INTERNATIONAL
CONFERENCE ON REGULATION REFORM, MANAGEMENT AND SCRUTINY
OF LEGISLATION
Parliament
House, New South Wales, 9 July 2001
THE
GROWTH OF LEGISLATION AND REGULATION
May I begin by adding my welcome to all
of the delegates who are attending this Conference and,
in particular, to those who are visiting Australia from
other countries. I am honoured by your invitation
to speak to you.
The subject matter of your deliberations
is technical, and I am conscious that among you there is
a high level of expertise and experience. I will try
to avoid a recitation of matters about which you are at
least as well informed as I am, and some of you, no doubt,
a good deal better informed. Rather, I will make some
observations about what to you is a familiar but important
topic, from the point of view of a judge.
You do not need me to tell you about
the ever-increasing volume of legislation, primary and delegated,
and regulation, which governs the conduct and affairs of
citizens in a modern democratic society. Each country
has its own striking examples. In Australia, a comparison
between the size and complexity of the Income Tax Assessment
Act of the Commonwealth and the legislation when originally
enacted in 1936 makes the point simply and clearly.
The current reprint of the 1936 Act, as amended, occupies
four substantial volumes. The original Act would have
occupied less than a third of one of those volumes.
A similar comparison may be made between the legislation
which embodies our current Corporations Law and the Companies
Act of New South Wales which applied when I commenced practice
40 years ago. During my time in the legal profession
there has been a vast increase in the sheer bulk of the
information needed by a lawyer to advise clients as to their
rights and obligations. Statutes, regulations, and by-laws
are rarely made simpler. But games are not necessarily
made fairer by multiplying the rules, and neither is life.
Legislation and regulation on this scale
represents a major change in the role of government.
To an extent this, in turn, reflects a change in community
expectations. It also represents a change in the nature
and understanding of law. In ancient times, legislative
authority might be employed to clarify or codify the law,
but rarely to change it. F A Hayek (Law Legislation
and Liberty, Vol 1 p 81) pointed out that, in early
times, "a legislator might endeavour to purge the law
of supposed corruptions, or to restore it to its pristine
purity, but it was not thought that he could make new law".
The same author observed (p 124) that as late as the 17th
century it could still be questioned whether the Mother
of Parliaments, the English legislature, could make law
inconsistent with the common law. In the days when
monarchs exercised personal law making power, a typical
cause of complaint was that the laws they promulgated were
different from the ancient laws and customs of the kingdom.
Such a complaint is to be found in Magna Carta.
Even in the 19th century,
and the early part of the 20th century, when
parliaments embraced with enthusiasm the function of altering
the law, and when executive governments and local authorities
began to exercise extensive regulatory power pursuant to
statutory delegation, the scope and reach of such activity
was modest by current standards.
One consequence of significance to courts
is the increasing complexity of the interrelationship between
the common law and statute. The common law, developed
by judicial precedent, involves an inductive technique.
Principles of general application are derived from earlier
decisions in particular cases, and then applied in turn
to resolve the case at bar. I emphasise the words
"general" and "principles". The
characteristic judicial task, especially when performed
by a court having the authority to modify and develop the
common law, is to identify general principles appropriate
to produce a just result in future cases where the detailed
facts and circumstances are unknown and unknowable.
A principle of common law does not legislate for a specific
outcome regarded as individually just in a particular case.
Discretionary decisions of courts exercising judicial power
in particular cases may do that, and such discretions are
often conferred on courts by statute. But the concern
of the common law is general principle.
Much legislation takes the same form
as rules of common law, and is consciously modelled upon
such rules. The express purpose of some legislation
is to alter established common law principles. At
the other extreme, a good deal of legislation, and much
regulation, consists of detailed directions, at a high level
of particularity, on matters which require regulation for
the orderly conduct of what is regarded as the business
of society.
A good deal of modern legislative activity
is devoted to altering, extending, or modifying common law
rules and principles. At the same time, when courts
modify and develop the common law, they often need to take
account of the way in which the common law will relate to
legislation and regulation operating in the same field.
Consider, for example, the matter of actions for damages
for work-related injury. The rights and liabilities
of employers and employees, relating to causes of action,
defences, and measure of damages, are the product of a complex
pattern of statutory provisions and rules of common law.
Legislation now frequently limits or caps the damages to
which an injured person is entitled at law. There
is a constant inter-action between laws made by Parliament
and principles developed and applied by courts.
In those areas where there is an overlap
between the activities of courts and legislatures or regulatory
authorities, the need for conscious regard by each to the
activities of the other is evident. What are sometimes
euphemistically described as "unintended consequences"
of legislation may be the result of a failure to advert
sufficiently to the rules of common law that might be affected,
directly or indirectly, by such legislation. Courts,
equally, attempt to develop the common law in a manner which
preserves the coherence of the entire legal system of which
the common law is only a part. Cross-referencing between
legislative and judicial activity is becoming more important,
and more difficult.
Where a proposed statute under parliamentary
consideration is the outcome of a report of a law reform
commission, or of detailed consideration by a Minister's
Department, it might reasonably be expected that such cross-referencing
will have been undertaken. But not all Departments,
which propose legislation are necessarily aware of, or concerned
with, areas outside their own particular interest.
And amendments made in the course of the passage of a Bill
through Parliament may arise in circumstances where only
a narrow range of considerations has been taken into account.
Similarly, courts
rely upon the assistance of counsel, and upon their own
knowledge and experience, but judges considering the development
or refinement of common law rules may find difficulty in
satisfying themselves that they are fully aware of all the
statutes and regulations that could affect the practical
consequences of their decision.
As the law grows more and more complex,
the task of comprehending all the consequences of particular
changes in the law becomes increasingly onerous. The
development of techniques to deal with this problem is a
challenge confronting modern legislatives and modern courts.
The burden of compliance with modern
regulatory regimes is well understood. There is, however,
an aspect of that burden which is sometimes left out of
account.
In a society in which citizens are subjected
to such detailed regulation that it may be unreasonable
to expect them to be aware of all the laws with which they
have to comply, or where the cost of compliance is onerous,
there arises the problem of selective law enforcement.
When I speak of citizens being aware of the laws with which
the must comply, I do not suggest that it ever has been,
or ever could be, the case that ordinary people generally
know the detail of all the laws that bind them. But
access to legal information and advice is costly, and is
not equally available across the community. And there
are many areas in which the burden of compliance with regulations,
both in terms of knowledge, time, and expense, is such that
many citizens give up the attempt. The unfairness
may be diminished by a policy of law enforcement which tolerates
non-compliance in cases regarded as worthy of benevolent
treatment. But this has its dangers.
I am not intending to suggest that law
enforcement authorities should be deprived of discretion.
On the contrary, there are many circumstances in which it
is appropriate and necessary that common sense and, from
time to time, mercy, should prevail over blindly rigorous
law enforcement. Even acknowledging that, it is a
dangerous condition of society, potentially subversive of
the rule of law, and demoralising, if officers of the executive
government exercise a wide ranging power to decide which
citizens will be required to obey the law, and which citizens
will not. The more difficult it becomes for ordinary
people to know their legal obligations, and to comply with
them, the greater is the danger that practical relief will
be found in the exercise of discretion by law enforcement
agencies. Arming the executive with appropriate discretionary
power to dispense with compliance, in advance of the need
for compliance, may be one thing. Selective enforcement
of the law after it has been broken is another.
The possible abuse that can result from
a general tolerance, or even expectation, of selective law
enforcement are too obvious to require elaboration.
But the effect upon the morale of a community, and upon
its respect for and willingness to obey the law, must also
be taken into account. Law and regulations that are
not seriously intended to be generally enforced may arm
the executive government or other authorities with a capacity
to oppress individual citizens. Striking a proper
balance between the preservation of a healthy discretion,
and and opening the way to unhealthy discrimination, in
law enforcement, is a difficult and sensitive matter.
Of course, the fact that offences against
some law may frequently go undetected and unpunished does
not of itself mean that the law is being selectively administered.
It may be, for example, that despite the best efforts of
the authorities, many Customs offences go undetected.
That is not the result of any failure to attempt to enforce
the law. It is the result of the nature of the offences
in question, which may be difficult to police. Many
similar examples could be given. But if a certain
kind of law is widely seen to be disregarded, or even publicly
flouted, and the authorities responsible for enforcing the
law appear to behave capriciously in its enforcement, then
respect, not only for that particular law, but for the entire
system of law and justice, is placed at risk. And
citizens who are lulled into a false belief that non-compliance
will be tolerated may find themselves embarrassed, or even
oppressed, by an unfavourable exercise of administrative
authority. The result may be not only injustice, to
an individual, but also a gross disturbance of the balance
between legislative, executive and judicial power.
This is an area where over-simplification
is dangerous. We can all think of laws which are necessary
for the protection of public safety or morals, but which
the public would be alarmed to see comprehensively enforced.
Part of the solution is found in establishing an independent
prosecuting authority, armed with appropriate discretions,
but manifestly free of political influence and separate
from the police service. Some statutes expressly provide
that certain kinds of prosecution may only be instituted
in the consent of the Attorney-General. The principles
according to which decisions not to prosecute alleged seriously
breaches of the law may be made are, in Australia, generally
made available to the public.
I referred earlier to the cost of compliance.
It is necessary also to remember the cost of enforcement.
Law enforcement authorities and regulatory agencies have
finite resources, and often have to set priorities, which
result in some, perhaps many, possible, offences going unpunished.
Again, this problem is magnified by the increasing volume
of regulation. Part of the solution is sometimes found
in legislative provisions for private law enforcement, which
may include action for damages or injunctive relief.
Working out the proper role of private enforcement of public
law is a challenge facing both parliaments and courts.
In courts, the issue usually arises in relation to the standing
of plaintiff to bring an action, but such issues normally
turn up statutory construction. This is a matter with
which many of you, I am sure, are familiar.
Another consequence of the proliferation
of regulation is what is sometimes called the democratic
deficit. Of course, the theory that, in a representative
democracy, all legislation is an expression of the will
of the majority, is true only in a somewhat remote and formal
sense. Occasionally, at parliamentary elections, a
single issue emerges which so dominates political debate
that a government, once elected, can fairly claim to have
a mandate to implement certain legislation. In such
a case it may be said that the law, when enacted, accords
with the wish of the majority of voters. Such cases
are rare. The issues at elections are more complex,
and outcomes are determined by influences which usually
make it impossible to identify most legislation with the
will of an electoral majority. As a rule, it is more
accurate to say that the legislative process is democratic
than it is to say that a particular legislative outcome
is desired by a majority of the people. But this problem
is increased when what is under consideration is not a statute
enacted by a parliament, after a process of public debate
and political conflict, but a regulation made pursuant to
authority delegated to the executive government, or to a
local authority, by statute. No doubt it is in an
attempt to diminish this democratic deficit that your Conference
is giving attention to the important matter of parliamentary
scrutiny. You are all familiar with the problem, but
there is an aspect of it, affecting the work of the courts,
that should be mentioned.
I referred earlier to the role of the
courts in modifying and developing the common law.
As you may be aware, there is a lively debate about the
extent to which it is appropriate for courts to engage in
law making activities in current circumstances. There
is no single or simple answer to the question. But
those who seek to encourage courts to engage in what is
sometimes, and perhaps misleadingly, called judicial activism,
put the argument that so many laws are now made in an undemocratic
fashion that it is a fantasy to regard parliamentary legislation
as the only, or even the principal, alternative to judicial
law making. Those who counsel judicial restraint on
the basis that, in a representative democracy, it is for
parliament to make and change the law, are sometimes met
with the response that modern parliaments have largely abandoned
their law making role to the executive government.
This is not an argument that I find attractive, but the
fact that it is made at all shows the importance of the
task upon which you are engaged in your Conference.
The democratic deficit, where it exists, is not only a threat
to the legitimacy of the institutions of a democratic government;
it may be something that feeds upon itself.
Political legitimacy, in a representative
democracy, is the proper basis for legislative activity.
If the absence of a democratic process in the manner in
which many laws and regulations are made became a justification
for legislative activity on the part of authorities which
lack political legitimacy, then the theory of democracy
would become even more remote from the practice.
I thank you for the
opportunity to join you for a brief time this morning, and
I wish you well in your deliberations.
