Legal Studies Research Paper Series Vol 20, No. 3

Melbourne Law School published Volume 20 Number 3 of the University of Melbourne Law School Legal Studies Research Paper Series on SSRN.

This issue includes the following articles:

Jasper Hedges, Ian Ramsay, Michelle Welsh and Helen Anderson
The Potential Economic Gains from Increasing Public Law Enforcement Against Illegal Phoenix Activity (770)

Illegal phoenix activity – the practice of liquidating or abandoning a company with the intention of avoiding its obligations and then continuing the same or a similar business via a new or related company – is estimated to cost the Australian economy up to $3.19 billion per year and appears to be increasingly prevalent. Yet public law enforcement agencies rarely take enforcement action against illegal phoenix activity. This article argues that, based on an analysis of the potential costs and benefits of increasing public law enforcement against illegal phoenix activity, enforcement should be increased, subject to periodic review. Empirical studies suggest that the aspects of enforcement that are most likely to produce general deterrence of wrongdoing are the perceived probability of apprehension (i.e. detection and commencement of enforcement action) and, to a lesser extent, the perceived probability of punishment (i.e. a sanction being imposed at the conclusion of enforcement action). As such, it is argued that enforcement agencies should increase the probability of apprehension and punishment and use the media more innovatively to heighten potential perpetrators’ perceptions of such probability. Given the reportedly substantial and escalating costs of illegal phoenix activity, this increase in enforcement has the potential to be a high-return investment for the Australian economy.

Scott Stephenson
Is the Commonwealth's Approach to Rights Constitutionalism Exportable? (771)

This paper considers whether the Commonwealth’s approach to rights constitutionalism, associated with the bills of rights adopted in Australia, Canada, New Zealand and the UK, might be suitable for other jurisdictions around the world. It argues that three questions are particularly relevant to evaluating the strength of the normative case for the Commonwealth’s approach. First, what is the nature of the disagreements about rights in a jurisdiction? Second, what options do institutions have to challenge the determinations on rights of other institutions? Third, what are the other objectives of the constitutional system? The paper considers how the answers to these questions yield insights into the circumstances in which the Commonwealth’s approach may prove to be more attractive or unattractive. In particular, it suggests that the normative case for the Commonwealth’s approach may be weaker in dominant party systems.

Tania Voon
State Support for Audiovisual Products in the World Trade Organization: Protectionism or Cultural Policy? (772)

The failure to agree on the treatment of audiovisual products in the Uruguay Round led to an unsatisfactory result for all World Trade Organization (WTO) members. Yet a balanced evaluation of the arguments on both sides demonstrates that the stalemate need not continue indefinitely. The audiovisual industry is a business, but audiovisual products have cultural features that distinguish them from other tradeable goods and services. If members see local audiovisual products as a means of communication among their people, or if they do not wish to stifle creativity, free speech, or the progressive development of culture, they may need to support local audiovisual products in a manner that discriminates expressly against foreign products. The same cannot be said of discrimination between foreign audiovisual products. If a member wishes to extend benefits to audiovisual products from countries with cultures similar to its own, it can do so by adopting objective criteria, such as language to distinguish between the relevant products. Cultural policy measures in relation to audiovisual products should be the least trade-restrictive necessary to achieve their objectives.

Ian Ramsay, Julie Abramson and Alan Kirkland
Review of the Financial System External Dispute Resolution and Complaints Framework: Final Report (773)

This is the report of the independent Panel asked by the Australian government to review the financial system external dispute resolution (EDR) and complaints framework. As the Panel notes, it is essential that consumers of financial products and services have access to effective EDR. The current EDR arrangements consist of the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT). In 2015-16, FOS, CIO and SCT received 41,223 disputes in total, with FOS receiving 34,095 disputes (83 per cent), CIO receiving 4,760 disputes (12 per cent) and SCT receiving 2,368 disputes (6 per cent). The Panel found that although the existing EDR framework reflects some important strengths, a number of features of the framework mean that it is not producing the best possible outcomes for some users.

The problems identified by the Panel include:

(a) issues associated with the existence of multiple EDR bodies with overlapping jurisdictions;
(b) the monetary limits and compensation caps of the EDR bodies have fallen behind what is required to ensure access to justice;
(c) small business does not have adequate access to EDR;
(d) the dispute resolution arrangements for superannuation are not adequate; and
(e) there are gaps and overlaps in membership of EDR bodies.

The report contains a series of recommendations designed to address these problems.

Miranda Stewart
Transparency, Tax and Human Rights (774)

Transparency has attracted unprecedented attention in national and global debates about taxation in recent years. It has been adopted as a goal by international organizations, governments, non-government organizations (NGOs), academic commentators, media and citizens across the political spectrum. There has been a particular focus on transparency to enforce taxation of multinational enterprises and high wealth individuals, with a specific goal of addressing avoidance and evasion in tax havens. The pursuit of transparency in taxation is consistent with broader trends, as John Braithwaite and Peter Drahos observed nearly two decades ago that transparency was the most striking emergent principle” in global regulation. However, who is transparent, concerning what data, process, or outcomes, why transparency is the goal and how it is intended to achieve the stated regulatory outcome, differ depending on the context. The paper explores the meaning and uses of transparency in a fiscal context, where it started as transparency of governments and budgets to the people, but more recently has shifted to focus on the transparency of taxpayers to governments, between governments, and even to the public. The paper asks, what does tax transparency achieve, when is it justified, how does it serve human rights and what are its costs?

Cheryl Saunders
The Processes of Constitutional Transition in the Face of Territorial Cleavages (775)

This paper examines the relevance of territorial cleavages to the process of constitutional transitions. It does so by reference to a wide range of case studies, including Bolivia, Bosnia-Herzegovina, Cyprus, Ethiopia, India, Indonesia, Iraq, Kenya, Nepal, Nigeria, the Philippines, Scotland, South Africa, Spain, Sri Lanka, and the Ukraine. The paper begins by examining contextual factors that will have a bearing on the process for any constitutional transition, including the nature of the transition, the nature of the territorial cleavage, the challenges confronting statehood in the transitioning state, and the extent and nature of international involvement. Secondly, the paper examines the impact of territorial cleavages at each phase of a process of constitutional transition: during “agenda setting”, deliberation, ratification, and finally, in the implementation of new constitutional arrangements. It argues that it is desirable that at the outset, the territorial cleavage and relevant stakeholders are identified and acknowledged; that during deliberation and ratification, an acceptable balance between majoritarian voting and territorial representation is achieved; and that conditions of territorial cleavage should inform procedures for public participation and proposals to transplant institutions and practices, even if they have successfully been used elsewhere. Finally, the paper suggests that techniques of postponement, such as deferring contested constitutional questions to later legislation, should be used strategically, and with an awareness of the possibility that postponement may secure constitutional agreement at the cost of leaving unresolved issues of constitutional importance.

Andrew Godwin, Ian Ramsay and Miranda Webster
International Commercial Courts: The Singapore Experience (776)

The last decade or so has seen the emergence of international commercial courts in four jurisdictions: the Dubai International Financial Centre ('DIFC') Courts in the DIFC, the Qatar International Court in the Qatar Financial Centre, the Abu Dhabi Global Market ('ADGM') Courts in the ADGM and the Singapore International Commercial Court ('SICC') in Singapore. Described as courts that are ‘particularly attuned to the needs and realities of international commerce’, these courts are inspired in part by the London Commercial Court and have some unique features when compared with domestic courts. For example, their judicial bench includes judges from various foreign jurisdictions. In addition, their rules and procedures cater to commercial disputes involving foreign litigants and transnational and cross-border disputes that often have little or no connection to the state within which the court is situated. Further, foreign lawyers have greater rights of audience than in traditional domestic courts with the result that, in some cases, the parties, counsel and judges all come from different jurisdictions. Given the experience of these courts to date and the likelihood that further international commercial courts will be established, it is both useful and timely to examine key issues concerning their institutional design and perceived benefits. This paper uses the SICC as the case study for an examination of these key issues.