Economic and Legal Implications
The private legal system must fulfil three functions, all of which relate to property and property rights. First, the system must define property rights; This is the task of property law itself. Secondly, the system must allow for the transfer of ownership; That is the role of contract law. Finally, the system must protect property rights; This is the function of tort law and criminal law. These are the most important issues studied in law and economics. Specialists in law and economics also apply the tools of economics, such as game theory, to purely legal issues, such as the process strategies of various parties. Although these are aspects of law and economics, they are of more interest to lawyers than to business students. Critics of the economic analysis of legal issues have argued that normative economic analysis does not reflect the importance of human rights and the concern for distributive justice. Some of the sharpest criticisms of law and economics come from the critical jurisprudence movement, particularly Duncan Kennedy[50] and Mark Kelman. Jon D.
Hanson of Harvard Law School argues that our legal, economic, political, and social systems are too influenced by an individualistic model of behavior based on preferences, rather than a model that includes cognitive biases and social norms. [51] Law and economics have adapted to some of these criticisms and have developed in various directions. An important trend has been the application of game theory to legal issues. [53] Other developments include the inclusion of behavioural economics in the economic analysis of law[54] and the increasing use of statistical and econometric techniques. [55] Within the Academy of Law, the term socio-economic has been applied to economic approaches that are broader than the neoclassical tradition. However, not all teachings are effective. The parties sometimes determine damages (called “lump sum damages”) to be paid in the event of a breach. If the courts decide that these lump sum damages are too high – that they are a penalty rather than actual damages – they will not apply the amount of the contractual lump sum damages. This failure to enforce agreed terms is a major mystery to legal and economic experts; It seems that the courts would be better off enforcing the agreement of the parties, just as they do with respect to the price and other terms of a contract. Here, the positive theory of the effectiveness of the law seems to be violated, but the researchers argue that the courts should enforce these agreements.
The economic-legal relationship is very old. It has been the subject of discussion and controversy over time, from antiquity to the first decades of the 21st century. This evolution has evolved into what is now called the economic analysis of the law; or legal analysis of economic issues. This raises the following questions: Is economics a social science that must act independently of the law? Or how would an economy function without laws and regulations? Due to the globalization of the economy, the increase in economic transactions and the emergence of new forms of digital and collaborative business between citizens, it has again become necessary to analyze the relationship between economic law or the economics of law. A legal system should contain clear definitions of property rights. That is, for any asset, it is important that the parties are able to clearly determine who owns the asset and what exactly rights that asset entails. Ideally, efficiency implies that in a dispute over ownership of a right, the right should go to the party who appreciates it most. However, if the exchange of rights is permitted, the effectiveness of the initial assignment is of secondary importance. Coase`s theorem – the most fundamental conclusion in economic jurisprudence – states that if rights are transferable and transaction costs are not too high, the precise definition of property rights is not important, as parties can exchange rights and rights move on to their most valuable uses (see Externalities). Ethical, legal and economic framework issues relating to human samples, genetic data and bioresources are evolving rapidly. In most cases, no international standards have been defined.
National legislation on the use and use of human sampling varies considerably. Legislation on intellectual property rights and access to database information for public or private entities of national or foreign origin is also different. Import and export rules, in particular as regards data protection, biosafety and the protection of the rights of individuals, have not always been established. This article gives a brief assessment of the legal, ethical and economic framework conditions in some EC countries (Germany, France and the United Kingdom) and compares them with the conditions in the United States. Based on the information gathered, it is obvious that the use of human cells, tissues and organs in medical research must be considered a global and global problem. Such use has profound ethical, cultural and economic consequences not only in the country of origin, but also throughout the world. Biotech and pharmaceutical companies that conduct research with human samples face different framework conditions in the areas of data protection, policy measures, economic support, export, etc., which already influence the business activities and investments of these companies at the international level. In the last 3 years, a trend towards harmonization can be observed: the World Health Organization has recognized the problems of postgenomic medical research as a priority.
The OECD has set up a Working Group on Biological Resource Centres. Biobanks are a common theme of the French and German national ethics councils. A lack of international harmonization and coherence can not only be a challenge for biotech and pharmaceutical companies, but can also compromise the goals that laws and regulations are supposed to achieve. In many cases, however, it will depend on who has the right. Transaction costs are never zero, and so if rights are assigned incorrectly, an expensive transaction is required to correct this misallocation. If the transaction costs are higher than the increase in value resulting from the transfer of the resource to the efficient owner, there may not be a corrective mechanism. This can happen in any type of economy. An extreme example is Russia, where the courts have not been able to provide clear definitions of property rights, and the people who have control over the companies are not necessarily the owners. That is, those who have control of a company cannot sell it and keep the product. This creates incentives for inefficient use of assets, such as: selling valuable raw materials at prices below the market price, with the product being deposited outside the country.
In such circumstances, Coase`s theorem will not work, and the correct definition of property rights will become important. More generally, the experience of Russia and its former satellites has highlighted the importance of the legal system for the development of a market economy, thus demonstrating the importance of law and economics in influencing politics. Pre-trial discovery – the exchange of relevant information between litigants – is at the heart of American civil procedure. With the advancement of computer technologies, concern has been expressed that due to the amount of information stored electronically, requests for electronic disclosure (electronic evidence) may increase litigation costs, impose new risks on lawyers and their clients, and alter expectations for the likely outcomes of the courts. For example, concerns about e-recognition may cause companies to change the way they track and store information, or they may make certain types of plaintiffs and defendants more likely to sue, settle out of court, or go to court. This article presents the results of an exploratory study aimed at identifying the main legal and economic implications of e-discovery. The authors interviewed plaintiffs and defense lawyers, as well as IT staff and in-house corporate lawyers, and examined the current state of the law and the eDiscovery process. They then developed a preliminary model to examine the range of plausible effects that eDiscovery could have on case outcomes. After summarizing this research, the authors propose five studies that assess how eDiscovery affects and is influenced by technology, costs, business practices, legal outcomes, and public policy.
However, most criminals do not have sufficient assets to pay such multiplied fines, and therefore prison sentences or other forms of non-pecuniary penalties must be applied. One of the implications of law and economics is that a fine should be used as punishment if the thug can pay. The reason for this is that fines are transfers and do not cause deadweight effects (i.e. losses for some that do not represent profits for others); On the other hand, imprisonment practically does not transfer the wealth of the criminal, but causes two forms of dead weight: the loss of the criminal`s purchasing power in a legitimate job in the outside world and the cost of making a prison and guards available to taxpayers. But because so few criminals have enough wealth to pay multiple fines, private enforcement would not be profitable for private law enforcement, and thus the state provides law enforcement. In some circumstances, imprisonment serves an additional function of incapacity for potential offenders. This special issue focuses on the analysis of economic development and new forms of enterprise based on the digital sphere. These new forms of business pose a regulatory challenge in some cases. These forms of business can affect citizens` rights and range from the most basic, usually contained in constitutional law, to the sphere of privacy (which is regulated by data protection regulations). Thanks to new forms of digital contract awarding via blockchain (which will affect civil rights, hiring) and through workers` rights (workers in the digital sectors), these companies are creating a new challenge for tax and collection companies (which concern tax law) and even reaching the realm of criminal law (in the case of illegal acts and liability for crimes, engaged in these new forms of enterprise).
