Friday, January 8, 2010
I just read a very stimulating paper by Prof. Ofer Raban of the Univ. of Oregon School of Law entitled "The Fallacy of Legal Certainty: Why Vague Legal Standards May Be Better for Capitalism and Liberalism." As commentators both domestic and foreign - no doubt including me at times - often criticize Chinese legislation for its vagueness and ambiguity (that is, when it's vague or ambiguous; it's not always so), I thought it might offer a useful opposing view. Bottom line: the argument is certainly worth taking into consideration when thinking about China, but it doesn't map perfectly onto the Chinese context. (I should add that Prof. Raban does not purport to be writing about China, but he does purport to be writing about rules and standards in legal systems generally.)
Let's first clear away a couple of preliminary obstacles. The author accepts (perhaps just for the sake of argument) that predictability in the law is good for the economy and, I think it's fair to say, good in itself (which is not to deny the existence of any countervailing values). And let me go further and assume here, for the sake of argument, that predictability in the law would be a good thing for China. The interesting issue is what kind of laws best provide that kind of predictability: rules or standards?
The author's argument is that we have to distinguish predictability for lawyers and judges from predictability for parties, and that we should worry about the latter because that's why predictability is valuable in the first place. If we worry about predictability for parties, then often bright-line rules will serve to confound, not support, their expectations. It is standards, on the other hand, that authorize a court's inquiry into context, surrounding circumstances, etc. - precisely the things that will tell us (if the inquiry is properly conducted) what the parties really expected. (See the article for examples.) If we apply a bright-line rule, a lawyer or judge can predict the result, but it may not at all be what the parties expected would happen.
I don't think Raban anywhere denies that applying standards may cost more than applying bright-line rules, but that's another issue; he's out simply to deny what is commonly assumed, that there is a cost in certainty and predictability to applying standards. He argues that in fact certainty and predictability where it matters - in the actions of parties when they transact - can be enhanced by the use of standards.
So far so good. He raises some good examples, and the argument shows at least that we have to be careful about assuming that bright-line rules have the conventionally-assumed benefit of predictability. Can we take this insight to China?
I can think of two main problems with doing so. (This doesn't mean we should reject the insight; just that we have to apply it with more care than usual.) First, we need to compare the result of the use of standards in the substantive law of the US and China. In the US, the result is that more discretion is placed in the hands of the decision-maker. Pretty straightforward, right? But in China this is not always going to be the case. We often see that when vague standard-like language is used in Chinese legislation, the reaction of courts, at least, is to say, "This isn't enough for us to use in adjudication," and they refuse to accept cases (or arguments) predicated on that standard. The end result is that it's as if the standard had never been promulgated. Courts wait around until the Supreme People's Court issues a document making the standard much more concrete and specific.
The second problem is a little more obvious. Doesn't any discussion of the relative merits of rules versus standards have to take into account the people or institutions that will be administering them? And surely those people and institutions show a lot of variation over space and time. Standards might yield more predictable results than rules in the hands of judges of a certain type (the type Prof. Raban has in mind), but less predictable results in the hands of judges of another type. (I suppose this goes back to the issue I raised earlier of the costs of applying standards versus rules.) Prof. Raban does address this in the final paragraph of the paper, but only briefly and, to my mind, unsatisfactorily:
A final caveat: the extensive use of vague legal standards no doubt harbors dangers. Vague standards can easily mask arbitrariness, inconsistency, and injustice, and can also (of course) generate uncertainty. Their proper use requires good faith, professionalism, and intelligence, and therefore depends on a high caliber legal profession. But then again, it’s hard to imagine a form of law (and of legal interpretation) that doesn’t.
This seems to me far too flip a dismissal of a real problem. Since not all societies at all times have the kind of legal profession called for, we must think about whether the argument works when that kind of legal profession is not present. If it doesn't, then that means that we can't know whether the argument is correct or not as applied to a given society without undertaking an assessment of the legal profession of that society - unless, very improbably, we were to assume that as the quality of the legal profession declines, there is no relative change in its ability to administer rules versus standards predictably. Thus, even if Prof. Raban's argument is correct as applied to the United States (I should note that he frames his argument in universalist, not national, terms), we can't apply the argument to China (or any country) without thinking first about the capacity of the judiciary to administer standards versus rules.