Luppi, Barbara; Parisi, Francesco --- "Rules versus Standards" [2011] ELECD 1061; in Parisi, Francesco (ed), "Production of Legal Rules" (Edward Elgar Publishing, 2011)

Book Title: Production of Legal Rules

Editor(s): Parisi, Francesco

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781848440326

Section: Chapter 3

Section Title: Rules versus Standards

Author(s): Luppi, Barbara; Parisi, Francesco

Number of pages: 11

Extract:

3 Rules versus standards
Barbara Luppi and Francesco Parisi



Just like contracts, laws are of necessity incomplete. Lawmakers cannot
effectively foresee all the particular circumstances to which their laws could
apply. Incompleteness of law is not only a matter of unavoidable necessity.
At times, incomplete laws can be purposefully enacted as a way to delay
the decision-making process, transferring to the judiciary some of the tasks
otherwise carried out ex ante by the legislature. Lawmakers can choose the
level of incompleteness of the laws that they write by formulating laws with
different degrees of specificity. The law and economics literature refers to the
choice of specificity of legal rules as a choice between "rules" (laws with high
levels of specificity) and "standards" (laws with low levels of specificity).
The present study concerns the functionality of these rules or standards, the
consequences of their incorporation into laws, and their significance from an
economic perspective.
A "standard" is the legal or social criterion that adjudicators use to judge
actions under particular circumstances. standards provide a greater degree of
flexibility to judges and allow them to consider fact-specific circumstantial
evidence, such as whether a driver's behavior was the "reason" for an accident.
While a standard like "reasonableness" can be subjective, judicial precedent
may provide some guidelines for adjudication (Kaplow, 1992).
A "rule," conversely, provides a definitive criterion for the resolution of a
legal issue. Rules contain a higher degree of specificity and often bright-line
tests. For instance, a rule ...