This aspect of efficiency certainly appears as part

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Unformatted text preview: s now entrenched in 295 the deceased and the spouse would have divorced if the death had not occurred or the deceased might have died from other non-compensable causes, in both cases again some more than others. Commercial cases might be in danger of embracing concepts such as that the particular claimants might anyway have lost their investment in other enterprises.81 The hatred for wasted time is not a modern phenomenon. In 1596, in Mylward v Weldon Lord Keeper Puckering ordered that a young lawyer who had filed more than 120 pages of handwritten pleadings "fraught with much impertinent matter not fit for the court" ordered that the drafter be hung with the writings around the neck and paraded through the courts whilst they were in sitting in Westminster Hall, bareheaded and barefaced, and then ordered confined until he paid both the defendant's costs and £10 to the Crown. Efficiency, in a narrow sense, is a justifiable concern of officers of the bench from early cases to the present time. This aspect of efficiency certainly appears as part of the common law court process. The other aspect of efficiency is not as easily dealt with. The emphasis of this particular strand is whether or not the common law, as an institution, promotes efficiency through its decision-making processes (the descriptive mechanism), and more, whether or not it ought to do so (the normative mechanism). The literature on this aspect of efficiency is problematic. The definition of the criteria to be used upon which to judge 'efficiency' is openly questioned, based on either a search for the highest 'social wealth' or 'utility', terms which are both defective and insufficient for measuring levels of perceived social living standards. Coase opened up the modern discussion on this subject by arguing that rights will always be allocated to the most efficient party in a conflict, in the absence of See Evidence Act 1995 (Cth), ss. 55-58. Lockyer Investment Co. Pty. Ltd. v Smallacombe and Smallacombe and Swanwood Pty. Ltd. (1994) 12 A.L.R. 659; (1994) A.T.P.R. 41-328. This passage is strikingly similar to the passage of the judgment of Gibbs J. in Houghton v Murphy & Brown, which was discussed above. 81 296 transaction costs.83 Posner84 argued in terms of 'social wealth', that the c o m m o n law has always had a propensity to favour efficient rules. He takes the position that judges sh make decisions which promote the highest social wealth, measured in a currency metric. The underlying motivation, according to these writers, seems to be the allocation of resources in an economic sense, whether the subjective metric of 'utility' is used, or more objective 'wealth' criterion is employed. "The theory is that the common law is best (not perfectly) explained as a system for maximising the wealth of society."85 This analysis of the common law has sparked debate for almost four decades in the USA and other common law countries. Posner has been the leading proponent in the economic analysis of law movement since 1973,86 when the first edition of The Economic Analysis of Law%1 was published. Posner argued for both the descriptive (the common law is efficient and promotes efficient rul and the normative (the common law should be efficient, and promote efficient rules) aspects of the common law's rule-making mechanism. Kornhauser88 supplemented the debate by arguing that common law processes select more efficient rules, and individual will support more efficient rules, while Priest89 and Rubin argued that common law process litigates less efficient rules into oblivion. 82 (1596) Reg. Lib. folio 692. Coase argued in the context of both contract and tort, that where transaction costs were zero, efficiency will result regardless of the structure of the law. Coase, R. H., 1960, "The Problem of Social Costs", 3 Journal of Law and Economics 1. Also see Cirace, J. 1990, " A Synthesis of L a w and Economics", 44 Southwestern Law Journal, 1139 at 1145, where Cirace mentions criticism by B aumol and Cooter regarding the Coase Theorem. 84 Posner, R , 1992, The Economic analysis ofLaw, 4th ed., Little, B rown, and Company, Canada. 85 Posner, 1992, p. 2 3. 86 Kornhauser, L. 2001, "The Economic Analysis of Law", Stanford Dictionary of Philosophy, p. 1. 87 Posner, R. 1973, The Economic Analysis ofLaw, Boston, LittleBrown. 88 Kornhauser, L.A., 1984, "The Great Image of Authority", 36 Stanford Law Review 349, cited in Kornhauser, 2 001, p. 1. 89 Priest 1977, p. 6 5; Rubin, P. H. 1977, " W h y is the C o m m o n L a w Efficient?", [1977] 6 Journal of Legal Studies 51. 83 297 Posner's initial approach is to view sections of law generally, and then to extract economic principles. Within the context of his analysis, there is an internal cogency in his arguments. To argue that copyright law is to promote efficient, imaginative, and creative resources within society, or that the law of property is, in effect, the way that law deals with the allocative problem of large tracts of unowned land and its associated impact...
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