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Legal Studies Research Paper Series Vol. 9, No. 3

The Faculty has published Volume 9 Number 3 of the University of Cambridge Faculty of Law Legal Studies Research Paper Series on SSRN.

This issue includes the following articles:

Sarah Worthington: Revolutions in Personal Property: Redrawing the Common Law’s Conceptual Map (8/2018)

It is suggested here that the core of English property law is not concerned with ‘assets’, and which assets are classed as property and which are not. Nor is it concerned with which ‘interests’ are proprietary and which are not. Instead, it is exclusively about sharing of assets, and which shared or derivative interests are possible. We could say that any asset that can be shared is ‘property’, so long as we then recognise that the key ‘property’ questions are exclusively concerned with the various possible sharing arrangements and shared interests in that asset. Defining these sharing arrangement inevitably requires the imposition of obligations on the parties to the arrangment, with this achieved either by agreement or by operation of law, and with the corresponding acquisition by each party of rights against the other.

One of the clearest examples of this is with debt. In a classificatory system that divides property and obligation, a contract creating a debt is the clearest example of ‘obligation’. And yet this asset can be ‘shared’: it can be held on trust or used as security, and those arrangements can be put in place by agreement or by operation of law.

Thus the most incisive and revolutionary contribution of English property law lies, it is suggested, in this novel idea: that it is English law’s greater flexibility and innovation in recognising sharing arrangements, and its concession that all wealth can be shared in some way, that is the true English ‘genius’. It is this that has enabled English ‘property law’ – the English law of sharing assets – to be more flexible, more commercial, more responsive, and therefore more useful and more attuned to modern times than the equivalent laws in civilian jurisdictions.

Simon Deakin, Prabirjit Sarkar & Mathias M. Siems: Is There a Relationship between Shareholder Protection and Stock Market Development? (9/2018)

We use recently created datasets measuring legal change over time in a sample of 28 developed and emerging economies to test whether the strengthening of shareholder rights in the course of the mid-1990s and 2000s promoted stock market development in those countries. We find only weak and equivocal evidence of a positive effect of shareholder protection on market capitalisation, the value of stock trading, and the turnover ratio, and a negative impact on the number of listed companies. There is stronger evidence of reverse causality, in the sense of stock market development at country level generating changes in shareholder protection law. We conclude, firstly, that legal reforms were at least in part an endogenous response to stock market development and not simply a reaction to the generation of global standards; but, secondly, that the laws passed in response to the demand for shareholder empowerment did not consistently have the expected impact on financial markets, and may have had some negative and perverse results.

John Buchanan, Dominic Heesang Chai & Simon Deakin: Unexpected Corporate Outcomes from Hedge Fund Activism in Japan (10/2018)

Hedge fund activism has been identified in the USA as a driver of enduring corporate governance change and market perception. We investigate this claim in an empirical study to see whether activism produced similar results in Japan in four representative areas: management effectiveness, managerial decisions, labour management, and market perception. Experience from the USA would predict positive changes at Japanese target companies in these four areas. However, analysis of financial data shows that no enduring changes were apparent in the first three areas, and that market perception was consistently unfavourable. Our findings demonstrate that the same pressures need not produce the same results in different markets. Moreover, while the effects of the global financial crisis should not be ignored, we conclude that the country-level differences in corporate governance identified in the varieties of capitalism literature are robust, at least in the short term.

Marc T. Moore: Flexible Work: A Law and Economics Perspective (12/2018)

Both casual and gig-based work arrangements have been subject to unprecedented levels of attention recently. This is mainly due to the widely-reported usage by many well-known corporate employers of controversial ‘zero-hours’ work contracts, the recent spate of well-publicised tribunal and court decisions on alleged employer exploitation of gig economy workers in cases such as Uber and Deliveroo, and also the publication in 2017 of the high-profile Taylor Review and subsequent House of Commons Committees’ Report into modern UK employment practices. While these developments and issues are likely to be subject to extensive analysis by employment lawyers, they remain relatively underexplored from other pertinent legal and inter-disciplinary angles. Accordingly, this paper will adopt an alternative perspective on flexible work inspired by the economic analysis of law and, in particular, the Coasean theory of the firm. Focussing on the implications of casual and gig-based work for the allocation of authority, risk, profit and decision-making rights within the firm, it will present a normative case for worker ownership as the reciprocal counterpart to flexible workers’ residual risk-bearing function. On this basis, it will critically assess key aspects of the current legal framework and policy agenda for the protection/empowerment of flexible workers in the UK.

Eyal Benvenisti: EJIL Foreword: Upholding Democracy Amid the Challenges of New Technology: What Role for the Law of Global Governance? (13/2018)

The law on global governance that emerged after the Second World War was grounded in irrefutable trust in international organizations and an assumption that their subjection to legal discipline and judicial review would be unnecessary and, in fact, detrimental to their success. The law that evolved systematically insulated international organizations from internal and external scrutiny and absolved them of any inherent legal obligations – and, to a degree, continues to do so. Indeed, it was only well after the end of the Cold War that mistrust in global governance began to trickle through into the legal discourse and the realization gradually took hold that the operation of international organizations needed to be subject to the disciplining power of the law. Since the mid-1990s, scholars have sought to identify the conditions under which trust in global bodies can be regained, mainly by borrowing and adapting domestic public law precepts that emphasize accountability through communications with those affected. Today, although a ‘culture of accountability’ may have taken root, its legal tools are still shaping up and are often contested. More importantly, these communicative tools are ill-equipped to address the new modalities of governance that are based on decision-making by machines using raw data (rather than two-way exchange with stakeholders) as their input. The new information and communication technologies challenge the foundational premise of the accountability school – that ‘the more communication, the better’ – as voters-turned-users obtain their information from increasingly fragmented and privatized marketplaces of ideas that are manipulated for economic and political gain. In this article, I describe and analyse how the law has evolved to acknowledge the need for accountability, how it has designed norms for this purpose and continues in this endeavour – yet how the challenges it faces today are leaving its most fundamental assumptions open to question. I argue that, given the growing influence of public and private global governance bodies on our daily lives and the shape of our political communities, the task of the law of global governance is no longer limited to ensuring the accountability of global bodies, but is also to protect human dignity and the very viability of the democratic state.


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