Designing Compliance Patterns: Integrating Value Modeling, Legal Interpretation and Argument Schemes for Legal Risk Management.

Abstract

Companies must be able to demonstrate that their way of doing business is compliant with relevant rules and regulations. However, the law often has open texture; it is generic and needs to be interpreted before it can be applied in a specific case. Entrepreneurs generally lack the expertise to engage in the regulatory conversations that make up this interpretation process. In particular, for the application domain of technological startups, this leads to legal risks. This research seeks to develop a robust module for legal interpretation. We apply informal logic to bridge the gap between the principles of interpretation in legal theory with the legal rules that deter- mine the compliance of business processes. Accordingly, interpretive argu- ments characterized by argument schemes are applied to business models represented by value modeling (VDML). The specific outcome of the argu- mentation process (if any) is then summarized into a compliance pattern, in a context-problem-solution format. Two case studies in the application area of startups shows that the approach is able to express the legal arguments, but is also understandable for the target audience. The project is presented in two parts; Part I, the background, contains an introduction, literature review, motivational case studies, a survey on legal risks, and a modeling of business and legal aspects. Part II builds on the interdisciplinary facets of the first part to develop the Compliance Patterns Framework which is then validated with two case studies followed by a conclusion.