Ronen Perry

Good Faith Performance

This Article aims to unveil and undermine one of the most resonant truisms in contract law. It shows that a dominant criterion used by courts and academics in applying the omnipresent and overarching principle of good faith is essentially flawed. Our argument is innovative in at least four respects. First, it uncovers a common denominator of the major accounts of good faith performance in case law and academic literature, namely resort to community standards. While not unheard of, this test has never been recognized or addressed as a unifying thread of the various theories. Second, the Article distinguishes two forms of community standards: common views of morality and common practice. This has never been done before in this context. Third, the Article fiercely challenges the common denominator by proving that all definitions of community standards are either theoretically unsound or impractical. This conclusion undermines the validity of judicial practice and contemporary legal theories. Fourth, the Article uses a novel theoretical perspective that can be labeled “axiomatic jurisprudence,” employing tools from a branch of economics known as social choice theory. In this respect, it follows up on our recent publication, which utilized similar tools to analyze the concept of reasonableness in tort law.

Imbalances of Power in ADR

In recent decades, Alternative Dispute Resolution processes have gained worldwide recognition, a growing role in legal practice, and academic attention. Despite their professed advantages they have also faced fierce opposition. In a seminal article, Owen Fiss argued that ADR exacerbates imbalances of power between the parties. But while the theoretical argument has been widely discussed and developed in academic literature, empirical evidence has remained scant. This Article purports to bridge the gap. It empirically examines the impact of two seemingly relevant factors in inherently imbalanced legal disputes: representation and dispute resolution method. Arguably, professional representation of weaker parties may reduce the effects of inequality, whereas less formal, transparent and adjudicatory processes may exacerbate them.

'May the Odds Be Ever in Your Favor': Lotteries in Law

Throughout history, lotteries have been used in numerous legal contexts. However, legal theorists have rarely discussed the role of randomization in law, and have never done so systematically and comprehensively. Against this backdrop, the Article has three underlying goals. First, it fills the aforementioned gap by providing a theoretical framework for assessing lotteries’ role in legal resource allocation. It innovatively integrates fairness and efficiency concerns, critically evaluating and applying insights from various disciplines, including economics, philosophy, political science, psychology, and theology. This multidisciplinary framework — of unprecedented breadth and complexity — provides lawyers and policymakers with a powerful analytical tool for assessing the possible use of random allocation schemes. Second, the Article recognizes the importance and highlights the pervasiveness of lotteries in law. It does so by analyzing and appraising the historical and present role of lotteries in numerous legal contexts through the theoretical prism. It also advocates a cautious expansion of the use of lotteries in other contexts, a notion that runs counter to the basic intuition that the law must be committed to reason and certainty. Third, the Article substantiates a jurisprudentially provocative thesis: While random-based schemes can be and are employed in many settings, there is no consistent set of justifications for all applications. The rationalization is highly varied and context-specific.To construct and apply the theoretical framework, the Article uses the fundamental distinction between fairness and efficiency as a cornerstone. Part I unveils the fairness of random selection as a matter of common perceptions and normative commitments. It starts by showing that lotteries are often perceived as fair allocation methods, especially compared to the alternatives (“positive fairness”). Part I then examines whether the use of lotteries can be justified on the ground of fairness (“normative fairness”). It discusses the outmoded theological justification which associates random selection with divine intervention, the egalitarian argument and its limits, the fairness-related advantages and disadvantages of processual detachment from human agency, and fairness vis-a-vis people who do not take part in the primary allocation, be they allocation candidates or allocators.Part II addresses the advantages and possible drawbacks of random selection in terms of efficiency, compared to conventional alternatives: auctions, need- and merit-based allocations, and queues. It first examines recipients’ ability, ex post, to maximize the utility of the allocated resource, as well as ex post psychological effects of the allocation method. This Part then analyzes ex ante changes in potential recipients’ behavior created by random allocations, also noting the outcomes of the so called “insulation” from power-structures facilitated by random processes. Next, Part II examines the relative advantages and shortcomings of random selection in terms of administrative costs. Finally, it discusses possible effects of random allocations on society at large, such as political economy dynamics, and the potential impact on information flow, public knowledge, and taxation policy.

Liability for Online Anonymous Speech: Comparative and Economic Analyses

This is a pre-edited draft of of an article presented in the special session of the Annual Conference on European Tort Law. The article examines various models for handling the problem of online anonymous defamation from comparative and economic perspectives. The comparative analysis reveals four main paradigms. The US model bars content providers’ indirect liability, but facilitates identification of the speaker. The Israeli model recognises content providers’ fault-based liability but does not provide procedural tools for identifying the speaker. The EU framework enables the victim to request identification of the speaker, and at the same time bring an action against the content provider. Although there is variance among Member States, this model seems to comply with the relevant Directives and European court decisions. The recently-adopted English model (‘residual indirect liability’) enables the victim to pursue a claim against the speaker and, if the speaker is unavailable, imposes liability on the content provider. From an economic perspective, the main problem with exclusively direct liability is the special effort in identifying and pursuing the anonymous speaker. Additional, yet probably less serious, problems are the high likelihood of judgment-proof defendants and high transaction costs which prevent a contractual transfer of the burden to the content provider when it is the cheapest cost avoider. The drawbacks of exclusively indirect liability are the relatively high cost of precautions, the fact that content providers do not capture the full social benefit of their activity, and the asymmetric legal response to errors with respect to ‘defamatoriness.’ Concurrent liability of the speaker and the content provider overcomes the high cost of identifying and pursuing anonymous speakers, and the problem of judgment-proof defendants. It also induces content providers to facilitate identification of anonymous speakers, increasing the likelihood of internalisation by primary wrongdoers. But concurrent liability has potentially conflicting effects on deterrence, and may result in an aggregation of the implementation costs of both direct and indirect liability. The residual indirect liability regime eliminates (or at least reduces significantly) the need for monitoring, and prevents over-deterrence associated with unaccounted benefits and asymmetric response to errors. It also incentivises content providers to reduce the cost of identifying anonymous wrongdoers, and does not raise the characteristic problems of multiple-defendants. This model may raise some difficulties but they seem either insignificant or solvable, making the English model (with some modifications) the most efficient.

The Third Form of Justice

Izhak Englard, a prominent tort scholar and a former justice of the Supreme Court of Israel, has dedicated the last few years to an unprecedented research project, aimed to “retrace the long and complex history of the Aristotelian conceptual distinction between distributive and corrective justice from antiquity to the present day.” Modern legal theorists are well versed in the Aristotelian concepts. But although these concepts have engaged “the most brilliant philosophical, legal, and theological minds for generations,” the millennial treatment of the Aristotelian distinction has been disregarded in recent times. Englard’s recently published book brings the cumulative knowledge to the attention of contemporary thinkers, offering an opportunity to enhance and deepen ongoing jurisprudential discourse. Englard has structured the book chronologically (with a single exception), on the grounds that a topical arrangement would be impractical due to its complexity. Nonetheless, one can break down his sequential analysis of discrete manuscripts and extract fascinating inter-temporal debates on concrete questions that have occupied the minds of Western thinkers for centuries. This Critical Notice focuses on one of the main themes that run throughout the book, and may be of the greatest importance to contemporary legal theorists, namely the place of retributive (punitive, vindictive) justice within the Aristotelian framework. Following a short presentation of the Aristotelian text, this Critical Notice utilizes Englard’s painstaking study to systematically evaluate four possible attitudes to the place of retributive justice vis-a-vis the Aristotelian forms: (1) retribution is part of corrective justice (the Thomist position); (2) retribution pertains to distributive justice (the Scotist position); (3) retribution combines both forms of justice; (4) retribution is a third form of justice.