The Utilisation of Evolutionary Concepts in Legal History: Company Law as a Case Study

Abstract

Evolutionary concepts that draw upon Darwinian principles have been highly influential and widely used in many social science disciplines. This article suggests that an evolutionary perspective provides a useful theoretical framework from which to analyse legal change and its interaction with its environment, and in some cases, the persistence of suboptimal laws. An evolutionary approach does not seek to provide a determinist or predictive explanation of legal change, but rather, invites critical analysis of law because it sees legal outcomes as the result of historical contingencies, chaotic developments or sometimes chance accidents that quite feasibly could have turned out differently. After discussing the utilisation of evolutionary concepts to law generally, the article then analyses the historical development of three fundamental concepts of company law: joint stock, separate legal personality and limited liability so as to provide an example of the application of evolutionary concepts to legal change. In so doing, a particular legal problem concerning the tort liabilities of corporate groups is identified that has been widely criticised around the world as a suboptimal legal outcome. An evolutionary perspective, by recognising the significance of chance occurrences, encourages us to change the law for the better where this is appropriate.