In simple terms the net benefit rule is applied to these options in the following
way. The legislature or court goes through the list of options and determines
the net benefit of each effect. Having done this, it then identifies the highest net
benefit and the effect that yields this net benefit. Assume that this is Net
Benefit X which is the net benefit of Effect X. The legislature or court then
determines which statute or which meaning causes Effect X, which is labelled
Statute X or Meaning X. The legislature then enacts Statute X or the court then
declares Meaning X to be the legally correct meaning of the ambiguous
provision.
There is, however, a variation. In some cases a court may not exercise its own
judgment as to which is the best effect that a meaning of an ambiguous
provision can cause. Instead it may do one of two things. (i) Legislative
Legitimacy. It may defer to the judgment of the legislature, in which case the
court identifies the effect that accords or most accords with the effect that the
legislature was trying to achieve when it enacted the statute now before the
court. Strictly, this still involves the net benefit rule except that the legislature
that enacted the statute, not the court that is now interpreting it, determines the
effect that yields the highest net benefit. (ii) Metademocracy. The court may
take an approach based on metademocratic considerations. This happens
when the court believes that the statute was not made in a properly democratic
way. Here the court seeks to restore the neglected democracy by interpreting
the statute to mean what it would mean if it had been democratically made. As
with legislative legitimacy the court is still operating according to the net benefit
rule, except that it is substituting metademocratic considerations for both its
own judgment as to the highest net benefit and for the judgment of the
legislature in this respect.
Components of Net Benefit
Broadly described, net benefit consists of total benefits of a law or a meaning
minus total costs. Conveniently, the costs and benefits can be classified as
operating costs or benefits on the one side and changeover costs and benefits
on the other. Obviously, to work with net benefit, it is necessary to examine
these components in more detail.
To undertake this task, assume that a government is deciding whether to
persist with the existing law, Statute 0, which causes Effect 0, or to pass a new
law. This new law might be Statute X which causes Effect X, or Statute Y
which causes Effect Y.
Operating costs and benefits are the costs and benefits incurred and achieved
once a statute has been enacted and has commenced operation. With rare
exception, any statute that operates incurs costs and yields benefits. There are
benefits in having the statute and costs in maintaining those benefits. In our
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