What is Private Law Really?

Prem Vinod Parwani |

---

The Classification Problem

Just as we founded the Indian Private Law Review, the most common question we received was “what is private law?” Traditionally, we understand private law as the antithesis of public law – i.e., the law which governs the relationship between individuals, as opposed to the State. In this sense, the question of whether a law is ‘private’ depends on whom it governs. Indeed – that is why international arbitration traditionally falls under the category of ‘private international law’, as opposed to ‘public international law’, the subject of which are treaties and practices of States. From this, perhaps the clearest examples falling in the category of private law are contract law, arbitration, property law, corporate law and so on.

However, there are categories of law which defy this clean, conceptual classification. What of competition law? Is it private? After all, investigations in competition law are initiated by statutory bodies (competition authorities such as the Competition Commission of India), who are considered public bodies. Even the preamble of the Competition Act 2002 notes a number of welfarist objectives in its preamble – the protection of freedom of trade, the promotion of economic competition, the protection of consumer interests and so on.[1]

What of evidence law? Arguably, it defies a party-centric definition. After all, it is procedural in nature, and can govern disputes between both private and public authorities. Does this mean that we must amend our enquiry of public-private classification, or are there simply certain bodies of law that elude this classification?

What of labour law? While it certainly governs the relationship between private parties (employers and employees), most labour law statutes are professedly designed with the welfarist aim of mitigating the excessive bargaining power of employers, and levelling the playing field for employees. Claims of unfair dismissal, racial discrimination at workplaces and so on are common features of labour law. Can we then call it private? The same can be said of consumer law.

Even those laws we traditionally consider ‘private’ have indubitably public elements. For instance, a merger between two companies must be approved by the National Company Law Tribunal (the statutory adjudicator in the Companies Act) before it can occur (s.230, Companies Act 2013). Companies can even be forced to merge if it is in public interest (s.237, Companies Act 2013). At first glance, these do not seem ‘private’ in nature – what is the State’s business in the companies -  which are nothing more than a set of contractual relationships between parties; or in Professor Kraakman’s words – axes of contracts?  Thus, our classificatory enquiry seems to require more conceptual rigor.

This piece tries to unpack the question of what private law is. Of course, it is not possible to come up with definitive answers or a comprehensive framework – that would be akin to the attempt to answer the ‘meaning of life’ in a two-thousand-word essay. Rather, this piece has the modest aim of giving us the conceptual apparatus to understand the domain occupied by ‘private’ law, and the tensions mired in its definitional enquiry.

What’s the Point?

Before embarking on a brief philosophical enquiry about what ‘private law’ is, it is useful to address the question nagging all pragmatists – what is the utility of this understanding?

Traditionally, public law is concerned with societal and policy interests (p.2). As a result - firstly, areas of public law are subject to more administrative restrictions; due process, proportionality and non-arbitrariness to name a few. (p.3) Secondly, areas of public law also allow for the imposition of obligations and liabilities (on States, and on private parties) that private law does not otherwise allow. For instance, in the recently delivered CORE v SPIC, the Supreme Court held that arbitral tribunals would be bound by Article 14 and administrative law standards of impartiality – a threshold duty that did not otherwise exist in the framework of the arbitration legislation. Thirdly, approaches to adjuration may differ. Goff and Jones note in the context of claims against public authorities:

…in [the] private law framework…. The Court is [left with] no choice whether to treat an ultra vires government act as a nullity…. By contrast, in public law proceedings, the Court has a more flexible discretion (sic) as to the consequences that should be attributed to an ultra vires act.(22-25)[2]

Thus, our philosophical enquiry carries some implications not just for those with a keen eye for the abstract, but also for the hard-faced pragmatist. Besides, it rarely hurts to have conceptual clarity.

A Functionalist Understanding of Private Law

In his piece on ‘Private Law Statutory Interpretation’, Professor Balganesh argues that there are ‘public law’ interpretations, and ‘private law’ interpretations. While he does not squarely deal with the question of the distinction between the two, his insights on what the two different methods of interpretation are illuminating. While discussing a US Statute, he notes that:

‘a public law interpretation would ‘under[stand] [the legislation] as a piece of economic legislation directed at facilitating contractual arrangements commonly seen in certain sectors—such as the shipping and transportation industries—and therefore reflecting a grand bargain of sorts that balances the multiple interests at issue.’ By contrast, in the private law approach, the Act would be understood as itself driven by the contract law principle of prioritizing contractual intent over all else absent concerns of morality or public policy.’  (p.959)

From this, two things seem to emerge. First, that private law occupies the domain of legal relationships between private parties, while public law occupies the domain of regulation and policy – functions of the State. What follows from this is second, that private law is understood as such because its function is the governing of relationships (of liability, or otherwise) between private parties. This is what we would call a ‘functionalist’ or ‘purposive’ understanding of private law. We will recall the jurisprudential view that all laws have a telos - in that sense, private law has the telos of governing the relationships between private parties. However, there is some scholarship that offers a pushback against this functionalist understanding.

About Liability Between Parties?

Professor Weinrib of the University of Toronto attempts to address this enquiry in his book ‘The Idea of Private Law’. He argues that private law is better understood as ‘internally intelligible’ – not by a manifestation of extrinsic purposes. In his words – ‘if private law had a purpose, it would be to be private law’ (p.5).

What then, are its internal features? On a rudimentary level, he notes that private law ‘connects two parties through the phenomenon of liability’ (p.1). Procedurally, this means that the plaintiff brings a claim against the defendant. Doctrinally, he says that this means that the liability of the defendant would depend on the actions of the plaintiff. Thus, the public-private classification is governed not by the litigants or the community, but a ‘biploar relationship of liability’.[3]

Elaborating, he says that it ‘embodies a regime of correlative rights and duties that highlights, among other things, the centrality of the causation of harm and of the distinction between misfeasance and nonfeasance.’ (p.10) What are the ‘other things’ in question? And is all private law about regulating harm? This would seem to be more squarely in the domain of tort law, not the entire breadth of law that we call ‘private law’. For instance, it may be a stretch to argue that all contract law is about the causation of harm. Even the field of commercial remedies is more concerned with what to do after harm is caused, and not the ‘causation’ of harm. However, he goes on to say that these are merely ‘features’ of private law that we as lawyers gather through experience. He concludes that the ‘central theory of private law is to illuminate the directness of the connection between the parties’ (p.11). Professor Ripstein echoes this view:

I will unashamedly maintain that the point of tort litigation is to resolve the specific dispute between the parties currently before the court, based entirely on what transpired between them.

We can safely takeaway one thing from Professor Weinrib: that private law has to do with private parties, but also the relationship of liability between them. But our initial enquiry remains unanswered. What of evidence law, competition law, or the public (or State-mandated) elements of company law or labour law? This question may be better answered by questioning this ‘party-centric’ definition of private law.

Questioning the Definition: It is Really Between Parties?

Professor Keating pushes back against Weinrib’s definitions in his chapter in the book ‘Civil Wrongs and Justice in Private Law’ (OUP, 2020). Specifically, he argues that tort law cannot be classified as private law, and that Weinrib’s conception of tort law as ‘internally intelligible’ cannot stand scrutiny. He notes:

yet even in civil society the relations among persons are always entangled with larger questions of justice and injustice (p.364). Damage awards in tort lawsuits, for example, may be infected by gender and racial discrimination, past and present.

It is, therefore, starkly implausible to assert that tort law might be “private” in the sense of being autonomous from the rest of social life. In the case of the law of torts, we must always be prepared to ask if its attempts to secure various interests from wrongful interference at the hands of others are both justified and reasonably successful.  (p.365)

Perhaps this is why as first years in law school, we were taught that tort law is a tool of equity. It has deep socio-political implications and can even be used as a tool of justice. Our professor of labour law remarked in class:

To say that there is no place for tort law in Indian jurisprudence may be too far reaching a claim to make. And as a professor of labour law, it may even be harmful to employees. If this fan falls upon me, my family members will have no recourse but tort law!

Indeed, this is at the foundation of legal courses offered at universities that combine the liberal arts with legal subjects. An understanding of political science and sociology is expected not only to bleed into our understandings of core public law (such as constitutional law, or criminal law) – but even what we traditionally conceive of as core private law – tort law, contract law and so on. One will recall the policy critique that nearly every first year-law student makes[4] in their tort law or contract law papers - that some standards offer excessive discretion to adjudicators - such as ‘reasonable’ or ‘just, fair and equitable’.

In the context of tort law, Professor Keating seeks to emphasize on this ‘public law-type’ function of private law by hammering down on the role played by the ‘strict liability’ principle. He argues that scholars such as Weinrib have downplayed its significance in modern tort law (p.369). After all, the principle of strict liability emerges as an ‘exception’ to the ‘fault’ principle undergirding tort claims. One may say that the strict liability principle was fashioned as a ‘public policy’ response to abnormally dangerous activities, which the ‘fault’ principle is insufficient to govern on its own.[5]

Thus, a tension emerges between the private-law leaning principle of fault, and the public-law leaning principle of strict liability. Keating argues that to ignore this aspect of tort law is to treat the world as consisting of ‘isolated, ungeneralized wrongs, not our world of organized risk.’ This points to what Professor Kit Barker calls the growing ‘public law pressures on private law’.[6] (p.2)

Arguably, this tension holds for nearly all forms of law; that Professor Keating’s pushback against the ‘internal intelligibility’ of private law may extend not only to tort law, but to all forms of law. We may recall that s.23 of the Indian Contract Act, or s.34 of the Arbitration Act stick out like sore thumbs for the leeway they offer to adjudicators in determining what ‘public policy’ grounds are. For instance, an example of a ‘competing principle’ resembling Professor Keating’s characterization in would be the principles of ‘party autonomy’ and ‘fairness’/’public policy’ in arbitration. Thus. it seems inescapable that all forms of law, however ‘private’ contain ‘public’ elements – elements that have very little to do strictly with the ‘relationship of liability between private parties.’

Building up on this, Professor Keating concludes:

we’ve shown that “private law” regulates interactions between all manner of persons, including in some instances citizens and the state….the private/public distinction seems coarse and clumsy. (p.347)

Recognizing the Incompleteness of the Public-Private Definitional Enquiry

At the end of all this tension, Professor Keating notes:

Thus, one might say that “private law” marks frameworks of legal rules that generally govern interactions between citizens, while “public law” marks frameworks of legal rules that constitute the state and govern state-citizen interactions where the state acts in a prerogative capacity.

It would seem like we are back to square one - we began by noting that perhaps what law is ‘private’ turns on whether it governs private parties. And where the State acts in a prerogative (right-bearing) capacity, then that area of law can loosely be called ‘public law’.

However, Keating suggests that we may instead adopt the word ‘interpersonal law’ to classify subjects such as tort, contract and unjust enrichment. This label has the advantage of tailoring the definition in accordance with whom it addresses (i.e., private people), since we have seen that ‘private law’ as we know it – tort, contract etc. is not entirely interpersonal.

Alternatively, he suggests:

in place of a binary distinction between private and public law, we might use distinctions between civil, criminal, regulatory, and other forms of liability. (p.348)

However, if we still wish to stick with the labels of ‘private’ and ‘public’, my best answer would be that some laws are more private than others. In other words, that what is private and public law would be on a spectrum. Where a field of law is placed on this spectrum would depend on (borrowing from Professor Keating):

i) To what extent does the law govern the relationship of liability between individual parties?

ii) To what extent do State interests make inroads into this relationship? (this may be on the grounds of public policy etc).[7]

Intuitively, contract law seems more private than labour law.[8] Even so, I am making these categorizations based on broad brush-strokes – it is perfectly conceivable that certain areas of ‘hard’ private law have deeply public elements in comparison to more ‘public’ areas of law. Nevertheless, the label of ‘private’ is a useful one for the purposes of shorthand convenience, since it continues to denote an important feature of laws – it tells us that certain areas of law are governed more strongly by those principles denoting the relationship between private parties.[9].

---------------------

[1] I am grateful to Anirud Raghav for this point.

[2] This is in the context of discussing whether claims of unjust enrichment can be brought against State actors – governed by the ‘Woolwich principle’. I am grateful to Anirud Raghav for this point.

[3] Importantly, he discusses this in the context of laying down an ‘internal theory of private law’. He argues that private law is an independently intelligible body of law – it does not require grounding in any other normative framework (such as law as a product of society).

[4] Guilty as charged.

[5] It is important to qualify what ‘policy’ means – see Kit Barker ‘Private Law: Key Encounters with Public Law’ in K Barker and D Jensen, Private Law: Key Encounters with Public Law (Cambridge, CUP, 2013) ch 1, 11. ‘Some ‘policy’ arguments will challenge conceptions of the constitutional limits of the judicial role, the practical informational capacities of judges, or deontological understandings of private law. By contrast, there are others relating to the operation of the system of private justice as a whole (such as ‘certainty’ or ‘determinacy’ in the delineation of the rights the system supports, respect for institutions of justice, respect for human dignity, the importance of maintaining coherence in the development of legal doctrines, and so on) that will not. Some policy is ‘social’ policy in the broadest sense and certainly belongs in the hands of the public (democratic) process, whereas some policy might better be described as ‘legal’ policy and is clearly less challenging to (and is indeed assumed by) deontological, private law paradigms.’

[6] He argues that these pressures derive from: (i) the rise of the welfare State, (ii) burgeoning legislation, (iii) corporatisation, (iv) human rights, (v) globalisation , (vi) instrumentalism, (vii) a shift towards greater collectivism. See p.12 – 13.

[7] These are of course, imperfect categorizations, particularly in light of Professor Keating’s arguments.

[8] Even though labour law encompasses contractual elements, the field as a whole is arguably dedicated to hedging in policy exceptions to the contractual relationships between employers and employees. In many areas, labor laws can even remove any possibility of contracting.

[9] This is roughly what Professor Balganesh draws on to argue that there exists a private law interpretation of a statute instead of a public law interpretation.

For More Literature on What is ‘Private Law’ (besides those cited in the piece)

1. Andrew Robertson, ‘Constraints on Policy-Based Reasoning in Private Law’, in Robertson and Tan (eds.), Goals, ch. 11.

2. Alan Calnan, ‘The Instrumental Justice of Private Law’ (2010) 78 University of Missouri-Kansas City Law Review 559.

3. Arthur Ripstein, Force and Freedom (Cambridge, Mass: Harvard University Press, 2009).

4. K Barker and D Jensen, Private Law: Key Encounters with Public Law (Cambridge, CUP, 2013) ch4 (authored by Christian Turner).

5. Benjamin Zipursky, Philosophy of Private Law, in Jules Coleman, Kenneth Himma and Scott Shapiro, eds., The Oxford Handbook of Jurisprudence and Philosophy of law, (OUP, 2004).

6. Ralf Michaels and Nils Jensen, ‘Private Law Beyond the State? Europeanization, Globalization, Privatization’ (2006) 54 American Journal of Comparative Law 843.

7. Shyamkrishna Balganesh, The Constitutionalization of Indian Private Law (October 28, 2014) in Sujit Choudhry, Madhav Khosla & Pratap Mehta eds., The Oxford Handbook of Indian Constitutional Law (OUP, 2016).

8. Jack Beatson, 'Finessing Substantive Public Law Principles into Private Law Relations' (1997) 1997 Acta Juridica 1.

9. Jack Beatson, ‘Public Law Influences in Contract Law’ in Jack Beatson and Daniel Friedman (eds), Good Faith and Fault in Contract Law (Oxford University Press 1997).