While algorithms bring about benefits for consumers in the form of more efficient price setting, concerns have also been expressed about possible adverse effects including discrimination. The paper takes a competition law perspective in analysing a type of discrimination that is said to be facilitated by the use of algorithms, namely personalised pricing. This is a form of price discrimination between consumers whereby a firm charges each consumer a different price depending on willingness to pay. As the advent of data analytics and algorithm-based services has made it easier for firms to engage in price discrimination, a clarification of the latter’s legality under competition law is to be welcomed. As such, the paper discusses the extent to which competition enforcement can be considered desirable to target price discrimination towards end consumers. In this regard, attention is also paid to the interaction with other regimes such as data protection, consumer protection and antidiscrimination law.
{"title":"Algorithms and Fairness: What Role for Competition Law in Targeting Price Discrimination Towards End Consumers?","authors":"Inge Graef","doi":"10.2139/ssrn.3090360","DOIUrl":"https://doi.org/10.2139/ssrn.3090360","url":null,"abstract":"While algorithms bring about benefits for consumers in the form of more efficient price setting, concerns have also been expressed about possible adverse effects including discrimination. The paper takes a competition law perspective in analysing a type of discrimination that is said to be facilitated by the use of algorithms, namely personalised pricing. This is a form of price discrimination between consumers whereby a firm charges each consumer a different price depending on willingness to pay. As the advent of data analytics and algorithm-based services has made it easier for firms to engage in price discrimination, a clarification of the latter’s legality under competition law is to be welcomed. As such, the paper discusses the extent to which competition enforcement can be considered desirable to target price discrimination towards end consumers. In this regard, attention is also paid to the interaction with other regimes such as data protection, consumer protection and antidiscrimination law.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"170 6 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-12-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123255611","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
‘Crowdfunding’ — raising capital through large numbers of small contributions — is a burgeoning phenomenon, spurred by the internet’s capacity to reduce communication costs. Its still-evolving status is reflected in diversity of contracting practices: for example, ‘equity’ crowdfunders invest in shares, whereas ‘reward’ crowdfunders get advance units of product. These practices occupy a hinterland between existing regimes of securities regulation and consumer contract law, with no consistency of treatment. Thus consumer protection law in the UK (but not the US) imposes mandatory terms that impede risk-sharing in reward crowdfunding, whereas US (but not UK) securities law mandates expensive disclosures that hinder equity crowdfunding. This article offers a normative roadmap for the regulation of crowdfunding. We suggest that while crowdfunding poses real risks for funders, neither the classical regulatory techniques of securities or consumer law provide an effective response. At the same time, a review of rapidly-developing mechanisms in crowdfunding markets suggests they offer the potential to provide meaningful protection for funders. In light of this, a permissive regulatory approach — with a credible threat of intervention should the market fail to protect consumers — is justified.
{"title":"The Promise and Perils of Crowdfunding: Between Corporate Finance and Consumer Contracts","authors":"J. Armour, L. Enriques","doi":"10.1111/1468-2230.12316","DOIUrl":"https://doi.org/10.1111/1468-2230.12316","url":null,"abstract":"‘Crowdfunding’ — raising capital through large numbers of small contributions — is a burgeoning phenomenon, spurred by the internet’s capacity to reduce communication costs. Its still-evolving status is reflected in diversity of contracting practices: for example, ‘equity’ crowdfunders invest in shares, whereas ‘reward’ crowdfunders get advance units of product. These practices occupy a hinterland between existing regimes of securities regulation and consumer contract law, with no consistency of treatment. Thus consumer protection law in the UK (but not the US) imposes mandatory terms that impede risk-sharing in reward crowdfunding, whereas US (but not UK) securities law mandates expensive disclosures that hinder equity crowdfunding. This article offers a normative roadmap for the regulation of crowdfunding. We suggest that while crowdfunding poses real risks for funders, neither the classical regulatory techniques of securities or consumer law provide an effective response. At the same time, a review of rapidly-developing mechanisms in crowdfunding markets suggests they offer the potential to provide meaningful protection for funders. In light of this, a permissive regulatory approach — with a credible threat of intervention should the market fail to protect consumers — is justified.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"128 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-09-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131709708","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2016-12-06DOI: 10.1146/ANNUREV-LAWSOCSCI-112116-014728
Sandeep Vaheesan, Frank A. Pasquale
Elite economists and lawyers contend that occupational licensure raises consumer prices and unemployment. Billed as a bipartisan boost to market competition, this technocratic policy agenda rests on thin empirical foundations. Studies of the wage effects of licensing rarely couple this analysis of its putative costs with convincing analysis of the benefits of the professional or vocational education validated via licensure. While some licensing rules may be onerous and excessive, licensing rules are inadequate or underenforced in other labor markets. Furthermore, by limiting labor market entry, occupational licensing rules, like minimum wage and labor laws, can help stabilize working- and middle-class wages. Although current antitrust law provides an ideological framework for technocratic attacks on licensing, it is fundamentally unsuited for evaluation of labor markets. Contemporary antitrust law's arcane concept of efficiency reflects neither the legislative objectives animating the antitrust statutes nor popular understanding of what competition policy should do.
{"title":"The Politics of Professionalism: Reappraising Occupational Licensure and Competition Policy","authors":"Sandeep Vaheesan, Frank A. Pasquale","doi":"10.1146/ANNUREV-LAWSOCSCI-112116-014728","DOIUrl":"https://doi.org/10.1146/ANNUREV-LAWSOCSCI-112116-014728","url":null,"abstract":"Elite economists and lawyers contend that occupational licensure raises consumer prices and unemployment. Billed as a bipartisan boost to market competition, this technocratic policy agenda rests on thin empirical foundations. Studies of the wage effects of licensing rarely couple this analysis of its putative costs with convincing analysis of the benefits of the professional or vocational education validated via licensure. While some licensing rules may be onerous and excessive, licensing rules are inadequate or underenforced in other labor markets. Furthermore, by limiting labor market entry, occupational licensing rules, like minimum wage and labor laws, can help stabilize working- and middle-class wages. Although current antitrust law provides an ideological framework for technocratic attacks on licensing, it is fundamentally unsuited for evaluation of labor markets. Contemporary antitrust law's arcane concept of efficiency reflects neither the legislative objectives animating the antitrust statutes nor popular understanding of what competition policy should do.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"4 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"129380536","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
On 2 June 2016, the Commission published a Communication containing “A European agenda for the collaborative economy”. The Communication intends to provide non-binding legal guidance and policy orientation on the sustainable development of the collaborative economy. It contains a number of helpful suggestions for example as to when an individual offering services via an online platform is to be regarded as an employee. The advice to ensure a high level of consumer protection while not imposing disproportionate burdens on non-professional service providers can be supported in general. However, it is to be investigated whether the application of many rules of consumer law could not be extended to consumers dealing with such service providers. The Commission’s advice to use trustmarks as an instrument of consumer protection is interesting, but its implementation requires further research. While the Commission is generally very supportive of the collaborative economy, its advice to collaborative platforms to take voluntary action to fight illegal content online may entail the risk of the platform losing the benefit of the hosting exemption.
{"title":"The Commission's European Agenda for the Collaborative Economy – (Too) Platform and Service Provider Friendly?","authors":"C. Cauffman","doi":"10.2139/SSRN.2883845","DOIUrl":"https://doi.org/10.2139/SSRN.2883845","url":null,"abstract":"On 2 June 2016, the Commission published a Communication containing “A European agenda for the collaborative economy”. The Communication intends to provide non-binding legal guidance and policy orientation on the sustainable development of the collaborative economy. It contains a number of helpful suggestions for example as to when an individual offering services via an online platform is to be regarded as an employee. The advice to ensure a high level of consumer protection while not imposing disproportionate burdens on non-professional service providers can be supported in general. However, it is to be investigated whether the application of many rules of consumer law could not be extended to consumers dealing with such service providers. The Commission’s advice to use trustmarks as an instrument of consumer protection is interesting, but its implementation requires further research. While the Commission is generally very supportive of the collaborative economy, its advice to collaborative platforms to take voluntary action to fight illegal content online may entail the risk of the platform losing the benefit of the hosting exemption.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"55 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127456579","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Vocational education and training once held a proud place in Australia’s education system, providing opportunity along a less academically and more practically oriented path. While interest in and need for vocational education and training has not lost currency, the sector has been drawn into a downward reputational spiral. Reforms have been introduced in abundance to reverse the problems of VET, but instead have contributed to loss of status and scandal after scandal. At the heart of the debilitation of the VET sector has been lack of respect for and support for teaching professionalism in the reform process. Industry and government domination over what was to be taught in VET was intended to create opportunity through growth and jobs, but domination is bound to be doomed when the guardians of delivery and quality are not engaged professionally in the process. In these circumstances, a market methodology is likely to attract markets in ‘bads’ that repeatedly dislodge markets in ‘goods’. Regulation also faces a difficult challenge when it is overlayed on a market where there is deep and persistent internal conflict over the values of the sector. Delivery of quality education and training is much touted, but a schism sits below this mantra. The sector divides in its commitment to professional educators and to the aspiration of being a quality education provider in a highly stratified tertiary sector.
{"title":"Transforming a Race to the Bottom to a Ladder to the Top: Regulatory Support for Excellence in Australian VET","authors":"V. Braithwaite","doi":"10.2139/SSRN.2825851","DOIUrl":"https://doi.org/10.2139/SSRN.2825851","url":null,"abstract":"Vocational education and training once held a proud place in Australia’s education system, providing opportunity along a less academically and more practically oriented path. While interest in and need for vocational education and training has not lost currency, the sector has been drawn into a downward reputational spiral. Reforms have been introduced in abundance to reverse the problems of VET, but instead have contributed to loss of status and scandal after scandal. At the heart of the debilitation of the VET sector has been lack of respect for and support for teaching professionalism in the reform process. Industry and government domination over what was to be taught in VET was intended to create opportunity through growth and jobs, but domination is bound to be doomed when the guardians of delivery and quality are not engaged professionally in the process. In these circumstances, a market methodology is likely to attract markets in ‘bads’ that repeatedly dislodge markets in ‘goods’. Regulation also faces a difficult challenge when it is overlayed on a market where there is deep and persistent internal conflict over the values of the sector. Delivery of quality education and training is much touted, but a schism sits below this mantra. The sector divides in its commitment to professional educators and to the aspiration of being a quality education provider in a highly stratified tertiary sector.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"134524824","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Hebrew Submission: מוכר נכס תבע מהקונה פיצויים מוסכמים בשל הפרת חוזה המכר. בין הקונה לבין עורך הדין שייצג אותה בתביעה הוסכם בעל-פה ששכר טרחתו של עורך הדין יהיה בשיעור ההפרש בין סכום הפיצויים המוסכמים שהלקוחה נתבעה לשלם לבין הסכום שבו היא תחויב למעשה. בית-משפט השלום קיבל את תביעתו של עורך הדין לשכר טרחה בשיעור זה, בית המשפט המחוזי הפחית במידת מה את השכר המוסכם, ובית המשפט העליון דחה בקשה לרשות ערעור על פסק הדין המחוזי.רשימה זו מציגה את הרקע הכלכלי, ההתנהגותי והמשפטי של הסדרי שכר טרחה התלוי בתוצאה. היא מסבירה שבמקרה הנדון היה מדובר בשכר טרחה התלוי בתוצאה, ששיעורו 100% מהתועלת שהלקוחה עתידה הייתה להפיק מהייצוג המשפטי. הרשימה טוענת שלא היה מקום לתת תוקף להסכם זה, משום שהוא בלתי-סביר ואינו עולה בקנה אחד עם חובות האמון החלות על עורכי דין. מעבר למקרה הספציפי, ההתדיינות הנוכחית חושפת ליקויים בהסדר המשפטי החל על הסכמי שכר התלוי בתוצאה במשפטנו, הן מבחינת היעדרה של דרישת כתב הן מבחינת אופן הפיקוח על סבירותם של הסכמים אלה. English Abstract: A seller filed a lawsuit for liquidated damages against a buyer who breached a sales contract. The defendant and her attorney agreed orally that the attorney’s fee will be the difference between the sum claimed by the seller and the sum she would actually have to pay. The court of first instance accepted the attorney’s claim for that fee, the court of appeal reduced the fee to a certain extent, and the Supreme Court of Israel rejected a petition for a second appeal.This Note presents the economic, behavioral, and legal background of contingent-fee arrangements. It claims that, in essence, the agreement in the present case provided for a fee rate of 100% of the client’s benefit from the legal representation. It further argues that this agreement should have been deemed unenforceable, because it was unfair and incompatible with the attorney’s fiduciary obligations. Beyond the particular case, the Note criticizes the regulation of contingent fees in Israel. It argues that the law should require that such agreements be made in writing and call attention to several deficiencies in the statutory provision authorizing the Bar to supervise their fairness.
{"title":"שכר טרחה התלוי בתוצאה בשיעור של מאה אחוז A Contingent Fee at the Rate of One Hundred Percent","authors":"E. Zamir","doi":"10.2139/SSRN.2819983","DOIUrl":"https://doi.org/10.2139/SSRN.2819983","url":null,"abstract":"Hebrew Submission: מוכר נכס תבע מהקונה פיצויים מוסכמים בשל הפרת חוזה המכר. בין הקונה לבין עורך הדין שייצג אותה בתביעה הוסכם בעל-פה ששכר טרחתו של עורך הדין יהיה בשיעור ההפרש בין סכום הפיצויים המוסכמים שהלקוחה נתבעה לשלם לבין הסכום שבו היא תחויב למעשה. בית-משפט השלום קיבל את תביעתו של עורך הדין לשכר טרחה בשיעור זה, בית המשפט המחוזי הפחית במידת מה את השכר המוסכם, ובית המשפט העליון דחה בקשה לרשות ערעור על פסק הדין המחוזי.רשימה זו מציגה את הרקע הכלכלי, ההתנהגותי והמשפטי של הסדרי שכר טרחה התלוי בתוצאה. היא מסבירה שבמקרה הנדון היה מדובר בשכר טרחה התלוי בתוצאה, ששיעורו 100% מהתועלת שהלקוחה עתידה הייתה להפיק מהייצוג המשפטי. הרשימה טוענת שלא היה מקום לתת תוקף להסכם זה, משום שהוא בלתי-סביר ואינו עולה בקנה אחד עם חובות האמון החלות על עורכי דין. מעבר למקרה הספציפי, ההתדיינות הנוכחית חושפת ליקויים בהסדר המשפטי החל על הסכמי שכר התלוי בתוצאה במשפטנו, הן מבחינת היעדרה של דרישת כתב הן מבחינת אופן הפיקוח על סבירותם של הסכמים אלה. English Abstract: A seller filed a lawsuit for liquidated damages against a buyer who breached a sales contract. The defendant and her attorney agreed orally that the attorney’s fee will be the difference between the sum claimed by the seller and the sum she would actually have to pay. The court of first instance accepted the attorney’s claim for that fee, the court of appeal reduced the fee to a certain extent, and the Supreme Court of Israel rejected a petition for a second appeal.This Note presents the economic, behavioral, and legal background of contingent-fee arrangements. It claims that, in essence, the agreement in the present case provided for a fee rate of 100% of the client’s benefit from the legal representation. It further argues that this agreement should have been deemed unenforceable, because it was unfair and incompatible with the attorney’s fiduciary obligations. Beyond the particular case, the Note criticizes the regulation of contingent fees in Israel. It argues that the law should require that such agreements be made in writing and call attention to several deficiencies in the statutory provision authorizing the Bar to supervise their fairness.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"79 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2016-08-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115521128","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Notwithstanding the negative effects arising from global economic recession, E-commerce transactions in China has increased steadily. Meanwhile, the legal system still lacks specific regulations concerning consumer protection of distance contracts. Nevertheless, the distance consumer market in China is well self-regulated, due to its reliance on a version of the Lex Mercatoria. This article will discuss the detail of the modern Lex Mercatoria that has developed in China, and draw conclusions on its future. The first aspect is “right of withdrawal” which has been adapted from the European Union’s legal system. Another aspect is “escrow” which Chinese is known as “third-party payment method”. This has been borrowed from the common legal system. The former is a self redress mechanism whereby the consumer can protect whereby the consumer can protect himself during the purchasing process; the latter is a mechanism for security of payment. These two legal concepts do not operate in isolate. On the contrary, they cooperatively break through the difficulty that can occur in practice, when the trader fails to reimburse the consumer. Even though the EU Directives require the trader to return all payments when the right of withdrawal id exercised by the consumer, repayment is frequently withheld or delayed. This approach enrolls escrow to solve the problem, by returning the payment via an escrow holder, which is a credit-neutral third party. The combination of these two concepts makes up the hybrid approach of modern Lex Mercatoria in China. The paper will concludes that increased protection for distance consumer protection in China will be advanced by the use of this Lex Mercatoria and led to further development of relevant legislation.
{"title":"Contemporary Lex Mercatoria in China","authors":"Ying Yu","doi":"10.2139/ssrn.2590350","DOIUrl":"https://doi.org/10.2139/ssrn.2590350","url":null,"abstract":"Notwithstanding the negative effects arising from global economic recession, E-commerce transactions in China has increased steadily. Meanwhile, the legal system still lacks specific regulations concerning consumer protection of distance contracts. Nevertheless, the distance consumer market in China is well self-regulated, due to its reliance on a version of the Lex Mercatoria. This article will discuss the detail of the modern Lex Mercatoria that has developed in China, and draw conclusions on its future. The first aspect is “right of withdrawal” which has been adapted from the European Union’s legal system. Another aspect is “escrow” which Chinese is known as “third-party payment method”. This has been borrowed from the common legal system. The former is a self redress mechanism whereby the consumer can protect whereby the consumer can protect himself during the purchasing process; the latter is a mechanism for security of payment. These two legal concepts do not operate in isolate. On the contrary, they cooperatively break through the difficulty that can occur in practice, when the trader fails to reimburse the consumer. Even though the EU Directives require the trader to return all payments when the right of withdrawal id exercised by the consumer, repayment is frequently withheld or delayed. This approach enrolls escrow to solve the problem, by returning the payment via an escrow holder, which is a credit-neutral third party. The combination of these two concepts makes up the hybrid approach of modern Lex Mercatoria in China. The paper will concludes that increased protection for distance consumer protection in China will be advanced by the use of this Lex Mercatoria and led to further development of relevant legislation.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"45 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-04-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"133037528","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
One of the currents of change sweeping through the insurance industry is the rise of insurance bad faith liability. There is an emerging legal question today as to whether the individual employee adjusters of insurance companies can be subject to bad faith liability.This article examines the question of whether employee-adjusters of insurance companies can and should be held liable for insurance bad faith liability. Early reported cases involving personal liability for bad faith generally held that insurance company employee adjusters were immune from bad faith claims as they were not in privity of contract with insureds. However, three significant decisions from the Montana Supreme Court (O’Fallon v. Farmers Insurance Exchange in 1993), Texas Supreme Court (Liberty Mutual Insurance Company v. Garrison Contractors, Inc. in 1998) and the West Virginia Supreme Court (Taylor v. Nationwide Mutual Insurance Company) in 2003 challenged this doctrinal rule in holding that bad faith claims can proceed against insurance company employee adjusters. Today a split has emerged among courts on the issue of whether bad faith claims can proceed against insurance company employee adjusters.This article proposes a uniform standard that courts can employ in cases where insureds allege insurance company employee adjusters act in bad faith. To keep insurance company employee adjusters fair and honest and to ensure the quasi-fiduciary nature of the insurance contract is upheld, this article contends that insurance company employee adjusters be held liable for insurance bad faith in cases where a trial court makes an evidentiary finding that an employee adjuster acts with the purposeful or actual malicious intention to prejudice the rights of an insured.
{"title":"The Personal Liability of Insurance Claims Adjusters for Insurance Bad Faith","authors":"Chad G. Marzen","doi":"10.2139/SSRN.2562171","DOIUrl":"https://doi.org/10.2139/SSRN.2562171","url":null,"abstract":"One of the currents of change sweeping through the insurance industry is the rise of insurance bad faith liability. There is an emerging legal question today as to whether the individual employee adjusters of insurance companies can be subject to bad faith liability.This article examines the question of whether employee-adjusters of insurance companies can and should be held liable for insurance bad faith liability. Early reported cases involving personal liability for bad faith generally held that insurance company employee adjusters were immune from bad faith claims as they were not in privity of contract with insureds. However, three significant decisions from the Montana Supreme Court (O’Fallon v. Farmers Insurance Exchange in 1993), Texas Supreme Court (Liberty Mutual Insurance Company v. Garrison Contractors, Inc. in 1998) and the West Virginia Supreme Court (Taylor v. Nationwide Mutual Insurance Company) in 2003 challenged this doctrinal rule in holding that bad faith claims can proceed against insurance company employee adjusters. Today a split has emerged among courts on the issue of whether bad faith claims can proceed against insurance company employee adjusters.This article proposes a uniform standard that courts can employ in cases where insureds allege insurance company employee adjusters act in bad faith. To keep insurance company employee adjusters fair and honest and to ensure the quasi-fiduciary nature of the insurance contract is upheld, this article contends that insurance company employee adjusters be held liable for insurance bad faith in cases where a trial court makes an evidentiary finding that an employee adjuster acts with the purposeful or actual malicious intention to prejudice the rights of an insured.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"9 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-02-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128347744","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Jonathan B. Cohn, Stuart L. Gillan, Jay C. Hartzell
We use events related to a proxy access rule passed by the Securities and Exchange Commission in 2010 as natural experiments to study the valuation effects of changes in shareholder control. We find that valuations increase (decrease) following increases (decreases) in perceived control, especially for firms that are poorly performing, have shareholders likely to exercise control, and where acquiring a stake is relatively inexpensive. These results suggest that an increase in shareholder control from its current level would generally benefit shareholders. However, we find that the benefits of increased control are muted for firms with shareholders whose interests may deviate from value maximization.
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A market can have a lemon's problem when one party to the transaction has far superior information to the other and defects are not obvious. The classic bad car, the "lemon" led to the name for this theory. A lemon's market is inefficient. Both consumers and reputable sellers of high quality goods are harmed by the consumer's inability to distinguish superior goods. Frauds, who sell poor quality goods by misrepresenting quality are the only winners. Markets beset by lemon's problems may be improved by government intervention, which can aid both consumers and honest sellers.In his article "How Trust is Achieved in Free Markets," Dan Klein, a libertarian, argues that government intervention is not necessary to deal with lemon's problems because the markets do so. A variant of Dan's reasoning lies at the heart of modern corporate governance. Its leading scholars assert that fraud by controlling persons is minimal because legitimate firms successfully distinguish themselves from control frauds. They do so through three primary devices: hiring top-tier outside auditors, insuring that their CEOs own large amounts of the company's stock, and having the company take on large amounts of debt. The S&L debacle and the ongoing financial crises have shown that this confidence in the ability of markets to discern control frauds was misplaced.White-collar criminologists are less sanguine about the ability of honest firms to distinguish themselves from the control frauds in many contexts absent effective regulation. Fraud always involves the creation and abuse of trust. Fraudulent firms love it when legitimate firms adopt signaling devices that they can mimic. This creates greater trust and allows more lucrative fraud. Moral restraints and legal prohibitions, in a functional, representative government, are generally mutually supportive. They can also support, instead of supplant, voluntary agreement.
当交易的一方拥有比另一方优越得多的信息，而缺陷并不明显时，市场就会出现柠檬问题。经典的坏车“柠檬”导致了这个理论的名称。柠檬市场是低效的。消费者和信誉良好的优质商品销售者都因消费者无法区分优质商品而受到损害。通过谎报质量来销售劣质商品的骗子是唯一的赢家。受柠檬问题困扰的市场可能会通过政府干预得到改善，这对消费者和诚实的卖家都有好处。自由主义者丹·克莱因(Dan Klein)在他的文章《信任如何在自由市场中获得》(How Trust is achieve In Free Markets)中指出，政府干预对于解决柠檬的问题是不必要的，因为市场会这样做。丹的推理的另一种变体是现代公司治理的核心。它的主要学者断言，控制人的欺诈行为是最小的，因为合法公司成功地将自己与控制欺诈区分开来。他们通过三个主要手段来做到这一点:聘请顶级外部审计师，确保ceo拥有公司的大量股票，以及让公司承担大量债务。储贷危机和目前的金融危机表明，这种对市场识别控制欺诈能力的信心是错误的。在许多缺乏有效监管的情况下，白领犯罪学家对诚实公司将自己与控制欺诈区分开来的能力不太乐观。欺诈总是涉及信任的建立和滥用。当合法公司采用他们可以模仿的信号设备时，欺诈公司就会乐在其中。这创造了更大的信任，并允许更多有利可图的欺诈。在一个有效的代议制政府中，道德约束和法律禁止通常是相互支持的。它们还可以支持自愿协议，而不是取代自愿协议。
{"title":"How Trust is Abused in Free Markets: Enron’s 'Crooked 'E’'","authors":"W. Black","doi":"10.2139/ssrn.1536532","DOIUrl":"https://doi.org/10.2139/ssrn.1536532","url":null,"abstract":"A market can have a lemon's problem when one party to the transaction has far superior information to the other and defects are not obvious. The classic bad car, the \"lemon\" led to the name for this theory. A lemon's market is inefficient. Both consumers and reputable sellers of high quality goods are harmed by the consumer's inability to distinguish superior goods. Frauds, who sell poor quality goods by misrepresenting quality are the only winners. Markets beset by lemon's problems may be improved by government intervention, which can aid both consumers and honest sellers.In his article \"How Trust is Achieved in Free Markets,\" Dan Klein, a libertarian, argues that government intervention is not necessary to deal with lemon's problems because the markets do so. A variant of Dan's reasoning lies at the heart of modern corporate governance. Its leading scholars assert that fraud by controlling persons is minimal because legitimate firms successfully distinguish themselves from control frauds. They do so through three primary devices: hiring top-tier outside auditors, insuring that their CEOs own large amounts of the company's stock, and having the company take on large amounts of debt. The S&L debacle and the ongoing financial crises have shown that this confidence in the ability of markets to discern control frauds was misplaced.White-collar criminologists are less sanguine about the ability of honest firms to distinguish themselves from the control frauds in many contexts absent effective regulation. Fraud always involves the creation and abuse of trust. Fraudulent firms love it when legitimate firms adopt signaling devices that they can mimic. This creates greater trust and allows more lucrative fraud. Moral restraints and legal prohibitions, in a functional, representative government, are generally mutually supportive. They can also support, instead of supplant, voluntary agreement.","PeriodicalId":142664,"journal":{"name":"LSN: Other Regulation that Pertains to Consumer Markets (Sub-Topic)","volume":"90 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-01-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117281431","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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