Step 2: Reasons
Having identified the options in the first step, the second step focuses on the
reasoning or the arguments that a legislature or a court uses in order to choose
one of the options. Step 2, therefore, is to formulate reasons or arguments that
legislators and courts use to decide between the options.
A rational legislature or court should seek the best achievable outcome for any
decision that they make. Thus, to pursue the point by reference to statutes, a
rational legislature will enact the statute that causes the best effect. How then
does one determine what is the best effect? In principle the best effect is based
on net benefit. Net benefit is determined by summing all the benefits that a law
causes, summing all the costs and subtracting total costs from total benefits. It
is the excess of benefits over costs. It is the single measure of the value of a
law to society.
In the light of this analysis, it is now clear which statute is the best. It is the
statute which yields the highest net benefit. A similar reasoning applies to a
court making common law. It also applies to a court interpreting law – the best
meaning is the meaning that causes the best effect, being the effect that yields
the highest net benefit.
This process of reasoning by reference to net benefit is labelled policy.
Because it is so eminently rational, logically it should be the only form of
reasoning for both making and interpreting law. It is so regarded in this text.
However, this raises an issue with interpreting law. On the surface, three other
sources of reasons in addition to policy are used for interpreting law.
Precedent is used for interpreting both common law and statute law.
Secondary sources are purportedly or allegedly used for interpreting both
common law and statute law. (Although the argument in this text is that
secondary sources are more for tidying the law than for persuading a court.)
There are also rules, also referred to as maxims or canons, which are used just
for interpreting statute law.
This apparent dilemma is resolved by a simple mechanism. Precedent and the
rules of statutory interpretation are reconceived as derivatives of policy rather
than competitors, while secondary sources are seen as ways of suggesting
policy or presenting legal rules in tidy form.
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Christopher Enright Legal Reasoning Chapter 23 Precedent, Chapter 24 Rules
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