Keane, Chief Justice Patrick --- "The prospects for an international legal order" (FCA) [2010] FedJSchol 28

Keynote Presentation, 2010 Global Courts Conference and Workshop, Sydney, 1-3 December 2010

I begin by accepting that to seek to argue that our legal institutions can continue to function and develop unaffected by, and without response to, the pressures of globalization, would be to consign one’s self to irrelevance. There can be no denying the fact of globalization, and there can be no denying its influence upon our legal institutions.

But many questions arise as to the nature of legal order which might emerge from the new cosmopolitanism: I want to raise some of these questions. I propose to approach them in two broad-groupings:

(a) is the new legal order likely to be consistent with our current Anglo-Australian understanding of what is involved in the exercise of judicial power? and
(b) secondly, is the new order, when it fully emerges, likely to accommodate the continued existence of the welfare state as we know it?

We can say immediately that the prospects for the further development of an international legal order which operates outside the courts of nation states look good.

Developments in the law relating to the facilitation and recognition of international arbitration in recent years have followed, and now continue to facilitate, international trade.

Arbitration is distinguished from the dispute resolution mechanism provided by, and at the expense of, the state, i.e. the courts, by the circumstance that, with arbitration, the dispute is resolved by a person or persons whose authority to decide is derived from the voluntary agreement of the parties to the dispute.

The exercise of judicial power to affect the rights of subjects of a particular state is, in our legal tradition, regarded as subject to special constraints because that special kind of power is considered to flow from the sovereign as the fountain of justice. With us, the exercise of the judicial power of the state requires a fair hearing of all parties by a disinterested judge in public and a decision justified by comprehensive reasons which reflect the application of pre-existing rules of law to the evidence adduced by the parties.

Decision making by the courts is not merely a matter of dispute resolution between private parties. Each decision by a court involves the compulsory application of the law of the land upon at least one unwilling party. The efficacy of a court’s decision does not depend upon that party’s consent to the process.

That party, and the community at large, have a vital interest in the quality of the judicial process and in the reasons given for the decisions. The giving of a comprehensive statement of reasons why the power of the state is to be exercised against an unwilling subject is an essential requirement of the exercise of judicial power as we conceive it.

A judicial decision of a particular case is the most concrete expression of the law of the land. In a hierarchical judicial system which observes the doctrine of stare decisis (ie. adherence to precedent) judicial decisions affect not only the immediate parties to the dispute but all other persons in like cases. Furthermore, the requirement of comprehensive reasons aids the exercise of the right of appeal to higher courts.

These considerations of principle concerning the public interest are not in play in the case of arbitral decisions because of the anterior agreement of the losing party to be bound by the arbitrator’s decision.

Professor Adrian Briggs, Professor of Private International Law at Oxford University, has rightly observed that a principal objective of agreements for international arbitration is to “keep the resolution of disputes as far away from the court as practicable.” The well-resourced, well-advised and commercially sophisticated parties who make this choice do so for reasons which they find compelling.

The application of local laws cannot be presumed or assumed to apply in relation to international agreements. International arbitration offers traders a mode of dispute resolution which is not skewed by local policies or peculiarities. The well-resourced and well-advised corporations or individuals engaged in international trade and commerce are likely to prefer to look to their contract lawyers, rather than national laws, to protect their interests.

Parties to such agreements will usually be concerned to customise them to their particular needs in terms of the allocation of the risks of their venture. The substantive law to be enforced in these extra-curial fora will be the irreducible minimum standards agreed between the parties.

In these circumstances, the restrictions and uncertainty to which some high-minded national laws give rise in practice are unlikely to be attractive to the large corporations which dominate international trade. Statutes, such as the Trade Practices Act 1974 (Cth), which seek to impose higher standards of conduct on business, are unlikely to be acceptable to parties to multi-national agreements as either necessary or desirable.

The recent amendments passed by the Commonwealth Parliament to the International Arbitration Act 1974 (Cth) facilitate the conduct of international arbitration in Australia and the enforcement and recognition of arbitral awards made outside Australia.

Under the Act, an Australian court may now decline to enforce an award only on the grounds stated in the Model Law and not on local grounds of public policy which might previously have been invoked to prevent recognition or enforcement of a foreign judgment.

The situation is now that, by virtue of the Act, the Model Law and the New York Convention, arbitral awards are almost universally enforceable whereas decisions of foreign courts may not be so easily enforced.

We may expect that pressure will mount on national courts to become less willing to allow parties to litigate disputes in court where they have promised each other to resolve those disputes by arbitration. As a result anti-suit injunctions will be more liberally granted.

The prospect is for national courts to become less relevant to the determination of international trade disputes.

I turn to consider the prospects for an international legal order established by treaties between nation states for our understanding of judicial power.

The late lamented Lord Bingham did not favour the view that the exercise of judicial power involved the articulation of eternal verities about human rights. Significantly, for example, he could not discern in the common law any basis for the courts to declare a right of individual privacy. But he was also of the view that, “Anyone who sees Parliament as a reliable guardian of human rights in practice is … guilty of wishful thinking.”

In his famous 1993 lecture “The European Convention on Human Rights: Time to Incorporate”, he urged that the doctrine of Parliamentary sovereignty was not a sufficient protection for the rights of individuals. He championed, and successfully, the incorporation of the European Convention on Human Rights into English law by the Human Rights Act 1998.

The two major European treaties to which the United Kingdom has acceded are the 1950 European Convention on Human Rights (“ECHR”) which established the European Court of Human Rights in Strasbourg and the accession in 1973 pursuant to the European Communities Act 1972 (UK), and the Treaty of Rome, under which the European Court of Justice (“ECJ”) was established in Luxembourg.

The English experience with these treaties should alert the rest of us in the common law tradition to a number of problems which may arise after the difficult problems of reaching agreement between nations in the first place have been overcome.

There are, I suggest, three problem areas: delay, public confidence, and democratic deficit.

The 1972 Act requires the Courts of the United Kingdom to defer to European law so that European law trumps the law of the United Kingdom, whether common law or statute. Under the Treaty of Rome, if a question as to the interpretation of the Treaty of Rome or of a subordinate statute comes before the Supreme Court of the UK, that Court is duty-bound to refer the determination of that question to the ECJ in Luxembourg. Lord Hoffmann recently observed of this procedure:

The delay of which Lord Hoffmann speaks is a serious fault in the system
established by the Treaty – at least in terms of Anglo-Australian expectations of a system of justice.

Another disadvantage of the system established under the Treaty is that the Court at Luxembourg cannot decide the case: it can only provide its interpretation of the rule with which the national court must comply. On some occasions, the interpretation which is offered is so obscure that it has been necessary for the national court to seek a second interpretation. Delays of this kind can be a serious drain on public confidence.

As to the issue of competence, in the common law tradition, public confidence in the administration of justice is thought to be maintained by the quality of judicial reasoning. While judgments of courts in the common law tradition: Australia, New Zealand, Ireland, Canada, the United States and England and Wales, may not be readily understood by many laymen, the process of reasoning is exposed and subject to scrutiny by informed commentators and other courts. The pronouncements of the ECJ and the ECHR tend to be “in the French style … magisterial pronouncements unaccompanied by much in the way of reasoning.”

And the problems are not likely to be limited to matters of process. Many international contracts choose English law as the proper law of the contract. As Lord Hoffman has observed, this phenomenon reflects the success of English law as a vehicle for distributing commercial risks by reason of the clarity of its principles, the relative certainty of their operation, and the ease with which they can be established in individual cases by reference to an accessible body of case law. Not many legal systems can boast these advantages. The concern is that the very act of producing an international code will destroy the value of the common law jurisprudence by displacing the authority of the cases which comprise it.

And would we not view with regret the arrival of a judicial system in which the bland, formulaic and uninformative reasons characteristic of continental jurisprudence and the Convention tribunals becomes the norm?

The interaction of the Courts of the UK with the ECHR in Strasbourg also provides examples of the sacrifices, in terms of principle and common sense, which may be required of us. In the case of Osman, the ECHR interpreted Article 6 of the European Convention on Human Rights as operating to entitle a litigant, whose claim had been struck out by a national court as disclosing no reasonable cause of action, to a declaration that he had been denied the right to have a court hear this claim. The refusal to distinguish between a failure to hear a claim and a hearing which decides that a claim has no prospects of success and should therefore be dismissed is not something to be emulated, especially in an age of much vexatious litigation.

Which leads us to the issue of democratic deficit confronting the enforcement by international tribunals of treaty rights (including, importantly, human rights) of a positive kind.

Human rights of a negative kind, that is the right to be left alone by governments, cost the community little in upholding those rights – at least directly. It is one thing to look to courts to stand between individuals and the State to ensure that rights to personal liberty are protected from the arbitary exercise of State power; it is another thing to arm courts with a supervisory power to ensure that positive rights, eg, to an education, to health care, to support for those affected by disability and old age, are enforced against a recalcitrant community. To uphold those rights, money must be raised by taxation and then allocated between competing priorities.

One of the defining characteristics of our constitutional tradition, indeed, the central element in the constitutional settlement following the Civil Wars of the 17th Century, is the requirement that the raising and expenditure of public moneys must be the exclusive province of the elected legislature. Neither the executive nor the judicial branch of government may insist on the extraction of money from the citizenry or the expenditure of public money, however worthwhile the objects of that expenditure may be, without legislative authority for that exaction and appropriation.

How will this central element of our Constitution survive internationally-based positive rights to the provision of services to the disadvantaged? And what will be the implications for our relatively modest view of judicial power?

The challenges to our traditional conception of judicial power which can be expected to confront courts obliged to give effect to internationally recognised rights, once they are incorporated into domestic law, are illustrated by the recent decision of the Queensland Court of Appeal in Aurukun Shire Council & Anor v CEO Office of Liquor Gaming and Racing in the Department of Treasury [2010] QCA 37. Cases of this kind oblige a court to balance right against right in circumstances where many persons who may be affected by the Courts’ decision are not parties to the litigation, where the assessment of competing claims is broadly political, rather than based on the application of pre-determined rules to evidence adduced by the parties, and where a determination may require the expenditure of money by a government department which has no appropriation from the legislature to meet the exigencies of the Court’s order.

May I turn then to the questions which arise as to the compatibility of the welfare state with a global legal order?

Some of my generation tend to see the welfare state as a great achievement: the idea that the State underwrites minimum levels of human dignity for the benefit of all of its citizens. That achievement is historically associated with the nation state. Some are sceptical as to whether a global legal order will be willing or able to maintain these achievements.

The sceptics tend to view with alarm a global legal order the philosophy of which is likely to be based on the common denominators of economic rationalism and managerialism.

Some, of course, are excited and energised by the prospect of a global market society. They view the market as providing the best measure of value, and a global market as the guarantee of a world in which local cultural differences can be relegated to little or no importance by a global adherence to market values, especially individual enterprise.

They envision a world of global free trade as a world in which all share in the benefits of rapid technological change – and it will be except perhaps for most sub-Saharan Africans, most South Americans, most Mesopotamians and most South Asians. Nevertheless, it may be said, it will be a world at peace. And that might well prove to be so; but then again, it might not.

The question I wish to raise is whether it will also be a world in which the moral and cultural values which underpinned the nation state have withered so that market forces are unrestrained by governments, or subject only to such minimal regulation as is necessary to keep the market efficient? Tony Judt would describe such a world as an “eviscerated society”. John Rawls would describe it as a world without “civic friendship”.

In such a society, what will be the moral basis for the networks of mutual obligation and responsibility which characterize the planet’s successful welfare states and democracies?

One thing we can confidently predict is that there would be a lot of work for the legal order to do in a society which is not underwritten by a moral order in which altruism tempers economic rationalism and managerial prerogatives. Cold-blooded, self-interested calculation by social atoms bound only by their bargains is unlikely to provide a basis for a stable or just society. It will, however, provide a lot of work for the lawyers.

As Edmund Bourke knew, obedience to legal authority based solely on the prospect of punishment for disobedience, does not make for a strong community. As an Anglo-Irishman of the 18th Century, he had powerful reasons, from his own experience, to know that the strength of societal bonds depends more upon matters of morality and emotional attachment than upon the state’s ability to enforce obedience.

If altruism within a society is the key to the moral order which underpins the legal one, then shared national identity is, as a matter of history, an important well-spring of that altruism. Throughout human history, public altruism derived from a sense of shared identity has made possible the public generosity that, in our time, facilitated the development of the welfare state and the growth of social democracy in some parts of the world. Great Britain, France, Germany, Canada, New Zealand and Australia come readily to mind.

Australian taxpayers, like the taxpayers of the other countries I have mentioned, are very generous, but their generosity is not unlimited. The limits of that generosity are likely to be commensurate with the intensity of their sense of shared community and fellow feeling with the objects of their generosity.

Is it likely that poorer developing nations, especially the autocratic and theocratic, aligned as they often are in international blocs, will be disposed to indulge us in our deeply held belief, in what I will describe as one of our foundational myths, that those who raise money from a community should be elected by the community and only those representatives of the community should decide how and upon whom it is spent?

May I turn then to speak a little more of the relevance of what I have called foundational myths to the phenomenon of altruism in the moral life of a society.

The legal enforcement of altruism has, since the decline of Christendom, and the making of the Treaty of Westphalia, the Islamic Caliphate, and the power of Imperial China, been a project of national governments. It has depended largely upon a moral order which stood upon or reflected the foundational myths of the nation. Just as some nations have embraced the welfare state more enthusiastically than others, so some foundational myths are more supportive of public altruism than others. I want to consider two such myths.

One of the oldest, most enduring and most inspiring illustrations of the importance of the emotional attachments involved in a shared national identity to a people’s willingness to accept obligations to others as shaping a nation’s legal order is the Book of Deuteronomy.

There is some controversy as to the provenance of the Book of Deuteronomy. It is, of course, traditionally regarded as part of the Pentateuch, the five Books of the Law traditionally attributed to Moses. But that is inherently unlikely given its content. Recent scholarship suggests that it emerged, in its present form, as late as in the 6th Century BCE as part of a cultural revolution sponsored by the priestly cast and King Josiah to galvanise the Hebrew peoples in united opposition to the hostile powers surrounding them.

Deuteronomy compares favourably with the angrier, more narrow-minded misogynistic and mean-spirited Leviticus. It does have to be acknowledged, however, that it contains some oddities of perspective, peculiar to the historical conditions from which it emerged, including some truly blood-curdling curses as sanctions for non-observance of the law.

As a code of law, it shows a decency and humanity remarkable for the 6th Century BCE. Indeed, it conveys a spirit which we need in the 21st Century of the Common Era:

If you take security for a debt, you must not take away the debtor’s means of repaying that debt. In our legal tradition, this principle is manifest in the rule against clogging the equity of redemption.

These are all rules concerned to affirm the dignity of the poor who are forced to borrow, to ensure that the borrower retains the privacy of his own home and to prevent the abuse of superior economic power.

Here we see a precisely focussed concern with the obligation of the employer, not just to pay his or her employees what they are owed; but to ensure that they are treated with the respect due to the dignity of labour.

But the most important provisions for the purpose of my point about the connection between national myth and altruism are the following:

The proposition that justice is due to all hangs from a specific cultural hook: “You shall remember that you were a slave in Egypt …” And the passage concludes with the following:

The idea is that we should treat everyone who comes within our borders, including complete strangers afflicted by misfortune, not just with respect and dignity, but with generosity, because we too have – at some time – been ourselves saved, without any particular merit on our part, from the misfortunes which are part of the human condition. The point of these passages is that this people owe it to their national conception of who they are to treat others well.

These passages make one proud to be a human being. What is more important for present purposes is that they made the people to whom they were directed very proud to be Jewish and willing to make the individual sacrifices involved in adherence to that identity.

These passages appeal directly to the emotions rather than to reason. Of course the persons to whom these laws were directed had not actually been slaves in Egypt; but it was this foundational myth which so powerfully expressed to the audience a basis for social solidarity. The ethnic solidarity which that shared mythic identity instilled in these people expresses a sense of community and national pride, national purpose and social patriotism.

As a matter of history, I suggest, these are the kinds of moral underpinnings of a legal order if it is not to be dependent, as Thomas Hobbes bleakly suggested, on state violence or state fraud.

Human rights which operate in a negative way to seek to ensure that we are left alone by the State and are free from state violence are very good, but they won’t educate or heal us, or support the aged and the poor, or the veterans of our nation’s wars: for that we need taxes raised from those who are willing to be generous.

Deuteronomy is an example of a shared national morality that inspires its people to be generous, even to strangers.

The other foundational myth I wish to mention is that of the United States of America.

An aspect of the foundational myth of the United States, as recently interpreted by the majority of the Supreme Court of the United States, tends to guarantee the enduring legitimacy of the claims of the individual in the state of nature. Unfortunately, the state of nature in view seems to resemble that conceived by Thomas Hobbes in his war of all against all. At least that is likely under what is now a constitutionally assured entitlement to access by individuals to firearms.

In 2008, in District of Columbia v Heller (128 S Ct 2783) the Supreme Court of the United States had to decide whether a federal law passed in 1975 forbidding possession of handguns, loaded rifles and loaded shotguns within the District of Columbia, was in violation of the Second Amendment to the US Constitution. The court ruled by a majority of 5-4 that it did. The opinion of the majority was written by Scalia J.

Earlier this year in McDonald v Chicago (130 S Ct 3020), the Supreme Court, in an opinion written by Alito J, extended Heller to strike down most gun-control laws in the States as well.

The foundational myth seems to have had greater claim on the attention of the majority of the Court than the Constitutional text. The Second Amendment says:

The minority of the US Supreme Court in Heller were of the opinion that the right conferred by the Second Amendment was conferred, not upon individuals, but upon the People, to ensure the maintenance of a well-regulated militia.

That would seem, clearly, to be the correct interpretation of the text. The right to keep and bear arms expressly inheres in the People, that is, the organized community, and exists for the purpose of facilitating the existence of a militia which is itself to be “well-regulated”.

To reach the conclusion that the language of the Second Amendment is apt to license the keeping of weapons by individuals as an end in itself, the majority took comfort in the writings of Blackstone. Scalia J, writing for the majority, said of Blackstone at 128 S Ct 2783 at 2798-2799:

The irony of invoking the support of Blackstone for this “natural right” approach can be seen first by recalling Blackstone’s conception of the people, namely, an organized society legally anterior to the political arrangements which it might make.

In the US Constitution, it is “the People” who announce to an awe-struck world the establishment of a new system of government. The US Constitution expressly proceeds on the postulate, stated in Article 1, Section 2, and the First, Second, Fourth, Ninth and Tenth Amendments, that “the People” exists as a community organized and functioning as such anterior to the arrangements put in place by the Constitution for the government of the United States.

The irony can also be observed by noting that in 4 Commentaries 55, Blackstone recognized that this supposedly fundamental natural right was not so fundamental or natural that it could not sensibly and lawfully be abridged in the case of Catholics convicted of the heinous crime of not attending service in the Church of England.

The Chief Justice of the United States, on his visit to Australia in July this year, made the point that the Bill of Rights was very much the product of historical circumstances of the founding of the United States. More importantly for present purposes, his comments articulate aspects of the foundational myth with which I am concerned. It is worth noting some of the points he made.

It is this powerful national myth of the armed individual pursuing his or her own happiness in the state of nature where opposition, natural or human, is there to be overcome which is, I suggest, the lens through which the majority in Heller and McDonald view the constitutional text. It is a myth that also inspired two generations of Wild West movies. More than the tendentious reference to Blackstone to which I have referred, it serves, I think, to explain the reading of the Second Amendment by the majority in Heller and McDonald.

Foundational myths of nation states can work for good or ill in shaping the moral order of a society. The question is what place will our various national myths play in the shaping of the emerging international legal order? How do we harness those which can be a power for good within that order? How do we persuade nations profoundly attached to anti-social myths to leave them behind?

I do not suggest that there are not satisfactory answers to these questions. Pessimism would be out of place in the globalizing perspective which affords humans an ever-more ample opportunity to know and value each other better.

It would be particularly out of place at this Conference whose business it is to find the answers, and where you have a special opportunity to cast informed and rational human eyes over the problems we face. I wish you every success in your deliberations and discussions. I would make only one suggestion, and that is that our best hope lies in accepting the truth that, in different ways, we have all been slaves in Egypt.

2010 Global Courts Conference and Workshop, Sydney, 1-3 December 2010

Chief Justice of the Federal Court of Australia

Adrian Briggs, Agreements on Jurisdiction and Choice of Law (2008) at 199.

(1993) 109 LQR pp 390-400.

Lord Hoffmann, Fifth John Lehane Memorial Lecture, “The Influence of European Law on the Common Law in English Courts”, Sydney, 18 August 2010, at 3.

Lord Hoffman, op cit p 4.

See Phelps v Hillingdon London Borough Council [2000] UKHL 47; [2001] 2 AC 619.

Finkelstein and Silberman, The Bible Unearthed (2002) Simon & Schuster.

Federal Judicial Scholarship

Keane, Chief Justice Patrick --- "The prospects for an international legal order" (FCA) [2010] FedJSchol 28