On the efficiency of the common law: an application to the recovery of rewards

Anthony Niblett ()
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Anthony Niblett: University of Toronto

European Journal of Law and Economics, 2017, vol. 43, issue 3, No 2, 393-417

Abstract: Abstract Richard Posner’s influence on the field of law and economics cannot be overstated. Among his many contributions, Posner offered an early conjecture that remains fascinating and controversial to this day: the idea that common law rules are more likely than legislative codes to be concerned with efficiency. In this paper, I compare the efficiency of a common law rule of contracting to the efficiency of a civil law rule. In common law jurisdictions, claimants must have knowledge of a reward in order to recover. In civil law jurisdictions, however, no such knowledge is required. I analyze the efficiency of each rule by examining the incentives created by each rule. In a finding that agrees with Posner’s hypothesis, I argue that the common law rule is more efficient. The model has a number of applications beyond contract default laws. I use the model to discuss three legal questions previously analyzed by Richard Posner: (1) incentivizing innovation; (2) the finders-keepers rule in property law; and (3) salvage rights in maritime law.

Keywords: Efficiency of the common law; Civil law; Contracts; Rewards; Unilateral contracts; Property; Innovation; Finders keepers; Salvage; Maritime law (search for similar items in EconPapers)
JEL-codes: K00 K10 K12 O30 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s10657-015-9520-1

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