4 10/9/00 DRAFT-DO NOT CITE WITHOUT PERMISSION VOL #: property, computer law, the Internet, and perhaps commercial or corporate law Part II critiques and updates the arguments for and against common law system. Part Ill analyzes three alternatives to common law system: statutory law, model acts and private law, and private adjudication. Part IV discusses the proposal for synthetic common law and compares it to the alternatives. Part V considers how common law and its alternatives have failed in the area of financial derivatives dispute resolution, and explains the potential advantages of a synthetic common law regime in resolving such disputes, and suggest how a synthetic common law regime might be implemented II. THE LIMITS TO COMMON LAW Oliver Wendell Holmes, one of the great advocates for the common law,also recognized its limitations. Holmes told the story of a Vermont justice of the peace who, after considering a suit brought by one farmer against another for breaking a churn, ruled for the defendant because he had looked through the statutes and could not find anything about churns The story illustrates some of the limits to common law adjudication. Common law depends on human, and therefore 1 There may also be applications to criminal law. In the sentencing guidelines ontext, Albert Alschuler has proposed using fake, paradigmatic cases, not unlike synthetic common law, to guide judges in sentencing criminal defendants. Se Ibert w. Alschuler, The Failure of sentencing Guidelines: A Plea for Less Aggregation, 58 U CHI. L REv. 901(1991)(noting as the advantages of such a tem that"In]o real-world case might fit any of the co exactly, and unusual cases might be far removed from any situation that the ommission had considered. But lawyers could use the commission's paradigms at sentencing hearings in much the same way that they now use judicial precedents at other proceedings. ). However, Alschuler's proposal -unlike synthetic common law would require both the involvement of federal judges and close judicial appellate review. Moreover, because the entity creating the common law would be a regulator monopoly, the U.S. Sentencing Commission, there would be no assurance that theo paradigmatic cases" would reflect societal practice. Of course, criminal sentencing ight not be an appropriate area to introduce competing providers of law, whether synthetic or not. See infra notes 35-41(assessing the regulatory competition debate ). I am grateful to Kevin Cole for bringing Alschuler's proposal to my Examples include the Uniform Commercial Code, the Model Penal Code, and the various Restatements of Laws. See Steven Walt, Novelty and the Risks of Uniform Sales la, 39 VA.J. INT'L L 671(1999) See generally OLIvER WENDELL HOLMEs, THE COMMON LAW(1881 i See Oliver Wendell Holmes, The Path of the Law, 10 HARV.LREV.457,474 75(1897). Holmes may have adapted this story from a passage in a letter to him from Sir Frederick Pollock. In that letter, the first of a series of correspondence between Holmes and pollock from 1874 to 1932, Pollock described a"gem from Viner's Abridgment somewhere in title Pleader, which may be useful to you [and]is not generally known,. A declaration in trover for bottles without naming how many bottles is ill: but a declaration for twelve pair of boots and spurs without naming how many spurs is well enough: for it shall be intended of the spurs that belong to the boots MARK DEWOLFE HOWE. ED.. I HOLMES-POLLOCK LETTERS: THE CORRESPONDENCE OF MR JUSTICE HOLMES AND SIR FREDERICK POLLOCK 1874-1932 5 (1942)(letter from Pollock to Holmes, dated July 3, 1874) Melvin Eisenberg has made a similar point about the almost numberless rule permutations that are possible based on fact differences in common law cases. For example, he has noted that the "vehicle" of harm in a well-known British case in4 10/9/00 DRAFT – DO NOT CITE WITHOUT PERMISSION [VOL. #:# property, computer law, the Internet, and perhaps commercial or corporate law.12 Part II critiques and updates the arguments for and against a common law system. Part III analyzes three alternatives to a common law system: statutory law, model acts and private law,13 and private adjudication. Part IV discusses the proposal for synthetic common law and compares it to the alternatives. Part V considers how common law and its alternatives have failed in the area of financial derivatives dispute resolution, and explains the potential advantages of a synthetic common law regime in resolving such disputes, and suggest how a synthetic common law regime might be implemented. II. THE LIMITS TO COMMON LAW Oliver Wendell Holmes, one of the great advocates for the common law,14 also recognized its limitations. Holmes told the story of a Vermont justice of the peace who, after considering a suit brought by one farmer against another for breaking a churn, ruled for the defendant because he had looked through the statutes and could not find anything about churns.15 The story illustrates some of the limits to common law adjudication.16 Common law depends on human, and therefore 12 There may also be applications to criminal law. In the sentencing guidelines context, Albert Alschuler has proposed using fake, paradigmatic cases, not unlike synthetic common law, to guide judges in sentencing criminal defendants. See Albert W. Alschuler, The Failure of Sentencing Guidelines: A Plea for Less Aggregation, 58 U. CHI. L. REV. 901 (1991) (noting as the advantages of such a system that “[n]o real-world case might fit any of the commission’s paradigms exactly, and unusual cases might be far removed from any situation that the commission had considered. But lawyers could use the commission’s paradigms at sentencing hearings in much the same way that they now use judicial precedents at other proceedings.”). However, Alschuler’s proposal – unlike synthetic common law – would require both the involvement of federal judges and close judicial appellate review. Moreover, because the entity creating the common law would be a regulatory monopoly, the U.S. Sentencing Commission, there would be no assurance that the “paradigmatic cases” would reflect societal practice. Of course, criminal sentencing might not be an appropriate area to introduce competing providers of law, whether synthetic or not. See infra notes 35-41 (assessing the regulatory competition debate). I am grateful to Kevin Cole for bringing Alschuler’s proposal to my attention. 13 Examples include the Uniform Commercial Code, the Model Penal Code, and the various Restatements of Laws. See Steven Walt, Novelty and the Risks of Uniform Sales Law, 39 VA. J. INT’L L. 671 (1999). 14 See generally OLIVER WENDELL HOLMES, THE COMMON LAW (1881). 15 See Oliver Wendell Holmes, The Path of the Law, 10 HARV. L. REV. 457, 474- 75 (1897). Holmes may have adapted this story from a passage in a letter to him from Sir Frederick Pollock. In that letter, the first of a series of correspondence between Holmes and Pollock from 1874 to 1932, Pollock described a “gem from Viner’s Abridgment somewhere in title Pleader, which may be useful to you [and] is not generally known. . . . A declaration in trover for bottles without naming how many bottles is ill: but a declaration for twelve pair of boots and spurs without naming how many spurs is well enough: for it shall be intended of the spurs that belong to the boots.” MARK DEWOLFE HOWE, ED., I HOLMES-POLLOCK LETTERS: THE CORRESPONDENCE OF MR. JUSTICE HOLMES AND SIR FREDERICK POLLOCK 1874-1932 5 (1942) (letter from Pollock to Holmes, dated July 3, 1874). 16 Melvin Eisenberg has made a similar point about the almost numberless rule permutations that are possible based on fact differences in common law cases. For example, he has noted that the “vehicle” of harm in a well-known British case in