3.3 The importance of setting and interpreting rules

Usually, the approach to remedial law set out above will lead to clear and predictable results. After all, in most case it is relatively clear what purpose a particular rule has and – as was argued above – the appropriate remedy can be easily discerned from that. The rule that someone who created a dangerous situation must take the appropriate measures to prevent others from suffering damage is evidently aimed at the prevention of losses, and it seems self-evident that the only appropriate remedy for a violation thereof is the order to pay damages. Matters become more difficult, however, where the purpose of the rule is manifold or opaque, such as is the case with rules against unfair competition. In those cases, the rule will need to be interpreted to identify its purpose and with interpretation comes a degree of unpredictability. This introduces a degree of formal uncertainty, narrowly defined. Laying emphasis on the interpretation of the rule, however, does improve the broadly defined formal certainty of the system, as it clarifies what the debate should be about: why was this competition unfair or illegal? What responsibility does one competitor have towards the other? It then becomes apparent that not all rules against unfair competition are identical. For instance, if one competitor illegally uses trade secrets to gain an advantage, it seems an account of profits is quite appropriate. After all, she obtained an advantage that was, by virtue of the rule against illegally using someone else trade secrets, to be obtained by the owner of the trade secret alone. If, on the other hand, the rule mainly exists so as to ensure a level playing field, its violation can – at most – lead to an award of damages where the rule can be said to inspire a certain degree of care for one’s competitors.1

The application of doctrines rooted in reasonableness and fairness require a good deal of interpretation, too. Doctrines such as the reversal of burden of proof, genuine proportional liability and the reasonable attribution of losses guide this process and help identify the interpretative questions that need to be asked. The norm, in turn, helps to find an answer to these questions. Instead of asking what kinds of interests might be conceivably at stake, we can focus on those interests that are protected by the norm. The rule sets the stage, in other words, for finding the answers to these normative questions, preventing parties and judges from returning to the normative debate at the remedial stage. The that binds parties is, after all, the primary source of normative information as to what the division of responsibility between two parties is.

Paradoxically, this approach also shows that not all remedies follow from the violation of behavioural norms. There are many instances in which an order to compensate is deemed appropriate, but the defendant has not committed a wrong. The most obvious examples are the instances of strict liability,2 but there are some unwritten duties, too, that are best explained as primary duties to take on financial responsibility for others. One example would be the duty for the state to compensate any losses of a suspect in a criminal case whose innocence is later established. Even though the state’s actions are not illegal, there may still be reason to ensure the actually innocent suspect does not have to bear the negative consequences herself. Such duties are rare, but they are not anomalies. All duties place a burden on the addressee to protect a beneficiary. Taking measures to prevent losses costs money and there seems to be no problem in finding those duties, so why should it be different for duties to take on a financial responsibility for someone else? Viewing these cases as primary duties to take on financial responsibility could both help identifying these types of duties more frequently as well as keep them in check. It will not often be the case that we are financially responsible for others that we do not know or do not have a close relationship with.