................

28
28
28
29
30
30
31
31

Chapter 5 Deduction .........................................................................

Introduction ............................................................................................
Nature .....................................................................................................
Applying Law .........................................................................................

35
35
35
38

vii

viii

Contents

Interpreting Law .....................................................................................

Ascertaining Values................................................................................
Ascertaining Causal Laws ......................................................................
Proving Facts ..........................................................................................
Commentary ...........................................................................................

43
49
49
49
54

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 ...........................................................................................

56
56
56
59
62
63
64
65
67
71
71

Chapter 7 Abduction.........................................................................
Introduction ............................................................................................
Nature .....................................................................................................
Uses ........................................................................................................
Commentary ...........................................................................................

73
73
73
74
76

Chapter 8 Analogy.............................................................................
Introduction ............................................................................................
Nature .....................................................................................................
Making Common Law............................................................................
Commentary ...........................................................................................

78
78
78
80
86

Chapter 9 Probability ........................................................................

Introduction ............................................................................................
Measuring Probability ............................................................................
Applying Probability ..............................................................................
Assigning Probability .............................................................................
Deriving Probability ...............................................................................
Fallacies in Probability ...........................................................................
Commentary ...........................................................................................

90
90
95
96
98
101
109
111

2.4: Policy
2.4.1 Introduction

Chapter 10 Policy...............................................................................
Introduction ............................................................................................
Levels of Policy ......................................................................................
Basis of Policy ........................................................................................
Nature of Policy......................................................................................

113
113
117
119
120

Contents
Model for Policy .....................................................................................
Derivatives of Policy ..............................................................................
Commentary ...........................................................................................

ix
123
129
129

2.4.2 Net Benefit

Chapter 11 Nature of Net Benefit ..................................................

Introduction ............................................................................................
Net Benefit Rule .....................................................................................
Changeover Costs and Benefits ..............................................................
Operating Costs and Benefits .................................................................
Illustration...............................................................................................
Commentary ...........................................................................................

131
131
131
136
142
144
144

Chapter 12 Measurement of Net Benefit .....................................

Introduction ............................................................................................
Methods of Measurement .......................................................................
Problems of Measurement ......................................................................
Attempts to Alleviate Problems..............................................................
Conclusion ..............................................................................................
Commentary ...........................................................................................

147
147
148
150
151
154
155

2.4.3 Components of Policy: Cause and Effects

Chapter 13 Cause ..............................................................................

Introduction ............................................................................................
Determinism ...........................................................................................
Science ...................................................................................................
Nature of Causation ................................................................................
Commentary ...........................................................................................

157
157
158
160
166
171

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 ...........................................................................................

174
175
174
177
177
188
191
192
194
197
200
216

Chapter 15 Cause: Responding to Uncertainty.........................

Introduction ............................................................................................
Expected Value.......................................................................................
Review of Legislation.............................................................................

221
221
221
223

Contents

Review of Judicial Decisions .................................................................

Disjointed Incrementalism......................................................................
Precautionary Principle...........................................................................
Defensive Design....................................................................................
Commentary ...........................................................................................

229
230
232
234
234

Chapter 16 Effects .............................................................................

Introduction ............................................................................................
Continuation of Effects...........................................................................
Operation of Effects................................................................................
Function of Effects .................................................................................
Prediction of Effects ...............................................................................
Commentary ...........................................................................................

236
236
240
240
246
250
253

2.4.4 Components of Policy: Values

Chapter 17 Values .............................................................................

Introduction ............................................................................................
Nature of Values .....................................................................................
Use of Values..........................................................................................
Outline ...................................................................................................
Commentary ...........................................................................................

256
256
256
257
259
259

Chapter 18 Classification of Values .............................................

Introduction ............................................................................................
Deontological and Teleological Values..................................................
Absolute and Relative Values.................................................................
Commentary ...........................................................................................

260
260
260
263
266

Chapter 19 Choice of Values ..........................................................

Introduction ............................................................................................
Unity of Values.......................................................................................
Diversity of Values .................................................................................
Compromise View ..................................................................................
Choice of Values ....................................................................................
Commentary ...........................................................................................

270
270
271
278
283
295
295

2.4.5 Social Choice

Chapter 20 Social Choice ................................................................

Introduction ............................................................................................
Making Law............................................................................................
Interpreting Law .....................................................................................
Commentary ...........................................................................................

300
300
301
303
304

Chapter 21 Social Choice: Making Law.......................................

Introduction ............................................................................................
Direct Democracy...................................................................................
Representative Democracy .....................................................................

305
305
306
307

Contents

xi

Deliberative Democracy .........................................................................

Social Democracy...................................................................................
Conclusion ..............................................................................................
Commentary ...........................................................................................

317
317
317
319

Chapter 22 Social Choice: Interpreting Law ..............................

Introduction ............................................................................................
1. Legislative Legitimacy .......................................................................
2. Metademocracy ..................................................................................
Deference................................................................................................
Reconstructionism ..................................................................................
Pragmatism .............................................................................................
Disciplinarianism....................................................................................
3. Judicial Legitimacy.............................................................................
4. Legislative Legitimacy Reinterpreted ................................................
Commentary ...........................................................................................

322
322
323
330
331
332
334
338
341
341
351

2.4.6 Derivatives of Policy

Chapter 23 Precedent.......................................................................
Introduction ............................................................................................
1. Nature of Precedent ............................................................................
Preserving Rules .....................................................................................
Preserving Policy ....................................................................................
Preserving Adaptability and Continuity .................................................
2. Overruling Precedent ..........................................................................
Commentary ...........................................................................................

359
359
359
364
365
366
369
372

Chapter 24 Rules ...............................................................................

Introduction ............................................................................................
Identifying Meanings..............................................................................
Promoting Meanings...............................................................................
Commentary ...........................................................................................

375
375
376
378
379

2.5: Analysing Ambiguity

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 ...........................................................................................

381
381
382
382
384
387
390
391
392
392
396
397

xii

Contents

2.6: Observing Facts

Chapter 26 Observing Facts ...........................................................
Introduction ............................................................................................
Observation by a Witness .......................................................................
Observation by Equipment .....................................................................
Observation by an Institution .................................................................
Observation by the Court........................................................................
Commentary ...........................................................................................

402
402
404
405
405
406
408

Part 3 Irrationality
Chapter 27 Irrationality.....................................................................
Introduction ............................................................................................
Psychology..............................................................................................
Sociology ................................................................................................
Economics ..............................................................................................
Philosophy ..............................................................................................
Situational Factors ..................................................................................
Commentary ...........................................................................................

410
410
411
419
422
425
427
428

Part 4 Method
4.1: Introduction
Chapter 28 Legal Method ................................................................
Introduction ............................................................................................
Absence of Method.................................................................................
Need for Method.....................................................................................
Nature of Method....................................................................................
Commentary ...........................................................................................

433
433
433
437
439
442

4.2: Organising Law

Chapter 29 Model for Organising Law .........................................
Introduction ............................................................................................
Macro Analysis.......................................................................................
Micro Analysis .......................................................................................
Commentary ...........................................................................................

445
445
445
445
447

4.3: Forming Law

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 ...........................................................................................

449
449
452
456
466
468
469
469

Contents
4.4: Using Law
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 ...........................................................................................

xiii

471
471
471
472
473
474
479
480
480
484
484

Part 5 Summary
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 ...........................................................................................

486
486
486
487
487
489
489
489
489
490
491
499
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 of n
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 1n.
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 plaintiffs
and the defendants 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 0n cause Effects 0n, and Evidence 1n proves Facts 1n. 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 1n. Lists
such as these are often represented in a table. For example, Meanings 1n can be represented
in a table in the following way:
Meanings
Meaning 1
Meaning 2
Meaning n
Figure 1 Meanings

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(A B) = probability that event A or event B occurs (A union B)
P(A B) = 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
DPP
FCT
GMLAS
NSW
VVA

Adelaide Steamship Co
Director of Public Prosecutions
Federal Commissioner of Taxation
General Mutual Life Assurance Society
New South Wales
Vietnam Veterans 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

xxi

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 ODea [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
McCarry 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 OBrian [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
OBrien v Gillies (1990) 69 NTR 1 ................................................................................ 350
Oceanic Sunline Shipping v Fay (1988) 165 CLR 197 .................................................... 81
OConnell v Reg (1844) 11 Cl & Fin 155....................................................................... 145
OReilly, 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.
3.

Wagon Mound (No 1)

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.

Somersets 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, The6
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.1

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

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 reason2

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.
3.

William Shakespeare Hamlet III.i.159

Aristotle Politics Book 1

Chapter 1 Outline

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 Queens 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)

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 actions intrinsic value is its value as it stands alone,
regardless of what it leads to. An actions 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 Herods 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

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.7 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.

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 societys 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 moneys worth, the analysis here is allinclusive. 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

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.8 (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.9 (iii) It is necessary to understand how to take into account the uncertainty
involved in predicting causation.10
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.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
of incommensurability.12
8.
9.
10.
11.
12.

Chapter 16 Effects
Chapter 13-15
Chapter 13-15
Chapters 17-22
Chapter 12 Measurement of Net Benefit

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
any legal rule can be collectively described as Elements 1!n.13 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 1n. 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.
13.
The letter n is used in its standard mathematical designation to refer to the last item
on the list.

Chapter 1 Outline

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.14
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.15 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
Major Premise
Minor Premise
Conclusion

Relationships
Facts that fall within the categories designated by Elements 1n cause
Consequence X.
Facts 1n in this case fall within the categories designated by
Elements 1n.
Facts 1n 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 1n, 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 1n and Consequences wrapped in a conditional statement. When facts in a
case satisfy Elements 1n, the cause of action applies to those facts. The facts to which
Elements 1n apply are, as already stated, designated as Facts 1n.
14.
MacCormick (1978) pp 19-32, citing Daniels v White [1938] 4 All ER 258 as an
illustration.
15.
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 1n 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 1n is the
evidence that might prove Facts 1n.
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.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
outcome.17
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,
16.
17.

See Chapter 10 Policy

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.18
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.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
companion volume to this text, Legal Method.20
18.
19.
20.

Chapter 31 Model for Using Law

Chapter 27 Irrationality
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 Chaucers The Wife of Baths 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.1

Introduction

The heart has its reasons that reason knows nothing of.2

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.3 Homo sapiens, the thinking human, is distinguished from other animals in
their ability to behave rationally. Therefore in public life, including fields such as law4
and law reform,5 humans aspire to rational decision-making. Consequently, society
will judge decisions of legislatures and courts according to how rational they are.6
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.7 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.8
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).9
1.
2.
3.
4.
5.
6.
7.
8.
9.

Fleming (1977) p v
Blaise Pascal Pensees (1670) iv 277
See, for example, Bromberger (1986) and Suchman (1997).
See Lloyd (1964), Bray (1979) and Parker (1993).
See Sawer (1970 and Woodman (1975).
See Suchman (1997), Rubin (1991 and Schaffer (2001).
Mobasa v Nikic (1987) 47 NTR 48, 50
Dornan v Riordan (1990) 95 ALR 451, 457
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.10
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 ones 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.11

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

difficult distinction between rationality and irrationality.12 Rational decision-making is
detached and intellectual. Irrational decision making, by contrast, is personal and
based on feelings.13 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,14
reason and 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.15 However, decision
makers who act rationally rather than irrationally still have emotions. They differ from
10.
Chapter 28 Legal Method
11.
Joseph Heller Catch-22 (1961) Chapter 5
12.
See McCrone (1993).
13.
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.
14.
Naffire, Wundersitz and Gale (1991)
15.
Commentary 2.1.

16

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.16
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
to produce and purchase goods.17 Contrasted with behaviourism is Sigmund Freuds
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 Austens 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.18 It
is 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.19

Thinking Irrationally
The experience of the irrationality of the world has been the driving force of all religious
revolution.20

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
decision-making to be irrational.21 These are many and varied and include factors that
are personal, political, ideological, social and cultural.22 To illustrate this, scholars
adopting a socio-economic approach recognise that individual choices are shaped not
only rationally by calculation of advantage23 but also irrationally by other factors
such as emotions [and] social bonds.24
Various explanations for irrationality are canvassed in later discussion,25 but one
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
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.

Goleman (1996). Commentary 2.2.

See Bensusan-Butt (1977).
Jane Austen Emma Chapter 13
Mary Wollstonecraft A Vindication of the Rights of Woman (1792) Chapter 3
Max Weber
Chapter 27 Irrationality
Fogg (1992) and Easterbrook (1994)
Galanter (1997) p 386, citing Ashford (1997)
Galanter (1997) p 386, citing Ashford (1997)
Chapter 27 Irrationality

Chapter 2 Rationality

17

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
processes.26
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
interest groups to whom a government is beholden)27 and ideology (an a priori
commitment to ways of thinking and acting) overwhelm and displace scientific
reasoning.28

Commentary
Commentary 2.1 Footnote 15
This distinction between rational and irrational appears in Max Webers 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 persons 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.
27.
28.

Simeon (1976) p 566

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

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.1
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.2
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
1.
2.

Commentary 3.1.
Commentary 3.2.

18

Chapter 3 Structuring Legal Rules

19

fact3 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 1n.
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 1n correspond with Elements 1
n. This means that we can describe the application of facts in a collective way by
saying that Elements 1n apply to Facts 1n, or that Facts 1n satisfy Elements 1n.
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.

20

Chapter 3 Structuring Legal Rules

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 1n 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.4 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 1n are satisfied
by the right facts, Consequences apply. On our labelling system the right facts for
convenience are labelled Facts 1n. Consequently the conditional statement can be
framed in this way: When Elements 1n are satisfied by Facts 1n, Consequences
apply.
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.5 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
4.
5.

Twining and Miers (1999) pp 131-134

Commentary 3.4.

Chapter 3 Structuring Legal Rules

21

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.6
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.7 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.8
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
6.
Commentary 3.5.
7.
While most legal rules contain both elements and consequences there is an exception
this is discussed below.
8.
Chapter 5 Deduction

22

Chapter 3 Structuring Legal Rules

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.9
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 readers understanding of
conditional statements.10
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
Minor Premise
Consequences

If a person does X, Y will happen

A person does X
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 1n 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
9.
10.

Commentary 3.6.
Chapter 31 Model for Using Law

Chapter 3 Structuring Legal Rules

23

circumstances the syllogism takes the following form, which features the conditional
statement constituted by the rule as the major premise:
Major Premise
Minor Premise
Consequences

If facts fall within the categories designated by Elements 1n they cause

Consequences.
The material facts in this case, Facts 1n, fall within the categories
designated by Elements 1n.11
Therefore Facts 1n 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
form:
Elements
Element 1
Element 2
Element n
!
Consequences
Consequence 1
Consequence 2
Consequence n
Figure 3.3 Legal Rule as a Conditional Statement

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 1n.
(2)
Consequences. The bottom part of the diagram lists the consequences provided
by the legal rule, Consequences 1n.
(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 1n cause Consequences can also be expressed in the
form If Elements 1n 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.

24

Chapter 3 Structuring Legal Rules

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
general or categorical terms.12 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.14
Latter Day Illustrations
There have been several latter day uses or would-be uses of attainder. Some
illustrations are as follows:
12.
13.
14.

Stark (2004)
Commentary 3.8.
Commentary 3.9.

Chapter 3 Structuring Legal Rules

25

(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.15

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.16 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
15.
16.

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

Commentary 3.10.

26

Chapter 3 Structuring Legal Rules

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.

Chapter 3 Structuring Legal Rules

27

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 1n 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

Sir, I have found you an argument; but I am not obliged to find you an understanding.2

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.
2.

Edmund Burke Reflections on the Revolution in France (1790)

Dr Samuel Johnson

28

Chapter 4 Logical Reasoning

29

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 hypotheticodeductive 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

If the world were a logical place, men would ride side saddle.3

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
Conclusion

In all observed instances A causes B.

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)

30

Chapter 4 Logical Reasoning

(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
Explanation
Strength of Explanation
Conclusion

B has occurred
There is a rule, Rule R, that says A causes B.
No other explanation explains B as well as Rule R.
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:

Chapter 4 Logical Reasoning

Premise 1
Premise 2
Conclusion

31

Rule R says: X has attribute A.

X is similar to Y
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

32

Chapter 4 Logical Reasoning

(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
Conclusion

In all observed instances A causes B.

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.

Chapter 4 Logical Reasoning

33

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
Explanation
Strength of Explanation
Conclusion

B has occurred
A causes B
No other explanation explains B as well as Rule R that
says A causes B.
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
Premise 2
Conclusion

Rule R says: X has attribute A.

X is similar to Y
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.

34

Chapter 4 Logical Reasoning

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
Form of Reasoning
Deduction
Induction
Abduction
Analogy

A causes B
Effect on Rule R
Deduction illustrates the operation of Rule R.
(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 establishes the existence of Rule R.
Abduction shows some probability that Rule R is correct.
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.1

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.2
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.3

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,
1.
2.
3.

William Shakespeare Hamlet v I 4 166

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

35

36

Chapter 5 Deduction

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:
4.

Commentary 5.2.

Chapter 5 Deduction

37

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
5.

Commentary 5.3.

38

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 1n.
(2) Facts. Facts and the facts that fit within those elements are labelled Facts 1n.
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.

Chapter 5 Deduction
Components
Major Premise
Minor Premise
Conclusion

39

Relationships
Facts that fall within the categories designated by Elements 1n cause
Consequences.
The material facts in this case, Facts 1n, fall within the categories
designated by Elements 1n.
Facts 1n 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.7 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
1n, fall within the categories designated by Elements 1n. In the diagram, the minor
premise is represented by the horizontal arrow at the head of Column 2. This links
Column 1 (Elements 1n) and Column 3 (Facts 1n). 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 1n in Column 3 fall within the categories delineated by Elements 1n in
Column 1 and thus satisfy Elements 1n.
Column 2: Conclusion
Column 3 displays the conclusion. Since the rule applies to Facts 1n the
Consequences designated by the rule apply to those facts. Column 3 lists Facts 1n.
Beneath Facts 1n is located an arrow leading to the row containing Consequences.
This is how the diagram portrays the conclusion to the syllogism, namely: Facts 1n
cause Consequences.
7.

Chapter 31 Model for Using Law

40

Chapter 5 Deduction

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 1n cause Consequences. This, as previous discussion showed, comprises a
conditional statement, which constitutes the standard structure for a legal rule.8
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 1n and the
facts of a case (meaning the material facts). It takes this form: The facts of this case,
Facts 1n, fall within the categories designated by Elements 1n.
Now for this premise to be true, two requirements must be satisfied.
First, it is implicit in this statement that Facts 1n 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.9 In a transaction, however, processes create the relevant facts.10
Second, as the premise specifically requires, Facts 1n must fit or fall within the
categories designated by Elements 1n. 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
8.
9.
10.

Commentary 5.5.
Commentary 5.6
Chapter 31 Model for Using Law

Chapter 5 Deduction

41

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.11 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 1n 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
Element 2 Possession
Element 3 Interference
Element 4 Intention
Element 5 Permission
Element 6 Defences

There is land.
The plaintiff possesses the land.12
The defendant interferes with the land.
The defendant interferes with the land intentionally.13
The defendant interferes with the land without the permission
of the plaintiff.
There is no defence available to the defendant.

!
Consequences
Consequence 1
Consequence 2

Plaintiff can obtain damages against the defendant.

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

11.
Chapters 30 Model for Forming Law
12.
Strictly this component is that the plaintiff has a right to possession but it makes the
illustration simpler to refer just to actual possession.
13.
In Australian law trespass can be committed negligently as well as intentionally. For
the sake of simplicity we ignore this extension of the rule.

42

Chapter 5 Deduction

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 1n 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 1n fall within the categories designated by Elements 1n. 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
Fact 1
There is a field called Whiteacre.

! Law: Trespass to Land

Element 1 Land
Element 1 is satisfied because a field such as
Whiteacre is land.

Chapter 5 Deduction
Fact 2
Jill owns and uses Whiteacre.

43

Element 2 Possession
Element 2 is satisfied because Jill possesses
land when she owns and uses it.

Fact 3
Element 3 Interference
Jacks walks onto the field and picks an
Element 3 is satisfied because walking onto
apple from the apple tree.
land constitutes interference.
Fact 4
Element 4 Intention
Shortly before doing walking onto the
Elements 4 appears to be satisfied because
field and picking the apple from the
this pronouncement of Jacks strongly
apple tree Jack had said to a neighbour;
suggests that the interference with Jills land
I am going to fix Jill and show her how
was intentional.
mean I can be.
Fact 5
Element 5 Permission
Jill has not said or done anything to
Element 5 is satisfied because Jill has not
indicate that Jack could walk on her
given Jack permission to walk onto her land.
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 1n cause Consequences and Facts 1n fall into these
categories, then the conclusion is that Facts 1n 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.

44

Chapter 5 Deduction

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.14 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.15 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.16 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
interpretation.17
How do courts find this one and only correct meaning of the ambiguous provision?
They engage in logical reasoning18 because interpreting law is a process of strict
logic and high technique,19 based on deduction.20 It was with this in mind that Sir
Owen Dixon urged judges to make close adherence to legal reasoning because there
is no room for doubt or dissent.21
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
applying rules, not a matter of judicial choice.22
14.
Chapter 10 Policy
15.
Kirby (2003) in Sheard (2003) p 44 and Duncanson (1987-89)
16.
To illustrate this approach, Bennion (1980B) entitles his text The Science of
Interpretation.
17.
Commentary 5.7.
18.
Mason (2003) in Sheard (2003) p 4
19.
Dixon (1956) p 469, although conceding at p 472 that this was an overstatement
20.
Kitto (1992) p 794
21.
Swearing in of Sir Owen Dixon as Chief Justice (1952) 85 CLR xi, xiii
22.
Commentary 5.8.

Chapter 5 Deduction

45

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
with impartiality.23 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
justice.24 This explains why the ideology resident in some common law legal systems
will not easily tolerate an open and formal acceptance of free choice by judges.25
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
Minor Premise
Conclusion

Rule X provides a specific and correct answer for cases of

interpretation in Category Y.
This particular case falls into Category Y.
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.
23.
24.
25.

See Lucke (1982).

Schanck (1992) pp 2567-2568, citing Richard Posner (1990)
Posner (1990)

46

Chapter 5 Deduction

(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.26 As Sir Garfield Barwick
explained the position, there are quite distinct and understandable rules by which
courts interpret statutory provisions.27
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
it, interpretation does not generally depend on application of rules.28
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
that lawyers can ascertain by objective means.29 In consequence, a statute has to be
construed according to the grammatical and ordinary sense30 or the natural sense31
of the actual words employed in the Act.32 Read the words in their plain, natural or
literal sense, see what they mean and there is the answer to any question of
interpretation.33 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
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
26.
Brownlee v The Queen (2001) 180 ALR 301, 333 per Kirby J
27.
Commentary 5.9.
28.
Steyn (2002) p 2
29.
Kirby (2003) in Sheard (2003) p 45
30.
Australasian Temperance and General Mutual Life Assurance Society v Howe (1922) 21
CLR 290, 302
31.
Vacher v London Society of Compositors [1913] AC 107, 149
32.
Australasian Temperance and General Mutual Life Assurance Society v Howe (1922) 21
CLR 290, 302
33.
Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127 per Kirby P

Chapter 5 Deduction

47

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.34 Consequently, there is not
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
interpretation that is not reasonably open to it from the words of the statute.35
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.36 When a court
comes to 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.
34.
35.
36.

Christopher Enright Legal Method Chapter 14 Classifying Meanings

Chapter 30 Model for Forming Law
This concept is explained in Chapter 30 Model for Forming Law.

48

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
underlying policy.37 And in some jurisdictions, such as Australia, there are statutory
provisions that unequivocally make this approach mandatory.38
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
the legislature could achieve.39 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
37.
38.
39.

Christopher Enright Legal Method Chapter 9 Model for Forming Law

Christopher Enright Legal Method Chapter 16 Policy
Chapter 10 Policy

Chapter 5 Deduction

49

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.40

Ascertaining Causal Laws

Making and interpreting law involve causation, which relies on causal laws. A law and
an interpretation of a law cause effects.41 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
explained in the later discussion of induction.42 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
40.
41.
42.

Chapter 19 Choice of Values

Chapters 13-15 and Chapter 30 Model for Forming Law
Chapter 6 Induction

50

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

Probability that the proposed scientific rule is correct
Probability that the testing procedure is reliable

P(OF)
P(SR)
P(TP)

Figure 5.15 Probabilities for Scientific Testing

Chapter 5 Deduction

51

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
States.43 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.
43.

Frye v United States 54 App DC 46; 293 F 1013 (DC Cir) (1923)

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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.44
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

53

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.45
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 defendants 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

54

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

55

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 Dixons 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 19771983. 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 Barwicks 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.1

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

56

Chapter 6 Induction

57

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 A1n.
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
Conclusion

In all observed instances X has property Y.

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
Conclusion

In all observed instances crows are black

All crows are black.
Figure 6.2 Illustration of Induction

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Chapter 6 Induction

Now for swans. Here is an induction for them:

Premise
Conclusion

In all observed instances swans are white.

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

59

Ascertaining Values
Introduction
Induction is used in legal reasoning to ascertain values mainly for creation,
modification, extension or interpretation of a common law rule.2 The common form of
induction involves reasoning from the particular to the general. It takes the following
form:
Premise
Conclusion

In all observed instances X has property Y.

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.3 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.4 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.5
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
2.
3.
4.
5.

Moore (1991)
Donoghue v Stevenson [1932] AC 562, 580
Donoghue v Stevenson [1932] AC 562, 580
McHugh (1999) p 41. Commentary 6.1.

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Chapter 6 Induction

major controversy, in the case of Shaw v DPP, which created a new common law
offence of conspiring to corrupt public morals.6
In Shaw v the Lords created the new common law offence of conspiring to corrupt
public morals when the following facts came before it.7 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).8 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.9
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.10 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.
6.
7.
8.
9.
10.

Shaw v DPP [1962] AC 562

Shaw v DPP [1962] AC 562
Jones v Randall (1774) 1 Cowp 17, 39 and R v Delaval (1763) 3 Burr 1434, 1438-1439
Commentary 6.2.
See Krygier and Glass (1995).

Chapter 6 Induction

61

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.11 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.12 What appears as a
new rule is merely the first articulation of a rule that was always part of this underlying
natural order13 it is the enduring aspects of previous reasoning14 and in this way has
always been part of common law.15 This is why it is named the declaratory theory
judges should not and do not make new law,16 they merely declare what the law is and
what the law has always been.17 Hence, a judge sits merely to administer the law;18 to
engage in renovation of the law as distinct from innovation;19 and to follow the
spirit of cases [which] make law and not [merely] the letter of particular
precedents.20
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.21
11.
Harnett v Fisher [1927] 1 KB 402, 424, [1927] AC 573. Commentary 6.3.
12.
Willis v Baddely [1892] 2 QB 324, 326. Commentary 6.4.
13.
Commentary 6.5.
14.
Walker (2002) p 13.
15.
Commentary 6.6.
16.
State Government Insurance Commission v Trigwell (1979) 142 CLR 617
17.
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.
18.
Harnett v Fisher [1927] 1 KB 402, 424, [1927] AC 573
19.
Calvins Case (1609) 7 Co Rep 1a, 27a, per Coke CJ
20.
Fisher v Prince (1762) 3 Burr 1363, 1364, per Lord Mansfield
21.
Covey (1998) p 35

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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.22
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.23

Ascertaining Causal Laws

Introduction
Making and interpreting law involve causation. A law and an interpretation of a law
cause effects.24 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.
22.
There is some discussion of this moral code and its basis in Chapter 19 Choice of
Values.
23.
There is discussed in Chapter 19 Choice of Values.
24.
Chapter 13 Cause and Chapter 30 Model for Forming Law

Chapter 6 Induction

63

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
Doyles 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 horses owner, Colonel Ross. On the night before an important race Silver
Blaze mysteriously disappears. At the same time, the horses 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.

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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

65

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

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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.25 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 persons 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
25.

Murray (1938)

Chapter 6 Induction

67

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.26
26.

Chapter 27 Irrationality

68

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.27 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.28
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.29 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.
27.
28.
29.

Chapter 9 Probability
Chapter 9 Probability
Robertson and Vignaux (1993) p 459

Chapter 6 Induction

69

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:30
(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.31
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.
30.
Tenax v Steamship Co v The Brimnes [1974] Int Com LR 05/23, [1975] QB 929
31.
Tenax v Steamship Co v The Brimnes [1974] Int Com LR 05/23 [116] per Lord Justice
Cairns

70

Chapter 6 Induction

Probabilities
Relevant probabilities are as follows:
Notice is given in the 23 minute period
Payment is made in the 23 minute period
Both notice and payment are in this period
Half these cases payment will be before notice

23/30
23/60
(23/30) x (23/60)
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.32 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 prosecutors fallacy.33 However, there has also been some academic
support for the decision.34 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.
32.
33.
34.

People v Collins, 438 P2d 33 (Cal 1968)

Finkelstein and Fairley (1970) and Kreith (1976)
Tribe (1971)

Chapter 6 Induction

71

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.35 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.36

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 occupiers 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.
35.
Commentary 6.7.
36.
In contrast, a poll of only 50,000 citizens selected by George Gallups organisation
successfully predicted the result, leading to the popularity of the Gallup poll.

72

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 explanations1 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
inference2 and creativity.
Second, it determines the plausibility of each proposed explanation. By this means
abduction identifies the best explanation for the facts.3 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:4
1.
2.
3.
4.

Commentary 7.1.
Commentary 7.2.
Commentary 7.3.
Commentary 7.4.

73

74

Chapter 7 Abduction

Observation
Explanation
Strength of Explanation
Conclusion

B has occurred
A causes B is an explanation for the occurrence of B.
No other explanation explains the occurrence as well as
A causes B.
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
probabilitistic.5 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

75

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.6
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.7
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.8 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 1n which cause
Effects 1n, 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
6.
7.
8.

Chapter 15 Cause: Responding to Uncertainty

Chapter 30 Model for Forming Law
Commentary 7.6.

76

Chapter 7 Abduction

In both cases there is causation:

(1)
Statutes 0n are predicted to cause Effects 0n.
(2)
Meanings 1n are predicted to cause Effects 1n.
It is, however, difficult to research how statutes and interpretation of statutes cause
effects.9 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 OConnor 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.
9.

Chapters 13-15

Chapter 7 Abduction

77

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 !"!#$%&! (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.1 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.2 Thus, the
premises and conclusion with analogy involve particulars. Analogy involves a caseby-case extension of a rule or relationship, reasoning from the particular to the
particular.3
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.4 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
1.
2.
3.
4.

Commentary 8.1.
Commentary 8.2.
Twining and Miers (1999) pp 351-358
Commentary 8.3.

78

Chapter 8 Analogy

79

less superstitious or exceptional.5 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.6 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.7 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
Conclusion

In all observed instances X has property A.

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.
6.
7.

Sir Edmund Coke Nov. Org II 27

Mill (1843) Book III, Chapter XX
Mill (1843) p 365

80

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.8 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.9 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.
8.
Julia W Howe The Battle Hymn of the Republic (1861). Commentary 8.4.
9.
Courts, it might be noted, have sometimes reasoned by analogy from statute see
Gunasekara (1993).

Chapter 8 Analogy

81

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.10 Reason, as the common lawyers saw it,
provided a unified system of values, not a random collection of rules.11 Therefore
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
that similar remedies should apply in similar cases.12 In other words, the interests
recognised by the existing body of principles are similar to, but not identical with, the
interests now before the court.13 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.14
This process was possible because cases were not mere precedent but enshrined a
[moral] principle.15 In this sense, as natural law doctrine proclaimed, common law
principles were simply awaiting discovery.16 By this means, common law rules
judicially evolved in such a way that they contain[ed] within themselves their fair
logical result17 so that legal rules had their own inner logic.18 This gave common law
rules an inherent capacity for extension by logical processes19 and analogy was the
required form of logic.
All this created an evolutionary process that brought common law principles into
existence.20 Cases built up a rule bit by bit.21 Values on which rules were based were
10.
Commentary 8.5.
11.
Of course, if this assumption is true, the real nature of the reasoning process is
deduction.
12.
Commentary 8.6.
13.
McHugh (1999) p 41
14.
Bracton on the Laws and Customs of England (Thorne edition) Vol II, p 21
15.
Allen (1964) p 307
16.
Mason (2003) in Sheard (2003) p 1
17.
Dicey (1908) p 364, cited by Kitto (1992) p 794. See also X v Minister for Immigration
(1999) 164 ALR 583 and Rubin (1996).
18.
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.
19.
Kitto (1992) p 794
20.
Kitto (1992) p 794
21.
Commentary 8.7.

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Chapter 8 Analogy

latent in the law and courts invoke them.22 Judges made a rule for a new situation by
extrapolation or analogy with decided cases.23 By proceeding in this way a court was
not using a novel principle, but instead a principle that was consonant with the
whole doctrine of law and justice.24 Courts, in other words, sought to find the law
not to manufacture it.25
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.26
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
statutes reflect the popular will.27 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
law, did not penetrate into the expression and re-expression of non-statutory rules.28
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
what the public interest demands in a particular field of law.29 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
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
22.
23.
24.
25.
26.
27.
28.
29.

Webber (1995) p 9.
Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J. Commentary 8.8.
Allen (1964) p 307
Allen (1964) p 308
Donoghue v Stevenson [1932] AC 562, 580
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [170] per Kirby J. Commentary 8.9.
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [170]. Commentary 8.10.
Warnink v Townend [1979] AC 731, 743

Chapter 8 Analogy

83

asserting that a statute had created an entirely new setting to which the common law
must now adapt itself.30
Fiduciary Relationships
The High Court of Australia invoked analogical reasoning to determine whether a
relationship was fiduciary in reasoning from established categories of relationships
that were inherently fiduciary to new cases.31 Reasoning in this way the court decided
that the relationships between a firm of accountants and a client, and between a
medical practitioner and their patient, were not inherently fiduciary.32
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
misuser. First, confidential information constituted property.33 The court rejected this
argument.34 Second, the person who misused the 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.35 This argument was rejected also.36
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 plaintiffs 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
30.
Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360, 373
31.
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [136]
32.
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, [121-123]
33.
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.
34.
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22, [120], (2007) 230 CLR 89
35.
Commentary 8.11.
36.
Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 [120], [195], (2007) 230
CLR 89

84

Chapter 8 Analogy

labelled contributing fault.37 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.38 Because the
beneficiary reposes this trust and confidence, the relationship is at arms length.
Whereas negligence and contributory negligence function on the basis that both
plaintiff and defendant are expected to take reasonable care for the plaintiffs 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.39 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.40
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.41
Miscellaneous Examples
Here are some further examples of analogy:
(1) Exemplary Damages. In England42 and Canada43 claims for exemplary damages do
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
37.
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31, par 167 per Kirby J
38.
Gummow (1989) 57, 86 (footnotes omitted). Commentary 8.12.
39.
Handley (1992) 113, 127. This was cited by Justice Kirby in Pilmer v Duke Group Ltd (In
Liq) [2001] HCA 31 par [172].
40.
Pilmer v Duke Group Ltd (In Liq) [2001] HCA 31 167, 169, 171, (2001) 207 CLR 165
41.
Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67 [25];
(1999) 201 CLR 49
42.
Broome v Cassell & Co [1972] UKHL 3; [1972] AC 1027, 1083
43.
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

Chapter 8 Analogy

85

within a claim for compensatory damages that is expressed in general terms.44

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.45
(3) Liability of a Builder. In Bryan the court extended a house builders 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.46
(4) Criminal Conspiracy. The common law of criminal conspiracy was developed or
derived from statutes enacted in the 13th century.47
(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.48
(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.49 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.50 This was the situation in the United
States at least in relation to maritime law because of a case decided in 1886, The
Harrisburg.51 In Moragne 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.52
44.
Gray v Motor Accident Commission [1998] HCA 70 [33], [83], [128]-[130]; (1998) 196 CLR
1, 12-13, 27, 45-47
45.
David Securities v Commonwealth Bank of Australia (1992) 175 CLR 353. See McHugh
(1999).
46.
Bryan v Maloney (1995) 182 CLR 609. See McHugh (1999).
47.
Peters v The Queen [1998] HCA 7; (1998) 192 CLR 493, 513-515, per McHugh J
48.
Commentary 8.13.
49.
Cohen v Cohen [1929] HCA 15; (1929) 42 CLR 91, 100, per Dixon J
50.
Baker v Boulton (1808) 1 Camp 493; 170 ER 1033. Commentary 8.14.
51.
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.
52.
Moragne v States Marine Lines Inc 398 US 375 (1970)

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Chapter 8 Analogy

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.53
(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.54

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
53.
Esso Australia Resources Ltd v Federal Commissioner of Taxation [1999] HCA 67, [19];
(1999) 201 CLR 49
54.
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.

Chapter 8 Analogy

87

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 builders 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 OBrian
[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

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Chapter 8 Analogy

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.

Chapter 8 Analogy

89

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
Hjek neatly puts it, [p]robability is virtually ubiquitous since it is used in so many
disciplines of both academic and practical importance.2 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.3
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.
1.
2.
3.
4.

Bill Maudlin Up Front (1946) p 39

Alan Hjek Interpretations of Probability
Robertson and Vignaux (1993) p 460
Robertson and Vignaux (1993) p 462

90

Chapter 9 Probability

91

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.5
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.6
5.
6.

Commentary 9.1.
Robertson and Vignaux (1993) p 478

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Chapter 9 Probability

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.7
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.8
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.9 This has led, not
surprisingly, to the view that it is misleading to try to give these probabilities
numerical expression.10
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
7.
8.
9.
10.

Commentary 9.2.
Commentary 9.3.
Hodgson (1995B) p 738
Hodgson (1995B) p 738

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conceiving probability in numerical terms rather than using mere verbal formulas.
These are clarity, comparison and ease of working with probability.11
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 prosecutors or plaintiffs 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.
11.

Commentary 9.4.

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(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

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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
phrases such as well founded,12 fairly certain, most likely, with a strong chance,
reasonably likely, beyond all reasonable doubt (the standard of proof in criminal
cases), glaringly improbable13 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:
12.
13.

Minister for Immigration v Guo (1996) 144 ALR 567, 578

Commentary 9.5

96
(1)
(2)
(3)

Chapter 9 Probability
An event that will certainly occur has a probability of 100%.
An event that will certainly not occur has a probability of 0%.
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:
Will Occur
Will Not Occur
Total

Percentage
Decimal
25%
0.25
75%
0.75
100%
1
Figure 9.1 Measures of Probability

Fraction
1/4
3/4
1

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.

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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)]

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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 Jacks 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

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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.14
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
14.
Christopher Enright Legal Method Chapter 25 Model for Proving Facts; Christopher
Enright Proof of Facts.

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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 (16231662) 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

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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.16
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
16.
There is a brief description of some of the methods for establishing causal laws in
Chapters 13-15.

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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
Heads
Tails
Heads
Tails

Second Coin
Heads
Tails
Tails
Heads

Probability
25%
25%
25%
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%.

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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.
(3)
We assume that the facts are independent.17
(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.18
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
Fact 1
Fact 2
Fact 3
Fact 4

True
False
60%
40%
80%
20%
75%
25%
60%
40%
Figure 9.3 Independent Facts

Total
100%
100%
100%
100%

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
17.
18.

Commentary 9.6.
Commentary 9.7.

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Chapter 9 Probability

This shows us that the probability that the four facts in the plaintiffs 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 plaintiffs 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
Fact 1
Fact 1-2
Fact 1-3
Fact 1-4

Probability:
Additional Fact
60%
80%
75%
60%

Probability:
Probability:
Overall
Reduction in Overall Probability
60%
Not applicable
48%
20%
36%
25%
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%.

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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

106

Chapter 9 Probability

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 overcounted. 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 Newtons 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.20 It involves lurgi (a
fictitious disease). Assume that in a country the probability that any person has is 5%.
Thus if:
A1 refers to the event of having the disease
A2 refers to the event of not having the disease
then
P(A1) = 0.5
P(A2) = 0.95
19.
20.

Bayes (1764)
This example is taken from Mason and Lind (1992) pp 185-186.

Chapter 9 Probability

107

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|A1) = 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(A1|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(A1|B) =
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(A1|B) =
Calculations for the answer to the question are set out in the following table that
depicts the events and the four relevant probabilities:
Events
A1
Disease
No Disease

Prior
Probability
P(A1)
0.05
0.95

Conditional
Probability
P(B|A1)
0.90
0.15

Joint
Probability
P (A1 and B)
0.0450
0.3425
P(B) = 0.1875
Figure 9.6 Calculation of Probabilities

Posterior
Probability
P(A1|B)
0.0450/.1875 = 0.24
0.1425/.1875 = 0.76
Total 1.00

108

Chapter 9 Probability

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
give the overall probability of guilt or innocence.21
Expected Value

A bird in the hand is worth two in the bush.22

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:
21.
22.

Commentary 9.8.
This is a proverb.

Chapter 9 Probability
Option
Option 1
Option2

109

Profit
Probability
Expected Value
250,000
75%
187,500
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
expected value.23
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
benefit, because costs and benefits are not always commensurable.24

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 prosecutors
fallacy and the defendants fallacy.25
Prosecutor!s Fallacy
An illustrative version of the prosecutors 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. Based on this, the prosecutor argues that there is a 1 in 2 million chance of
23.
24.
25.

Commentary 9.9.
Chapter 12 Measurement of Net Benefit
These were identified and labelled by Thompson and Schumann (1987).

110

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 defendants fallacy can be illustrated from the example used for the prosecutors
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 defendants guilt
increases the probability of guilt.
Sally Clark Case
In the United Kingdom there was a famous conviction, of Sally Clark, based on the
prosecutors 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.26 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
26.

Royal Statistical Society (2001)

Chapter 9 Probability

111

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
staphylococcal sepsis.27 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
27.

Byard (2004)

112

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 authors 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.1

Introduction
The risk is that the present generation of leaders will turn out to be more focused on the
mechanics of politics than the art of government.2

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.3 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.4 Often in scholarly analysis of forming law,
1.
2.
3.
4.

Fleming (1977) p v
Abbott (2009) p 6
Commentary 10.1.
Chapter 18 Classification of Values

113

114

Chapter 10 Policy

particularly interpreting law, consequentialist reasoning is regarded as just one of

several approaches to interpretation.5 By contrast, the approach adopted here is that
policy based or consequentialist reasoning is the only rational way to proceed.6
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.
Regulatory Choice
Introduction
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.7

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.
6.
7.

See, for example, Mason (2002) p 34.

Commentary 10.2.
Thomas Jefferson

Chapter 10 Policy

115

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.8
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 hand9 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

116

Chapter 10 Policy

Law

All law is politics.10

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.11 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.12
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.
10.
11.
12.

Gilmore (1977) p 231, n 57

R v Smith [1974] NSWLR 576
Christoher Enright Legal Method Chapter 2 Law

Chapter 10 Policy

117

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
sapiens, can ask about ourselves.13

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 Sallys 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).

118

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.14
This choice of robbing Peter to pay Paul constitutes opportunity cost.15 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.
14.
15.

Commentary 10.3.
Commentary 10.4.

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119

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 cant read or write? No. Youll pay through the nose.16

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 moneys worth, this analysis does otherwise. It includes all types of
benefits and costs be they financial or otherwise.
Proposition 1: Changing the World

The end which the law will serve will dominate all other considerations.17

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.18 In this sense law is a social instrument,19 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).20
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
16.
Professor James Heckman, Nobel prize winner for economics in 2000, reported in
Horin (2006)
17.
Cardozo (1921) p 66
18.
Stone (1936) p 20
19.
McHugh (1999) p 42
20.
Cardozo (1921) p 102

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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,
multiple chain reactions,21 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
aequum et bonum (the just and the good).22 In a simple analysis it entails pursuing the
best ends by the best means. In the most precise and accurate formulation it entails
achieving the outcome that yields the highest net benefit.23

Nature of Policy
Policy is simply shorthand for the [legislature or] judge's attempts to make a decision which will
work out for the best.24

Introduction
Policy entails calculation of advantage25 encompassing both means and ends. In
simple terms, it involves seeking the best ends by the best means.26 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 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.
21.
22.
23.
24.
25.
26.

Chapters 13-16
Devlin (1979) p 85
Faulkes (1985). See also Sunstein (1994) and Mitchell (1990).
MacAdam and Pyke (1997) p 285
Galanter (1997) p 386, citing Ashford (1997)
See Faulkes (1985).

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121

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,
object, result, consequence or outcome.27 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
27.

Magat and Schroeder (1984)

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Chapter 10 Policy

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,
spiritual, symbolic, psychological or of some other kind.28
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.29
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.
28.
29.

Commentary 10.5.
Chapters 13-16

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123

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
rationality30 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
practice it is a rarely adopted process.31 It is confined to academic institutions, or the
occasional royal commission or major inquiry.32 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
30.
31.
32.

Lindblom (1980)
Carney (1991) p 115
Carney (1991) p 115

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consider only the close neighbours of existing policies, rather than more radical
replacements.33 The incremental model is frequently used in government decisionmaking. It is also the policy model that explains making common law.34
Mixed Scanning
Mixed scanning,35 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.36
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;
and it may be used as a simple tool or it may be part of an intricate social arrangement.37
Making Law
You change your laws so fast and without inquiring after results past or present that it is all
experiment, seesaw, doctrinaire; a shuttlecock between battledores.38

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
33.
34.
35.
36.
37.
38.

Carney (1991) p 115

Diver (1981)
Etzioni (1967)
Carney (1991) p 115
Wilson (1974)
Florence Nightingale admonition to the English Parliament

Chapter 10 Policy

125

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
Statute 0
Statute 1
Statute 2
Statute n

"

Effects
" Net Benefits
Effect 0
Net Benefit 0
Effect 1
Net Benefit 1
Effect 2
Net Benefit 2
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

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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 1n. 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 1n to match
Meanings 1-n. Thus:
#
Meaning 1 causes Effect 1
#
Meaning 2 causes Effect 2 and so on
#
Collectively Meanings 1n cause Effects 1n
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

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127

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 legislatures 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.40
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.
40.

Commentary 10.6.

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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
governments legislative intentions. Executive government is for the most part
organised as a bureaucracy.
Max Weber (1864-1920) formulated the ideal type of bureaucracy.41 This was the
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
goals set by the legislature.42
This is the essential point. For Weber bureaucracies are goal-oriented organisations
designed according to rational principles in order to efficiently attain their goals.43
In Webers 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, Webers 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
41.
42.
43.

Elwell (1996)
Baldwin (1995) p 34 refers to this as the transmission belt theory of administration.
Elwell (1996)

Chapter 10 Policy

129

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.44

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
44.

Chapter 23 Precedent and Chapter 24 Rules

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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
Desperate times call for desperate measures.1

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.2

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.3 While
the more usual use of net benefit confines it to benefits and costs that can be expressed
in moneys 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

Youre simply the best, better than all the rest.4

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
1.
2.
3.
4.

Commentary 11.1.
Anderson (2004)
Faulkes (1985), See also Sunstein (1994) and Mitchell (1990).
Tina Turner Simply the Best

131

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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 0n. 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 0n consists of Effects 0n. To spell this out,
Statutes 0n are predicted to cause Effects 0n. 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 1n are predicted to cause Effects 1n. 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.5 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.6
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
5.
6.

McHugh (1999) p 48
McHugh (1999) p 46

Chapter 11 Nature of Net Benefit

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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.

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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

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135

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.7

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.8
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.9
7.
8.
9.

Edmund Burke (1790) Reflections on the Revolution in France

Howell (1997)
Chapter 12 Measurement of Net Benefit

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Chapter 11 Nature of Net Benefit

Use of Net Benefit

Is the game worth the candle?10

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,11 public
administration, organisational behaviour,12 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
predicting work effort and motivation.13

Changeover Costs and Benefits

Foolish consistency is the hobgoblin of little minds, adored by little statesmen.14

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.15
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.16
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
10.
11.
12.
13.
14.
15.
16.

This is a proverb, possibly first used by Dr Raphael C Thomas.

Evans (2000) p 201
McShane and Von Glinow (2000) p 78
McShane and Von Glinow (2000) p 78
Ralph Waldo Emerson
Commentary 11.2.
Landes (1979) p 239; Peters (1996) p 2039

Chapter 11 Nature of Net Benefit

137

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
be separately enacted by each regional legislature.17 There is also the cost of judicial
policing of the federal legislative boundaries between central and regional
governments.18
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.19
(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
an established precedent.20
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
rule, to another.21 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
17.
See Hall (1998), Mason, AF (1986)
18.
See McConvill and Smith (2001).
19.
Currier (1965) pp 235-238
20.
For examples see Proctor v Jetway Aviation [1984] 1 NSWLR 166 and Evda Nominees v
Victoria (1984) 154 CLR 311
21.
For a more detailed discussion of adjustment costs see Van Alstine (2002).

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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
work with it and the sectors of the public who are affected by it;22 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.
22.

Van Alstine (2002)

Chapter 11 Nature of Net Benefit

139

Consequently, a court should be less likely to change a rule in these circumstances

because the adjustment costs would be very high.23
Predictability Costs

And always keep a-hold of Nurse / For fear of finding something worse.24

A change of law makes law less predictable.25 It takes away the benefit of stability and
continuity so that law is no longer certain and predictable.26 This is a problem because
society places great value on the stability of many institutional arrangements.27
Continuity enables people to know what the law is now and will be in the future,
promoting the necessary perception that law is stable and unchanging.28 It enables
law to keep faith with established expectations so that precedent protects reliance.29
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
would upset existing plans made by fair men in business and commerce.30
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 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.
23.
Commentary 11.3.
24.
Hilaire Belloc Jim Who ran away from his Nurse and was eaten by a Lion!. This is a
poem in Bellocs book Cautionary Tales for Children.
25.
Jones v Commonwealth (1987) 61 ALJR 348, 349, 71 ALR 497, 498
26.
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
27.
Currier (1965) pp 235-238
28.
Peters, (1996) at p 2039. See also Planned Parenthood v Casey 505 US 833, 853-868 (1992).
29.
Currier (1965) pp 235-238
30.
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.

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Chapter 11 Nature of Net Benefit

(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
dissenting judgments.31 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
such change would generate substantial predictability costs.32
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
from lack of continuity. Continuity brings uniformity and consistency to law.33 By
this means like cases are treated alike, so that similarly situated persons are treated
similarly.34 Hence we are all equal before the law, which appears to be at the heart
of our received notions of justice,35 and is enshrined in the maxim that justice is
blind.36 This is a symbolic benefit, so that there are symbolic costs when this benefit
is diminished. It tarnishes the image of justice.37
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 statute law more readily than it does change to common law.
31.
John v FCT (1989) 89 ATC 4101, 4112, 4119-4120
32.
John v FCT (1989) 89 ATC 4101, 4112, 4119-4120
33.
Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J
34.
Peters (1996) at p 2043. For judicial indorsement of this principle see James B Beam
Distilling Co v Georgia 501 US 529, 540 (1991).
35.
Currier (1965) pp 235-238
36.
Commentary 11.4.
37.
Currier (1965) pp 235-238

Chapter 11 Nature of Net Benefit

141

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
the rule intended).38 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,39 or it is out of line40 or incompatible41 with other authorities.
In an obvious case, this happens where the court fails to advert to an earlier
inconsistent decision,42 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.43 (In
such a case the decision is given per incuriam, literally through carelessness,44
although the phrase is also used to mean through ignorance.45)
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.
38.
For some academic attempts to articulate why courts overrule prior cases see Harris,
(1990) and Horrigan (1992).
39.
Re Mason [1928] Ch 385, 400 per Romer J
40.
Scruttons v Midland Silicone [1962] 1 AC 446, 476-477 per Lord Reid
41.
Rankin v Baldi [1985] 1 NSWLR 274, 276
42.
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
43.
Young v Bristol Aeroplane Co [1944] 1 KB 718
44.
Lord Justice Scarman said in Farrell v Alexander [1976] 2 All ER 345, 359 that it means
when Homer nodded.
45.
Young v Bristol Aeroplane Co [1944] 1 KB 718

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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.46

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
not the variable costs) of administration are duplicated.47
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,48 has led to considerable, serious or manifest
inconvenience,49 unduly restricts the liberty of the subject,50 is out of line with current
trends,51 is unjust,52 or is plainly unreasonable.53 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 would now be better once the law was changed.
46.
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
47.
See Hall (1998) and McConvill and Smith (2001).
48.
John v FCT (1989) 89 ATC 4101, 4112, 4119-4120
49.
John v FCT (1989) 89 ATC 4101, 4112, 4119-4120, Admiralty Commissioners v SS Valverda
[1938] AC 173, 194, Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J
50.
R v Taylor [1950] 2 KB 368, Nkambul v R [1950] AC 379
51.
Connor v Sankey [1976] 2 NSWLR 570
52.
Commentary 11.5.
53.
Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J

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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 rule54 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.55 A
rule is weakened to the extent that a relevant argument or a matter of decisive
importance was not considered.56
(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
this fact will usually be stated in the judgment), and where a matter is interlocutory.57
(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.58
Consequently they disagree on their reasons for the decision59 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.60 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.61
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.62 These are relevant
because law is the product of its own period and environment and it cannot remain
static.63 Over time there will be change in social circumstances and changes and
developments in human knowledge.64 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?
54.
Connor v Sankey [1976] 2 NSWLR 570 per Street CJ
55.
Re Mason [1928] Ch 385, 400 per Romer J, Tumahole Bereng v R [1949] 1 AC 253 per
Lord Denning
56.
Rankin v Baldi [1985] 1 NSWLR 274, 276, R v Taylor [1950] 2 KB 368
57.
Boys v Chaplin [1968] 2 QB 1
58.
See for example the High Court decision in Trident v McNiece (1988) 80 ALR 574.
59.
Rankin v Baldi [1985] 1 NSWLR 274, 276, John v FCT (1989) 89 ATC 4101, 4112, 41194120
60.
Commentary 11.6.
61.
See Maher and Evans (1984-86).
62.
Tumahole Bereng v R [1949] 1 AC 253 per Lord Denning
63.
Allen (1964) p 300
64.
Allen (1964) p 299. Commentary 11.7.

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Chapter 11 Nature of Net Benefit

(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 rule65 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:
65.

Commentary 11.8.

Chapter 11 Nature of Net Benefit

145

(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 Facit Ius
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 OConnell 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.

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Chapter 11 Nature of Net Benefit

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.1

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.2 While the conventional use
of net benefit confines it to benefits and costs that can be expressed in moneys 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.3 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.

147

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Chapter 12 Measurement of Net Benefit

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.4 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 benefits.5

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.

Chapter 12 Measurement of Net Benefit

149

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.6

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:

Nominal Scale
Ordinal Scale
Interval Scale
Ratio Scale

6.

Four Characteristics of Measurement

Classification Magnitude Equal Intervals Absolute Zero
Yes
No
No
No
Yes
Yes
No
No
Yes
Yes
Yes
No
Yes
Yes
Yes
Yes
Figure 12.1 Summary of Measurement Scales

Lewis Carroll Alice in Wonderland Chapter 11

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Chapter 12 Measurement of Net Benefit

Scales and Popular Sayings

Those who can give up essential liberty to obtain a little temporary safety, deserve neither
liberty nor safety.7

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.8

Problems of Measurement
O to be torn twit love and duty.9

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.10
7.
8.
9.
10.

Commentary 12.4.
GK Chesterton (1910) What's Wrong with the World Part IV, Chapter xiv
Ned Washington High Noon. It was the theme song for the film of the same name.
Howell (1997)

Chapter 12 Measurement of Net Benefit

151

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.11
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
requirements for a valid and reliable measure.12 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.13

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 Lukes Gospel 15:7

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Chapter 12 Measurement of Net Benefit

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.14 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.15
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.16 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.
14.
It was developed by the Italian statistician Corrado Gini and published in his 1912
paper Variabilit e mutabilit.
15.
Commentary 12.5.
16.
Three of these axioms have been used by some researchers, who have proposed
alternative indexes.

Chapter 12 Measurement of Net Benefit

153

Other Measures
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
multiple criteria in a manner that eliminates conflict between them.17 Four means are
suggested.18 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.19
Fourth, combine the criteria in a conceptual sequence.
Chapmans 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
receive the scholarship.20 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.21
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
choice on their own behalf.22 In formal terms, while the individual has not made an
actual choice, they have made an imputed choice.
17.
18.
19.
20.
21.
22.

Chapman (1998) p 1487

These are summarised in Adler (1998A)
These are summarised in Adler (1998A)
These are summarised in Adler (1998A)
Chapman (1998) p 1487
Craswell (1998)

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Chapter 12 Measurement of Net Benefit

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:23

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.
23.

William Shakespeare Sonnet No 18

Chapter 12 Measurement of Net Benefit

155

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
which the various consequences can be weighed.24 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
evaluation.25
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
(1998), 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.
25.

McHugh (1999) p 49
Kirk (1997) p 55

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Chapter 12 Measurement of Net Benefit

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?1

Introduction

It wasn't me that made him fall, no you can't blame me at all.2

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. Peoples 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.3 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.4

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
1.
2.
3.
4.

Eric Bogle No Mans Land. Commentary 13.1.

Bob Dylan (1963) Who Killed Davey Moore
Blair and Cunningham (1999)
Wallace (1819-1881)

157

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Chapter 13 Cause

an effect.5 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.6 It is, as we have also said, impossible to be more
rational than this.7
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.8
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.
5.
Magat and Schroeder (1984)
6.
This is called the net benefit rule. It is discussed in Chapter 11 Nature of Net Benefit.
7.
Passmore (1981), and Magat (1984). See also Chambliss (1967), and Akers and
Hawkins (1975).
8.
Chapter 10 Policy

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159

Voluntarism

[L]ead us not into temptation.9

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.10

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.11
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
performed or not performed an action.12
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.
9.
The Lord's Prayer
10.
Martin Luther, speech at the Diet of Worms, 18 April 1521. Commentary 13.2.
11.
Commentary 13.3.
12.
As Miller (1978) p12 puts it, with determinism all values in ethics, logic and
aesthetics disappear.

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Chapter 13 Cause

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
us that when the storm is long past that the ocean is flat again.13

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
13.

JM Keynes (1923) A Tract on Monetary Reform

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161

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
Major Premise
Minor Premise
Conclusion

Relationships
Substance Y is the continuing cause of Disease X.
This medical procedure removes Substance Y.
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.14 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.
14.

Commentary 13.4.

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Chapter 13 Cause

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.15
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.16 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
outlined above.17
15.
Commentary 13.5.
16.
Commentary 13.6.
17.
To ensure better control, the second batch of mental arithmetic questions should be of
similar difficulty to the first.

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163

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 Galileos pupil, Vincenzo
Viviani, claims that Galileo actually conducted an experiment to test Aristotles
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.

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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 towns 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

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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

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Chapter 13 Cause

popular stereotypes, general knowledge, experience, folklore and folk psychology.19

Since these laws are not scientifically grounded they may be infected by error or
prejudice.20
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
done is explained in the later discussion on social choice.21
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,
when one is [in fact] the dupe of an illusion.22

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
parents failure to talk frankly to their teenagers about the dangers of unprotected early sex.23

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
causes and effects can be hidden or at least difficult to discern.24
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
19.
Hodgson (1995) p 738, Neat Holdings v Karajan Holdings (1992) 67 ALJR 170, 170-171
Commentary 13.7.
20.
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).
21.
Chapter 21 Social Choice: Making Law, Chapter 22 Social Choice: Interpreting Law
22.
Frank (1930) p xx
23.
Neil (2008)
24.
Commentary 13.8.

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167

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

Statute X
Factor 2

! !

! Effect X.1
! !

!
!
!

Effect X.2A
Effect X.2A

"
! Effect X.3A
#

Effect X.2B
!
! Effect X.3B
#
Figure 13.2 Continuation of Effects

Effect X.nA

Effect X.nB

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
overall murder rate was lower than it had been since 1965.25 An economist, Steven D
Levitt, investigated this phenomenon in research, which was published in 2005.26 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
abortion legal throughout the United States as a constitutional right.27
25.
26.
27.

Levitt and Dubner (2005)

Levitt and Dubner (2005)
Roe v Wade 410 US 113 (1973)

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Chapter 13 Cause

Increased Sentences
One explanation was increased sentences.28 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 harms 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
in 1973 in the famous case of Roe v Wade.29 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
right.30 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
likely to breed criminals were now aborting them.31
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.
28.
29.
30.
31.

Commentary 13.9.
Roe v Wade 410 US 113 (1973)
Roe v Wade 410 US 113 (1973)
Commentary 13.10.

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169

Wagon Mound
The operation of contributing causes is illustrated by the facts of the Wagon Mound, a
well known case in the law of negligence.32 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 childrens 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
32.

Commentary 13.11.

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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
by starvation.33
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.34
The other cause of death is toxicity.35 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.36
There is now evidence of 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.
33.
34.
35.
36.

Sen (1981)
Kadiyali, Blalock and Simon (2007) and Kadiyali, Blalock and Simon (2009)
Armour (2006), Barry (2006), Coultan (2006)
Armour (2006), Barry (2006), Coultan (2006)

Chapter 13 Cause

171

(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 Bogles song No Mans 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 Mans 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 Mans knead,
And then of the Last Harvest sowd 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

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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 persons 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 Bs 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

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173

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 harms 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.1

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

174

Chapter 14 Cause: Explanatory Theories

175

(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.2 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.3

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.4

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
Marxs views are considerd in a later chapter a brief statement will suffice here.5
2.
3.
4.
5.

Maslow (1970)
Don Henley and Glenn Fry Lyin Eyes
Friedrich Engels (1882) Socialism Utopian and Scientific p54
Chapter 27 Irrationality

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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.6

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

177

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 1951.7 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.

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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.8
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

179

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

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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.9 This is one of their major characteristics.
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.10 This is a non linear relationship.11
A quite elaborate definition of emergence and a list of its common characteristics have
been devised by Jeffrey Goldstein.12 Emergence refers to the arising of novel and
coherent structures, patterns and properties during the process of self-organisation in
complex systems.13 The common characteristics of emergence are the following:
(1)
Radical Novelty. The behaviour possesses features not previously observed in
systems.
9.
10.
11.
12.
13.

Commentary 14.2.
Commentary 14.3.
Lewes (1875) p 412
Goldstein (1999)
Goldstein (1999)

Chapter 14 Cause: Explanatory Theories

181

(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
relations14 that cannot be created just by the atomistic market transactions on which
the 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 principles15 (so they are not just a loose collection of people,
resources and so on) and thus possess combinative capabilities.16
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
legal personality. They are mini societies that possess a separate identity.17 Their
action is structured by organising principles that are not reducible to [the sum of the
behaviour of the] individuals [within the firm].18
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
learning19 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.
14.
15.
16.
17.
18.
19.

Ghoshal and Moran (1996)

Kogut and Zander (1992)
Kogut and Zander (1992)
Kogut and Zander (1996)
Kogut and Zander (1992) p 384
Hodgson (1998)

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Ostensiveness

Structures or whole entities that are created by emergent behaviour are ostensive in
that they can be perceived. Firms are visible in their name, their identity20 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
closer to holism.21 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 systems part. This can also be described as
negative entropy, or negentropy.22
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).
20.
21.
22.

Hodgson (1998)
Commentary 14.4.
Fuller (1975) Fuller (1979)

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This irrationality is widespread, so much so that the irrationality of bureaucratic

institutions is a major factor in understanding contemporary society.23 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.24
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
regarding the moral implications of the overall operation of the organisation.25
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.26
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
more of a member of a group. During this process, as Zimbardo explained it,27
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 because it is not under the usual social and personal controls.28
In this way, organisations take on an impersonal character.29 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
merely efficient; they are not emotional at all but technically clean-cut.30 This is a
chilling but sadly convincing picture.
23.
24.
25.
26.
27.
28.
29.
30.

Elwell (1996). Commentary 14.5.

Elwell (1996)
Elwell (1996)
Vaughan and Hogg (1998) p253
Zimbardo (1970)
Vaughan and Hogg (1998) p253
Elwell (1996)
Mills (1958) pp 83-84. This was cited in Elwell (1996).

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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-Lszl Barabsi 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, Barabsi
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
to process information. Its components therefore can engage in collective learning.31
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.
31.

Hodgson (1998)

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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 Goldratts
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.
Meadows 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.

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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.

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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.

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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
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).
32.

Maddock (1972)

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Exponential Relationships
Exponential relationships are a species of non-linear functions. The exponential
function is written as:
exp(x) or ex,
where e is the base of the natural logarithm. It equals approximately 2.71828183.33
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=ex is always positive (above the x axis) and increasing (viewed
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.34
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
33.
34.

Commentary 14.6.
Commentary 14.7.

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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

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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 Ren 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
stability.35 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 is possible 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
35.

Business process re-engineering (BPR) can cause this type of change.

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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,36 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.

Salvador Dalis last painting, The Swallows Tail, was based on this catastrophe.

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(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. Rene 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 selforganising, 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
Beer and Norbert Wiener.37
There are some major indicative signs that a human society or institution possesses
self-organising properties. These signs consist of statistical properties shared with selforganising physical systems (for example Zipfs 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)

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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 !"#$%&'()* (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
scientist, who studied among other things organisationational behaviour.38 Later he
replaced the expression system accident with normal accident.39
38.
39.

His famous text on this is Complex Organisations: A Critical Essay (1972).

Perrow (1984)

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195

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

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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 Perrows 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

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197

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 selforganising tendencies.
This environment exists in an individuals (or in the collective groups) mind at a
certain point in time.41 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 persons 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 persons
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.

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Chapter 14 Cause: Explanatory Theories

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.

Chapter 14 Cause: Explanatory Theories

199

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 !
weak force !

" Restraining Forces

" weak force
##
no change
change
$$

strong force

" weak force

Figure 14.1 Occurrence of Change

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Chapter 14 Cause: Explanatory Theories

3. Theories of Legal Compliance

Legislative Marksmanship
Although the popular mind tends to see law as the solvent for all problems,42 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?43 Once a law is made, how
effective will it be? How can a law best achieve its goal?44
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.45
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?46 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
experiment, seesaw, doctrinaire; a shuttlecock between battledores.47

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 Podgrecki (192542.
Commentary 14.8.
43.
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.
44.
See Baldwin (1990) and Ingram (1980).
45.
Commentary 14.9.
46.
Commentary 14.10.
47.
This was Florence Nightingales admonition to the English Parliament.

Chapter 14 Cause: Explanatory Theories

201

1998).48 However, despite major efforts by these and other jurists, there is still not a
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.49
Nature
Legislative impact analysis is the science of legislation.50 It is a specific form of social
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.51 But despite
these gains, political manoeuvring rather than scientific analysis can still rule the law
making process.52
According to Podgrecki 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
narrow interests) and maniacal (utilising psychopathic and/or sociopathic methods).53
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.54 It examines the effects of
laws by considering in a scientific and rational manner why laws may succeed or fail
in bringing about their intended goal.55 In pure form, it involves assessing the
likelihood 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.56 Underlying this approach is the simple fact that knowledge
of the possible and likely effect of laws is properly based only on proper scientific
method, in contrast to resting on hunches,57 intuition,58 opinion polling or
supposition.59
Examining proposed legislation in a scientific way is an antidote to political rhetoric,
which scientific inquiry puts on trial.60 Moreover, it can also be economically justified
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.

Commentary 14.11.
Chapter 15 Cause: Responding to Uncertainty. Commentary 14.12.
Commentary 14.13.
Commentary 14.14.
Kirby (1988A), Cretney (1984), Marsh (1983), Nakamura and Smallwood (1980)
Podgrecki and Shields (1996)
Leigh (2003)
Beerworth (1980)
Pound (1912) pp 514-516
Allen (1964) p 350, citing Scrutton J in Hill v Aldershot Corporation [1933] 1 KB 259
Hutcheson (1928)
Leigh (2003)
Leigh (2003)

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Chapter 14 Cause: Explanatory Theories

because the cost of the research that it commands is likely to be far less than the cost
of a policy mistake.61
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,62 how should this inquiry
be made? Roscoe Pound (1870-1964) proposed a sociological study in preparation for
legislation.63 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.64
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.65 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.
61.
62.
63.
64.
65.

Leigh (2003)
Pound (1912) and Podgecki (1974). This is summarised in Tomasic (1980A) p 32.
Pound (1912) pp 514-516
Pound (1912) pp 514-516
Commentary 14.15.

Chapter 14 Cause: Explanatory Theories

203

Legislative Impact Analysis: Field Studies

Social causality is very complex. It most cases, it cannot be proven in a strict sense.66

Field studies refer to the examination of the impact of law by actually considering how
the law appears to affect society.67 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.68
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
66.
67.
68.

Mader (2001) p 123

Commentary 14.16.
Ross (1975)

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Chapter 14 Cause: Explanatory Theories

law.69 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.70

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
there is now an extensive literature on both experimental economics71 and
experimental archaeology.72
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.
Consequently, experimental law is now an active field of scholarly endeavour.73 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
naturally translate into explanations of how law works in the world at large.74
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
69.
70.
71.
72.
73.
74.

See Mason (1993B).

Oliver Goldsmith The Traveller I: 427
Vernon L Smith (1980). Commentary 14.17.
Commentary 14.18.
Commentary 14.19.
Commentary 14.20.

Chapter 14 Cause: Explanatory Theories

205

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 doesnt do the hard work necessary to
find out whether that is correct or not, but often feels intuitively supportive.75
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 peoples
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.76 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
societies.77 This is how social forces will overwhelm socio-legal or other scientific
evidence when new legal policies are formulated.78 For example, politicians fear
that with real evidence, voters might discover that reality does not match political
rhetoric.79
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.80 Commonly, those who push their own special interests will seek to make
75.
76.
77.
78.
79.
80.

Banks (2009) p 7
Simeon (1976) p 566
Beerworth (1980) p 68
Beerworth (1980) p 70
Leigh (2003)
Banks (2009) p 7

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them appear legitimate by trying to align their demands with the public interest.81
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
uninformed voters often feel intuitively supportive of government proposals.82
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
bear the costs of implementing the resulting policies.83
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,84 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.85
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
81.
82.
83.
84.
85.

Banks (2009) p 7
Banks (2009) p 7
Banks (2009) p 7
Beerworth (1980) p 67
Beerworth (1980) p 67

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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 of peoples reactions
to change.86

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
interest groups proposals.87
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.88 In 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.89
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.
86.
87.
88.
89.

Banks (2009) p 6
Banks (2009) p 7
Leigh (2003)
Leigh (2003)

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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.90 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.91 They argue that the behavioural laws,
which underlie economics, also determine the effect that some civil laws have in that
they apply by analogy to the activities that these laws regulate.92
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
the response to those implicit prices.93 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 forgo the consequences of complying.
90.
91.
92.
93.

For a general discussion see Hicks (1980).

Levitt and Dubner (2005)
Commentary 14.21.
Cooter and Ulen (1988) p11

Chapter 14 Cause: Explanatory Theories

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This approach has been used to analyse activities as diverse as drug addiction, sexual
acts, surrogate motherhood, rescue at sea, religious observances,94 trust, status,95
and crime, racial discrimination, marriage and divorce.96 Consequently, economic
concepts such as maximisation, equilibrium and efficiency are [used as] fundamental
categories for explaining society, especially the behaviour of rational people97
responding to rules of law.98
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 it99 as a common basis for rational decisions about whether to comply with a
law or other sanction.100 The decision constitutes a cost-benefit analysis of
transgression 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
94.
95.
96.
97.
98.
99.
100.

Posner (1992) p xix. Commentary 14.22.

Landes and Posner (1994)
Posner (1992) p 22
Commentary 14.23.
Cooter and Ulen (1988) p 11
Bentham (1789) Chapter 4. Commentary 14.24.
Becker (1968)

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risks differently or may possess a stronger or weaker desire to avoid a risk even when
the probabilities are the same.101 Hence a persons 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
even enhancing their personal wealth.102 Other factors may come into play.103
Consequently there are limitations on this model as a predictor or producer of
compliance.104
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.105 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.106
To a significant extent social factors such as culture and custom will incline many
people towards obeying the law on many occasions.107 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
101.
102.
103.
104.
105.
106.
107.

Parnell (2006)
Williams and McNeill (2005)
Hauck (2008), Sutinen and Kuperan (1999)
Simpson (2002), May and Handmer (1992)
Simpson (2002), May and Handmer (1992)
Ayres and Braithwaite (1992), Lind and Tyler (1988), Wenzel (2004)
May (2004), Walker (2004)

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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.108
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.109! Sanctions
may involve a lessening or increase in reputation,110 status, respect111, social approval
or social disapproval. Sanctions can also involve increased or decreased acceptance or
some form of public shaming.112
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
to problems.113
108.
109.
110.
111.
112.
113.

Jenny et al (2007) p240

Sutinen and Kuperan (1999) p181
May (2004)
Sutinen and Kuperan (1999) p181
Posner and Rasmusen (1999)
Ayres and Braithwaite (1992)

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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.114 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),115 when individuals are not committed as a way of life to the prohibited
behaviour,116 and when law conforms to prevailing ideas.117 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.118 (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.119
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
114.
115.
116.
117.
118.
119.

Jenny et al (2007) p240, Sutinen and Kuperan (1999) p178

Cranston (1980) pp 89-90. Commentary 14.25.
Chambliss (1967), Cranston (1980) pp 89-90
Simeon (1976)
Jenny et al (2007) p 240
Bardach and Kagan (1982), Sheffrin and Triest (1992)

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213

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 [r]esistance to change can become socially
galvanised, and galvanising. Groups identify as anti-regulation or anti-government
which becomes continually supportive of anti-regulation behaviour.120
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
strong or weak cooperators, and conditional or non conditional co-operators.121
(2)
There are pro-selfs (who are more likely to defect).122 These can be classified
as strong or weak defectors.123
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
science; and being less dogmatic and fatalistic.124
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
heroin illegal goes as follows.125 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
120.
121.
122.
123.
124.
125.

Bardach and Kagan (1982), Sheffrin and Triest (1992)

Kurzban and Houser (2001)
De Cremer and Van Lange (2001)
Kurzban and Houser (2001)
Rogers (1995)
Cooter and Ulen (1988) pp 570-579

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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.126 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
nudging.127 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 mens 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
126.
127.

Commentary 14.26.
Thaler and Sunstein (2008)

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215

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
impose an excessive or unfair burden on the individual.128 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
leaders and pace setters in the activity because these can more easily be targeted.129
There are also restraints on the effectiveness of law because there are inherent
limitations on the power of a government to enforce law.130 Enforcement relies on
coercion, by force if necessary, but coercion is limited in several ways; for example, a
government cannot compel people to love one another or be creative.131 Similarly
social relationships and economic dynamics tend to be outside a governments
sphere of operations.132 Legislation may also not operate effectively when it is trying
to resolve conflict over values;133 it may be difficult or impossible for a law to counter
the cohesiveness of a group;134 and law may not always be effective in changing
attitudes,135 for example in coercing people to be good,136 although some claim that the
state can promote virtue.137 Even where coercion will work in principle, a government
128.
Commentary 14.27.
129.
Cranston (1980) pp 89-90
130.
Passmore (1981)
131.
Passmore (1981)
132.
Hughes (2005)
133.
Passmore (1981)
134.
Passmore (1981) and Posner, Eric (1996)
135.
Passmore (1981) and Schwartz (1978)
136.
Passmore (1981), Skolnich (1968), Walker and Argyle (1964) and Gutman (1992-93).
See also Daintith (1989), Summers (1974), Kelbey (1979).
137.
Passmore (1981), Gordbaum (1990-91)

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has only limited resources. In any particular case there will not necessarily be enough
resources to enforce a law.138 Finally, whether, how and to what extent these factors
operate will be determined by many factors, including the political environment,
demography, urbanisation, wealth and technology.139
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.140 Compliance with social norms may be hard-wired into the brain.141
Compliance may be affected by reasoning biases and errors.142 Compliance with
legislation may rest on inertia, or on the fact that there are no visible alternatives to
compliance.143 Finally, public policy aims may be frustrated by behaviour that
complies with the letter of the law but not the spirit.144

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
138.
139.
140.
141.
142.
143.
144.

Passmore (1981)
Simeon (1976)
Schmeichel and Marten (2005)
Spitzer et al (2007)
Gifford and Hine (1997), Moxnes (2000)
Podgrecki (1972)
McBarnet (2003)

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217

(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 Eulers 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 Butterflys 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)

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Chapter 14 Cause: Explanatory Theories

#
#
#

Ernst Freund: Freund (1965)

Roscoe Pound: Pound (1942)
Adam Podgrecki: Podgrecki (1972), Podgrecki (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),
Podgrecki (1972), Podgrecki (1974) Robertson (1973); Lempert (1966); Dror
(1971), Ziegler (1988), Summers (1971), Summers (1974), Summers and Howard
(1986), Sunstein (1990A), Stone (1961), Stone, G (1975), OMalley (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

219

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:

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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.1

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.2 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
1.
2.

Paul Samuelson (1915-2009), Nobel Memorial Prize for Economics in 1970

Uncertainty of causation also occurs in economics see Ford (1987).

221

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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
measure these as well as the circumstances allow.3)
(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

223

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.4 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.5 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.6

Review of Legislation

And you can never have certainty in public policy. All policy effectively is experimentation.7

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
4.
5.
6.
7.

Chapter 12 Measurement of Net Benefit

Howell (1997)
Kirk (1997)
Banks (2009) p 6

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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.8
Similar things have been done in other countries such as the United States of
America.9
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
8.
9.

Mitchell (1990), Keating (1990), Ziegler (1988)

Halligan (1994)

Chapter 15 Cause: Responding to Uncertainty

225

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.

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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 legislatures 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

227

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.10
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.11
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.
10.
11.

Banks (2009) p 14
Banks (2009) p 14

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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

229

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
law has a chain of consequences reaching in many directions.12 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
passed is an effect or the law or an effect of something else.13 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.14 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.15
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.16

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:
12.
13.
14.
15.
16.

See Ziegler (1988).

Commentary 15.1.
Banks (2009) p 8
Banks (2009) p 17
Chapter 14 Cause: Explanatory Theories

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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
we wait for others to come to the party in other words, an adaptive response.17

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.18 It
avoids a major project that is both a complete failure and is also difficult or vastly
expensive to unwind or reverse.19
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
reverse.20 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-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
17.
18.
19.
20.

Banks (2009) p 7
Lindblom (1980). See also Gillette (1997).
Gillette (1997)
Gillette (1997)

Chapter 15 Cause: Responding to Uncertainty

231

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
moves from increment to increment.21
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
21.

Commentary 15.2.

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Chapter 15 Cause: Responding to Uncertainty

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
righteous within the city, then I will spare all the place for their sakes.22

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
Biodiversity, it is incorporated into the law of the European Union23 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
22.
23.

Genesis 18:23-32 1
Recuerda (2006)

Chapter 15 Cause: Responding to Uncertainty

233

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
standard there is based solely on abduction.24
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
of the law proclaim the innocence of a guilty one.25 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.26
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
acquitted.27 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
man.28 Sir Edward Seymour (speaking for John Fenwick on a Bill of Attainder in 1696
for High Treason)29 and Blackstone30 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 99:1.31 The author
also believes that this ratio is appropriate.
24.
25.
26.
27.
28.
29.
30.
31.

Chapter 7 Abduction
Van der Meer v The Queen (1988) 82 ALR 10, 31 per Deane J. Commentary 15.4.
Bentham (1829) 169, quoted in Laufer (1995) at p 333 fn 17.
For a wide ranging account see Volokh (1997).
Commentary 15.5.
8 Will. 3, 13 How. St. Tr. 565 n. (1696)
Blackstone (1765) Vol iv c 27, 352
Schlup v Delo 513 US 298 (1995), 325, quoting Starkie (1830) p 751

234

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

235

(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),
370372, with support from Brennan J at pp 363364. Another classic source is
Jackson v Delaware L&W RR 170 Atl 22 (1933), 2324, 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 (Amoss 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.2 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)

236

Chapter 16 Effects

237

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

238

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
(2)

239

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 of
4.

Baldwin (1990)

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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.5

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.6

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.7 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
5.
John Milton Paradise Regained
6.
Muylle (2003) p 169
7.
Pound (1910). It needs to be said that the other effects of a rule are referred to as rules
in action.

Chapter 16 Effects

241

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 Pounds term rules in books). This rule,
of course, divides into elements and consequences joined in a conditional statement.8
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 1n would apply
to Facts 1n 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.9 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.

242

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 is no inherent executive or prerogative power for the government to do
so.10
(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

243

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

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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.11 If the government succeeds in this ulterior aim, the
revenue it gathers may be negligible because the revenue purpose of the tax is
secondary, but the goal it really wants is achieved.12 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
11.
Fairfax v Federal Commissioner of Taxation (1965) 114 CLR 1, 11 per Kitto J
12.
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

245

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
can have wholly unanticipated and undesirable side effects.13 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 intended, and so worsens the problem or solves one problem by creating another
one.14
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 persons 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
propensity to consume is 0.75 (75 cents of an extra dollar is spent), the multiplier is 4
13.
14.

Beerworth (1980) p 67
Sunstein (1990A)

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Chapter 16 Effects

(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 Sandalls 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 Gellners 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 peoples 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
clothes on their back, bread on the table and milk in the refrigerator.17 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 Lords Prayer
17.
Commentary 16.3.

Chapter 16 Effects

247

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 market18 (although the market is not
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.19 Posner argues that
the economic policy underlying some legal rules is to promote the efficient allocation
of resources.20 Consequently, many legal rules bear the stamp of economic
18.
19.
20.

See Duxbury (1996).

Commentary 16.4.
Posner (1992) p 22

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Chapter 16 Effects

reasoning because in legal reasoning there is an inarticulate groping towards

efficiency.21 Thus as different as the legal and economic approaches are [to a
question], they frequently lead to the same conclusion; consequently, the same legal
rule which legal scholars defend as just, economists defend as efficient.22
Liberty
My Fathers house has many mansions.23

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.24

As stated already, when used symbolically (or expressively) law affects ideology,
ideas, beliefs, values,25 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.26
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 Gusfields
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 middle-class, old stock, white American Protestants against a society
increasingly hostile to their values. Even if the legislation was not enforced, it was
21.
Posner (1992) p 23
22.
Cooter and Ulen (1988) pp 4-5. Commentary 16.5.
23.
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.
24.
The Lords Prayer
25.
Gordbaum (1990-91), Gutman (1992-93)
26.
Aubert (1966) p 115

Chapter 16 Effects

249

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
the law was broken, it was still clear whose law it was.27
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
rather for comforting society.28 While passing legislation to deal with a problem does
not work, it makes us feel good. Legislation of this kind does not have much
instrumental effect but operates mainly in the sphere of symbolism and magic.29
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
should not only be done, but should manifestly and undoubtedly be seen to be done.30
Why must justice be seen to be done? Justice must be rooted in confidence31 because
it is of fundamental importance that the public should have confidence in the
administration of justice.32 Confidence is destroyed when right minded people go
away thinking: The judge was biased 33 or if fair-minded people reasonably
apprehend or suspect that the tribunal has prejudged the case.34

Yet in a liberal democracy there is an anti-symbolic force at work, namely a

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
27.
28.
29.
30.
31.
32.
33.
34.

Mayer and Nelson (1973) pp 467-468; Gusfield (1967). Commentary 16.6.

Beerworth (1980) p 69, citing Arnold (1935). Commentary 16.7.
Aubert (1966) p 115
R v Sussex Justices; Ex parte McCarthy [1924] 1 KB 256, 259 per Lord Hewart CJ
Metropolitan Properties v Lannon [1969] 1 QB 577, 599 per Lord Denning
R v Watson; Ex parte Armstrong (1976) 136 CLR 248, 263
Metropolitan Properties v Lannon [1969] 1 QB 577, 599 per Lord Denning
R v Watson; Ex parte Armstrong (1976) 136 CLR 248, 263

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Chapter 16 Effects

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 Wildes
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
Nor mark it with the blessed cross
Because the man was one of those

By his dishonoured grave,

That Christ for sinners gave,
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.35

Prediction of Effects

Among all forms of mistake, prophecy is the most gratuitous.36

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
anticipated and desired, but they also may not.37 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
expression unintended consequences to capture this uncertainty.38 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 investigated in a laboratory by a controlled experiment. This is almost
35.
36.
37.
38.

Barclay (1999)
George Eliot Middlemarch Chapter 9
Beerworth (1980) p 67
Commentary 16.8.

Chapter 16 Effects

251

invariably the case with the operation of statute law. It cannot, therefore, be directly
subjected to completely scientific analysis.39
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.40
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.41 Consequently, for any situation there may be an intricate chain
or network of causation.42
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.43
(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
39.
40.
41.
42.
43.

Commentary 16.9.
See Mason (1993B).
Commentary 16.10.
Commentary 16.11.
Commentary 16.12.

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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.44 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:
44.

Boston Consulting Group (1972)

Chapter 16 Effects

253

(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.45 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.46

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).
45.
46.

Commentary 16.13.
Chapters 13-15

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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 organisations 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 Bs 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

255

familial factors go back for generations and involve maladaptive behaviour that is
learnt 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 Streisands 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 brothers life
But straws the wheat and saves the chaff

Or whether Laws be wrong;

Is that the wall is strong
A year whose days are long
That men have made for Man
And the sad world began
With a most evil fan.1

Introduction
Values are a crucial part of policy because policy comprises two major processes. It
involves predicting what effect or outcome a law or an interpretation of a provision in
a 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
[S]ocial science is not in a privileged position to pronounce on social values, because there is a
logical gap between empirical evidence and moral action.2

Values are the criteria or standards by which people judge something to be good or
bad or right or wrong.3 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.4
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.
1.
2.
3.
4.

Oscar Wilde The Ballad of Reading Gaol

Ambercrombie, Hill and Turner (2000)
McShane (2000) p 215
Haralambos and Holborn (1991) p 6

256

Chapter 17 Values

257

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 0n with the
corresponding effects of these statutes being labelled Effects 0n.5 These options can
be set out in a table in the following way:
Statutes
Statute 0
Statute 1
Statute 2
Statute n

Effects
Effect 0
Effect 1
Effect 2
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.6 So, if
Statute X causes Effect X, and Effect X yields the highest net benefit, the legislature
should enact Statute X.7 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
5.
6.
7.

Chapter 30 Model for Forming Law

See, for example, Eskridge (1989), Finn (1989) and Guest (1981-84).
See Honigman (1964).

258

Chapter 17 Values

those before a legislature. It has to interpret an ambiguous provision that has a range of
meanings, Meanings 1n. Each meaning causes an effect so that collectively Meanings
1n cause Effects 1n.8 These can be set out in a table in the following form:
Meanings
Meaning 1
Meaning 2
Meaning n

Effects
Effect 1
Effect 2
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 1n and determines which is best.9 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.10
Third, the court can resort to notions of metademocracy. This approach is premised on
the legislatures 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.11
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
8.
9.
10.
11.

Chapter 30 Model for Forming Law

Chapter 10 Policy
See Krygier and Glass (1995), Honigman (1964) and Honor (1993).
Commentary 17.1.

Chapter 17 Values

259

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
background not foreground to the policy model.12

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
values.13 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.14

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); Honor (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).

12.
13.
14.

For a general discussion of these matters in a legal context see Goodman (1995).
Chapter 18 Classification of Values
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.1

Introduction

Necessitas non habet legem.2

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.3

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.4 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.5
Putting this in another way, deontological morality incorporates the notion that some
acts are morally obligatory regardless of their consequences.6 We desire an end just
because the end has built into it the notion that, somehow, it is has to be pursued.7
1.
2.
3.
4.
5.
6.
7.

Commentary 18.1.
Commentary 18.2.
William Pitt the Younger, 1783
Commentary 18.3.
McShane and Von Glinow (2000) p 215
Flew (1984) p 89. See also Peters (1996).
Mackie (1986) p 775

260

Chapter 18 Classification of Values

261

(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.8
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 actors 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.9
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)

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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

263

Absolute and Relative Values

Inter arma leges sunt silentia11

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
good in itself12 regardless of other consequences.13 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.14 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, s116 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.
11.
12.
13.
14.

Commentary 18.4.
Kant (1785) p 62
Flew (198) under deontology.
Commentary 18.5.

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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.15 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 societys 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.16 In this vein John
Stuart Mill (1806-1879) asserted in his celebrated treatise On Liberty (1859) that a
justification (indeed in Mills 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
judicial system.17 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,18 and those who would subjugate them to the claims of distributive justice.19
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.
15.
16.
17.
18.
19.

Commentary 18.6.
Commentary 18.7.
Commentary 18.8..
Prominent examples are Robert Nozick (b 1938) and Friedrich Hayek (1899-1992).
Commentary 18.9.

Chapter 18 Classification of Values

265

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
Justice Brennan of the High Court of Australia took this point directly in Dietrich.20
There, he was the lone dissenter in a decision by the court to establish, even if
indirectly,21 a common law right to legal aid. Brennans objection was succinctly put:
Who is to pay for it?22
As an illustration of how protection of rights might require resources, take freedom of
worship. Ordinarily this is economically costless for society.23 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
concerning distributive justice, such as rights to a decent income, legal aid,24 proper
medical care and adequate education. Obviously these rights are inherently economic
because they make a direct claim on societys 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
resources are directed to building the schools, paying the teachers and so on.25 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.
20.
21.
22.
23.
24.
25.

Dietrich v The Queen (1992) 177 CLR 292

Commentary 18.10.
Dietrich v The Queen (1992) 177 CLR 292, 320-321
Commentary 18.11.
Dietrich v The Queen (1992) 177 CLR 292
Commentary 18.12.

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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.26 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
commercial channels for ourselves.27
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
26.
27.

Broadcasting Services Act 1992 (Cth)

Commentary 18.13.

Chapter 18 Classification of Values

267

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 (Somersets Case) (1772) Lofft 1; 20 Howells State Trials 79,
98 ER 499. Somersets 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

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Chapter 18 Classification of Values

right to free speech doesnt 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 Washingtons 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, societys acceptance of the right to own property means
that the social cost is not considered important. In any event, the percentage of
societys resources used to establish and maintain places of worship is small in the

Chapter 18 Classification of Values

269

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
Stones perspicaciously identified, the normative force of the actual. Another
explanation, which can be taken consistently with Stones, 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 Gods children.1

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.2
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

270

Chapter 19 Choice of Values

271

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.3 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.4
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.5

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;
6
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.7 This
enables the law in a particular society to speak with one voice in the face of conflict.8
This approach finds judicial support. Sir Frank Kitto, for example, says that the
3.
4.
5.
6.
7.
8.

R v Carroll (2002) 77 ALJR 157, [24]

Flew (1971)
Einstein (1950) p 12
Samuel Taylor Coleridge The Rime of the Ancient Mariner
Dworkin (1986) p 139
Dworkin (1986) p 165

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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.9
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 of faith. It is an act of faith to assert that our thoughts have any relation
10
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.11 Therefore, reasoning by means such as
deduction or induction can devise or discover the standards by which humans should
live.12 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.13 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.14 As the Levellers of the 17th century
put it, reason hath no precedent for reason is the fount of all just precedents.15
Induction
Common lawyers claim that courts develop law by induction. Induction is discussed
earlier,16 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.17
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
9.
10.
11.
12.
13.
14.
15.
16.
17.

Kitto (1992) p 794

GK Chesterton Orthodoxy (1908)
Commentary 19.1.
Allen (1964) pp 298-299
Sir Edmund Coke Institutes: Commentary upon Littleton, First Institute 62a
Emmens v Pottle (1885) 16 QBD 354, 357 per Lord Esher
Hill (1961) p 179
Chapter 6 Induction
Commentary 19.2.

Chapter 19 Choice of Values

273

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.18 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,
19
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. Gods 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).20 This version of natural law is neatly summed up in an evangelical
religious slogan: For best results follow the Makers instructions.21 Or as William
Cowper expressed it: Nature is but the name for an effect, Whose cause is God.22
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
18.
19.
20.
21.
22.

Chapter 5 Deduction
St Matthews Gospel 28:19
Commentary 19.3.
Commentary 19.4.
William Cowper The Winter Walk at Noon 1:223

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Chapter 19 Choice of Values

to love your neighbour.23 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.24
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.25
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
23.
24.
25.

Donoghue v Stevenson [1932] AC 562, 580

John Milton, Paradise Lost 1.652
Flew (1984) p 19

Chapter 19 Choice of Values

275

principles by which they should live. This knowledge is the common property of
mankind,26 based on common sense27 or the common thoughts of men.28 It is part
of every mans natural reason.29 Consequently the principles that should direct our
lives, and the values from which they are derived, are self evident.30 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.31
Ronald Dworkin (b 1931) makes a similar point, claiming that humans know moral
principles as a matter of instinct.32 In a similar vein, Stephen Covey argues that
humans have an innate consciousness and awareness of these principles.33 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.34
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.35 Other judges use
phrases of a similar inclination when they refer to prevailing community standards36
and accepted standards of right conduct.37
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.38
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. Stones
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.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.

Allen (1964) p 286

Pearce v Gardner [1897] 1 QB 688
Carrington (1997)
Sir Edmund Coke 97b, Calvins case (1608) 7 Co Rep 1a, 19a
United States Declaration of Independence, Covey (1998) p 34
Thomas Aquinas Summa Theologica Qu 94 Art 2
Dworkin (1986) p 180
Covey (1998) p 35
Covey (1998) p 34
McFarlane v Tayside Health Board [2000] 2 AC 59, 82 per Lord Steyn
Mason (2003) in Sheard (2003) p 7
Cardozo (1921) p 112
Mackie (1986) pp 772-773

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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,39 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,40 a general public sentiment of moral wrongdoing,41
community attitudes and community values,42 all of which are in sharp contrast to
mere personal values.43
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.44 On this line of reasoning
values are most fully recognised and legitimised when they are incorporated into
international law.45
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,46 and some are honoured in state practice.47 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
39.
40.
41.
42.
43.
44.
45.
46.
47.

Wilson v Glossop (1888) 20 QBD 354 per Fry LJ

Moore (1994)
Donoghue v Stevenson [1932] AC 562, 580
Braithwaite 1995) p 353
Mason AF (1986) p 5
Lebanese Moslem Association v Minister for Immigration (1986) 11 FCR 543, 67 ALR 195
French (2000) p 20
Minister for Immigration v Teoh (1995) 183 CLR 273, 291, 128 ALR 353, 365
Lebanese Moslem Association v Minister for Immigration (1986) 11 FCR 543, 67 ALR 195

Chapter 19 Choice of Values

277

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 Kings 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.48 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.49 Hence, as the
maxim said, neminem oportet esse sapientiorem legibus50 that is, no man [out of his
own private reason] ought to be wiser than the law.51 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.52
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 answer53 or making the proper construction of a provision;54 judges assert
that basic values underlie, and are recognisable in, common law;55 Justice Michael
Kirby refers to the High Court of Australia deploying, over its history a happy mix of
creativity and continuity.56 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,57 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.58 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,
48.
Hobbes (1971) p 62
49.
Sir Edmund Coke 97b, Calvins Case (1608) 7 Co Rep 1a, 19a
50.
Sir Edmund Coke 97b, s138
51.
See Kelly (1995)
52.
Commentary 19.5.
53.
Doyle (1999) p 937. Commentary 19.6.
54.
Bourke v State Bank of NSW (1988) 85 ALR 61, 71 per Wilcox J
55.
See, for example, Dietrich v The Queen (1992) 177 CLR 292, 306 and Derbyshire County
Council v Times Newspapers [1993] AC 534, 549
56.
Kirby (2000) p 9
57.
French (2000) p 20
58.
McLachlin in Sheard (2003) p 18

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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.59
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.60
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.61 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.62
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

63

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.64 At the other extreme,
law is a wilderness of single decisions, totally unpatterned and with no concern for
internal consistency.65 No one, however, takes this view to its full extreme, but some
59.
Allen (1964) p 286
60.
Leon v Casey [1932] 2 KB 488
61.
Abercrombie (2000) p 373
62.
Haralambos (1991) p 6
63.
Commentary 19.7.
64.
For example, Julius Stone called one of his texts Legal System and Lawyers Reasoning
see Stone (1964).
65.
Twining and Miers (1999) p 140

Chapter 19 Choice of Values

279

approximate it. AWB Simpson describes common law rules as chaotic66 to the extent
that they are more of a muddle than a system.67 Charles Sampford takes a similar
view. Institutions of law lack an overall structure; instead they are just a part of the
social mle.68 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.69
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,70
even if there are substantial areas of agreement.71 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 directions72 reflecting the mores of the time.73 In these cases
policy makers must reappraise values according to social necessity or changed
conditions.74
While the existence of a diversity of values is easily observable it has been judicial
indorsed,75 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.76 Schaefer makes a similar observation in stating that
[o]bviously not all the 250 million Americans agree on one set of goals.77 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
66.
Simpson (1986) p 15
67.
Simpson (1986) p 24
68.
Sampford (1989) p 261. See also Barnes (1994) and Barnes (1995).
69.
Abella (2003) p 59
70.
See Nedelsky (1997).
71.
Commentary 19.8.
72.
R v Carroll (2002) 77 ALJR 157, [24]
73.
Cardozo (1921) p 112. There, Cardozo also opines that judges are not powerless to
raise the level of prevailing conduct.
74.
Brennan (1993), Mason (1992), Mason (1993B)
75.
Cardozo (1921 p 112, Brennan (1993), Mason (1992), Mason (1993B)
76.
Vaughan and Hogg (1998)
77.
Schaefer and Plamm (1992) p 81

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Chapter 19 Choice of Values

accepted by large sections of the population.78 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.79
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.80
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.81 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.82 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,
78.
79.
80.
81.
82.

Abercrombie (2000) p 71
Schaefer and Plamm (1992) p 81
Allport (1931)
Mackie (1986) p 773
Mackie (1986) p 775

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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.83
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.84
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
83.
84.

Mackie (1986) p 774

See, for example, Elkins (1983)

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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.85 Honigman makes a related point in
arguing that legislation may not be effective when it is trying to resolve conflicts over
values.86
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).87
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,88 individual predispositions,89 and personal
preference.90 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
85.
86.
87.
88.
89.
90.

Passmore (1981)
Honigman (1964)
Phares (1997) pp 15-18
Allen (1964) p 350, citing Scrutton J in Hill v Aldershot Corporation [1933] 1 KB 259.
Wilson v Minister for Aboriginal Affairs (1996) 189 CLR 1, at 43 per Kirby J
Walker (2002)

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283

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.91

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,92 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,93 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.94
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.95 In plain language not all
judges are cut with the same cloth even if they wear the same type of robes.
91.
Factors that adversely affect legal decision-making are discussed in Chapter 27
Irrationality.
92.
Schaefer and Plamm (1992) p 81
93.
Krygier and Glass (1995), especially p 359, where they stress that shared or
community values are essentially contested.
94.
Schaefer and Plamm (1992) p 80
95.
Commentary 19.9.

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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.96
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,97 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
96.
Heydons Case (1584) 3 Co Rep 7a, 7b. Commentary 19.10.
97.
Commitment to rights, however, is not totally shared because there is not complete
agreement about the existence and scope of some individual rights.

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285

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.98

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
98.
St Matthews Gospel 7:12
99.
Dietrich v R (1992) 109 ALR 385, 402-403
100.
Minister for Immigration v Teoh (1995) 183 CLR 273, 291; 128 ALR 353, 365 per Mason
CJ, Toohey J
101.
Cooper Brookes v FCT (1981) 147 CLR 297, 320-321; 35 ALR 151, 169-170
102.
See Moore (1994).
103.
Attorney General v Heineman Publishing (1987) 10 NSWLR 86, 191, McManus v ScottCharlton (1996) 140 ALR 625, 632

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Chapter 19 Choice of Values

justice,108 fairness,109 the guiding rules of right,110 a sense of legal right,111 equity,112
reciprocity,113 and the fundamental principles which underlie a parliamentary
democracy based on the rule of law.114 These are in contrast to, and oppose, that
which is unjust,115 irrational,116 inconvenient,117 capricious,118 absurd,119 manifestly
unreasonable,120 unfair,121 or illogical.122 In contrast, public values promote what is
effective,123 fair,124 and reasonable.125 They exhort the achievement of goals that are
harmonious, rather than conflicting,126 the correction of prior action which we now
take to be wrong,127 the satisfying of human needs,128 the enactment of statutes that
are public regarding,129 the rational solution of social conflicts,130 the creation of
social utility131 and the need for parties to deal with each other fairly and in good
faith.132 These values are also manifest in the economic concept of public goods.133
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 (1748104.
Chaudary v Minister for Immigration (1994) 121 ALR 315
105.
Donoghue v Stevenson [1932] AC 562 at 580, Honor (1993), Wilson v Glossop (1888) 20
QBD 354 per Fry LJ
106.
National Bank of Greece v Metliss [1958] AC 509, 525
107.
Robinson v Continental Insurance Co [1915] 1 KB 155
108.
Valentini v Canali (1890) 24 QBD 166
109.
New South Wales Law Reform Commission (1968) First Annual Report
110.
Allen (1964) p 299
111.
Sir Edmund Coke
112.
Duggan (1997)
113.
Commentary 19.11.
114.
Legislative Standards Act 1992 (Qld) s4(1)
115.
Centronics Systems v Nintendo (1992) 111 ALR 13
116.
Centronics Systems v Nintendo (1992) 111 ALR 13
117.
Centronics Systems v Nintendo (1992) 111 ALR 13
118.
Graham v Ninness (1986) 65 ALR 331, Australian Telecommunications Commission v
Parsons (1985) 59 ALR 535
119.
Director of Public Prosecutions v Fowler (1984) 55 ALR 175, Newcastle City Council v GIO
(1997) 149 ALR 623
120.
Hilton v FCT (1992) 110 ALR 167
121.
Minister for Immigration v Petrovski (1998) 154 ALR 606
122.
Alcatel v Commissioner of Patents (1996) 138 ALR 504
123.
Richardson v FCT (1997) 150 ALR 167
124.
Cooper Brookes v FCT (1981) 147 CLR 297, 320-321; 35 ALR 151, 169-170
125.
Cooper Brookes v FCT (1981) 147 CLR 297, 320-321; 35 ALR 151, 169-170
126.
Project Blue Sky v ABA (1998) 153 ALR 490
127.
Webber (1995) p 7
128.
Thomson (1987)
129.
Mace (1986)
130.
Fleming (1977) p v
131.
Allen (1964) p 297
132.
Finn (1989)
133.
Commentary 19.12.

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287

1832), James Mill (1773-1836), John Stuart Mill (1806-1873)134 and Henry Sidgwick
(1838-1900) who constitute a creative strand of English philosophical scholarship.135
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.136 The aim then, according to
the famous maxim of Francis Hutcheson (1694-1746) is to obtain the greatest
happiness for the greatest number.137
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 mens reasonable expectations in life in civilised society, with the minimum of
friction and waste.138
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
134.
135.
136.
137.
138.
139.
140.

Mill (1861)
See Guest (1981-1984).
Mill (1861). Commentary 19.13.
Hutcheson (1725) sections 3 and 7. Commentary 19.14.
Pound (1954)
Johan Norberg (2005)
Commentary 19.15.

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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 shouldnt 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.141

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
141.

Johan Norberg (2005)

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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 its 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.142

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.
143.
144.
145.
(2006).

Neil (2008)
These questions are discussed in Chapter 18 Classification of Values.
Commentary 19.16.
For discussion of the connection between happiness and moral dilemmas see Bagaric

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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.146 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 neighbours
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
146.

Sen (1985). Commentary 19.17.

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291

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 childrens
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 citizens right to
procedural justice in the courts.
Markets

Greed is good.147

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
147.
In the 1980s this was the catchcry of share traders that was shouted along the canyons
of Wall Street.

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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,148 innovation, technical, economic and political rationality,149 the
saving of costs,150 and efficiency.151
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.152 These rules bear the stamp of economic reasoning because they
encapsulate an inarticulate groping towards efficiency.153 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.154
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
148.
149.
150.
151.
152.
153.
154.

Finn (1989)
Matheson (1997)
Sawer (1970)
Mitchell (1990)
Posner (1992) p 22
Posner (1992) p 23. See also Campbell (1968).
Cooter (1988) pp 4-5.

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293

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.155 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.156 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.157
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?158

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.159 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.160
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.161 The theory assumes that we are rational. Therefore, if we
were asked to make a decision about what we wanted, even when confronted with
155.
Posner (1992) p 530, Baumol (1991) p 5 (production is everything in the long run),
Jackson (1994) pp 436-437
156.
See Schumacher (1989).
157.
Stewart (1982-83)
158.
Ingram (1996)
159.
For discussion of equality see Baker (1990)
160.
See Duggan (1997) and Haddad (1990).
161.
Rawls (1971)

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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.162 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.163 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.164
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
162.
163.
164.

Solomon (1990)
Lucas (1989) p 185
Scruton (1982)

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295

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.165 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
165.

Nozick (1974)

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(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 Lords 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 frogs 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), Honor (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.

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297

Commentary 19.10 Footnote 96

Heydons 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 Matthews 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 Smiths 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.

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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 Victorias 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
Lockes 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.

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299

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
governments 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 Lockes analysis of the basis of civil society. That said, while
Lockes 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.1 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
1.

Lennards Carrying Co v Asiatic Petroleum Co [1915] AC 705 per Lord Haldane LC

300

Chapter 20 Social Choice

301

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.2 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.3 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
2.
3.

Commentary 20.1.
John Locke Essays Concerning Human Understanding 1690

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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.4 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 Arrows
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,5 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.
4.
5.

Commentary 20.2.
Commentary 20.3.

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303

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.6
6.

Commentary 20.4.

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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.1

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,2
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.

305

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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.3

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 operations4 that may
be allowed by a constitution.5 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.
3.
GK Chesterton Heretics
4.
Morris (2004) considers with regard to the New Zealand provision how democratic
such provisions really are.
5.
Commentary 21.2.

Chapter 21 Social Choice: Making Law

307

(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.6

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 Burkes Principle.7 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
6.
7.

St Matthews Gospel 25:40

Commentary 21.3.

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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 publics 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.8

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
Arrows 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.9 These conditions include that the system of voting is
fair, that voters have full access to the information necessary to make an informed
choice,10 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.
Arrows 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
8.
Button (2007B). Button was quoting John Lloyd, Director of Journalism, Reuters
Institute for the Study of Journalism, at Oxford University.
9.
Burnheim (1985)
10.
Commentary 21.4.

Chapter 21 Social Choice: Making Law

309

impossibility theorem of Kenneth Arrow (b 1921)11 and the research of Amartya Sen
(b 1933).12 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
that both constrain individuals and influence their preferences.13 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.14 A
person can make a decision that is good enough (called satisficing) rather than a
decision with the highest payoff (called maximisation or optimisation).15 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.
11.
12.
13.
14.
15.

Arrow (1951)
Sen (1970). See also Kamesar (1997).
Abercrombie (2000) p 287
Conlisk (1996), Lipman (1995).
Pinfield (1986)

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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.)16
The obvious answer to this question of changing values is to make periodic reviews of
legislation. How this can be done is discussed in the context of causation.17
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
16.
17.

Chapter 22 Social Choice: Interpreting Law

Chapters 13-15

Chapter 21 Social Choice: Making Law

311

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.18

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.19
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
contributors, present or future, want done.20
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,
18.
19.
20.

Senator Hubert H. Humphrey (Minnesota)

Commentary 21.5.
For discussion of the corruptive aspects of lobbying see Girling (1997).

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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
is that losers [by lobbying] pick government policy.21
Problem: Domination
In a democracy, the majority of the citizens is capable of exercising the most cruel oppressions
upon the minority.22

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.
21.
22.

Baldwin and Robert-Nicoud (2007)

Edmund Burke Reflections on the Revolution in France (1790)

Chapter 21 Social Choice: Making Law

313

This is a law about the procedure of the legislature. To change the composition of the
upper house there are two alternative means of proceeding.23 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
23.

Trethowan v Peden (1930) 31 SR (NSW) 183, Clayton v Heffron (1960) 105 CLR 214

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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 . . .
Double entrenchment detracts from the sovereignty of a legislature.24 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, yesterdays majority is given more authority than todays
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 humans 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
power and you have at least an appearance of legitimacy.25
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,
24.
25.

Commentary 21.6.
For criticisms of majoritarianism see Chemerinsky (1989) pp 74-77.

Chapter 21 Social Choice: Making Law

315

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 Somersets god-parents
(from the christening) learned of this, they obtained a writ of habeas corpus from the
Court of Kings Bench requiring the ships captain to produce Somerset in court so
that the court could adjudicate on the legality of his imprisonment on the ship.26
Counsel for Somerset submitted in support of his clients 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.27
The conclusion that followed was simple. Slavery had no legal basis. Consequently, in
Lord Mansfields 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 Gods chilren.
While Somersetts 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
Supreme Court, some 85 years later, in Dred Scott v Sandford.28 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
26.
27.
28.

Somerset v Stewart (1772) Lofft 1; 20 Howell's State Trials 79 (Somersett's Case)

Somerset v Stewart (1772) Lofft 1; 20 Howell's State Trials 7979 (Somersett's Case)
Dred Scott v Sandford, 60 US (19 How) 393 (1857)

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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
corner stone of democracy,29 and consequent fears that a few powerful voices drown
out 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.
29.

Schacter (1995A) pp 603-606

Chapter 21 Social Choice: Making Law

317

Deliberative Democracy

If liberty means anything, it means the right to tell people what they do not want to hear.30

Deliberative democracy is also called discursive democracy.31 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
minimum and acceptable level of equality for all citizens.32

Conclusion
There are, to put it broadly, different forms of democracy each with different
requirements for legitimacy. When those requirements are satisfied, two consequences
30.
George Orwell
31.
Commentary 21.7.
32.
Arup (1982) at p 14 refers to this as a guaranteed fundamental level of integrity and
humanity.

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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
by reference to the democratically determined purpose for which they are enacted.33
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.34 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
amounts to no responsibility.35
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.
33.
34.
35.

However, see Weaver (1985).

This proposal is discussed in Chapter 15 Cause: Responding to Uncertainty.
Commentary 21.8.

Chapter 21 Social Choice: Making Law

319

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

Burkes principle was named after Edmund Burke (1729-1797) the English lawyer,
politician and writer. Burkes 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 Burkes
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

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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: Its very obvious what the strategy is. Get an
image for nightly news for people who dont follow politics an image that makes the
government look like its 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 dont 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 Australias 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

321

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.1

Introduction

They aint nuthin until I calls em.2

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
1.
2.

Schacter (1995A) p 593

This was attributed to Bill Klem (1874-1951), the father of all baseball umpires.

322

Chapter 22 Social Choice: Interpreting Law

323

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.3
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 disciplinarianism.4 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,5 purposive interpretation6 or original
constructivism.7 These terms are used interchangeably in this discussion. Originalism
3.
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).
4.
This usage is directly illustrated by Schacter (1995A).
5.
Schacter (1998)
6.
Kingston v Keprose (1987) 11 NSWLR 404
7.
Schanck (1990) p 850 and see also Goldsworthy (1997).

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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,8 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.9 The
interpreters role resembles that of an historian or an archaeologist, in quest of an
ancient thought of which the enactment may contain traces.10 Through the process of
statutory archaeology the originalist interpreter sifts through the statutes text in an
attempt to unearth the intention of the drafters.11
Legislative legitimacy is squarely based on the notion that any deviation from the
originalist construction is an improper judicial intrusion into the legislatures role.12
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.13
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.14
Legislative Legitimacy in Principle

A perfect judge will read each work of wit With the same spirit that its author writ.15

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.
8.
9.
10.
11.
12.
13.
14.
15.

Schacter (1995A) p 594

Schacter (1995A) p 594
Cot (1992) p 6
Graham (2002) p 93
Graham (2002) p 97
Frankfurter (1947) p 533
See Symmons (1977).
Alexander Pope (1688-1744) An Essay on Criticism

Chapter 22 Social Choice: Interpreting Law

325

Proposition 1: Democratic Legislature

Proposition 1 is that the legislature is perfectly democratic.16 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 legislatures 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.
There is, as has been discussed, debate as to how correct is Proposition 1.17 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.18
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.19 Some singularly correct statutory meaning exists and is inscribed in the
statute at the time of enactment.20 Consequently all a court has to do is to engage in a
fairly mechanical retrieval of legislative meaning.21
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
precisely how the statute is to be interpreted in all of these situations.22 Moreover,
16.
Schacter (1995A) p 597. Commentary 22.1.
17.
Chapter 21 Social Choice: Making Law
18.
Schacter (1995A) p 595. Illustrations are the approaches discussed later in this chapter
deference, reconstructionism, pragmatism and disciplinarianism.
19.
Schacter (1995A) p 595
20.
Schacter (1995A) p 623
21.
Schacter (1995A) p 597
22.
See, for example, Easterbrook (1984) especially p 93.

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Chapter 22 Social Choice: Interpreting Law

empirical studies show that legislators will sometimes deliberately employ wide
ranging or uncertain language for political and self serving ends.23 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
criticism.24 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

If Parliament does not mean what is says, it should say so.25

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 parliaments 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 legislations enactment.26
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
fraught with difficulty.27
(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.
23.
24.
25.
26.
27.

Schacter (1995A) pp 604-605

Schacter (1995A) pp 599-603
AP Herbert
Graham (2002) p 98
However Vogenauer (1997) argues that this is not the case.

Chapter 22 Social Choice: Interpreting Law

327

(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.28
(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 Heydons
Case, a court must interpret a statute according to the intent of the Parliament that
made it29 which will involve removing the mischief or defect that caused the
statute to be enacted.30
In Heydons 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,
according to the true intent of the makers of the Act, pro bono publico.31
Under this rule a court is directed to make a sure and true interpretation of a statute
by interpreting it according to the true intent of the makers of the Act.32 Heydons
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
28.
Cox (1947) p 44, Scalia (1997) pp 32-36
29.
Heydons Case (1584) 3 Co Rep 7a, 7b.
30.
Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers Case) (1920) 28
CLR 129, 161-162, per Higgins J
31.
Heydons Case (1584) 3 Co Rep 7a, 7b. Commentary 22.2.
32.
Heydon's Case (1584) 3 Co Rep 7a, 7b

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Chapter 22 Social Choice: Interpreting Law

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
explain the rule in more formal terms, a court initially does three things.33 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
evasions.34
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.35
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.36
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.
33.
34.
35.
36.

Heydon's Case (1584) 3 Co Rep 7a, 7b

Heydon's Case (1584) 3 Co Rep 7a, 7b
Heydon's Case (1584) 3 Co Rep 7a, 7b
Commentary 22.3.

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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
court to give effect to every provision of the legislation37 according to its spirit,38
intent39 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 Parliaments
intent to give new meaning to the phrase Cannabis Sativa L.40
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).41 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
its policy or with any common law or statutory duty to that same effect.42
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 interest43 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
37.
38.
39.
40.
41.
42.
43.

In South Australia it is each Act and every provision.

In Western Australia the provision refers to true spirit.
In South Australia the provision refers to the true intent.
Perka v The Queen [1984] 2 SCR 232, 264, 266
Posner (1992) p 534
Commentary 22.4.
Commentary 22.5.

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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.44
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
44.

Schacter (1995A) p 607

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331

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.45
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.46 By this mean it retains but fundamentally reconfigures democracy as
an anchoring normative principle.47
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
45.
46.
47.

Schacter (1995A) p 607

Schacter (1995A) p 607
Schacter (1995A) p 607

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Chapter 22 Social Choice: Interpreting Law

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
Council.48
Full scale deferral entails a court deferring to the interpretation of an agency at all
times, provided the agencys 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.49
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 short, an administrative agency possesses a better democratic pedigree than a
court.50
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.51
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 of public policy objectives.52

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
48.
Chevron Inc v Natural Resources Defense Council 467 US 837 (1984).
49.
Chevron Inc v Natural Resources Defense Council 467 US 837, 843 (1984)
50.
Schacter (1995A) p 617
51.
Deference to the interpretation of an agency may, however, affect legislative
deliberation and drafting see Molot (2001).
52.
Ison (1985-1986) pp 1-2

Chapter 22 Social Choice: Interpreting Law

333

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
lacking.53 Typically it is invoked to protect those who are silenced, marginalised,
oppressed or sidelined54 through lack of either political power or economic capacity.55
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.56
But reconstructionism does not just reconstruct democracy by outcomes, it also
reconstructs democratic institutions. Courts are not mere ciphers, transmitting the
policy wishes of a legislature. Instead they become gatekeepers and auditors.57 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.58 Statutory meaning is
thus not indelibly inscribed at the moment of statutory creation; rather courts perform
the task that the legislature failed to do.59
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.60 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 correct61
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.
53.
Reconstructionism has judicial support in the celebrated footnote 4 of the Supreme
Court decision in United States v Carolene Products 304 US 144, 152 n 4 (1938).
Ely (1980) gave great impetus to this approach.
54.
Commentary 22.6.
55.
The analysis of political power by Lukes (1974) explains how this can happen.
56.
St Matthews Gospel 7:16
57.
Commentary 22.7.
58.
Schacter (1995A) p 619. Commentary 22.8
59.
Schacter (1995A) p 620
60.
Sullivan (1988) p 1718
61.
Schacter (1995A) p 626

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(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.62 A
dynamic or progressive interpretation is not tied to the framers original intention but
is permitted to evolve in response to both linguistic and social change63 because once
enacted, a statute can operate under conditions originally unguessed at by those who
made it.64 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.65
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
62.
63.
64.
65.

See, for example, Atiyah (1980) p 368.

Sullivan (1994)
Bennion (1983)
Re BC Motor Vehicle Act [1985] 2 SCR 486

Chapter 22 Social Choice: Interpreting Law

335

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
courts 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 courts 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,66
that assist them to produce effective and coherent statutory law.67 The basis for these
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.68 A court, by contrast, has a unique vantage point that the legislature
enacting 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.69 In relation to this application the
court has 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
of creating statutes.70 A strong judiciary can improve legislative outcomes and so
strengthen the democratic process.71 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
the needs of society.72
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
by a special majority (for example two thirds).73
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
66.
67.
68.
69.
70.
71.
72.
73.

Goldstein (1984) p 104

Schacter (1995A) p 627. Commentary 22.9.
McHugh (1999) p 42
Commentary 22.10.
Schacter (1995A) p 634
Schacter (1995A) p 636
McHugh (1999) p 42
Commentary 22.11.

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time that elapses, the greater the probability of change.74 In theses circumstances a
court may interpret or may consider interpreting a statute by reference to what is
variously known as contemporary policy, contemporary values,75 contemporary
needs,76 current views of justice,77 or values in line with current trends,78 which are in
contrast to the values of a bygone era.79 Interpreting statutes in this way is called
evolutive constructivism because it views the statute as a living, evolving
document.80 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).81 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,
attitudes, beliefs, and knowledge.82 Thus they view statutes through the prism of
their understanding of the current context.83 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 judges 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.
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
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.

Mason (1992), Mason (1993)

Fleming (1977) p v
Sawer (1970)
Sawer (1970)
Connor v Sankey [1976] 2 NSWLR 570
Mason (1988)
Schanck (1990) p 851; Eskridge (1987), Eskridge (1990)
Eskridge and Frickey (1987). Commentary 22.12.
Schanck, (1990) p 851
Schanck, (1990) p 851

Chapter 22 Social Choice: Interpreting Law

337

legislature.84 This is why a judges view of contemporary policy can sometimes be

seen as idiosyncratic by some observers, especially those who disagree with those
views.85
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.86 Ronald Dworkin also
echoes this approach in arguing that judges can create a community of principle
rather than just a mere rulebook community.87
Representative Nature of Judicial Decision Making
There is an argument that courts themselves operate as a form of representative
democracy.88 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.89 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.90 This after all is the heart of democracy.
84.
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.
85.
Metal Manufacturers v Lewis (1988) 13 ACLR 357 per Mahoney J
86.
Eskridge and Frickey (1987)
87.
Dworkin (1986) pp 338, 345. Commentary 22.13.
88.
Peters (1997)
89.
Dworkin (1986) p 342
90.
Schacter (1995A) p 629

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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 tenants family. In the result the court
held that the tenants surviving same sex life partner was a member of the deceaseds
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.91
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
its scope. First, courts do not make new law spontaneously.92 Instead their law making
is opportunistic since it is made in response to a dispute which parties bring to the
court.93 Second, judges tend to put a high premium on certainty and predictability,
which are necessary to create a stable legal system.94 Third, judges are aware of their
limitations as lawmakers and so move cautiously, making change only when
justification for it is manifest.95
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.96 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. Therefore a court should respond and seek reparation in the way that it
91.
Braschi v Stahl Associates 543 NE 2d 49, 51 (NY 1989)
92.
McHugh (1999) p 43
93.
Consequently, as Lord Diplock (1978A) p 279 pointed out, common law could not
have created the welfare state.
94.
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
95.
McHugh (1999) pp 43-44
96.
Graham (2002) p 114

Chapter 22 Social Choice: Interpreting Law

339

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 selfinterest.97 Hence, when they legislate, they further their own self-interest,98 most
obviously by furthering their own monetary or re-election opportunities.99 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.100
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.101 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
Scalia, legislators are chronically tempted to pass off difficult choices of policy102 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
customers satisfied.103 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
Arrows impossibility theorem, of inherent difficulties in aggregating individual
97.
Commentary 22.14.
98.
Commentary 22.15.
99.
Schanck (1990) p 843
100.
Schacter (1995A) p 639
101.
Schanck (1990) p 843
102.
Schacter (1995A)
103.
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.

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Chapter 22 Social Choice: Interpreting Law

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 politics.104
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 moneys
worth.
Thus, on this approach a statute is read narrowly in favour of those whose interests are
not advanced by the statute.105 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 Heydons Case, which urges that statutes be interpreted
pro bono publico (for the public good) rather than pro privato commodo (for private
benefit).106
The other is a maxim from private law, verba chartarum fortius accipiuntur contra
proferentem (called the contra proferentem rule for short).107 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.108
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.109 (Like
many generalisations this has some merit but it is not the full picture.)
104.
Chapter 21 Social Choice: Making Law
105.
Easterbrook (1983). See also Gunningham (1992) and Eskridge (1989).
106.
Heydons Case (1584) 3 Co Rep 7a, 7b
107.
See, for example, White v John Warwick [1953] 1 WLR 1285, 1293.
108.
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.
109.
Commentary 22.16.

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341

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.110 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.111

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
110.
111.

Moles (2007)
Tom Stoppard, playwright

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Chapter 22 Social Choice: Interpreting Law

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
deciding which option is best.112
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
sense.113 Consequently, when interpreting law [e]ducated intuition may play a larger
role than an examination of niceties of textual analysis.114
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
112.
113.
114.

This model is developed and described in Chapter 30 Model for Forming Law.
Steyn (2002) p 12
Steyn (2002) p 7

Chapter 22 Social Choice: Interpreting Law

343

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.115
These options can conveniently be set out in table. This labels the range of meanings
that a court choose as Meanings 1n, and label the effects as Effect 1n to correspond
with Meaning 1n. 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
115.
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.

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Chapter 22 Social Choice: Interpreting Law

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.116
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
they are based and thus by the judgments and values impounded in these policies.117 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
116.
Chapter 19 Choice of Values
117.
For analysis of how legislative intent might be ascertained and for justification of its
use, see Vogenauer (1997).

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345

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.118 That case had to interpret s703(a)(1) 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 Aluminiums plant were African
American, even though African Americans made up 39% of the workforce in the
area.119 To remedy the problem Kaiser Aluminium and United States Steelworkers
Union created the scheme that gave rise to the issue for consideration in Weber.120
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
reasonably comprehensive statement of the policy behind the statute.121 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
118.
119.
120.
121.

United Steel Workers v Weber (1979) 443 US 193

Graham (2002) p 112
United Steel Workers v Weber (1979) 443 US 193
Samuels (1998), Vogenhauer (1997)

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Chapter 22 Social Choice: Interpreting Law

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
specific provision may reveal its intent.122
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
122.
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.

Chapter 22 Social Choice: Interpreting Law

347

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
or scope of a word,123 or it can express this intention by overwhelmingly clear and
strong implication.124 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
statute was passed.125 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.126
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
used.127 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 37.128 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 means the expression fancy bread had an identifiable and quite specific meaning
in 1836.
123.
Smoker v Pharmacy Restructuring Authority (1994) 36 ALD 1, 3, where a guideline was
taken to be binding because the statute said so.
124.
Barrett v Thurling [1984] 2 NSWLR 683, holding that children did not include stepchildren.
125.
Commentary 22.17.
126.
Sharp v Wakefield (1888) 22 QBD 239, 242
127.
Babianis v Lutony Fashions (1987) 71 ALR 225, 240
128.
The Aerated Bread Company v Gregg (1873) 8 LRQB 355

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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.
In doing this they reject the contemporanea expositio maxim.129 In its stead they adopt
the notion that a statute is usually intended to endure for a long time in a changing
world.130 Therefore, as the formal phrase puts the position, a statute is taken to be
always speaking.131 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
these. A bicycle constitutes a carriage,132 a hovercraft is a vehicle, an airplane can be a
vehicle,133 a locomotive is a car134 and a jet ski should in principle be a ship.135
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.136
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
Case.137 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 tenants family. In the case the court held that the tenants
surviving same sex life partner was a member of the deceased tenants family. What
constitutes a family depends to a large extent on social recognition.138 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.
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
129.
130.
131.
132.
133.
134.
135.
136.
137.
138.

Commentary 22.18.
Steyn (2002) p 15
Pearce (2001) p 96
Corkery v Carpenter [1951] 1 KB 102
McBoyle v United States 283 US 25 (1931). Commentary 22.19.
Johnson v Southern Pacific Co 196 US (1904). Commentary 22.20.
Commentary 22.21.
Braschi v Stahl Associates 543 NE 2d 49 (NY 1989)
Braschi v Stahl Associates 543 NE 2d 49 (NY 1989)
Commentary 22.22.

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349

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
growth and expansion within its natural limits.139 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.140
Despite Lord Sankeys 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.141
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
background of common law notions of justice and fairness142 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
139.
140.
141.
142.

Edwards v Attorney General [1930] AC 124

Hogg (1997)
Commentary 22.23.
Kioa v West (1985) 159 CLR 550, 62 ALR 321, 365 per Brennan J

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Chapter 22 Social Choice: Interpreting Law

accepted part of the legal and social system, and thus reflect the likely policy behind a
statute.143 They assume that the intention of the legislature is more likely than not to be
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,144 as
well as freedom, equality before the law, good faith and reasonableness.145 A statute,
therefore, will not be interpreted to operate in conflict with these values unless its
language is reasonably capable of no other construction.146
These presumptions concerning legal and economic justice, fairness and
reasonableness are of wide ranging operation. One significant area where they have
been invoked consists of protection of human rights.147 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),148 navigating a
river,149 avoiding deportation,150 refusing a blood test,151 maintaining personal
privacy152 and exercising free speech;153 procedural rights as in retaining legal
representation,154 trial by jury155 and receiving a hearing before a possibly adverse
decision;156 property rights as in freedom to dispose of property,157 for example by
disposing of part of an interest in a lease by subleasing,158 and the right to exclude
others from entry to ones land;159 and finally protection of economic and commercial
activities as in carrying on ones business160 or trade,161 preparing goods for sale,162
selling goods,163 authorising an agent to act on ones behalf, 164 and the exercise of
freedom of contract.165
143.
Kirby (1988B)
144.
Commentary 22.24.
145.
McHugh (1999) p 47
146.
Sargood Brothers v Commonwealth (1910) 11 CLR 258, 279. Commentary 22.25.
147.
This list of cases is taken, with some modification, from Pearce and Geddes (2001) pp
150-151
148.
Re Bolton; Ex parte Beane (1987) 162 CLR 514, 70 ALR 225, 231-232
149.
Fergusson v Union Steamship Co (1884) 10 VLR (L) 279
150.
Minister for Immigration v Sciascia (1991) 103 ALR 307
151.
OBrien v Gillies (1990) 69 NTR 1
152.
Tackiack v Commissioner of Australian Federal Police (1995) 131 ALR 319, 330
153.
Brown v Classification Review Board (1998) 154 ALR 67, 76
154.
Bell v Australian Securities Commission (1991) 103 ALR 689
155.
Tassell v Hayes (1987) 71 ALR 480
156.
Gladstone v Armstrong [1908] VLR 454; Barratt v Howard (2000) 170 ALR 529, 543
157.
American Dairy Queen v Blue Rio (1981) 37 ALR 613
158.
Re Shearer (1891) 12 LR (NSW) 24
159.
Coco v R (1994) 120 ALR 415
160.
Commonwealth v Progress Advertising and Press Agency Co (1909) 10 CLR 457
161.
Committee of Direction of Fruit Marketing v Collins (1925) 36 CLR 410
162.
Mudginberri Station v Langhorne (1985) 68 ALR 613, 621
163.
Mudginberri Station v Langhorne (1985) 68 ALR 613, 621
164.
Christie v Permean, Wright Co Ltd (1904) 1 CLR 693; McCrae v Coulton (1986) 7 NSWLR
644
165.
Hayes v Cable (1961) 78 WN (NSW) 735

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351

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.166
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 continuum167
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.168 It is the legislatures intent that the court makes the political choices
involved in interpreting and applying this provision.169
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
from a statutory base,170 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
interpretation.171
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 Grahams article.
The authors 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).

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Chapter 22 Social Choice: Interpreting Law

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 Heydons Case (1584) 3 Co Rep 7a, 7b.
Some other cases asserting or applying the rule are Lincoln Colleges 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 prparitoires) to ascertain the
policy, that is, the purpose or object of the legislation. These provisions allowing

Chapter 22 Social Choice: Interpreting Law

353

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

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Chapter 22 Social Choice: Interpreting Law

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 tenants
family. In the result the court held that the tenants surviving same sex life partner
was a member of the deceaseds 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 Schacters 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, [i]ntelligent policy-making often

Chapter 22 Social Choice: Interpreting Law

355

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: [L]egislators 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

Dworkins 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

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Chapter 22 Social Choice: Interpreting Law

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

Chapter 22 Social Choice: Interpreting Law

357

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

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Chapter 22 Social Choice: Interpreting Law

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
I could not love thee near so much,

That you too shall adore

Loved I not honour more.1

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.2 This rule is called the ratio decidendi (meaning
1.
2.

Richard Lovelace (1649) To Lucasta on Going off to War

Commentary 23.1.

359

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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.3 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.4

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.5
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 1n. 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
3.
4.
5.

Commentary 23.2.
Donoghue v Stevenson [1932] AC 562, 578 per Lord Buckmaster, dissenting.
Commentary 23.3.

Chapter 23 Precedent

361

or relevant facts. These can be any of Case Facts 1n; for example they may be Case
Facts 2, 4, 9 and 11. For making common law they are relabelled and designated as
Facts 1n 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 Baldricks 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 1n, are generalised to make Elements 1n of the
legal rule:
Facts
Fact 1
Fact 2
Fact n

Legal Rule
Element 1
Element 2
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)

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Chapter 23 Precedent

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 14, 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.7
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.8 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.9
(2)
Must Follow Decisions of Higher Courts. Courts must follow decisions of
higher courts, that is, courts above them in the hierarchy;10 conversely, higher courts
can overrule decisions of lower courts.11
(3)
Other Decisions Have Persuasive Value. Courts attach persuasive value to
decisions of major common law courts outside their jurisdiction and courts beneath
them in the hierarchy, although they are not technically bound by them.12
Justification for Precedent
Je suis que je suis, mais je ne suis pas que je suis.13

There has been debate as to the status of the rules of precedent.14 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.15 Other views proposed are that
precedent is based on convention, custom or tradition.16
7.
Commentary 23.4.
8.
Blackshield (1980A)
9.
See Blackshield (1978), Blackshield (1980A) and Prott (1978).
10.
See Blackshield (1980A). Lower courts, however, can be rebellious and not do so see
Prott (1977).
11.
See Carly (1981). Commentary 23.5.
12.
Commentary 23.6.
13.
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.
14.
Evans, PJ (1982), Goldstein (1984) p 89, Evans, Jim (1984)
15.
Commentary 23.7.
16.
Goldstein (1984) p 91

Chapter 23 Precedent

363

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
traditional view tends to rationalise it on the basis that courts have authority.17 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
17.

Commentary 23.8.

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Chapter 23 Precedent

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
because it asserts judicial sovereignty,19 supremacy20 authority,21 and independence.22
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.
18.
19.
20.
21.
22.

Commentary 23.9.
See Ison (1985-86) and Caldwell (1984).
See Mendelsohn (1961).
Blackshield (1980A)
Commentary 23.10.

Chapter 23 Precedent

365

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?23

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.

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Chapter 23 Precedent

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.24

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
cost flowing from loss of uniformity.25 In allowing only a higher court to overrule a
lower court stare decisis puts greater store on continuity and stability for law than on
24.
25.

Smith v Allwright (1944) 321 US 649, 669. Commentary 23.11.

Chapter 11 Nature of Net Benefit

Chapter 23 Precedent

367

adaptability and flexibility it ups the value so to speak.26 These costs have already
been discussed in the explanation of net benefit.27 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
Continuity brings desirable qualities to law,28 namely stability,29 certainty and
predictability. Consequently any change to a precedent diminishes this sense of the
law being steadfast.30 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
without guidance from precedent the judicial workload would be intolerable.31
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
permission of the court in order to argue that the court should change an established
precedent.
26.
Commentary 23.12.
27.
Chapter 11 Nature of Net Benefit
28.
Kingston v Keprose (1987) 11 NSWLR 404, 423
29.
McHugh (1999) p 48, 49
30.
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
31.
Currier (1965) pp 235-238

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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
are increasing the transaction costs of the rule.32
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
consistency to law.33 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
32.
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.
33.
Mirehouse v Rennell (1833) 1 Cl & F 527, 546 per Parke J

Chapter 23 Precedent

369

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.34

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.35 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.36 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
34.
Schrader (1972)
35.
Ostime v Australian Mutual Provident Society [1969] AC 459, 489 per Lord Denning
36.
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.

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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
are articulated in some of the cases.37 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

371

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
it.38 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
the statute.39 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
38.
39.

Chapter 30 Model for Forming Law

Commentary 23.14.

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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
legislatures 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)

Chapter 23 Precedent

373

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 WesleySmith (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.

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Chapter 23 Precedent

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.1 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.2 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.3
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.4 But despite their
1.
2.
3.
4.

Commentary 24.1.
Chapter 25 Analysing Ambiguity
For an account of or maxims or canons see Llewellyn (1950). Commentary 24.2.
Commentary 24.3.

375

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Chapter 24 Rules

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.5 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 courts 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.)6
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.
5.
6.

Llewellyn (1950). Commentary 24.4.

Chapter 30 Model for Forming Law

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377

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 Sherwood7 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 example,
tigers.8 It is this construction which is urged by the eiusdem generis rule. Essential to
its operation is that there exists 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 legislatures 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.9 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.10 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.
7.
8.
9.
10.

Prior v Sherwood (1906) 3 CLR 1054

Pearce (1988) p 40
Christopher Enright Legal Method Chapter 10 Classifying Meanings
Christopher Enright Legal Method Chapter 10 Classifying Meanings

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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

Chapter 24 Rules

379

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
meaning as the legally correct meaning of the ambiguous provision.12
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
12.

Chapter 30 Model for Forming Law

380

Chapter 24 Rules

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.1 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 1n and their
effects as effects as Effects 1n. 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.
1.

Chapter 30 Model for Forming Law

381

382

Chapter 25 Analysing Ambiguity

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 1n in our model). While there
has been some consideration of ambiguity by legal writers,2 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
2.

Commentary 25.1.

Chapter 25 Analysing Ambiguity

383

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.3
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.4
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 Carpenter.5 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, Im half crazy, all for the
love of you. It wont be stylish marriage, I cant afford a carriage, but youll look
sweet upon the seat of a bicycle built for two.6
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
3.
4.
5.
6.

See Christopher Enright Legal Method, Chapter 14 Classifying Meanings.

Smith v United States 53 113 SCt 2050, 2061 (1993) per Justice Scalia
Corkery v Carpenter [1951] 1 KB 102
Corkery v Carpenter [1951] 1 KB 102, p 103

384

Chapter 25 Analysing Ambiguity

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.7 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.8

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.9 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 ambiguity10 is ambiguity within words themselves. A word can have
two or more distinct meanings.11 In the phrase offensive behaviour does the word
offensive mean aggressive (as in taking the offensive) or disgusting?12 A word can
also be wide or vague in its terms and hence uncertain in its reach. How high does a
7.
Christopher Enright Legal Method Chapter 14 Classifying Meanings
8.
Commentary 25.2.
9.
See Christopher Enright Legal Method, Chapter 14 Classifying Meanings
10.
Repatriation Commission v Vietnam Veterans Association (2000) 171 ALR 523, 550 per
Spigelman CJ
11.
Ormond Investment v Betts [1922] All ER Rep 709 per Lord Buckmaster
12.
R v Smith [1974] 2 NSWLR 586

Chapter 25 Analysing Ambiguity

385

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
grammatical ambiguity.13 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.14 There is an implication from the text that the
words might be read either more widely or more narrowly than their ordinary
meaning.15 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.
13.
14.
15.

Repatriation Commission v Vietnam Veterans Association (2000) 171 ALR 523, 550
Commentary 25.3.
Commentary 25.4.

386

Chapter 25 Analysing Ambiguity

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
Pattersons 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 statutes 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

Chapter 25 Analysing Ambiguity

387

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,16 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
again the outline of them that is located earlier in this chapter.17
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.18 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).19 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
16.
R v L (1994) 122 ALR 464 at 468
17.
See Christopher Enright Legal Method Chapter 14 Classifying Meanings.
18.
For example, it is reflected in the drafting of s15AB of the Acts Interpretation Act 1901
(Cth) and its counterparts in other jurisdictions.
19.
Repatriation Commission v Vietnam Veterans Association (2000) 171 ALR 523, 550

388

Chapter 25 Analysing Ambiguity

the wording. In other words, the court rules that the meaning that a party seeks to put
on a word or phrase is lexically untenable.20
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:
(1)
Ambiguity of Implication. This is by far the most common exclusion,21 and
occurs in texts,22 legislation23 and cases.24 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
the defendant used the gun for the purchase.25
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.
20.
21.
22.
23.
24.
25.

Williams (1981A) p 1129

Williams (1981A) , referring to implication as the secondary meaning of a provision.
An example is Pearce (2001) p 25.
Commentary 25.5.
Commentary 25.6.
Smith v United States 53 113 SCt 2050 (1993)

Chapter 25 Analysing Ambiguity

389

A problem with this ambiguity is that judicial discussion is not very articulate. Lord
Diplock, for example, refers to judges who invent fancied ambiguities.26 As 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
one construction is open.27
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 eitheror challenge, the uncertainty of vagueness lies in a marginal question of degree.28
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.29 The golden rule of
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
with the rest of the statute.30 These, it should be noted are fairly extreme cases.31 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
implication32 or by allowing a meaning that only partially fits within the words of the
statute.
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
but only up to a point. In the result it gives the words a permissible but strained33 or
26.
27.
28.
29.
30.
31.
32.
33.

Duport Steels v Sirs [1980] 1 WLR 142, 157, [1980] 1 All ER 529
Mills v Meeking (1990) 91 ALR 16, 30-31. Commentary 25.7.
Dickerson (1964) p 10
Commentary 25.8.
Grey v Pearson (1857) 6 HLC 61, 106 per Lord Wensleydale
Commentary 25.9.
Commentary 25.10.
Bermingham v Corrective Services Commission (1988) 15 NSWLR 292, 302

390

Chapter 25 Analysing Ambiguity

ambulatory34 construction, but this construction should be neither unreasonable nor

unnatural.35

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),36 propounds the view that language is extremely open to ambiguity.
Commonly its exponents refer to the indeterminacy of legal language.37 Affiliated
with this is the notion that each of us is likely to take our own interpretation. As the
Latin proverb puts it, quot homines tot sententiae,38 that is, there are as many opinions
as there are people. Thus, Berns writes that interpretation is a profoundly creative act
[because] to read a text is also to create that text anew,39 and Wald asserts that
language is inherently indeterminate and will always depend upon both the writer and
the readers context to give it meaning.40 In a similar vein Hart, a positivist we should
add, says that language is open textured.41
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
both extreme and irrelevant.42
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 choice43 on some occasions, even if in
some cases this creative choice is secret and even unconscious.44
The view taken here is similar to Julius Stones. Language is potentially ambiguous
but is not always so in all contexts. Except in the case of a wide and open term with an
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
34.
R v Young (1999) 46 NSWLR 681, 687-688
35.
IW v City of Perth (1997) 146 ALR 696, 702. Commentary 25.11.
36.
Schanck (1990) pp 833-843
37.
See Greenwalt (1990); Endicott (1996) and Drahos and Parker (1991).
38.
Publius Terentius Afer (185 BC 159 BC), a Roman comic dramatist (aka Terence)
39.
Berns (1993) p 63
40.
Wald (1990) p 302
41.
Hart (1961) p 125
42.
Commentary 25.12.
43.
Stone (1964) p 276, and see Queensland v Commonwealth (1977) 139 CLR 585, 603 per
Stephen J, 606 per Mason J.
44.
Stone (1964) p 241. See also Krygier (1986).

Chapter 25 Analysing Ambiguity

391

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

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Chapter 25 Analysing Ambiguity

the options must constitute the best available solution to the problem.45 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.46

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.
45.
46.

Commentary 25.13.
Easterbrook (1983) p 544

Chapter 25 Analysing Ambiguity

393

(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
be given their literal meaning.47 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.48 By contrast, the view propounded here
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.49 Other expressions besides literal50 are sometimes used such as natural,
ordinary and grammatical,51 but the effect is the same.
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.
(2)
Part 2. One can discover this literal meaning by objectively means.52 As the
Latin maxim puts it, lucet ipsa per se the meaning comes shining through.53 Words,
as it were, mean what they say and say what they mean.54
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.55 In other words, someone does not have to be a
lawyer to interpret law they only need to know how to read.
47.
Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127 per Kirby P
48.
Commentary 25.14.
49.
Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127 per Kirby P
50.
Project Blue Sky v ABA (1998) 153 ALR 490
51.
Vacher v London Society of Compositors [1913] AC 107, 149. Commentary 25.15.
52.
Kirby (2003) in Sheard (2003) p 45
53.
Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers Case) (1920) 28
CLR 129, 149
54.
Repatriation Commission v Kohn (1989) 87 ALR 111, 523 per Hill J. Commentary 25.16.
55.
Avel Pty Ltd v Attorney General (1987) 11 NSWLR 126, 127. Commentary 25.17.

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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.56 This is not the case for at least two
reasons. First, many words have more than one meaning as flipping through the pages
of a dictionary will reveal.57 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.58

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.59 In this way
the rule both assumes and requires that the intention of the legislature is found only in
the language in the statute as whole.60 Words used in the text of a statute constitute a
constraint on the range of interpretive options available.61 This is why a court must
not do violence to the language of an Act so as to bring within its terms articles
which are not expressly included.62
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
56.
Commentary 25.18.
57.
Commentary 25.19.
58.
Justice Antonin Scalia (2006)
59.
FCT v Trustees of Lisa Marie Walsh (1983) 48 ALR 253 at 278. Commentary 25.20.
60.
Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers Case) (1920) 28
CLR 129, 161-162, per Higgins J. Commentary 25.21.
61.
Eskridge (1990) p 626
62.
Corkery v Carpenter [1950] 1 KB 102, 106

Chapter 25 Analysing Ambiguity

395

that construction of an Act must be text based.63 As Lord Steyn succinctly put it, the
primacy of the text is the first rule of interpretation64 so that the text becomes the
formal focus of interpretation.65
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.66 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.67 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].68 That is, the mandated point of departure or commencement when a
court starts out on the road to interpretation must be the text itself.69
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
established or assumed intent of a legislature.70 A court cannot add words to a statute
or rewrite it when, through oversight or inadvertence, the clear intention of the
legislation has not been translated into the text of the law.71 Interpretation is deciding
which of two or more meanings is legally correct. It is not a warrant for redrafting
legislation nearer to an assumed desire of the legislature.72 As Easterbrook neatly puts
it, in these cases a court should say to a litigant: Too bad, but legislative intentions are
not legal rules.73 One sticks to the letter of the law, and must not depart from it in
pursuit of the supposed spirit or purpose of the legislation.74 Putting it simply, law is
the language and the language is the law.
63.
R v Young (1999) 46NSWLR 681, 687-688
64.
Steyn (2002) p 5
65.
Eskridge (1990) p 626
66.
Corkery v Carpenter [1950] 1 KB 102, 104, Federal Commissioner of Taxation v Trustees of
Lisa Marie Walsh (1983) 48 ALR 253, 278
67.
R v The Judge of the City of London Court [1892] 1 QB 273, 301-302 per Lopes LJ
68.
Trevisan v FCT (1991) 101 ALR 26, 31
69.
Steyn (2002) p 5
70.
Pearce (2001) pp 20-22
71.
Brennan v Comcare (1994) 50 FCR 555; 122 ALR 615
72.
Trevisan v FCT (1991) 101 ALR 26, 31
73.
Easterbrook (1983) p 534
74.
Indeed the English word literal is derived from the Latin word littera, a letter.

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Chapter 25 Analysing Ambiguity

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
example because it is inconvenient or impolitic or improbable.75 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.76 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
be.77 In any event, a policy is not ill conceived because a judge disagrees with it.78
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
recognise qualification or extension of a statute explicitly occurs in texts, cases79 and
legislation,80 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 the language is the law and the law is the language, which
75.
Amalgamated Society of Engineers v Adelaide Steamship Co (Engineers Case) (1920) 28
CLR 129, 161-162, per Higgins J. Commentary 25.22.
76.
Phosphate Co-op v Environment Protection Authority (1977) 18 ALR 210
77.
Davies v Deverell (1992) 1 Tas R 214, Shire of Arapiles v Board of Land and Works (1904) 1
CLR 679
78.
McCawley v The King (1918) 26 CLR 9, 24 ALR 413
79.
Commentary 25.23.
80.
Commentary 25.24.

Chapter 25 Analysing Ambiguity

397

leads to the proposition that a court may give a meaning to words only if these words
are reasonably open to such a construction.81
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
limits that they impose.82

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
(1981A) 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.
81.
82.

R v Young (1999) 46NSWLR 681, 687-688. Commentary 25.25.

Christopher Enright Legal Method Chapter 14 Classifying Ambiguity

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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, 3031 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 Veterans Association (2000) 171 ALR 523, 550 per Spigelman CJ and in
Bowtell v Goldsborough Mort & Co (1996) 3 CLR 444 at 456-457, per OConnor 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 Occams 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

399

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

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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 ODea [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

401

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.1

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.2 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.3 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.

402

Chapter 26 Observing Facts

403

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.4 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.5
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 Sphinx6 because its processes were neither
visible nor otherwise generally known.7 There were two specific prohibitions:
(1)
Judges could not interrogate juries for their reasons.8
(2)
Generally the law forbade investigation of the reasoning process by which
juries reached their decisions.9
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.10
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
4.
Twining (1984) p 68
5.
Christopher Enright Legal Method Chapter 25 Model for Proving Facts
6.
Ward v James [1966] 1 QB 273, 301; see Mackenzie v The Queen (1996) 190 CLR 348, 365.
7.
Kirby in Sheard (2003) pp 43-44
8.
Mourani v Jeldi Manufacturing (1983) 57 ALJR 825, 826, Newbury v Bristol Tramways and
Carriage Co (1912) 107 LT 801, 804
9.
Commentary 26.3.
10.
Kirby in Sheard (2003) p 45

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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
entail a blinding flash of light.12
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
sense of sight, sound, taste, smell or touch.13 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
11.
12.
13.

Kirby in Sheard (2003) p 46

Kitto (1992) p 792
Hodgson (1995) p 733

Chapter 26 Observing Facts

405

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.14
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.15

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.16 Just as a body has organs that perform various functions,17 so
14.
15.
16.
17.

Commentary 26.4.
Agbaba v Witter (1977) 14 ALR 187
Lennard's Carrying Co v Asiatic Petroleum Co [1915] AC 705, 713-714 per Lord Haldane
Commentary 26.5.

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Chapter 26 Observing Facts

does an institution.18 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.19 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
18.
19.

HL Bolton v TJ Graham [1957] 1 QB 159 per Denning LJ

Commentary 26.6.

Chapter 26 Observing Facts

407

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
in this way are a weapon, such as a gun or a knife, a piece of clothing or a document.20
(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 items 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.
20.

Commentary 26.7.

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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
to whether a fact can be subject to judicial notice is that it is sufficiently notorious21
or so commonly known that it is part of the knowledge of the ordinary man.22 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 partys
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 demissa per aures, /
Quam qu 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.
21.
22.

State Superannuation Board v FCT (1988) 82 ALR 63, 75

Brisbane City Council v Attorney General (1978) 19 ALR 681, 686

Chapter 26 Observing Facts

409

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.1

Introduction

Life is a comedy for those who think, and a tragedy for those who feel.2

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.3 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 Marxs 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
1.
2.
3.

Thomas Nagel Times Literary Supplement August 1998, cited in Lewis (1998)
Horace Walpole
For discussion of irrationality see Nedelsky (1997) 101-103

410

Chapter 27 Irrational Thinking

411

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. 4

Psychology

Emotions can be more easily manipulated than our intellect.5

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.6

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.7

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
4.
5.
6.
7.

Commentary 27.1.
Spence (2006) p 9
Viner (1925) pp 373-374
Sigmund Freud (1927) The Future of an Illusion

412

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.8
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.9
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.10 Most behaviour the
authors argue results from the interaction of all four quadrants while leaving open the
possibility that only one, two or three quadrants are involved.11
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,
limitations to human cognition,12 and consequent difficulty of making a rational choice
under conditions of great uncertainty.13 In consequence, an actors 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
8.
9.
10.
11.
12.
13.

Camerer, Loewenstein, and Prelec (2003)

Camerer, Loewwnstein and Prelec (2003) p 3
Camerer, Loewwnstein and Prelec (2003) p 3
Camerer, Loewwnstein and Prelec (2003) p 10
Ulen (1997)
Ford (1987), Davis (1970)

Chapter 27 Irrational Thinking

413

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.14 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.15
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.16 They put on a face and they put on an act.
Quadrant III involves automatic cognitive processes. Basic learnt human movement
fits into this category. An example is returning serve while playing tennis.17
Quadrant IV involves automatic affective behaviour. An example is that we jump
when someone says Boo.18
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).19
Robert W Levenson: Quadrants II and III
Professor Robert W Levenson proposes an explanation for why affective behaviour
can be either controlled (as per Quadrant II) or automatic (as per Quadrant III).20
Emotions, which involve affective behaviour, perform two major functions they
assist in determining whether something in the environment is a threat, and they gear
14.
15.
16.
17.
18.
19.
20.

Conlisk (1996), Lipman (1995).

Pinfield (1986)
Camerer, Loewwnstein and Prelec (2003) p 10
Camerer, Loewwnstein and Prelec (2003) p 10
Camerer, Loewwnstein and Prelec (2003) p 10
Snyder (1999)
Levenson (1999)

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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
significant implications for our well being and survival.21 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
response.22 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
the actual response we produce.23 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
rationality and passions.24 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
facts. This is a recognitional model for finding facts.25 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
21.
22.
23.
24.
25.

Levenson (1999) p 486. Commentary 27.2.

Levenson (1999) p 488
Levenson (1999) p 488
Levenson (1999) p 492
Hodgson (1995) p 7313

Chapter 27 Irrational Thinking

415

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.26
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
custody or does the other parent lose the child.27 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
by reference to its listed price.28
(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
be ascertained by proper inquiry and careful thought.29
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 peoples
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.
(4)
Actor-Observer Error. This is a tendency for people to do two contrasting
things:(i) They attribute anothers faulty behaviour to internal causes. (ii) They
attribute their own faulty behaviour to external causes. This is also an example of a
26.
27.
28.
29.

Commentary 27.3.
Mason in Sheard (2003) p 37
Mason in Sheard (2003) p 38
Mason in Sheard (2003) p 38, and see Posner (2001) pp 245-246, 256-257

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Chapter 27 Irrational Thinking

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.30 They do this
by giving undeserved favourable treatment to people from other races or with different
skin colours.31
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 cold32
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
are variously labelled personality, temperament, idiosyncrasies,33 the human factor,
individual predispositions34 and personal preference.35 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.36
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
generally unrecognised and taken completely for granted.37 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
30.
31.
32.
33.
34.
35.
36.
37.

Mason (2003) in Sheard (2003) p 39

See, for example, Bracy v Gramley 520 US 899 (1997)
Baker (1996)
Allen (1964) p 350, citing Scrutton J in Hill v Aldershot Corporation [1933] 1 KB 259
Wilson v Minister for Aboriginal Affairs (1996) 189 CLR 1, at 43 per Kirby J
Walker (2002)
Lord MacMillan, cited in Winters (1975) p 62
Schanck (1990) p 824

Chapter 27 Irrational Thinking

417

regarding some laws as socially better than others.38 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 hunches39 or intuition.40
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,41 Quinn v Leathem42 and the Taff Vale Railway Case.43 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 Vale.44
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.45 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.46 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
evidence and the consequent fact finding.47 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.48 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
38.
Walker (2002) p 11
39.
Allen (1964) p 350, citing Scrutton J in Hill v Aldershot Corporation [1933] 1 KB 259
40.
Hutcheson (1928)
41.
Allen v Flood [1898] AC 1
42.
Quinn v Leathem [1901] 1 AC 495
43.
Taff Vale Railway Co v Amalgamated Society of Railway Servants (Taff Vale Railway Case)
[1901] AC 426
44.
Commentary 27.4.
45.
Westen (2007B)
46.
Westen (2007A)
47.
Commentary 27.5.
48.
Mason in Sheard (2003) p 4. Commentary 27.6.

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Chapter 27 Irrational Thinking

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.49 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.50
49.
There may, however, be difficulties in conducting such research see Ross and
Blumenthal (1975).
50.
Commentary 27.7.

Chapter 27 Irrational Thinking

419

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.51

Introduction
Social factors affect decisions because all of us are socialised.52 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 cooperation53 or social bonds.54
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
legislators 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.55 As a result of these social factors individual choices
are shaped by a number of factors such as class, culture, political allegiance and
ideology.56 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
51.
52.
53.
54.
55.
56.

Lou Gerstner, Former CEO, IBM

Commentary 27.8.
Galanter (1997) p 385. See also Bensusan-Butt (1980).
Galanter (1997) p 386, citing Ashford (1997)
Lord Scrutton, cited in Winters (1975) and Mahoney and Martin (1987)
See Ferguson (1977), Galanter (1997) p 386, Sward (1989).

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Chapter 27 Irrational Thinking

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.
As an obvious example, the fact that judges are trained as lawyers57 and part of an
ancient profession steeped in tradition58 undoubtedly affects their decisions.59 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 judges 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.60 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.61
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.62 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.63 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
57.
58.
59.
60.
61.
62.
63.

Commentary 27.9.
Commentary 27.10.
See Paterson (1974).
See Nakamura and Smallwood (1980), Marsh (1983) and Kirby (1988A).
Leigh (2003)
Commentary 27.11.
Commentary 27.12.

Chapter 27 Irrational Thinking

421

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.64
This view had a major consequence for forming law. Because of the impersonal
powers to be found in the peoples national spirit65 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.66
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
64.
65.
66.

Freeman (1994) p 787

Freeman (1994) p 785
Commentary 27.13.

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Chapter 27 Irrational Thinking

particularly evil people. Most went to church on Sundays; most had children, loved
animals and life.67
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.68
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.69
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
member of a group. During this process, as Zimbardo explained it,70 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
because it is not under the usual social and personal controls.71
In this way, organisations take on an impersonal character.72 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
merely efficient; they are not emotional at all but technically clean-cut.73

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
Marxs approach to social analysis in a single phrase it is that appearances are
67.
68.
69.
70.
71.
72.
73.

Elwell (1996). Commentary 27.14.

Elwell (1996)
Vaughan and Hogg (1998) p253
Zimbardo (1970)
Vaughan and Hogg (1998) p253
Elwell (1996)
Mills (1958) pp 83-84. This was cited in Elwell (1996).

Chapter 27 Irrational Thinking

423

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.74
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
separate publication. Hence they must be pieced together from his writings75 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 Marxs 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
74.
75.

Friedrich Engels (1882) Socialism Utopian and Scientific p54

Freeman (1994) p 856

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Chapter 27 Irrational Thinking

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.76 Hence legislation
never does more than proclaim [or] express in words, the will of economic
relations,77 and juridical relations are but the reflex of the real economic relations.78
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
subjection79 since the state itself is an instrument of class oppression.80 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.81
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
76.
77.
78.
79.
80.
81.

Karl Marx, The Communist Manifesto

Karl Marx, The Poverty of Philosophy
Karl Marx, Capital, Vol 1
Dias (1973) p 456
Freeman (1994) p 854
Schanck (1990) pp 824-825. Commentary 27.15.

Chapter 27 Irrational Thinking

425

contract, to use an important example, is illusory since the parties do not have equal
economic bargaining power. By obscur[ing] power relations82 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
as liberty, the rule of law and the equality of all before the law.83
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.84
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 Marxs
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.85
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.86

Within philosophy, postmodernism, probably more than any other theory, has directly
attacked the notion that humans are capable of thinking rationally. Postmodernism
does this in a fundamental way by contending that there is no such thing as good and
82.
83.
84.
85.
86.

Freeman (1994) p 856

Collins (1982) p 91
Schanck (1990) pp 824-825
Harris (1986) p 253
Eleanor Rigby, words and music by John Lennon and Paul McCartney

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Chapter 27 Irrational Thinking

objective reason. As Frederich Nietzsche put it, there is no such thing as rationality
other than that contextually defined by the practices of a group.87 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).88
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 thats the truth.89

For the purposes of our general account, postmodernism involves several premises.90
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.91 Instead arguments succeed because of their capacity to persuade other
members of the community. We are socially conditioned to think that they are true.
Hence all arguments are rhetorical in nature,92 that is they persuade by emotion
rather than reason.93 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
and cultural background.
87.
88.
89.
90.
91.
92.
93.

Rorty (1990) p 232

The work that is most complete is J Derrida (1976) Of Grammatology
John Shakespeare (caption on a cartoon), The Sydney Morning Herald, 5 August 1999.
For a very readable account see Schanck (1992).
Nussbaum (1994) p 716
Schanck (1992) p 2551, citing Fish (1989) pp 294, 297.
Commentary 27.16.

Chapter 27 Irrational Thinking

427

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.94

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 revenge.95

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
94.
95.

Lewis Carroll
David Kennedy The Sydney Morning Herald 26 September 2001, Commentary 27.17.

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Chapter 27 Irrational Thinking

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.96 This pressure comes from many sources and in many ways.97 It
can be particularly intense in acute circumstances such as the cold war.98 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.99 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.100

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.
96.
97.
98.
99.
100.

Devlin (1978), Hanks (1987), Devlin (1979), Woods (1978)

Cretney (1984). Commentary 27.18.
See Maher (1993) and Williams (1993).
Kirby (1995), Kirby (1997B), Kirby (1997C), but for a contrary view see Thomas (1997).
See Solomon (1993).

Chapter 27 Irrational Thinking

429

(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 Webers 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.

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Chapter 27 Irrational Thinking

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 judges 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

Chapter 27 Irrational Thinking

431

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 Webers
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.

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Chapter 27 Irrational Thinking

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 Law1
#
Model for Using Law2
This explanation, however, is brief since the legal method proposed here is fully
explained in another text.3

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.4 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.5 Lawyers are skills averse in the central
tasks of working with law. This lack of method can be demonstrated in several ways
1.
This combines two similar and related models, the model for making law and the
model for interpreting law.
2.
This combines two similar and related models, the model for litigation and the model
for transactions.
3.
Christopher Enright Legal Method
4.
Commentary 28.1.
5.
See, however, Luhmann (1995).

433

434

Chapter 28 Legal Method

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.6 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.7
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.8
Instead, one of two things happens. Law students are taught methods that do not
work.9 Or legal method is taught by immersion, by osmosis or by some other
implicit models of learning.10 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.11 Mark Duckworth is similarly
blunt in relation to legal writing, asserting that [v]ery few lawyers are taught how to
write legal documents. It is something they are meant to pick up on the way.12
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 lack of method. The problem of lack of method is both identified by critics and
6.
7.
8.
9.
10.
11.
12.

Kirby (2003) in Sheard (2003) pp 46, 52

William (1981A) p 1128
Commentary 28.2.
Commentary 28.3.
Laster (2001) p vii
Ernst Freund A Course in Statutes (1916). Commentary 28.4.
Duckworth in Sheard 2003, p 96

Chapter 28 Legal Method

435

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
fact as a judge must do to decide a case,13 but also the absence even of possible
explanations for how these tasks might be performed.14 Thus, there is not disagreement
over method, there is a total absence of method.15
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.16 This has happened, according to
Kirby, because some of the issues raised by a reflection on judicial reasoning and
decision-making are puzzling to judges themselves.17 In consequence, as His Honour
goes on to say, when they interpret law, lawyers are truly upon an untracked ocean of
decision-making.18 In a similar vein, Sir Anthony Mason expresses the view that there
is an absence of uniform judicial methodology,19 while Lord Steyn describes
interpreting statutes as an intractable problem.20
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
there was no way of writing judgments.21
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
commonplace.22 As Professor Rodell succinctly put it more than 70 years ago, the two
things wrong with almost all legal writing are its stye and content.23 In a similar vein,
Mark Duckworth complains that the language of the law is in fact wordy, pompous
and dull.24 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
they cannot comprehend.25
13. Kirby (2003) in Sheard (2003) p 45
14. Kirby (2003) in Sheard (2003) p 46
15. Commentary 28.5.
16. Kirby (2003) in Sheard (2003) p 46
17. Kirby (2003) in Sheard (2003) p 46
18. Kirby (2003) in Sheard (2003) p 52
19. Mason (2003) in Sheard (2003) p 5
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

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Chapter 28 Legal Method

Criticism of legal writing also extends specifically to judgments.26 As Justice Sheller

says it: Many important judgments of our greatest judges are largely
incomprehensible to most readers.27 Gerard Henderson echoes this in saying of a
judgment, that [l]ike many High Court judgments, this is not easy to read.28
Judgments, it has been said, do not speak in a language or style that people readily
understand.29 In a similar vein Duckworth points out that law reports are not filled
with pages of great prose.30
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
are] using sound techniques.31
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
and used for good reason, though we cannot at present remember the reason.32
All of this testifies to a large gap in legal learning, caused by the absence of any
accepted method for performing the tasks necessary for working with law.33 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.34 For lawyers, legal method constitutes bona
vacantia.35
Delusion of Complexity
Law is sometimes seen as a complex36 and mysterious37 phenomenon. As Sir Garfield
Barwick, a former Chief Justice of the High Court of Australia, made the point: We
are practised in what is, in very truth, an ancient mystery and those who have mastered
its intricacy have indeed great power in their hands.38 This view of the law, it is
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.

Campbell (2003), Davies (1987)

Sheller (1996) p 4
Henderson (2002) p 11, Commentary 28.7.
Mason (1993A) pp 186-187
Duckworth (2003) in Sheard 2003, p 94
Merritt (2010)
Chief Justice Fortescue, in the reign of Henry VI, cited in Mellinkoff (1963) p 11
Kirby (2003) in Sheard (2003) p 45
Kirby (2003) in Sheard (2003) p 46
Commentary 28.8.
Abernathy (1983), Wilson (1974)
Commentary 28.9.
Barwick (1958) p 14

Chapter 28 Legal Method

437

suggested, comes from lacking proper method for working with law. Learn 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
of a method.39 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
39.

McShane (2000) pp 40-41

438

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 of Performance 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

439

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

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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.

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441

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.

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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.40
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.
40.

Commentary 28.10.

Chapter 28 Legal Method

443

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: Occupiers 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.]

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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 authors 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.1

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.2

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.3 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.4
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.
1.
2.
3.
4.

Chapter 3 Structuring Legal Rules

See Christopher Enright Legal Method Chapter 5 Organising Law: Macro Analysis
Chapter 3 Structuring Legal Rules
Commentary 29.1.

445

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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.5
(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.6 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.7 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 1n.
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 2.12.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
5.
6.
7.

Chapter 5 Deduction
Christopher Enright Legal Writing. Commentary 29.2.
Commentary 29.3.

Chapter 29 Model for Organising Law

447

might divide into Elements 2.3.12.3.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 1n 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 1n, 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.8
Diagram
Organising law can be represented in a diagram. This diagram is described and
explained in the earlier discussion of conditional statements.9

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

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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.1 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.2 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 1n 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
1.
2.

See Bauman (1989)

Chapter 25 Analysing Ambiguity

449

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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:3
Element 2M1

Fact 2M1

Evidence 2M1

Element 2
Element 2M2
Evidence 2M2
! Fact 2M2
!
Figure 30.1 Effect of Ambiguity on Litigation

Now consider the situation from the plaintiffs position (which will logically also
reveal the defendants 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 plaintiffs 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 plaintiffs 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
One
"

Case 2
Other
X

"

Case 3
Neither
X

Case 4
Both
"

! Fact 2M1

Evidence 2M1

X
Element 2M2 ! Fact 2M2
"
Figure 30.2 Analysis of the Effect of Ambiguity

Evidence 2M2

Element 2M1

Element 2

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

451

(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.4 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.5 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.6
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
4.
5.
6.

Re OReilly; Ex parte Bayford Wholesale (1983) 181 CLR 557 per Dawson J
Bauman (1989)
See Easterbrook (1984)

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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.7

Introduction
Forming law is purposive action that seeks the best outcome when a decision maker is
confronted with a number of options.8 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.9
(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
7.
Subordinate Legislation Act 1989 (NSW) Schedule 2, clause 2. Commentary 30.1.
8.
Chapter 10 Policy
9.
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

453

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.10

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.
10.

Einstein (1950) p 12

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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.11
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 0n. 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
11.

Chapter 22 Social Choice: Interpreting Law

Chapter 30 Model for Forming Law

455

In this diagram the range of effects consists of Effects 0n to correspond with Statutes
0n, 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 1n.
(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 1n. 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
following way:
Meanings
Meaning 1
Meaning 2
Meaning n
Figure 30.5 Meanings

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

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Chapter 30 Model for Forming Law

consists of Effects 1n to correspond with Meanings 1n 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
incorporate various down-the-line effects.12 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 X2Effect 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
cases.13

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.14
12.
13.
14.

Chapters 13-16
McHugh (1999) p 42
Chapter 10 Policy

Chapter 30 Model for Forming Law

457

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

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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.15
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.16 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
correct, rationality entails adopting the value that natural law provides for the task.17
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.18 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
15.
16.
17.
18.

Chapter 15 Cause: Responding to Uncertainty

Chapter 19 Choice of Values
Commentary 30.2.
Einstein (1950) p 12

Chapter 30 Model for Forming Law

459

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.19
In making this social choice, there is one logical constraint. These chosen values must
not seek inconsistent ends or outcomes.20 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
sufficient to carry the discussion forward.21 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
according to their preferences.22
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
19.
20.
21.
22.

Chapters 17-22
Scruton (1982) p 392
Chapter 11 Nature of Net Benefit
Abercrombie (2000) p 286

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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.23

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
Statute 0
Statute 1
Statute 2
Statute n

Effects
! Net Benefits
Effect 0
Net Benefit 0
Effect 1
Net Benefit 1
Effect 2
Net Benefit 2
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 0n. 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 0n, 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
23.

Stone (1936) p 20

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461

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
in earlier discussion of deduction.24
Legal realists assert that legal interpretation is a subjective process.25 Essentially their
argument is that ambiguity in law generates an inescapable need for choice26 between
feasible interpretations27 or competing solutions.28 Ambiguity is inescapable,29 so,
in the absence of precise rules, there is unavoidability of choice.30
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
they have a choice between differing interpretations, nor was the policy on which the
24.
25.
26.
27.
28.
29.
30.

Chapter 5 Deduction
See Fisher, Horowitz and Reed (1993). Commentary 30.3.
See Kirby (2003) in Sheard (2003) p 45
Steyn (2002) p 7
Steyn (2002) p 6
Kirby (2003) in Sheard (2003) p 44
Kirby (2003) in Sheard (2003) p 45

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Chapter 30 Model for Forming Law

choice was based freely and frankly discussed by them.31 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
court than a carefully reasoned argument based on policy.32 Consequently, in these
cases a large amount of consideration of policy was made covertly and in denial, rather
than with open and rational consideration.33
A second strand involves admission that policy is relevant without conceding it the
primal and exclusive relevance accorded to it by this text.34 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
attend to policy.35
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.36
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 1n. Each of these meanings, if
chosen as the legally correct meaning of the provision, will cause an effect. These
effects can be labelled Effects 1n to correspond with Meaning 1n, 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).
31.
32.
33.
34.
35.
36.

Metal Manufacturers v Lewis (1988) 13 NSWLR 315 per Mahoney J. See Bell (1983).
Commentary 30.4.
For a discussion of judicial use of policy see Bell (1983) and Richardson (1985).
Lord Bingham (2000) p 28
Stone (1968) p 236
Mason (2003) in Sheard (2003) p 5, citing McHugh (1999) p 46. Commentary 30.5.

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463

(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 1n 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
rectifies defects in the democratic process this is labelled metademocracy.37
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 courts calculation of net benefit; instead the court abides by the interpretive choice
expressly or implicitly revealed by the legislature when debating and enacting the
statute.38 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
37.
Chapter 22 Social Choice: Interpreting Law
38.
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.

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Chapter 30 Model for Forming Law

(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:
Meanings
Legislative Intent
! Effects
Effect 1
" Meaning 1
Meaning 2
Effect 2 " Effect Y
Meaning n
Effect n
Figure 30.9 Elected Legitimacy of the Legislature

Legislative Intent
Meaning X

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 courts 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
legislatures choice of effect, and use its own judgment as to which meaning will cause
this effect.39
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.

Chapter 30 Model for Forming Law

465

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
Meaning 1
Meaning 2
Meaning n

Effects
! Net Benefit
Effect 1
Net Benefit 1
Effect 2
Net Benefit 2
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.40 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
Legislative Intent
! Effects
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.
40.

Chapter 22 Social Choice: Interpreting Law

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Chapter 30 Model for Forming Law

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.41 Despite
the enormous reverence and devotion of common law for precedent, its only rational
justification is, as explained earlier, that it is squarely and entirely based on policy.42 A
similar argument is put concerning the rules of statutory interpretation.43 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.44

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.
41.
42.
43.
44.

Chapter 10 Policy
Chapter 23 Precedent
Chapter 24 Rules
Christopher Enright Legal Method Chapter 15 Secondary Sources

Chapter 30 Model for Forming Law

467

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 0n cause Effects 0n.
In Step 2 the legislature first determines the net benefit of each option. These are
labelled Net Benefit 0n. Thus, Statutes 0n cause Effects 0n, which yield Net
Benefit 0n. This can be set out in the following table:
Statutes
Statute 0
Statute 1
Statute 2
Statute n

Effects
! Net Benefit
Effect 0
Net Benefit 0
Effect 1
Net Benefit 1
Effect 2
Net Benefit 2
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

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Chapter 30 Model for Forming Law

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.45
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.46 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
45.
46.

Chapter 22 Social Choice: Interpreting Law

Chapters 10-25

Chapter 30 Model for Forming Law

469

jurisdictions. It also analyses a court interpreting law, which constitutes making law
but on a reduced scale.47

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,48 as well as associated tasks such as writing and reading
law.49

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
47.
48.
49.

Commentary 30.6.
Christopher Enright Legal Method
Christopher Enright Legal Writing

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Chapter 30 Model for Forming Law

(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 persons 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 persons 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
persons 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 persons 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
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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 peoples 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 1n that cause Consequence X.
(2)
The facts to which the rule applies consist of Facts 1n. (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
Minor Premise
Conclusion

Facts that fall within the categories designated by Elements 1n cause

Consequence X.
Facts 1n in this case fall within the categories designated by Elements
1n.
Facts 1n 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

473

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 1n cause Consequence X.1 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.2 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
1.
2.

Commentary 31.1.
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Chapter 31 Model for Using Law

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.3

Minor Premise
Introduction
The minor premise is represented by the relationship between Elements 1n and the
material facts of a case, which are labelled Facts 1n. It takes the form: The facts of
this case, Facts 1n fall within the categories designated by Elements 1n.
Now for this premise to be true, two requirements must be satisfied. First, as the minor
premise specifically requires, Facts 1n must fit or fall within the categories
designated by Elements 1n. This entails the task of applying law to facts.
Second, it is a logical or implicit requirement that Facts 1n 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 1n must fit within the categories
designated by Elements 1n. This requirement can also be framed from the reverse
perspective where it says that Elements 1n must apply to Facts 1n.
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

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475

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 1n. 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
4.

Commentary 31.2.

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Chapter 31 Model for Using Law

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
Element 1
Element 2
Element 3
Element 4

Facts
Fact 1
Fact 2
Fact 3
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

Chapter 31 Model for Using Law

477

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 1n 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 partys 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.

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Chapter 31 Model for Using Law

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.6 In this model, Processes 1n create Facts 1n.
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 clients legal position,
whereas in litigation a lawyer can only help to clarify and alter their clients 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.7
(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.8
(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.
6.
7.
8.

Commentary 31.4.
Commentary 31.5.
R v Morton (1873) LR 2 CCR 22

Chapter 31 Model for Using Law

479

(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
Minor Premise
Conclusion

Facts that fall within the categories designated by Elements 1n cause

Consequence X.
Facts 1n in this case fall within the categories designated by Elements
1n.
Facts 1n 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
Minor Premise
Conclusion

If A happens then B also happens.

A has happened.
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.

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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
apply.9
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.10
This model has five columns. Column 1 contains the law in the form of the elements
(Elements 1n) and consequences (Consequences) of the legal rule that constitutes the
cause of action. Column 3 contains the material facts, Facts 1n, being the facts that
satisfy Elements 1n. For litigation, Column 5 contains the evidence, Evidence 1n,
which can be used in an attempt to prove Facts 1n. For transactions, Column 5
contains the processes, Processes 1n, which can be used in an attempt to prove Facts
1n. 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.
9.
10.

Commentary 31.6.
Christopher Enright Legal Method

Chapter 31 Model for Using Law

481

(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 1n 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 1n.
(3)
Minor Premise. The arrow in Column 2 between Columns 1 and 3 represents
the minor premise. In short form it indicates that Facts 1n satisfy Elements 1n. 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 1n the rule would not apply
to the set of facts and the syllogism would not operate.
(4)
Conclusion. Because the rule applies to Facts 1n, it brings Consequences to
those facts. This is the conclusion of the syllogism. It is indicated in the diagram by

482

Chapter 31 Model for Using Law

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 1n 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 1n and Consequences, impounded in a conditional statement. Column 3
portrays the material facts of the case, Facts 1n. Column 2 contains a reverse arrow,
which indicates that Facts 1n satisfy Elements 1n.
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 1n 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
Evidence
! Facts !
Element 1
Fact 1
Evidence 1
Element 2
Fact 2
Evidence 2
Element n
Fact n
Evidence n
Consequences
Figure 31.7 Model for Litigation

Column 5 contains evidence. Evidence 1n is the evidence for Facts 1n. 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 1n consists of the
available evidence that is capable of proving Facts 1n, although there is no certainty
that this attempted proof will be successful when the case is tried.

Chapter 31 Model for Using Law

483

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
Processes
! Facts !
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 1n are the processes for establishing Facts
1n. 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 1n, and
portraying how each version of the consequences may be satisfied by the appropriate
facts, labelled ConFacts 1n, which in turn are established by ConEvidence 1n in
litigation and ConProcesses 1n in a transaction:
Law
Element 1
Element 2
Element n
Consequences
Consequences 1
Consequences 2
Consequences n

Facts
Fact 1
Fact2
Fact n

Evidence/Processes
Evidence/Process 1
Evidence/Process 2
Evidence/Process n

ConFact 1
ConEvidence/Process 1
ConFact 2
ConEvidence/Process 2
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 1n and
Consequences 1n. For the law to apply, therefore, the person must satisfy each of

484

Chapter 31 Model for Using Law

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 1n 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 text11:
(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
questions of fact.12
(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 1n 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 1n they cause Consequence X.
This conditional statement, of course, comprises the major premise of the syllogism
that represents the process of applying law.
11.
Christopher Enright Legal Method
12.
For an explanation of how this could be done see Christopher Enright Reforming Civil
Litigation.

Chapter 31 Model for Using Law

485

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.
486

Chapter 32 Summary

487

#
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,1 deduction,2 induction,3 abduction,4
analogy5 and probability.6
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.7
Deduction
Deduction is a logically perfect form of reasoning. Deduction involves a form of
reasoning called a syllogism.8
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.
1.
2.
3.
4.
5.
6.
7.
8.

Chapter 3 Structuring Law. Commentary 32.1.

Chapter 5 Deduction
Chapter 6 Induction
Chapter 7 Abduction
Chapter 8 Analogy
Chapter 9 Probability
Chapter 3 Structuring Law
Chapter 5 Deduction

488

Chapter 32 Summary

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
Major Premise
Minor Premise
Conclusion

Relationships

If facts of a designated kind occur, these legal consequences

follow.
Facts of this designated kind have occurred.
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
Conclusion

In all observed instances something, called X, occurs when Y occurs.

There is a rule, Rule R, which says: X always occurs when Y occurs.
Figure 32.2 Form of Induction

Abduction
Abduction seeks explanations for events.9 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
Explanation
Strength of Explanation
Conclusion

B has occurred
There is a rule, Rule R, that says A causes B.
No other explanation explains B as well as Rule R.
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.

Chapter 32 Summary

489

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.10 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.11 The task can be
made easier by using a classification of ambiguity as a tool of analysis.12

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 witnesss 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
10.
11.
12.

This explanation of policy taken directly from Chapter 10 Policy.

Chapter 25 Analysing Ambiguity
Christopher Enright Legal Method Chapter 14 Classifying Meanings

490

Chapter 32 Summary
#
#
#

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
aspects to structure micro structure and macro structure.13
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 right types of facts satisfy the elements, the consequences apply:
Law
Element 1
Element 2
Element n
!
Consequences
Figure 32.4 Model for Organising Law

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:
13.

Chapter 3 Structuring Legal Rules and Chapter 29 Model for Organising Law

Chapter 32 Summary
(1)
(2)

491

Think. They think carefully about the area of activity that the subject regulates.
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.14
(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.
14.

Commentary 32.2.

492

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 1n 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
Statute 0
Statute 1
Statute 2
Statute n

Effects
! Net Benefit
Effect 0
Net Benefit 0
Effect 1
Net Benefit 1
Effect 2
Net Benefit 2
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 1n. 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

493

decline to interpret the provision. Each meaning causes an effect so that collectively
Meanings 1n are predicted to cause Effects 1n. Each effect yields a net benefit so that
Effects 1n yield Net Benefits 1n. 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 1n) 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 0n. 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

494

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,15 which use various methods of logical
reasoning:
(1)
Hypothetico-Deductive Model. This uses a mixture of deduction and
induction.16
(2)
Experimental Method. This uses a mixture of deduction and induction.17
(3)
Correlation Method. This uses a mixture of induction and abduction.18
Non Scientific Means
There are two reasons why legislators and judges will not always deploy scientifically
based behavioural laws when making and interpreting law.19
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,
all being processes which are not readily susceptible of precise analysis.20
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.
15.
16.
17.
18.
19.
20.

Chapter 13 Cause
Commentary 32.3.
Chapter 5 Deduction and Chapter 6 Induction
Chapter 6 Induction and Chapter 7 Abduction
Chapter 13 Cause
Federal Commissioner of Taxation v Chubb (1995) 128 ALR 489

Chapter 32 Summary

495

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
existing common law rule.21
(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
does not hold up since there is a significant amount of values being shared.22
(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
the author and the basis for any consequential analysis of policy.23
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
the answer both in theory and practice comes from representative democracy.24
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
21.
22.
23.
24.

Commentary 32.4.
Chapter 19 Choice of Values
Chapter 19 Choice of Values
Chapter 21 Social Choice: Making Law

496

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
net benefit. There is, however, debate as to who should judge what is the best effect.25
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.26
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 courts 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]
which passed the Act.27 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
provision. Column 3 lists the actual predicted effect of each meaning. Column 5 sets
25.
26.
27.

Chapter 21 Social Choice: Interpreting Law

See Christopher Enright Legal Reasoning Chapter 22 Social Choice: Interpreting Law.
Sussex Peerage Case (1844) 11 Cl & F 85, 143; 8 ER 1034, 1057

Chapter 32 Summary

497

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
Desired Effects
! Actual 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
provision that gives rise to the need for interpretation.28 These meanings can be
designated Meanings 1n. Identifying Meanings 1n 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.
(3)
Use a developed classification of ambiguity to assist.29
Other Methods
Introduction
Policy is arguably king in the field of making and interpreting law.30 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
28.
29.
30.

Chapter 25 Analysing Ambiguity

Christopher Enright Legal Method Chapter 14 Classifying Meanings
Chapter 30 Model for Forming Law

498

Chapter 32 Summary

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
Minor Premise
Conclusion

Rule X provides a specific and correct answer for cases of

interpretation in Category Y.
This particular case falls into Category Y.
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
Ostensibly courts use precedent31 and rules or maxims of interpretation32 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
31.
32.

Chapter 23 Precedent
Chapter 24 Rules

Chapter 32 Summary

499

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
model for applying law to facts and a model for using law.33
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 way:
Law
Element 1
Element 2
Element n
!
Consequences
Figure 32.9 Model for Organising Law

Elements 1n 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 1n 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.
33.

Chapter 31 Model for Using Law

500

Chapter 32 Summary

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
Element 1
Fact 1
Element 2
Fact 2
Element n
Fact n
"
Consequences
Figure 32.10 Model for Applying Law

This model is built on the proposition that elements of a legal rule apply to facts.
Consequently the model for applying law is constructed by adding two columns to the
model for structuring law with micro analysis:
(1)
Column 3. Column 3 contains Facts 1n.
(2)
Column 2. Column 2 contains an arrow pointing from Column 3 to Column 1
demonstrating the relationship of Facts 1n to Elements 1n. This relationship can be
expressed in either of two ways:
(i)
Elements 1n apply to Facts 1n.
(ii)
Facts 1n fit within or satisfy Elements 1n.
Applying law to facts is a deductive process based on a syllogism. This syllogism for
applying law to facts takes the following form:
Components
Major Premise
Minor Premise
Conclusion

Relationships
Facts that fall within the categories designated by Elements 1n
cause Consequences.
The material facts in this case, Facts 1n, fall within the categories
designated by Elements 1n.
Facts 1n 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
Element 1
Element 2
Element n
"

Facts
Fact 1
Fact 2
Fact n

Evidence/Processes
Evidence 1/Process 1
Evidence 2/Process 2
Evidence n/Process n

Chapter 32 Summary

501

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,34 deduction,35 observation
(seeing is believing)36 and deeming provisions37. 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
cases the reasoning is purely abductive.38 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
34.
35.
36.
37.
38.

Chapter 6 Induction
Chapter 5 Deduction
Chapter 26 Observing Facts
Commentary 32.5.
Chapter 7 Abduction

502

Chapter 32 Summary

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.

Chapter 32 Summary

503

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
abduction
causal laws
explanatory conclusion
nature
proving facts
strength of reasoning
uses
algorithms
ambiguity of implication
analogy
a priori
Battle Hymn of the Republic, The
confidential information
contributory fault
contributory negligence
de similis idem est judicium
fiduciary relationships
in consimili casu, consimile debet esse redium
in pari material
legal professional privilege
making common law
miscellaneous examples
nature
proportio
rules, arguing from
similibus ad similia
statutes, analogy with
values, arguing from
wrongful death, action for
ambiguity, analysing
ambiguity
classification of ambiguity
ambiguity of implication
competing versions of a rule
conflict between rules
implied extension
implied qualification
lexical ambiguity
open terms
partial satisfaction
relational ambiguity
special cases
dictionary, use of
identifying meanings
535

72
Chapter 7
75-76
76
30, 73-74
74-75
74
74-76
440-441
385, 397
Chapter 8
87
87
83
83-84
83-84
87
83
80-81
80
84
80-86
84-86
30-31, 78-80
78
82-86
81
88
82
89
Chapter 25
382-392
384-387
385, 397
385
385
385, 386
385, 386
384-385
386
386
385
386-387
383
382-384

536

Index

limits to interpretation
limits from ambiguity
limits from language
literal rule
lucet ipsa per se
model for interpretation
occams razor
prevalence of ambiguity
reasons for analysing language and ambiguity
relevance of ambiguity
assisting the reasoning process
defining the problem
identifying the solution
scope of ambiguity
proposed exclusion: meaning not fully within text of law
proposed exclusion: vagueness
resolution
wide scope of ambiguity
words, reusing
analysing ambiguity see ambiguity, analysing
Arrows impossibility theorem
attainder, acts of

392-397
396-397
392-396
393-396, 399, 400
393
381
398
390-391
382
391-392
392
391
391-392
387-390
388-389
389
389-390
387-388
383-384
308-309
24-25

B
Battle Hymn of the Republic, The
Bayes Theorem
bounded rationality
Burkes principle
butterfly effect

87
106-108
309
319
217
C

cause
ceteris paribus
compatabilism
correlation method
determinism
effects
experimental method
hidden causes
hidden effects
hypothetico-deductive method
independent and separate causes
joint interacting causes
nature
non scientific approach
outline
science
separate and independent causes
voluntarism

Chapter 13
172
159-160
164-165
158-160
158
162-164
169-170
170-171
160-162
167-168
168-169
157-158, 166-171
165-166
157, 158
160-166
167-168
159

Index
cause, explanatory theories for
accidents, cause of
adaptive behaviour
adaptive capacity
behaviourism
butterfly effect
catastrophe theory
catastrophic change
chaos
chaos theory
complex behaviour, theories of
complex systems, see complex systems
complexity
continuous and discontinuous change
cybernetics
decretinism
eulers number
experimental archaeology
experimental economics
exponential relationships
felicific calculus
field, concept of
force field diagram
forces
general theories
hedonic calculus
high reliability organisations
homo economicus
internal conflict
issues
law reform commissions
linear relationships
marx, karl
maslow, abraham
resolving issues
self organisation
system accidents
theories of legal compliance, see compliance with laws
tight coupling
weber, max
ceteris paribus
chaos theory
communis error non facit lex
compatabilism
competing versions of a rule
complex systems
changing complex systems
coherence
dynamic process, product of

537
Chapter 14
195-196
192-194
193
175
217
191-192
191-191
189-191
188-191
177-199
177-188
195
191
194
217
217
204, 219
204, 219
189
220
197
199
197-198
174-177
220
196-197
16, 220
197-199
198
218
188
175-176
174-175
198-199
193-194
194-197
195
176-177
172
188-191
145
159-160
385
177-188
185-188
181
181

538

Index

emergent behaviour
information processing
macro level existence
memory
nature of
nesting
openness
ostensiveness
supervenience
uncertain boundaries
unpatterned connections
compliance with laws, theories about
compliance, explanations for
cooperative behaviour
data gathering
decisions down the line
experimental law
field studies
forces of irrationality
legislative impact analysis
legislative marksmanship
nudge approach
personal morality
personality differences
rational choice
social factors
conditional statements
conflict between rules
consequences
contemporanea expositio est optima et fortimissa in lega
contra proferentem rule
correlation method

180-183
184
181
184
177-179
179-180
184
182
182
184
184
200-216
207-216
213
207
206-207
204
203-204
205-206
200-207
200-202, 217-218
214-215
212-213
213-214
208-210
210-211
20-22
385
20
347, 348
340
164-165

D
de similis idem est judicium
decision theory
decretinism
deduction
applying law
causal law, ascertaining
interpreting law
literal meaning
nature
objective rules of interpretation
precedent
preformed policy
proving facts
scientific evidence
strict and complete legalism

87
339-340
217
chapter 5
38-43
49
43-49
46-47
28-29, 35-38
46, 55
48-49
47-48
49-54
51-54
55

Index
syllogism
values, ascertaining
defendants fallacy
defensive design
deference
determinism
diet of worms
disciplinarianism
disjointed incrementalism

539
35-38, 45-46
49
110
234
331-332
158-160
171
338-340
230-232

E
effects of laws and meanings
direct
indirect
effects of laws and interpretation of laws
decretenism
effects, continuation of
effects, function of
economics
liberty
symbols
effects, operation of
adjustment effect
derived effect
direct effects
rule as written
rule in operation
ulterior effect
effects, prediction of
options
outline
streisand effect
unintended consequences
eiusdem generis
elements
emotional intelligence (eq)
esoteric knowledge
evolutive constructionism
ex tempore judgments
expected value
experimental law
experimental method
expressio unius exclusion alterius est
extremis malis extrema remedia

5
5-6
Chapter 16
255
240
246-250
246-248
248
248-250
240-246
244-245
245-246
240-241
241-243
243-244
244
250-253
237-239
236-240
255
250, 254
377
18-19
17
276-278
336
374
221-223
204
162-164
377-378
144-145
F

felicific calculus
fiat justitia et ruant caeli
forming law, model for

220
267
Chapter 30

540

Index

interpreting law
making law
model for forming law
model, applications of
model, justification of
outline
Step 1 options
causation
interpreting law, options for
making law, options for
means and ends
nature of options
outline
Step 2 reasons
interpreting law, reasons for
judicial legitimacy
legislative legitimacy
making law, reasons for
maxims
meanings and effects
metademocracy
net benefit
net benefit
outline
policy, judicial attitude to
precedent
secondary sources
values
Step 3 decision
interpreting law
making law
outline
freud, sigmund
functionalism

449-452
449
451-452
468-469
468
449-452
454
455-456
454-455
453-454
453-454
452
456-466
460-465
464-465
463-464
460
466
462-463
465
459-460
463-465
456-458
461-462, 469
466
466
458-459, 469, 470
466-468
467-468
467
466
411-412
278
G

gemeinschaft characteristics
generalia specialibus non derogant
gesellschaft characteristics
goods, lost and abandoned

283
378
283
443-444
H

handsome is as handsome does

hard cases make bad law
hedonic calculus
homo economicus
homo sapiens
homo sentiens
hypothetico-deductive method

13
143, 146
220
16, 220
15
15
160-162

Index

I
implied extension
implied qualification
in consimili casu, consimile debet esse redium
in gremio iudicium
in gremio judicis
in gremio legis
in pari material
induction
a dicto simpliciter ad dictum secundum quid
ascertaining causal laws
ascertaining values
common errors
common law rules, creating
declaratory theory
deduction
in gremio iudicium
nature of induction
negligence, integrating specific rules into
overarching principle, gathering disparate rules under
popular illustrations
proving facts
secundum quid
strength of induction
use of induction
inter arma leges sunt silentia
interest group theory
IRAC method for answering problem questions, problems with
irrationality
outline
economic analysis of class actions in court
economics
nature of
marxism
philosophy
psychology
causes of error
cognitive miseration
comment and analysis
ego boosters
freud, sigmund
judicial behaviour
outline
political behaviour
quadrant analysis
world view
political behaviour
postmodernism

541

385, 386
385, 386
80-81
72, 277, 296
296
296
80
Chapter 6
72
62-63
59-62
70-71
72
60-62
62
72
29-30, 56-58
71
71-72
57
63-70
72
57-58
58
263, 267
339
443
Chapter 27
410-411
428-429
422-425
16-17
422-425
425-427
411-419
414-416
415
417-419
415-416
411-412
416-417, 430
411
417-417
412-414
414-415
429
425-427

542

Index

situational factors
sociology
culture
organisations
outline
politics
ius gentium

427-428
419-422
420-421
421-422
419-420
420
276
J

judicial behaviour

416-417, 430

L
learning curve
legal method
absence of method
admissions against interest
delusions of complexity
lack of explanation
lack of instruction
IRAC method for answering problem questions, problems with
MacCrate Report, problems in describing skills
nature of method
adaptability
algorithms
comprehensiveness
manageability
rationality
simplicity
systematic
need for method
explicit knowledge
implicit knowledge
performance standards, raising
standards, problems with
transmission of problems
outline
legal reasoning, nature of
actions cause consequences
application of a legal rule
best is best
causation
changing the world
consequential value of actions
comparison between types
evaluation
intrinsic value of actions
litigation
nature of

234-235
Chapter 28
433-437
434-436
436-437, 444
434
434
443
442
12, 439-442
440
440-441
441-442
442
440
440
440-441
437-439
437-439
437-439
438
439
439
433
1, 2-12
3-4
9
6
7
8
4-6
31-33
7
4
9-11
1, 2-12

Index
net benefit as measure of best
propositions underlying
structure of a legal rule
summary
transactions
using law
legal tasks
lexical ambiguity
literal meaning
logical reasoning
Lords Prayer, The
lucet ipsa per se

543
6
3-6
8
13, 34
11-12
8-12
1-2
384-385
46-47
chapter 4
159
393

M
MacCrate Report, problems in describing skills
markets
marxism
metademocracy
metademocracy

442
291-295
422-425
323, 330-340
465

N
natural law
necessitas non habet legem
neminem opportet esse sapientiorem legibus
nemo debet esse iudex in propria sua causa
net benefit
benefits
blind justice
changeover costs and benefits
communis error non facit lex
components of net benefit
costs, adjustment
costs, economic
costs, predictability
costs, symbolic
desperate times call for desperate measures
determining net benefit
extremis malis extrema remedia
hard cases make bad law
illustration of net benefit
measurement, problem of
net benefit rule
operating costs and benefits
options
per incuriam
restating the net benefit rule
rule
use of net benefit
net benefit, measurement of

271-272
260, 266-267
277
353
chapter 11
136
146
136-141
145
133-134
137-139, 145
136-137
139-140
140-141
131
135
144-145
143, 146
144
135
131-136
142-144
131-132
141
134-135
132-133
136
chapter 12

544

Index

alleviating the problem of measurement

conclusion
distribution of income
gini coefficient
gini index
gross domestic product
individual, choosing for
integrative scales
interval scale
measurement devices, constructing
methods of measurement
nominal scale
ordinal scale
outline
popular sayings
poverty, measurement of
problem of measurement
ratio scale
nominal scale
non sub homine, sed sub deo et lege
noscitur a sociis
nudge approach
O
observing facts
observation by a witness
observation by an institution
observation by equipment
observation by the court
facts about a witness
facts that happen in court
judicial notice
real evidence
observation, using it for proving a causal law
observation, using it for proving facts
reliance on observation
Occams razor
open terms
ordinal scale
organising law, model for
macro analysis
micro analysis
advantages
conditional statement
consequences
diagram
elements
outline

151-154
154-155
152
152, 156
152
151-151
153-154
153
148-149
151-153
148
148
148
147-148
150
151
150-151
149
148
273-274
346, 376, 377
214-215
chapter 26
404-405
405-406
405
406-408
407
407
408
406-407
404
402-404
402
398
386
148
Chapter 29
445
445-447, 447-448
446
447
447
447
446-447, 448
445

Index

545

P
partial satisfaction
per incuriam
policy
administering law
basis of policy
best outcome
cause
cause and effect
changing the world
choosing an option
consequentalism
derivatives of policy
effect
evaluating options
guns or butter
identifying options
importance of policy
incremental model
interpreting law
law, as regulatory choice
levels of policy
location of policy in one statute
making law
market, as regulatory choice
mixed scanning model
model for policy
nature of policy
opportunity cost
outline
precedent, basis in policy
rational model
regulatory choice
rules of interpretation, basis in policy
scope for policy making
uncertainty of cause and effect
values
post ergo propter
postmodernism
pragmatism
precautionary principle
precedent
ex tempore judgments
justification for precedent
benefits of adaptability
benefits of continuity
preserving policy
preserving rules
resolving adaptability and continuity

386
141
Chapter 10
128-129
119-120
120
121
121-122
119-120
125, 128
129
129
121-122
125, 126-127
129-130
124-125, 126
116-117
123-124
125-128
116
117-119
124
124-125
114-115
124
123-129
120-121
130
113-114
129
123
114-117
129
123124
122
122
234
425-427
334-338
232-233
Chapter 23
374
362-364, 373
366
366-368
365-366
364-365
366-369

546
nature of precedent
outline
overruling precedent
common law
interpretation of statutes
net benefit rule
precedent embalms a principle
ratio decidendi
stare decisis
stare decisis et non quieta movere
terminology
presumption of endurance
presumption of welfare
pro bono publico
pro privato commodo
probability
applying probability
assigning probability
bayes theorem
causal law, truth of
complementarity rule
defendants fallacy
deriving probability
expected value
fallacies in probability
finding facts
frequency
function of probability
happening of an event
likelihood
making law
measuring probability
multiplication rule
numerical formulas
product rule, see multiplication rule
prosecutors fallacy
sally clark case
sum rule
symmetrical evidence
truth
uncertainty with probability
uses
verbal formulas
prosecutors fallacy
proving facts by induction
character
general behaviour
individual behaviour
objective probability

Index
359-369
359
369-372
369-370
370-372
369-370, 374
373
359-360, 360-362, 372
359-360, 362
372
372
346-349
349-350
297, 327, 328, 340, 352
297, 327, 340, 352
Chapter 9
96-98
98-101
106-108
100-101
101
110
101-109
108-109
109-111
91-93
97-98
31, 93-94
98-100
97-98
91
95-96
101-105
95-96
109-110
110-111
105-106
100
97
94-95
90
95
109-110
63-64
66
67-70
65-67
68-70

Index
patterns of behaviour
personality
repetition of behaviour
subjective probability
tendency
pursuit of happiness

547
64-65
66
66
67-68
65-66
289-291, 299

R
ratio scale
rationality and irrationality, distinguishing
rationality, nature of
reconstructionism
relational ambiguity
rule of law
rules of interpretation
conflict between rules
eiusdem generis
expressio unius exclusion alterius est
function of rules
generalia specialibus non derogant
identifying meanings
noscitur a sociis
outline
promoting meanings
status of rules
statutory indorsement, enactment or supplementation of rules

149
17
15-16
332-334
385
24-25
Chapter 24
376, 380
377
377-378
376
378
376-378
376, 377
375-376
378-379
375-376
375, 379

S
Sally Clark case
secundum quid
similibus ad similia
social capability
social choice
interpreting law
making law
outline
rational legal authority
social choice for interpreting law
judicial legitimacy
legislative legitimacy
agency costs
foundational propositions
illustration of legislative legitimacy
legislative legitimacy in law
legislative legitimacy in principle
mischief rule
outline
pro bono publico
pro privato commodo

110-111
72
81
299
Chapter 20
303
301-302
300-301
304
Chapter 22
323, 341
322-323, 323-330
329-330
324-327
329
327-329
324-327
327-328, 352
323-324
327, 328, 340, 352
327, 340, 352

548

Index

statutory requirements for interpreting with policy

legislative legitimacy reinterpreted
contemporanea expositio est optima et fortimissa in lega
meanings and effects
meanings and effects, sources
noscitur a sociis
options
outline
presumption of endurance
presumption of welfare
reasons based on delegated authority
reasons based on legislative legitimacy
metademocracy
contra proferentem rule
decision theory
deference
disciplinarianism
evolutive constructionism
interest group theory
legislative misbehaviour
outline
pragmatism
reconstructionism
remedy
verba chartarum fortius accipiuntur contra proferentem
nemo debet esse iudex in propria sua causa
outline
nemo debet esse iudex in propria sua causa
social choice for making law
Burkes principle
deliberative democracy
direct democracy
outline
representative democracy
Arrows impossibility theorem
bounded rationality
domination by majority
domination by oligarchy
double entrenchment
operation
oppression of the minority
problem of agency
problem of aggregation
problem of domination
problems
slavery
social democracy
summary as conclusion
stare decisis et non quieta movere

328-329
323, 341-351
347, 348
344-345
345-350
346
342-343
341-342
346-349
349-350
351
343-350
323, 330-340
340
339-340
331-332
338-340
336
339
339-340
330-331
334-338
332-334
340
340
353
322-323
353
Chapter 21
319
317, 320
306-307
305-306
307-316, 319
308-309
309
312-316
316
312-314, 320
307-308
314-316
311-312
308-311
312-316
308-316
314-316
317
317-318
372

Index
structuring legal rules
attainder, acts of
conditional statements
consequences
elements
legal rules, relationships between
macro analysis
micro analysis
outline
rule of law
syllogism
stupid is as stupid does
summary of this book
ambiguity analysing
ambiguity, analysing
applying law to facts
brick, making without straw
causation
deduction
evaluation
facts, observing
forming law
introduction
irrationality
judicial legitimacy
law, macro structure
law, micro structure
legislative legitimacy
litigation
logical reasoning
Lords Prayer, The
metademocracy
methods of reasoning
policy
policy
precedent
rationality
rules
secondary sources
social choice for interpreting law
social choice for making law
structuring law
structuring law, benefits
tasks with law
transactions
using law

549
Chapter 3
24-25
20-22
20
18-19
25-26
25-26
18-25
18
24-25
22-23
13
Chapter 32
497
489
499-500
502
493-494
498
494-495
489
491-499
486
486-487
496
490-491
490
496
500-502
487-489
159
496
487
489
492-497
498-499
486-487
498-499
499
496-497
495-496
490-491, 499
491
489-490
500-502
499-502

S
syllogism

22-23, 35-38, 45-46

550

Index

T
The Ten Commandments (movie)

296
U

ultra vires
uncertainty of causation, responses to it
defensive design
disjointed incrementalism
expected value
learning curve
outline
post ergo propter
precautionary principle
review of judicial decisions
review of legislation
staged review of legislation
United Nations Declaration of Human Rights (1948)
using law, model for
applying law to facts
checking elements against the facts
conclusion
conditional statement
establishing facts
establishing facts in litigation
establishing facts in transactions
legal position
major premise
minor premise
model (for using law)
model for litigation
model for transactions
model for using law
structure of the model
uses of the model
outline
outline
rules for applying law to facts
syllogism
utilitarianism

27
Chapter 15
234
230-232
221-223
234-235
221
234
232-233
229-230
223-229
225-227
276
Chapter 31
474-476
476-477
479-480
480, 484
477-479
477
477-479
471-472
473-474
474-479
480-484
482
483
483-484
480-484
484
471
472-473
474-478
472-480, 481-482
286-287

V
values
importance of values
nature of values
use of values
values, choice of
agreement about rights
choice of values

Chapter 17
258-259
256
257-259
Chapter 19
288-289
295

Index
compromise mixture of shared and diverse values
deduction
disagreement about rights
distributive justice
diversity of values
arguments for diversity
explanations for diversity
observation
outline
reason
esoteric knowledge
functionalism
gemeinschaft characteristics
gesellschaft characteristics
in gremio judicis
in gremio judicium
in gremio legis
individual rights
induction
innate knowledge
ius gentium
markets
natural law
neminem opportet esse sapientiorem legibus
non sub homine, sed sub deo et lege
outline
productive efficiency
public interest
public values
pursuit of happiness
rawls, john
reason
revelation
the ten commandments (movie)
united nations declaration of human rights (1948)
unity of values
utilitarianism
values, classification of
absolute values
categorical values
consequential values
deontological values
fiat justitia et ruant caeli
freedom of speech
high noon
hypothetical values
inherent values
instrumental values
inter arma leges sunt silentia

551
283-295
273
289
293-295
278-283
279-282
282-283
279-280
278-279
280-281
276-278
278
283
283
296
277, 296
296
287-289
272-273, 295-296
274-276
276
291-295
271-272
277
273-274
270-271
292-293
285-287
285-286
289-291, 299
293-295
272
273-274
296
276
271-278
286-287
Chapter 18
263-266
260
260
260-262
267
269
268
260
260
260
263, 267

552

Index

intermediate values
intrinsic values
means and ends
necessitas non habet legem
necessity
relative values
rights, identification of
teleological values
terminal values
ultimate values
verba chartarum fortius accipiuntur contra proferentem
voluntarism

260
260
267
260, 266-267
260
263-266
267-268
260-262
260
260
340
159

W
Wertrational
Wife of Baths Tale

17
13
Z

zweckrational

17

LEGAL REASONING

Legal Reasoning

Lawyers perform many tasks. This book focuses on the core tasks with law. The core tasks
are as follows:
U
U
U
U

This book:
U
U

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.

Legal Reasoning

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

Maitland Press

www.legalskills.com.au

Christopher Enright

making law simple

Christopher Enright