ESSAYS IN THE LAW AND ECONOMICS OF REGULATION IN HONOUR OF ANTHONY OGUS

Transcription

1 ESSAYS IN THE LAW AND ECONOMICS OF REGULATION IN HONOUR OF ANTHONY OGUS EDITORS MICHAEL FAURE AND FRANK STEPHEN intersentia Antwerpen - Oxford - Portland + *

2 TABLE,OF CONTENTS List of contributors List of abbreviations xiii xv Chapter 1: Editorial introduction 1 Michael Faure and Frank Stephen 1. Introduction 1 2. Contributors 1 3. Focus 2 4. Set-up 3 5. Regulation and contracts 4 6. Legal procedure and regulation of professions 6 7. Corporate and consumer regulation 8 8. Tort and insurance 9 9. Enforcement Words of thanks 11 Bibliography Anthony I. Ogus 13 Part I Regulation and contracts ; 19 Chapter 2: Audit, regulation and constitutional modernization 21 Martin Loughlin 1. Introduction The Westminster Model of Government The Westminster Model and the Administrative State Constitutional modernization Audit and accountability Conclusions 31 Bibliography 33 Chapter 3: Contract law and the protection of reliance 37 Stephen Waddams Bibliography 46

3 Chapter 4: European private law and democracy: a misunderstood relationship '. 49 Jan Smits " 1 Introduction Europeanization and private law: a democratic deficit? Realising 'democracy' through jurisdictional competition Democratic input: the experience of optional instruments Private law: design or organism? Concluding remarks 55 Bibliography, 56 Part II Legal procedure and regulation of professions 61 Chapter 5: Doing comparative law and economics: why the future is micro and not macro 63 Nuno Garoupa 1. Property law Contracts Administrative law 68 Bibliography 70 Chapter 6: The impact of civil procedure reforms on costs and delay 73 Paul Fenn, Neil Rickman and Dev Vencappa 1. Introduction The Woolf reforms Hypotheses Pre-action claims Post-action claims Data Introduction Definition of terms Methods Results Introduction Graphical analysis Volume of cases closed CFA vs. non-cfa cases Litigated vs. non-litigated claims Regression analysis Conclusions 90 Bibliography 91 VI

4 Chapter 7: Regulation of professions: a European perspective 93 Niels Philipsen 1. Introduction The economic theory of regulation The public interest approach The private interest approach Forms of professional regulation Self-regulation Developments in the EU The European Commission project Other European developments Concluding remarks 107 Bibliography 109 Chapter 8: The regulation of legal profession and the access to the supreme courts 115 Bruno Deffains 1. Introduction Elements methodologiques Considerations generates sur les reglementations professionnelles Avantages et couts Comment evaluer les effets de la reglementation? Controle direct de la qualite des services Conrr6le des competences et des comportements Controle de la qualite L'information des «consommateurs» La formation de reputations Droit d'exercice exclusif Controle des competences Les facteurs de motivation Titres reserves Droit d'exercice exclusif ContrSle des comportements Les modes de prestation de services et 1'independance des avocats devant les juridictions supremes Une gouvernance professionnelle basee sur le strict controle des effectifs L'independance des avocats devant les juridictions supremes Effets externes, biens publics et considerations tutelaires Effets externes Officiers ministeriels et bien public Considerations tutelaires Conclusion generate 138 VII

5 Part III Corporate and consumer regulation 141 Chapter 9: Reforming investor protection regulation: the impact of cognitive biases 143 Emilios Avgouleas 1. Introduction Investor protection regulation and behavioural finance The rational choice foundations of investor protection regulation Principles of behavioural finance Investor herding and asset market bubbles Bounded rationality and disclosure Is paternalistic regulation the right response to cognitive biases? BDT and paternalistic regulation The perils of soft paternalism Evolutionary investor protection regulation: a framework for reform The behavioural case for reform There is no case for wholesale reform Evolutionary regulation: targeted reform Investment advice, investment promotions, issuer disclosure, and investor cognitive boundaries Investment management contracts and fund manager herding Conclusion 164 Bibliography 166 Chapter 10: Direct-to-consumer prescription drug advertising: testing the limits of legal paternalism 177 Michael Trebilcock 1. Introduction The social value of advertising The arguments for and against DTCA The choice of regulatory instrument Conclusion 188 Bibliography 189 Chapter 11: Brands, business and social responsibility 193 Andrew Griffiths 1. Introduction Social responsibility in business activity The trade mark as a structuring device Trade marks and branding 195

6 3.2. Branding and undertakings The impact of branding on production Branding and marketing The implications of the brand for social responsibility The trade mark as a signalling device Branding as a force for social responsibility? Branding and the reduction of search costs Product differentiation and invisible characteristics Branding as information Branding, information and social responsibility Branding as something more than information The attractive power of strong brands Brands as intangible output Implications for social responsibility Conclusion 215 Bibliography 216 Chapter 12: Investor ownership and control over companies; some remarks on the structure of companies and the position of the equity partners 221 Kid Schwarz 1. Ogus and the law and economics perspective Introduction The right to instruct management The decision rights strategy in companies and partnerships The evolution of legal personality The law and economics perspective Decision rights strategy and de facto management Market acceptance of limited liability 234 Bibliography 236 Part IV Tort and insurance 237 Chapter 13: Partial blindness and alternative insights in the ascription of negligence liability 239 John Murphy and Frank Stephen 1. Introduction Transaction costs, rights and remedies Transaction costs and recourse to the law Transaction costs and legal remedies Negligence liability and expected damage? A bad hand from the start A behavioural alternative Conclusion 249 Bibliography 250 ix

7 Chapter 14: Insurance law and economics: an empirical perspective 253 Willem van Boom i 1. Introduction i>.,, Is theory reflected in practice? Demand for insurance in an empirical perspective Adverse or propitious selection? Empirical evidence of moral hazard? How does the insurance industry actually respond? Relevance of behavioural insights for European insurance law and policy Insurance demand and information Insurable interest Moral hazard and adverse selection Appraisal 266 Bibliography 267 Part V Enforcement 277 Chapter 15: Enforcement of consumer law by consumer associations 279 Roger Van den Bergh 1. Introduction The deterrence perspective The deficiencies of private enforcement by individual consumers The preventive function of representative actions by consumer associations Better information Curing rational apathy Overcoming free-riding The principal-agent problem A comparison with class actions Actions brought by consumer associations' The corrective justice perspective Opt-in representative actions by consumer associations Opt-out and mandatory representative actions Conclusions 298 Bibliography 301 Chapter 16: The impact of costs of crime methodology on criminal justice policy 307 Roger Bowles 1. Introduction Estimating the costs of crime Economic appraisal and evaluation 309

8 2.2. Intellectual property rights Piracy and shipping Costs of terrorism Setting of policy objectives Costs of crime and the costs of offending Concluding remarks 319 Bibliography 320 Annex 322 Chapter 17: Towards an effective enforcement of occupational health and safety regulation 325 Michael Faure and Laura Tilindyte 1. Introduction Optimal enforcement of OHS regulation: an economic approach Private versus public enforcement Monitoring models Post-detection discretion Administrative or criminal law? Concluding remarks 338 Bibliography 341 List of publications Anthony I. Ogus 347 XI