Prudent Person Research Articles

A Propaedeutic Treatment of Embodied Theology and the Applications of Self-Defence

Self-defence is generally thought to be either a staple of martial arts practice or a way for the Crown to establish if an accused was acting in self-defence. That calls to mind two essential aspects about the actor in self-defence: 1) the subjectivity of the actor’s intent and actions, and 2) the objective examination against what other prudent persons would or would not do given the same set of circumstances. Assessing criminal liability is essential to the legalities of self-defence but, the discovery of one’s mind and actions after the fact is relevant to consequence and reflective practice which merely defines what may be considered reasonable, legitimate, and necessary as per case. More importantly, is there a divine pre-eminence of self-defence that can ameliorate one’s actions of force against another to curtail the negative effects of a hostile attacker. In this article, I propose that both virtue and duty can lead the actor to discover the sacred site of the lived-body as the self-known as I to value the self-known as the other. To view the body as sacred in such a pre-emptive way may re-establish restraint and control over one’s actions as to promote bodily integrity and the preservation of life.

The Intervening Effect of Investment Policies on the Relationship between Corporate Governance and Performance of Pension Fund Managers in Kenya

The pension fund is a common asset pool meant to generate stable growth over the long term, and provide pensions for employees when they reach the end of their working years and commence retirement. These targeted investments often require union built construction or are aimed at job creation and retention as in the case of private equity investments. Pension fund performance has received increased attention across the world with public pension fund performing dismally when compared to private pension fund.. This study sought to determine the intervening effect of investment policies on the relationship between corporate governance and performance of pension fund managers in Kenya. The study employed a cross sectional survey design whereby access to the widest possible amount of data from the targeted Fund Managers in Kenya was sought. The population of interest of the study was 31 Fund Managers in Kenya licensed by RBA and CMA. The study used purely primary data sources. Primary data was obtained from the selected respondents. Primary data was collected through questionnaire. Regression analysis was used to establish the relative significance of each of the variables on the influence of corporate governance on the performance of pension fund managers in Kenya. The study findings indicated that there exists a partial mediation effect on the mediating role of investment policies on the relationship between corporate governance and performance of pension fund managers. The study thus, rejected the null hypothesis and adopted the alternative hypothesis that there is a partial intervening effect of investment policies in the relationship between corporate governance and performance of pension fund managers in Kenya. The study recommends that the governing body of the pension fund should set forth in a written statement and actively observe an overall investment policy. The investment policy should establish clear investment objectives for the pension fund that are consistent with the retirement income objective of the pension fund and, therefore, with the characteristics of the liabilities of the pension fund and with the acceptable degree of risk for the pension fund, the plan sponsor and the plan members and beneficiaries. The approach for achieving those objectives should satisfy the prudent person standard taking into account the need for proper diversification and risk management, the maturity of the obligations and the liquidity needs of the pension fund, and any specific legal limitations on portfolio allocation. Keywords: Investment Policies, Corporate Governance, Performance & Pension Fund Managers.

The Reasonable Person Standard: Psychological and Legal Perspectives

In criminal cases of self-defense and provocation, and civil cases of negligence, culpability is often decided with reference to how a reasonably prudent person (RPP) would have behaved in similar circumstances. The RPP is said to be an objective standard in that it eschews consideration of a defendant's unique background or characteristics. We discuss theory and evidence suggesting that in morally relevant judgments, including those involving negligence, self-defense, and provocation, the tendency to rely on the self—on one's own values and predilections—dominates considerations of the RPP. We consider subjective standards that have been proposed as alternatives to the RPP and review research on this topic. We conclude by considering avenues for future research, particularly addressing conditions in which self-standards of reasonableness are most likely to prevail.

The reasonably prudent person, or me?

AbstractAbundant research concerning the role of the self in social judgment suggests that people have a strong tendency to evaluate others’ actions, preferences, and values with regard to their own. Reliance on self‐standards contrasts with the legal standard of the reasonably prudent person (RPP) standard, which presumably represents the behavior of the average person in the community. In three studies that investigated judgments of harmful actions, we compared the influence of self‐standards (“How likely would I behave in this manner?”) and RPP estimates (“How likely would the average, reasonable person in the community behave in this manner?”). In each study, self‐standards influenced participants’ judgments of guilt and the acceptability of the defendant's actions more than did judgments about what a RPP would do. Studies 2a and 2b also investigated attitudinal differences in susceptibility to RPP consensus manipulations. Participants judged a target who committed murder in self‐defense, and also projected their own hypothetical behavior in the scenario. When the manipulated RPP disapproved of the murder, the target was deemed more culpable, but only among participants who themselves were unwilling to commit the hypothetical act. Participants who expressed willingness to murder in self‐defense were unaffected by RPP information, regardless of whether or not it was consistent with their own stance. Hence, RPP information at best exerted minimal influence on juridical judgments, and only among certain participants. Implications of these findings for legal applications of the RPP, and for the role of the self in social judgment, are discussed.

Pravilo poslovne procene

U radu se ukazuje na nedostatke pravila poslovne procene u Zakonu o privrednim društvima. Reč je o institutu koji je nastao kao produkt američke sudske prakse, ali koji je široku popularnost stekao i u drugim državama. Trend pravne transplantacije nije zaobišao ni našu zemlju, te je iz tog razloga jako bitno definisanje ovog pravila i ispravno razumevanje razloga njegovog postojanja. Upravo zbog toga prvi deo rada posvećen je istorijskom razvoju pravila poslovne procene, dok je centralni deo rada usmeren ka određivanju kruga lica koja su zaštićena ovim pravilom, kao i pretpostavkama koje moraju biti ispunjene kako bi se aktivirao mehanizam zaštite. Te pretpostavke u stvari konstituišu dužnost pažnje i služe za određivanje pojma pravila poslovne procene i nisu jedinstveno prihvaćene u svim pravnim sistemima. U radu je pojedinačno analizi ran svaki od njih: 1. poslovna odluka; 2. odsustvo sukoba interesa; 3. savesnost; 4. informisanost pri odlučivanju; 5. pažnja dobrog privrednika i 6. uverenje da se deluje u najboljem interesu društva. U završnom delu rada se ukazuje na obrnuto postavljenu raspodelu tereta dokaza koja podriva efikasnost zaštitne uloge pravila poslovne procene.

Indenture Trustee Duties: The Pre-Default Puzzle

This Article addresses a topic at the intersection of finance, agency, contract, and trust law: the pre-default duties of an indenture trustee for bondholders. The existing scholarship on indenture trustee duties focuses on the post-default scenario, when the indenture trustee is required to act as a prudent person in like circumstances on behalf of the bondholders. No prior scholarship addresses an indenture trustee’s pre-default duties. It is critical to try to define those duties because activist investors in the $42-trillion-plus bond market increasingly are making pre-default demands on indenture trustees, requiring them to know how to respond.

Fiduciary Obligations in Business and Investment: Implications of Climate Change

Fiduciary obligation, under both corporate law and the common law, requires directors and officers to identify and address climate-related financial and other risks. In fulfilling their obligations to act in the best interests of the company, directors and officers must directly engage with developments in knowledge regarding physical and transition risks related to climate change and how these risks may impact their corporation. Depending on the firm’s economic activities, the risk may be minor or highly significant, but directors and officers have an obligation to make the inquiries, to devise strategies to address risks, and to have an ongoing monitoring to ensure the strategies continue to be responsive to the risk. Directors’ fiduciary duty requires that they have overseen and monitored the actions of the individuals charged with mitigation and adaptation; and have mechanisms in place to respond rapidly to changes in the company’s risk profile. In addition to fiduciary obligations, this study examines the statutory duty of care under corporate law, which requires directors and officers to exercise the care, diligence and skills that a reasonably prudent person would exercise in the circumstances. This duty requires directors and officers to supervise and manage the transition that will address the specific risks, as well as the new opportunities, posed by climate change. The study also examines pension plan trustees and other investment fiduciaries in respect of their fiduciary obligations related to climate change. Pension fund trustees have a fiduciary obligation to pension beneficiaries to act prudently in their best interests in making investment decisions regarding fund portfolios. In fulfilling their obligations to beneficiaries, pension trustees and their investment managers have an obligation to identify and address climate-related financial risk. Trustees can take climate change into account as a legitimate investment issue over the short or long term or both. If trustees fail to act to address material climate change risk, they may be personally liable for breach of their fiduciary obligation. Inaction is no longer acceptable, given all the evidence that climate change risk is material across the entire economy. Trustees can also take climate change into account because they have duties as public fiduciaries additional to their financial duty to beneficiaries. Fiduciaries have a duty to act even where the potential costs and benefits of climate change cannot be fully quantified immediately. Fiduciary obligation also requires considering the benefits of investment in green adaption and mitigation technologies and other products and services that are likely to have upside financial potential for return on investment.

Healthism in Tort Law

This article draws on the author's recently published book, Healthism: Health Status Discrimination and the Law (with Jessica L. Roberts) (Cambridge University Press 2018), examining tort law doctrine and policy for examples of differential treatment of health status or behaviors. Just as scholars previously have drawn attention to discrimination based on race, sex, age, and other protected categories in tort law, the article urges similar examination of tort law's potential to discriminate against the unhealthy. The article discusses the potential for healthism in the reasonably prudent person standard of care, contributory negligence, assumption of the risk, noneconomic damages caps, impaired driver and physician cases, failure to mitigate, intentional infliction of emotional distress, and other tort law rules. It concludes by applying the book's decisional rubric for distinguishing between permissible and impermissible health status differentiation to specific examples from tort law.

Adam Smith’s Very Brief Mention and Discussion of the Invisible Hand, In His <i>The Theory of Moral Sentiments</i> and <i>The Wealth of Nations</i>, Was Not Intended to Provide Any Theoretical Foundation for Any of His Analysis: Smith Regarded the Invisible Hand as an Unimportant <i>Obiter Dicta</i> Used for Metaphorical Purposes Only

Adam Smith’s Very Brief Mention and Discussion of the Invisible Hand, In His <i>The Theory of Moral Sentiments</i> and <i>The Wealth of Nations</i>, Was Not Intended to Provide Any Theoretical Foundation for Any of His Analysis: Smith Regarded the Invisible Hand as an Unimportant <i>Obiter Dicta</i> Used for Metaphorical Purposes Only

Rhetoric and Economics, Analysis and History

Rhetoric and Economics, Analysis and History

Responsibility of administrative structure members for the taxation debts of company capital

Capital Companies are required, on the basis of business results, properly kept business records and financial reports, to determine, declare, and pay tax. Members of management organs of these companies should, with the due care and diligence of prudent business persons, ensure that companies are able to pay their taxation dues. If they violate the standard of due care and diligence, they can, as taxation guarantors be liable for the companies ' debts. Rules on the means and scope of their activity are primarily determined by the Companies Act. Therefore, analysis of the taxation provisions on due diligence and the liability of members of administrative structures of capital companies as taxation guarantors, can in advance view activity which is regulated by company provisions. In conclusion, solutions de lege ferenda are presented as incentives for further professional and scientific discussion.

Wrongful birth and wrongful conception: is there a right to compensation?

As the courts face a rising number of wrongful birth and wrongful conception claims brought by the parents, who are seeking for the compensation for a birth of an unwanted child, caused by the health care provider’s wrongful actions, the courts were bound to find a way to be able to arrive at a reasonable decision concerning allowable damages in birth-related cases. The common law jurisdictions experience fewer problems while dealing with these types of claims and throughout the years of case practice the common law courts managed to distinguish the public policy considerations that a child is a blessing, from the point of view that it actually causes financial damages which are triggered by the doctor’s negligent actions. It is commonly agreed that in certain situations there is a breach of health care provider’s duties owed to their patients and that they are liable for the damages occurred, and they are entitled to compensate for the financial losses that their patients had experienced. Although, it must be stressed that the burden of acting as a reasonably prudent person falls not only on the health care provider’s shoulders, but also must be applied to the patients, in this way preventing the possible over-speculation of the wrongful birth and wrongful conception causes of the action. Nevertheless, there are a lot of facts that need to be proved and conditions to be met in order to be able to bring a wrongful birth or wrongful conception lawsuit before the court, but it is clear that the parents have a right to seek for damages for a birth of an unwanted child when the birth was caused by the health care provider’s negligent actions.

Are Alternative Investments Prudent? Public Sector Use and Fiduciary Duty

Over the last decade, public pension systems have shifted away from equities and fixed income in favor of alternative investments. We construct panel data of legislative changes affecting pensions, merging these with fund level data from the Public Plans Database. Using these in tandem with data from Preqin we consider governance and financial performance motivations, as well as principal-agent and herding problems that may be unique to alternative investments. We find less liquid alternatives can be of value as a result of (1) better performance and (2) relatively consistent observed pricing. However we also find evidence that Alternatives’ relative performance has waned since 2007 while allocations have continued to grow. Further while some use is justified the prudent person standard is of little protection against herding risks due to its relative benchmarking schema. Given evidence that legislatures are relatively reactionary monitors we conclude that hybrid allocation rules merit consideration.

The 'New' Economic Thinking on Adam Smith of Vines and Morris Leads to the Same Old Errors About Adam Smith

The belief that the Utilitarianism of Jeremy Bentham is an outgrowth of Adam Smith’s approach in The Wealth of Nations is a contradiction in terms, given that the Wealth of Nations and The Theory of Moral Sentiments are both based on Smith’s Virtue ethics approach, which completely and totally rejects any role for the utilitarianism of Jeremy Bentham or any other kind of utilitarianism. The term "self interest" in the Wealth of Nations was called "prudence" in the Theory of Moral Sentiments. Prudence is that virtue involving individual human behavior that was circumspect, judicious, thrifty, frugal, careful, patient, and hardworking. The prudent or self-interested person developed his talents and became a financial success or was well off. However, this was only the first step in a process aiming at moral perfection that would culminate in the virtue of beneficence. Only at this stage in a person’s life would real happiness emerge. Smith’s views on economic growth have to do with justice and his application of Aristotle’s Golden Mean. Smith never viewed commercial society (capitalism) or economic growth as a path leading to happiness for the greatest number of citizens as the amount of material and consumer goods increased over time. This view was Bentham’s, not Smith’s.Finally, there never was an Adam Smith problem except in the minds of economists intent on foisting Bentham’s hedonic-hedonistic calculus onto Adam Smith. However, there is another, much more severe problem. The problem is that, since the 1790’s, the vast majority of economists, who are utilitarians, have been constantly trying to redefine Smith as a utilitarian and "read into" the Wealth of Nations their own utilitarian ethics and approach to probability and decision making. The remaining economists can be categorized as nihilists, such as the Post Keynesians and Institutionalists. Nihilists find no role for probability analysis in economics. Both approaches lead to myths, such as (a) the existence of some "Invisible Hand" force that coordinates the conflicting microscopic, price expectations-plans of market participants in such a manner so that a socially optimal, macroscopically, stable equilibrium is obtained over time; (b) Smith believed in Laissez faire; (c) Smith believed in a 100% Free Trade policy or (d) Keynes was an anti-mathematical, anti-formalist who realized that mathematics and statistics played no role in a world of Shackle-Davidson uncertainty. None of these myths has any support in the Wealth of Nations or in any of Keynes’s works

Directors’ defence of reliance on professional advisers under Anglo-Australian law

This paper analyses the issue of whether directors may use reliance on professional advice as a defence to a claim for breach of duty to exercise care, skill and diligence under common law or companies legislation in England and Australia. While England and Australia share the same common law tradition and have similar statutory provisions on the standard of care of directors, an English court generally regards a director as acting reasonably when he seeks advice from a qualified and independent professional adviser in a specialist matter within his expertise. In the absence of any conflict of interest, reliance is only unreasonable if the circumstances are so plain and obvious that no prudent person will rely on the advice. In contrast, recent Australian cases, particularly ASIC v Healey, ASIC v MacDonald and ASIC v Fortescue, restrict the circumstances in which directors can rely on professional advisers, even in specialist matters. This paper argues that the difference in approach between the two jurisdictions can be explained on two grounds. First, the Australian cases can be distinguished from the English cases because the former are special situations dealing with matters involving non-delegable duties of care imposed by legislation. Second, the potential outcomes of the breach of the duty of care differ in England and Australia, and this difference has a much deeper, substantive influence on the content of the standard of care. Contrary to academic suggestion, it is suggested that the Australian developments may not always be appropriate in determining the scope of the defence of reliance on professional advice in England.

Evidence Evaluation in Departmental Proceedings

It is important for employees to have a fair idea about the process and principles of evaluation of evidences during departmental proceedings. This paper attempts to provide the same to afford the employees practice the safeguards. Although not a substitute to professional legal advice, the deliberations in this paper are aimed at inducing public servants to think and comprehend that their actions need not only be transparent and fair but it is also important that all actions they perform invariably appear to be so. It is important to ensure that during scrutiny of their action, no prudent person may infer that the probability of the same being unjust or unfair is high.

Alternative Investments? State & Local Pension Portfolio Use and Performance

Over the last decade, Defined Benefit (DB) public pension systems have come under greater stress. Pensions have experienced two recessions, demographic shifts and generally bad public budget circumstances. Pensions have modified their allocation strategies over this period, generally shifting away from equities and fixed income allocations in favor of alternatives. What’s more, the stated justification for alternatives has shifted as well, from an emphasis on relative performance (alpha) towards diversification away from systemic shocks (beta). In this paper, we investigate motives for the employment of alternatives and the performance of these investments, considering both governance and financial performance motivations. We consider possible principal-agent and herding problems that may be unique to these portfolios, and find that the prudent person standard is of little protection against herding risks due to its relative benchmarking schema. Controlling for changes in governance, we find that private equity and other less liquid alternatives can be of value because of their relatively consistent pricing, whereas more liquid assets are more susceptible to price volatility. In fact, improvements in diversification (beta) can arise as an artifact of illiquidity.

The Most Reasonable Standard: Why Justice O'Connor's Endorsement Test Applying the Reasonable Observer Should Be the Preferred Test for Evaluating Establishment Clause Violations

Currently, the Supreme Court has yet to state a preferred test for Establishment Clause claims thus resulting in chaos in the lower courts. It is the author’s position that Justice O’Connor’s reasonable observer test results in the most just outcome for Establishment Clause claims. Specifically, by considering the unique circumstances of each monument or memorial, the conclusions it reaches are far more accurate than other tests.Her endorsement test asks the question whether it is the government’s purpose to endorse or disapprove a religion, and irrespective of its purpose whether that message is actually conveyed. The evaluations become very case specific and depend upon the conclusions a reasonable observer would make. This person is equipped with heightened knowledge and is aware of the general history and context of the display. By weighing all of the context and history factors, similar to the reasonable prudent person of tort law, the reasonable observer reaches a far more informed conclusion. An application to Am. Atheists, Inc. v. Port Auth. of N.Y. and N.J. illustrates the effectiveness of the test. This case, arguably filed for political purposes, involves the cross that was erected at the World Trade Center, post September 11th terrorist attacks. The potential Establishment Clause violation arises by placing the cross in a governmentally funded museum. Considering the context factors of the history of the cross and September 11th, the surrounding content of the memorial, the primary goal not being Christianity, and the size of the cross not being for the purpose to dominate all other objects, a reasonable observer would conclude there is no government endorsement present. Thus, Am. Atheists, Inc. v. Port Auth. of N.Y. and N.J. poses no substantial question of law and leads to the strong presumption that it is merely an effort to generate public awareness of American Atheist’s, Inc.’s cause through the legal process.

An Untrustworthy Presumption: Developing a Sound Standard for Stock-Drop Litigation

On December 13, 2013, the Supreme Court granted certiorari in Fifth Third Bancorp v. Dudenhoeffer to determine the fate of the Moench presumption. The Moench presumption, which establishes a broad presumption of prudence for fiduciaries plans designed to invest in company stock, was adopted by the Third Circuit in 1995. The six circuits to subsequently consider the issue have also adopted the presumption.Under the Moench presumption, judicial review of fiduciaries’ decisions to purchase, hold, or sell company stock is subject to an abuse of discretion standard. To overcome the Moench presumption, plaintiffs must show the existence of a “dire situation” that threatens a company’s viability or renders the stock essentially worthless. Plaintiffs have experienced great difficulty in meeting this standard, which has effectively insulated fiduciaries from liability in all but the most extreme circumstances.This Note argues that the Moench presumption is unsound in both theory and practice because it is unsupported by the common law of trusts, ERISA, and public policy. This Note draws heavily from the common law of trusts and ERISA's prudent person standard to articulate and apply a doctrinally sound alternative standard that protects both plan participants and fiduciaries.

OK Computer: The Fourth Amendment and Searches of Seized and Imaged Electronic Evidence

In 1916, the Supreme Judicial Court of Massachusetts addressed a novel question in Massie v. Barker: How does the standard for negligence previously applied to walkers apply to drivers? For the court, the answer was clear: “The law as to drivers of motor vehicles is not different from that which governs other persons. The standard required is that of the reasonably prudent person under all the circumstances.” In its 2012 opinion in United States v. Metter, the Eastern District of New York also addressed a question of first impression: How long may the government retain seized and imaged electronic evidence before conducting a review of that evidence to determine whether any of it falls outside the scope of a search warrant?Many advances in technology have forced courts to reconsider existing constitutional tests and standards given the brave new digital world in which we live. Other technological advances have not caused such legal retrofitting as courts have found that existing tests and standards can adequately accommodate some new innovations. This article argues that the problem confronted by the Metter court falls into this second category.