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reception of economic principles in common law courts, past judges, consistent with the requirement to provide written reasons, have appealed to rules to justify resistance to the
recognition of the relevance of applicable economic theory in common law courts,
obfuscating the underlying bias emanating from covert public policy perspectives. The rules which the common law uses in the disposition of cases, reflecting the principle
of stare decisis, are taken from past cases. This was made clear in Chapters Three and
Five. Whether past cases generate rules considered narrow and rigid, or else attempt to
promote a standard which contains flexibility is a debate which is not settled. Dworkin,1
Hart,2 Raz,3 Carrio,4 Christie,5 and Boukema6 have all written upon this subject and the
material on this subject is complex, subjective, and problematic. Schlag raises a number
of interesting observations in this debate, such as the fact that rules and principles are
used to judge rules and principles, and that disputes that pit a rule against a standard are extremely common in legal discourse. Indee
battles of legal adversaries (whether they be judges, lawyers, or legal academics) are often joined
so that one side is arguing for a rule while the other is promoting a standard. And this is true
regardless of whether the disputes are petty squabbles heard in traffic court or cutting edge
controversies that grace the pages of elite law reviews. This thesis does not enter deeply into the rules/principles (or "standards" as Schlag uses)
debate. When considering opportunity cost, the courts themselves have relied upon both 1 Dworkin, R. 1977, Taking Rights Seriously, London, Duckworth, chapters 2 and 3.
Hart, H.L.A. 1994, The Concept of Law, Bullock and Raz (eds.), 2 nd ed., Oxford, Clarendon Press.
Raz, J. 1972, "Legal Principles and the Limits of L aw", 81 Yale Law Journal (1972) 823.
Carrio, G. 1971, Legal Principles and legal Positivism, O'Connell translation, Buenos Aires.
Christie, P. 1968, "The Model of Principles", 1968 Duke Law Journal 649.
B oukema, H.J.M. 1980, Judging: Towards a Rational Judicial Process, W.E.J. Tjeenk Willink Holland
Schlag, P. 1985, "Rules and Standards", 33 UCLA Law Review, (1985) 379 at 380.
2 237 rules and standards. T hus, the latent ambiguity of the debate hinders meaningful progression. Exactly what constitutes a 'rule' of law, especially if one takes the view tha a 'rule' is different from a 'principle', is a vague proposition, and one difficult to brin
conclusion. Historically great legal scholars have found themselves on opposite sides of
legal argument regarding the "rules v principles" debate.8 Bentham thought that the
common law to be full of "pedantic caprice",9 and not rules at all, at least not rules to
which he gave approval. Simpson argues that the "common law" is essentially a
contradiction of terms, and promotes a characterisation of what courts do in common law
jurisdictions as "a body of traditional ideas received within a caste of experts".10 It is
the purpose of this thesis to provide an answer to the questions which would arise
regarding this aspect of legal rules. Courts themselves have acknowledged the
existence and perpetuation of rules. It m a y be m o r e accurate to portray all legal rules on a continuum rather than in
categories. The division in time past has been nominated between the evidentiary issues,
given to juries to decide, and 'legal' issues, those issues given to the bench to decide.
Even this dichotomy is singularly unsatisfactory for a thorough examination of this
subject. Even if we tried to outline all the principles and rules in force presently, 8 Oliver Wendell Holmes and Benjamin Cardozo found themselves in this dispute over the issue of a
railway crossing in Baltimore & Ohio R.R. v Goodman, 275 U.S. 66 (1927), and Pokora v Wabash Ry., 292
U.S. 98 (1934) cited in Schlag, P. 1985, pp. 379-430, at 379 ff.
Bentham, J. 1822, " Common Law", in Burns, J. H. and Hart, H. L. A. 1977, A Comment on the
Commentaries and A Fragment on Government, University of London, Athlone Press, II.3 at p. 170.
Simpson, 1987b, p. 362.
Indeed, as Simpson, 1987b, pp. 360 ff. points out, there is a strong argument both from historical writers
of the classical period in England, typified by Jeremy Bentham, and contemporary writers that the c ommon
law really does not exist at all, let alone whether there was a systemic reasoning within rules which were
susceptible to knowledge and codification.
Starting at the early cases on interest or opportunity cost recovery, there are references throughout to "the
rule of the c ommon law". See De Havilland v Bowerbank (1807) 1 C amp. 50; 170 E.R. 872; Hadley v
Baxendale (1854) 9 Ex. 341; 156 E.R. 145; The Liesbosch, Dredger v S.S. Edison (1933) A.C. 449. 238 relegating each one to a systematic classification, it would be pointless. According to
Dworkin: If... w e tried actually to list all the principles in force, w e would fail. They are controversial, then wei...
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