Philosophy

For quite a while now, there have been various positions regarding the efficiency of law. There are those who feel that common law is more efficient than statute law. Several attempts have been made, to establish this claim. The discourse regarding the issue of efficiency common law has been central to both economists and legal professionals. Posner was one of those who strongly hold that common law is efficient. This study is aimed at a critical assessment of the validity of the arguments raised by Paul Rubin regarding this issue. Considering that Posner was a major contributor in this debate, this study will offer what would be Posners response to the arguments raised by Rubin and others.

Towards an Understanding of Efficiency
    The concept of efficiency is used across several fields so its application is analogical. This means that its application solely depends on the subject. What efficiency would mean in economics would be different in law. As such, efficiency can only be justified if there is optimum performance. An action would be considered efficient therefore, if it accomplishes its intended goal with minimum employment of time and effort. Economists have advanced various arguments for, and against the possibility of efficiency in common law.

Paul Rubin and Efficiency in Common Law
    The question of the efficiency of common law is very basic in law and economics. It has been argued that expecting judges to attain efficiency would be too much in expectation because they are only presented with already biased cases, due to the rules in the practice. The argument from utility maximization however, claims that, judges are capable of efficiency because they are insulated from all factors that would influence them to make decisions that are inefficient. Posner argued that efficiency derives from the non-bias characteristic of judges (Posner, 1981). How would one establish that judges are free from bias Is there a mechanism that can be used to measure this This is rather absurd because we cannot take for granted that judges are at any particular time free from bias or prejudice. This argument is faced with its own challenges because it presupposes the taste of the judge for efficiency of law, which is unacceptable to the economists, and presumably to the rationalists as well. 

Rubin presented the argument that when judges were promoted it was due to judicial utility function (Rubin, 1999). This argument sought to find the correlation between the age of the judges, promotion, as well as efficiency. However, this was not sufficiently addressed because such a correlation was not established. Therefore, judicial utility functions should not be determined by the vertical mobility of the judges, because as already indicated, promotion could be based on many other issues divorced from efficiency (Rubin, 1999). What if a judge gets promotion out of friendship rather than merit As a matter of fact, one can get promoted as a reward for a favor done, which has nothing to do with satisfactory performance.

Several arguments advanced suggest that due to the many procedural rules, there is bound to be judicial utility. Litigation itself underscores the fact that there exists inefficiency in law. As such, the number of case outcomes is not necessarily an effect of utility maximization.

In the evolutionary model, Rubin argued that most of the cases were actually settled, whereas the best way to go is litigation (Rubin, 1999). This for him consisted of real legal change. It is argued that common law can only evolve to economic efficiency where both parties have an ongoing interest in legal cases. At the same time, common law remains efficient if it changes as conditions change. However, if this is the case, there is the risk of relativity. During the settlement process, there are certain risks of injustice, because some things cannot be bargained away. In this case, one party gains at the expense of the other. Furthermore, litigation is considered in cases where rules do not offer efficiency. In other words, larger stakes mean greater possibility of litigation. Regarding this view, Posner argued that litigation would have an either or effect (Posner, 1981). That is, if litigated, there would be the possibility of that precedent becoming stronger or weaker as a result. Rubin further argues that common laws and statute laws do not have too great, a distinction (Rubin, 1999). He further argued that the variations that are witnessed with regard to these two models are only due to the pressures exerted by various interest groups. However, it is difficult to see how these lead to efficiency, at least in law.

    What exactly are we investigating Is it the efficiency of the judges or the efficiency of the common law Can there be efficient laws and inefficient judges Do efficient laws guarantee efficient judges or do efficient judges guarantee efficient laws If a Justice Department recommends a judge is it the case that they have recommended the law Again, if a judge gets promotion is it a promotion of the law The functions and movements in the judicial system leave great doubt regarding the possibility of efficiency. Economists posit efficiency through the process by which outcomes are generated. This is a relationship of means and ends. If this understanding of the economists is used in law, it would mean that efficiency in law is to be determined by the process by which outcomes are generated. Processes by which outcomes in a legal framework are generated require a lot of judicial functions. As argued earlier, the judicial function could be efficient or inefficient. Just as an effect proceeds from the cause the outcomes are punctuated by the judicial rulings. An efficient judicial system translates into efficient outcomes and vice versa. To posit that higher quality people will occupy judicial positions and write better opinions due to the good pay and life tenure is a big fallacy. It is possible that good and better people remain at low position due to lack of recognition. 

    As already mentioned, if settlements in court are occasioned, and if the expected value to the plaintiff is less than the expected cost to the defendant, then dispensation of justice will be at stake. Inefficiency will occur since the action creates damages to one party that supersede the gains of the other. As aforementioned in this paper, economists affirm efficiency if the system leaves one party better off. From a legal point of view, a law that is unjust is inefficient. Settlements in legal cases risk being inefficient even where they are economically tenable. As Posner postulates, there should be a normative approach to what can and should be considered comprising of efficiency (Posner, 1981). The pressure for the common law to evolve to efficiency rests on the desire of parties to create precedence because they have interest in future similar cases.

    The case of multi-judge interactions can to some extent occasion inefficiency. This is because, where several judges sit, there is a possibility of inconsistency. Judges do in most cases follow judicial precedence, irrespective of rational convictions (Heyne, 2004). This again would add to the inefficiency of law. Judges can solemnly come to one judgment, but that is not a recipe for efficiency. What counts is not the collegiality of the judges but the outcome of their ruling.

    The issue of efficiency in economics and law is a very broad one. As such, there are no absolute measures that can be used to fully explain it. Economists cannot seek to explain the efficiency of any legal frame work by basing their understanding on economic efficiency. The fact that litigation keeps on occurring in every legal system is a clear indication that absolute efficiency in law does not exist. While some laws are efficient, others are not, and if the understanding offered in Rubin is anything to go by, then efficiency in common law is relative.

Even though promotions in the judicial system imply an element of judicial utility function, these promotions can be solely arbitrary and personalized. They should therefore not be considered as measures of efficiency. In addition, judges may care about things other than either efficiency or redistribution. Justice is a factor that transcends concerns in economic efficiency.
Efficiency cannot be dependent on how much judges are willing or seek to move towards it, otherwise, individuals would be reduced to the whims of the judges. Commitment to efficiency is not volitional, but a necessity in every legal framework and as such, it is an end in itself.