The Proprietary Foundations of Corporate Law

Recent work in both the theory of the firm and of corporate law has called into question the appropriateness of analysing corporate law as ‘merely’ a set of standard form contracts. This article develops these ideas by focusing on property law’s role in underpinning corporate enterprise. Rights to control assets are a significant mechanism of governance in the firm. Practical circumstances dictate that such rights must be shared. Property law protects the rights of co-owners against each other’s opportunistic attempts to grant entitlements to t hird parties. At the same time, it uses a range of strategies to minimise the costs such protection imposes on third parties. The choice of strategy significantly affects co-owners’ freedom to customise their control-sharing arrangements. This theory is applied to give an account of the ‘proprietary foundations’ of corporate law, which has significant implications for the way in which the subject’s functions are understood and evaluated.theory of corporate law, shared ownership, property rights

The Market Tort in Private International Law

Perhaps the most troublesome of all choice of law questions arises when a plaintiff asserts a cause of action for injuries arising from a contractual exchange entered in a market situation. This description embraces some of the most important case types in modern litigation: products liability, securities litigation, industrial accidents, medical negligence, and so on. Outside of private international law cases, these have represented the battlefields of recent tort crises and subsequent reforms. We shall refer to these cases as market torts . They represent the principal subject of analysis in this work. The rules that should apply where a choice of law does not exist is a question about the optimal form of default rules. This question can be answered with reference not only to the scholarship of contract default rules, but to the second analogous literature: the economics of adjudication by rules and standards. A choice of law rule is the product of what Cass Sunstein and Edna Ullmann-Margalit describe as a second-order decision. A strategy used in order to avoid the need to confront a decision-making situation is a second-order strategy; the choice of such a strategy is a second-order decision. Thus, choice of law rules avoid the need for a judge to choose a rule on the basis of a direct comparison, according to some cost-benefit calculus and the facts of the particular case. Instead, a choice of law rule provides a means to avoid the need for such comparison, by permitting the matter to be resolved according to the approach embodied in the second-order choice of law rule. Thus, choice of law rules can be differentiated according to whether or not the second-order choice of law rule takes a simple, low-cost formulation, and whether or not that rule permits the eventual first-order adjudication (wherein the law of the cause is selected) to be simple and low-cost. We show how choice of law methods can usefully be described by this taxonomy, and how, with the benefit of the economic literature on rules and standards, we might choose between and give content to these approaches

The Market Tort in Private International Law

Perhaps the most troublesome of all choice of law questions arises when a plaintiff asserts a cause of action for injuries arising from a contractual exchange entered in a market situation. This description embraces some of the most important case types in modern litigation: products liability, securities litigation, industrial accidents, medical negligence, and so on. Outside of private international law cases, these have represented the battlefields of recent tort crises and subsequent reforms. We shall refer to these cases as market torts . They represent the principal subject of analysis in this work. The rules that should apply where a choice of law does not exist is a question about the optimal form of default rules. This question can be answered with reference not only to the scholarship of contract default rules, but to the second analogous literature: the economics of adjudication by rules and standards. A choice of law rule is the product of what Cass Sunstein and Edna Ullmann-Margalit describe as a second-order decision. A strategy used in order to avoid the need to confront a decision-making situation is a second-order strategy; the choice of such a strategy is a second-order decision. Thus, choice of law rules avoid the need for a judge to choose a rule on the basis of a direct comparison, according to some cost-benefit calculus and the facts of the particular case. Instead, a choice of law rule provides a means to avoid the need for such comparison, by permitting the matter to be resolved according to the approach embodied in the second-order choice of law rule. Thus, choice of law rules can be differentiated according to whether or not the second-order choice of law rule takes a simple, low-cost formulation, and whether or not that rule permits the eventual first-order adjudication (wherein the law of the cause is selected) to be simple and low-cost. We show how choice of law methods can usefully be described by this taxonomy, and how, with the benefit of the economic literature on rules and standards, we might choose between and give content to these approaches

An economic analysis of trading on private information by external administrators: international comparisons

This paper examines the regulation of trades in listed securities by external administrators (EAs), such as trustees in bankruptcy, liquidators, receivers, and administrators on the basis of private information. We consider the economic policy issues associated with such trades. The principal considerations counsel in favour of taking a permissive approach. These are: the difficulties of associating trades with insider information, given the EA's necessarily short expected holding period, the asymmetric application of the insider trading prohibition to sales (rather than decisions not to sell), the market incentives not to misuse private information that apply to EAs, and the unlikelihood that the EA has monopolistic access to the information in question. We consider these considerations by reference to a number of hypothetical scenarios. The paper argues that the law should regulate the subject by coupling a broad exemption for EAs with a "goiod faith" proviso, a continuous disclosure obligation, and a requirement to sell "all or nothing" of a holding of listed securities

An Empirical Investigation of the Terms of Corporate Charters and Influences on Term Standardization in a Laissez-Faire Environment

More than fifty years before the debate about the contractibility of corporate law in the United States, English and then Australian lawmakers truncated what had been substantial scope for contracting around directors' duties. Legislation imposed mandatory rules concerning conflicts of interest and release of officer liability which substantially survive to this day. This article offers evidence on the form that corporate governance contracts took in Australia prior to the introduction of this legislation. Evidence demonstrates pervasive alteration of default rules. Although there is evidence of increasing standardisation in the terms selected and of the extent of previous adoptions influencing the choice of terms, the evidence does not support the distinctive lock-in claims made by theories of network externalities. The paper also demonstrates the critical role of precedents manuals in contract innovation.corporate charters, directors' duties, legislation, standardization

African Drought Risk Pay-Out Benchmarking

This report contains exploratory data analysis of rainfall and Water Resource Sufficiency Index (WRSI) data provided by African Risk Ca- pacity (ARC). The purpose is to assess the predictability of droughts in Africa. We assess the appropriateness of the historical WRSI bench- marks set by ARC members compared to the observed WRSI values for different regions. We conclude that the benchmarks are broadly sensible. We then compare a number of linear time series models based on their ability to fit and forecast the WRSI time series. We conclude that sim- pler models like Simple Moving Average and Moving Median are more appropriate than more sophisticated models containing trends and sea- sonality like Holt Winter and TBATS. We also investigate the use of the SARIMA and TBATS models to forecast the seasonal patterns observed in rainfall data and conclude that both models can generate structured forecasts that reflect seasonal variability. The statistical evidence how- ever favoured TBATS over SARIMA. Attempts to measure the influence of the El Nin ̃o-Southern Oscillation on rainfall levels are inconclusive for the areas studied. Finally we perform a simple application of univariate Extreme Value Theory to rainfall data and conclude that further inves- tigation is necessary to understand how the catastrophic famine that affected Ethiopia in the early 1980’s would be reflected in the data if a similar event were to reoccur today

Towards an Economy of Higher Education

This paper draws a distinction between ways thinking and acting, and hence of policy and practice in higher education, in terms of different kinds of economy: economies of exchange and economies of excess. Crucial features of economies of exchange are outlined and their presence in prevailing conceptions of teaching and learning is illustrated. These are contrasted with other possible forms of practice, which in turn bring to light the nature of an economy of excess. In more philosophical terms, and to expand on the picture, economies of excess are elaborated with reference, first, to the understanding of alterity in the work of Emmanuel Levinas and, second, to the idea of Dionysian intensity that is to be found in Nietzsche. In the light of critical comment on some current directions in policy and practice, the implications of these ways of thinking for the administrator, the teacher and the student in higher education are explored