Gilles Cuniberti, ‘The Merchant Who Would Not Be King – Unreasoned Fears on Private Lawmaking’

Modern theorists are concerned with the development of private lawmaking. Private powers increasingly legislate for themselves, and one could fear that the autonomy that they might gain as a consequence might be misused. While the breadth of the production of private norms is a fact which can barely be disputed, the goal pursued by private powers issuing and relying on those norms has not been clearly ascertained. This paper argues that it should be. Private lawmaking is cause for concern essentially because most scholars have at least implicitly assumed that private powers do not only produce norms and rules of conduct, but also claim autonomy from nation states. Yet, the fact that private powers lay down rules does not mean that they claim, and even less have, complete autonomy from nation states. It could perfectly be that the major part of private norm production takes place in a framework designed by nation states, which would thus grant limited, and certainly always controlled, autonomy to these powers. The paper begins by looking at a variety of instances of private norm production (model contracts issued by trade associations, international commercial arbitration, corporate codes) and finds that private parties virtually never claim complete autonomy from nation states. The paper then tries to explain why and argues that there is a simple economic reason for this: lawmaking is a costly activity and state laws are available at no cost. Finally, it addresses the concerns of modern theorists about private lawmaking and argues that its dangers have been overstated and that controlling or domesticating private power is much less of an issue than usually thought since the latter happily remains subject to nation states’ authority. A different and more serious issue is the ability of private actors to navigate between national legal orders and to choose the national law most favorable to their interest.

Cuniberti, Gilles, The Merchant Who Would Not Be King – Unreasoned Fears on Private Lawmaking (July 1, 2012). University of Luxembourg Law Working Paper No 2014-7.

First posted 2014-10-03 05:50:28

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