Faced with these options, a legislature has to decide whether to enact a statute
or not. If it decides not to enact a statute, it is opting for Statute 0. Statute 0 is
the null option, the option to do nothing and leave things as they are. So, if a
legislature "enacts" Statute 0 it does nothing. This may seem a silly way to put
it, but doing it this way enables all the options for choosing a law to be put on
the one list, Statute 0-n, and in consequence helps keep the discussion simple.
If a legislature does “enact” Statute 0, the matter is left to be regulated or
ordered by the existing law (which may be either common law or statute law),
or by non legal factors such as private morality, violence, self help, social
pressure and market forces.
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Once a legislature rejects Statute 0 as a possibility, and decides to make a law,
it has to determine the content of the law. Options for this are represented by
Statutes 1-n. Thus, in outline, the process entails deciding first whether to stay
with Statute 0 or to enact it its place a statute from the range Statutes 1-n.
To help the reader make sense of the way in which the options are presented,
it will help to look ahead at how and why a legislature enacts a statute, because
these options are set forth in this way to assist the decision making process.
The starting point is that all statutes in the range Statute 0-n
will generate
operating costs and benefits. Suppose now that a legislature is contemplating
repealing Statute 0 and replacing it with another statute in the range Statutes 1-
n. We can label this proposed law as Statute X. Now both Statute 0 and
Statute X will have operating costs and benefits. Thus, in a simple sense, we
can see whether Statute X is better than Statute 0 by comparing their operating
costs and benefits.
On the surface it may seem that the difference between any two statutes
consists of their operating costs and benefits, so that these are all that need to
be considered when contemplating enacting a statute on a topic. However,
there is a further matter. Changing from Statute 0 to Statute X generates
changeover costs, which are constituted by transaction, adjustment,
predictability and equality costs. Further, there may be some benefits obtained
in the process.
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Clearly, these changeover costs and benefits also need to be
taken into account when determining which version of a statute is best.
To put the point simply, it is worth changing from Statute 0 to Statute X when
two conditions are satisfied.
(1)
The net operating benefits (total operating benefits minus total operating
costs) of Statute X exceed the net operating benefits of Statute 0.
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Posner (1996)
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Christopher Enright Legal Reasoning Chapter 11 Nature of Net Benefit
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