Effectiveness

Full reference : Augagneur, L.-M., La compliance a-t-elle une valeur ?, JCP E, n° 40, 5 octobre 2017, p. 1522. Sciences Po students can read the article via the drive, folder "MAFR-Régulation & Compliance".

This working paper is the support for the article to appear in the collective book  dedicated to our very dear friend and colleague Philippe Néau-Leduc. It uses the Bilingual Dictionary of the Regulatory and Compliance Law. Compliance Law has the same teleological functioning as the Economic Law to which it belongs, which consists in placing the normativity of rules, decisions and reasoning in the aims pursued. Once we know what the goals of compliance techniques are, then we know who should be responsible for them, who must be subject to them, who must activate the rules: compliance rules must be activated by those who are in the best position to achieve the outcome in order to achieve the goal sought by the authority which designed the compliance mechanism. The "circles" are thus plotted in a rational and pragmatic way. That, all of it ("useful effect"), but not beyond that. The notion of efficiency does not always imply balancing: on the contrary, it can involve drawing circles which designate those who are "placed" to carry the burden of the rules because they are capable of producing them the desired effects. Within these circles, the rules must apply without restriction and without compromise, but they must not apply beyond these circles. Drawing such circles requires defining the Law of Compliance itself, since on the one hand the choice of those who must implement the Compliance depends on the aims of the Compliance and on the other hand the definition of the Law of Compliance is itself teleological in nature. This is why, contrary to the assertion that the exercise of definition would be useless in these matters, which would be above all on a case-by-case basis, this effort to define and determine the purposes is, on the contrary, necessary in practice to show which enterprise must bear the obligations of compliance and which must not. But it is enough to have posed this to reveal the major difficulty of the Compliance, that explains resistances, and even gives the impression that one is confronted with an aporia. If, as a matter of principle, what is expected of the "users" of the Compliance mechanisms must be articulated to the aim that is affected by the authors of the compliance mechanisms to them, we must have a minimum correspondence between the aims of these authors (Legislators and Regulators) and the aims pursued by those who are responsible for implementing them: companies. However, this correspondence does not exist at first sight, because the compliance mechanisms are found to be uniquely based on "monumental goals" which the public authorities have a legitimate concern, whereas companies have for their own interest . The two circles do not match. The internationalization of concern for these aims in companies would therefore be only a mechanism of violence of which enterprises are the object, violence felt as such. (I). To resolve this violence, it is better to stop confusing the State and enterprises, whose goals are not the same, and draw the circle of subjects of law "eligible" for Compliance. It is highly legitimate to target certain entities, in particular this category of companies, which are the "crucial operators", in a binding way, as it is legitimate to govern companies that have expressed a desire to surpass their own interests. These circles of a different nature can overlap on a concrete operator: for example, if a bank – alway a crucial operator that is structural because it is systemic – is also international – a crucial operator because of its activity – decides to worry about others by commitments verified by the authorities to overcome their own interest (social responsibility), but these different circles are not confused. In any case, companies may belong to only one circle, or even belong to none. In the latter case, they must therefore remain beyond the reach of the pressure and cost of Compliance Law, in particular because they are not objectively required to realize the "monumental goals" aimed at effectiveness and do not want it: in a liberal system, it is for the public authorities to aim at the general interest, the ordinary people indirectly participating in it by paying the tax. (II). It is by making these "Compliance Circles" of eligible subjects of this specific Law to implement the heavy but justified and controlled burden of Compliance with regard to the monumental goals that this new system  aims, that then opens a royal way in order to find a uniqueness and to increase the "monumental function" of the Compliance Law by a relation of Trust towards the global general interest, rather than the mechanical application of rules whose meaning is not understood and whose perception is no longer perceived than violence.

The cost issue of regulation is a recurring issue. One can complain specifically, when companies are protesting about the "cost of regulation" or when the topic is taken as an object of study, through the cost / benefit calculation. A practical question of importance is whether there is a "legal question" or not. The "juridicity" of a question is defined by the fact that discussing about this question has an effect on the outcome of a case before a judge. This concrete definition, leaving the judge's power, binding nature of the rule (here the balance between cost and benefit) the effectiveness of its decision before the judge, its consideration by him in the decision he makes, has been proposed in France by Carbonnier. It is opposed to a definition of Law by the source, the author of the rule, which identifies law for example through Parliament Acts, because the text is adopted by the legislator, listed source of law. The first definition, more sociological, more flexible, giving the spotlight on judge better corresponds to a legal system which gives more room for ex post and for the judge. It is logical that we find more demonstrations of this conception in the common law systems. However, the issue of cost / benefit is being debated before the Supreme Court of the United States, about the latest environmental regulations, adopted by the Environment Protection Agency (EPA). It is a question of law. It is under the empire of the judge. For it is in this light that President Barack Obama in November 2014 asked a very costly regulation, and it was under his leadership that the Environmental Protection Agency has developed texts. Indeed, pollution of certain plants are the cause of asthma and laid in public health imperative to fight a regulation that results in a direct cost on firms. Indeed, some plants pollution is the cause of asthma and President Obama has asked public health imperative to combat by a regulation that results in a direct cost on the industry. The regulations adopted in 2012 they cost a $ 9 million, some claiming that future ones could result in billions of costs directly related to business The President emphasized by stating that the health of children was priceless. By challenging those of 2012 before the Supreme Court, in the case Michigan v. EPA, this is the other texts that conservative states and companies have in mind because it is the principle that is posed: : does A regulator have the right to take regulations very "expensive" when the advantage, however legitimate it is, is small-scale in terms of costs? The Supreme Court, having chosen to handle the case, listened to March 25, 2015, the arguments of each other and discussed the case. The question is the integration or not into the constitutional notion of "necessity of the law" of the "cost / benefit" calculation. This is a crucial point because the concept of "necessity of the law" is a common notion to the constitutions of many countries. However, not only the so-called judges "conservatives" as Justice Antonio Scalia, took position felt it was crazy not "consider" the cost of new regulations from the expected health benefits, but also Justice Stephen Breyer called "progressive," said "irrational" the environmental regulator has not taken in consideration such an imbalance between cost and benefit. It is true that Justice Breyer was formerly professor of competition law at Harvard. Judgment will be given in June.

► Full Reference: M.-A. Frison-Roche, "Le critère de l’efficacité dans le traitement des difficultés des entreprises" ("The criterion of effectiveness in dealing with business difficulties"), in Colloque des experts judiciaires en matière commerciale, 29 mars 1996, Moulins. -

► Full reference : J. Carbonnier, "Toute loi est-elle un mal ? (Is every law a bad thing?), in Essais sur les lois (Essays on Legisation), 2nd ed., Répertoire du notariat Defrénois, 1992, pp. 317-334. - ► Summary :  Jean Carbonnier takes as his starting point the coincidence in time between the announcement of Christ’s birth and the proclamation of the census by Caesar Augustus’s edict, and goes on to ask whether, in legal matters as in religious ones, the advent of the new law might be good news. It is accepted that many new laws were bad, but is the new law bad ‘in itself’? The author does not wish to let the distinction between favourable and unfavourable laws (a sociological criterion of interest) or the distinction between old and new laws (a psychological criterion of the clash between novelty and habit) interfere, so as to address the subject as neutrally as possible: is the law an evil in itself? This pits the law against case law, custom or equity, which might be superior, but then again the author takes a broader view and prefers to contrast law with non-law and pose the question even more radically: is law in itself an evil?   To begin with, Carbonnier demonstrates the necessity, the advantages and the beneficial effects of the law, which was particularly revered by the French Revolution and, above all, by the people because of the ‘benevolence of the law’. France remains steeped in this favourable legalistic prejudice. This stems from the sense of security it affords the people, because it is clear, precise and uncompromising, permanent, and because it serves as a means of communication between people. In the second part of the article, Carbonnier refers to Lacan, who, in relation to the law, invoked the figure of the father and predicted a future society without a father. Carbonnier wonders whether a lawless society is not about to emerge, or whether psychoanalysis, seeing castration in the law, still identifies it as an evil.  In any case, he sees in this an opposition to freedom and liberalism, the rejection of the law being associated with the rejection of the state. Quoting Maurice Barrès and his 1892 work, L'ennemi des lois, he shows that for Barrès, all law is an evil, because the world must organise itself spontaneously.  For liberalism, which is less romantic, every law is an evil because it hinders the spontaneous emergence of the general interest of the social group. Thus, to take Hayek as an example, the individual knows his own interest better than the law, and the sum of these interests gives rise to the general interest. Moreover, not only is the law pernicious, but, according to liberalism, it corrupts human nature, atrophies the will and diminishes responsibility, in a perverse pedagogy. In the third part of the article, Dean Carbonnier goes on to argue that the law acts more as a safeguard and is therefore a good thing, provided the legislator remains modest. He believes that the law is necessary because man is a sinner (in a nation of righteous people, the law would be unnecessary), citing Luther and Saint Augustine. The law is therefore indispensable insofar as it wields the sword. Indeed, the law must strike because the world is inhabited by evil. The Dean states: “It is in this sense that the law appears as an evil: not because it causes harm or does harm, but because it is linked to the existence of evil. It is the revealer of sin…”. He concludes: "Knowing that the law was given to curb evil, lawyers will use it without hesitation. Knowing that it is a source of evil, they will use it with restraint." It is in this self-imposed limitation that lawlessness emerges.   -