Role Of Common Law Research Articles

The separation of information and lending and the rise of rating agencies in the USA (1841–1907)

This paper provides a new interpretation of the early rise of rating agencies in the USA (initially known as ‘mercantile agencies’). We explain this American exceptionality through an inductive approach that revisits the conventional parallel with the UK. In contrast with earlier narratives that have emphasised the role of Common Law and the greater understanding of American judges that would have supported the rise of an ethos of ‘transparency’, we argue that Mercantile Agencies prospered as a remedy to deficient bankruptcy law and weak protection of creditor rights in the USA. The result was to raise the value of the nationwide registry of defaulters which the mercantile agencies managed. This ensured the Agencies' profitability and endowed them with resources to buy their survival in a legal environment that remained stubbornly hostile.

The role of common law in environmental policy: Comment

In a recent contribution to this journal Fritz Sillner (1994) provides a rather harsh critic of the working of common law in environmental policy and a strict recommendation to rely on statutory law only in this field. In this comment, I will argue that the distinction of the small versus the large number case, which is central to his argument, is an oversimplification and misleading. Moreover, I will argue that judge made law does actually play an important role as part of an environmental policy mix. S6llner's line of reasoning proceeds as follows: If you take a look at the state of the environment in common-law-countries (e.g., USA or Great Britain), and compare them in this respect to civil-law-countries (e.g., France or Germany), you will not find that the former have done better on that account, as should be expected following the efficiency hypothesis of common law as proposed by Posner (1986), Priest (1977) and others. A further look will show you that, opposed to their naming, common law does only play a minor role in the environmental policy of the common-law-countries. This gives, according to Sallner, a strong indication that the alleged tendency of common law towards efficiency does not hold in this particular case. He provides two explanations for this finding:

The role of common law in environmental policy

This paper discusses the role of common law in environmental policy. It is shown that common law actually tends towards efficiency only under quite restrictive conditions — conditions that are fulfilled only for very few, less important environmental problems. Moreover, in these cases common law need not even be efficient because an efficient solution can be negotiated once the allocation of rights is undisputed. Furthermore, common law neglects important distributional and political questions and is biased towards the status quo. Therefore, dealing with today's environmental problems cannot be left to the common law process but necessitates legislative action.