This is another piece which sets out some of the areas I have written and lectured about in the past and which want to blog about when I get some time.There are, I reckon some good discussion subjects below — anyone have a view ?

As many know,several years ago I wrote a short paper about four core inter-linked phrases, which can be summarised as:- too much law; too much complex law; law which is unenforceable; and law which is unenforced.. These are now known ( by me at least ) as gould’s mantra. To me,these phrases suggested among other things an absence of common sense in the corporate and commercial legal processes.They could apply to many areas of law; I am concentrating on business law.

In 2011 I gave a lecture at UCL Centre for Commercial Law, entitled “Common Sense – the Dark Matter of Business Law”. Research for that paper included a survey of several owner /managers of SMEs who produced comments such as:-

…a director of a small company is far too busy keeping his head above water to worry too much about regulations. I would say that the attitude towards all this is to ignore it, fear it, hope it goes away and hope you won’t be caught doing something you didn’t know was wrong in the first place. I would also say that most directors of small companies run their businesses using common sense and by hard work and a desire to make money, grow the business, employ the people and so on. Regulation is a barrier to this”.

My paper looked at the “disconnect” between (i) those who decide on the framework of rules and those who draft them, and (ii) the “users” of those rules. I wondered whether common sense could have any part to play in drafting legislation, because if people can’t or don’t (for whatever reason) understand the law, they might ignore it; they might also do the same if it makes no “sense”. I also wondered about issues of legislation being micro-managed, resulting in an enormous piece of domestic legislation of particular concern to me (Companies Act 2006 and its dozens of accompanying statutory instruments).

I summarised some of  my ideas as follows:-

In respect of SMEs, as well as many other groups, there are far too many rules, most of which are too complex for their constituents to understand without costly assistance;

If laws are going to be passed there should be an acceptance that they will, whenever possible, be clear for their core constituents;

One size generally does not fit all companies/constituents and we should stop trying to draft laws as if it does;

Too often the wrong people appear to have been consulted during the discussion stages of the legislative process, when that process applies to smaller businesses;

Legislators should not try to micro-manage the regulations of every sort of business – some need it more than others;

If those who wish to encourage SMEs, and economic growth through that part of the private sector are serious about doing so, then not only do we need less complex legislation, we need appropriate legislation; and

If a halt to legislation is not possible, appropriate rules need to be introduced; in the case of some SMEs, a Smaller Companies (Companies) Act.

It seems to me that there is a strong case for those teaching company law in its widest sense to become involved in this debate, to shape future regulation by broadening the views of practitioners.

I appreciate that not all of these issues may not be within the direct scope of undergraduate law courses, but I believe that those teaching company law would greatly benefit their students by finding a way to introduce some at least.

One thought on “Gould’s mantra and more

  1. Interesting comments Nick, particularly around those who draft the Framework versus those who draft the supporting legislation. Policy Officials work closely with lawyeers in putting draft legislation together, but it is then put through the House of Commons and House of Lords by way of it’s passage through parliament, which is perhaps where some of the menaing may get lost.

    Our most recent Business Perceptions Survey noted an improvement in the number of businesses saying regulation was a burden, down fomr 62% in 2010 to 55% in 2014. Still needs improvement, but going in the right direction. Business tells us more and more that it is not the regulations that they dislike, but how they are enforced. We have been reviewing some sectors over the past year, and have just launched two new reviews that put business in charge of driving reform. In a significant shift, business groups will collect and present evidence directly to ministers and to regulators. In response to each review’s findings, in the first instance the fresh produce and livestock farming sectors, departments and regulators will propose how they will address the issues identified during the reviews, lightening needless burdens without weakening essential controls.
    Two trade bodies have been selected to run reviews under Business Focus on Enforcement: The Fresh Produce Consortium and the National Farmers’ Union (NFU).
    Two reviews launch today:
    • The Fresh Produce Consortium will investigate reports of high or inconsistent charges at ports on imports of perishable produce; inconsistency in service levels and delays; and emerging evidence that UK businesses are choosing to present shipments for import clearance at other points of entry in the EU because they can obtain a cheaper, more efficient service overseas.
    • The NFU will gather evidence from stakeholders including farmers to investigate claims of reported duplications, overlaps and inconsistencies in visits to livestock farms by national and local regulators. Starting with farmers’ own experiences, it will seek evidence of, for example, processes and equipment checked, and data requested during local authority visits.
    After a period of evidence gathering which will run until autumn 2014, the Fresh Produce Consortium and NFU will report their findings direct to ministers and regulators.

    Sue Bide, Better Regulation Executive, Department for Business

Leave a Reply

Your email address will not be published. Required fields are marked *