State Action in the Face of Uncertainty

Uncertainty and insecurity scare the legal analyst. His tools have been developed to solve clearly stated problems deriving from the application of similarly clearly stated legal rules. This has always been an illusion. The law never knows all the relevant facts. It understands even less fully how a problem at hand is nested in a problem area, and it cannot precisely predict the effect of legal intervention into social relations. But these deficiencies were less significant as long as the law was not predominantly conceived of as a governance tool. However, the social reality that is addressed by law today has become less stable and less coherent. Both factors make the development of a proper legal theory of uncertainty paramount.

Other disciplines are ahead of the law in their perceptions. Economics, sociology and political science have long investigated the individual and social perception of and reaction to uncertainty. An interdisciplinary approach therefore seems more promising than a purely disciplinary one. The analysis shall be in three steps: defining uncertainty, understanding its origin, and designing appropriate legal reactions.

In a first part, an attempt at defining the term “uncertainty” for the purposes of the law shall be undertaken. This is best done by contrasting it with views in neighbouring disciplines, such as the distinction between “risk” and “uncertainty” familiar in economics. A useful legal concept would presumably have to focus on the situation before a legal decision is taken. Uncertainty would be framed as an environment where the decisionmaker is not perfectly informed.

As a second step, a taxonomy of uncertainty shall be developed. It will – at least – need to apply two parameters: what type of information is unknown, and why is that so? Information can consist in either facts or knowledge about how facts are connected to each other. The law can use the latter for two basic purposes: predicting a development in natural or social reality, and predicting the impact of a legal intervention thereon.

Sometimes, no one possesses a given piece of information. It can be physically impossible to trace it, the cost of generating the information can be prohibitive, or the law itself might forbid searching for it. Often, however, only the legal officer is uninformed, as opposed to the parties before him or third persons. In such an instance of the asymmetric distribution of information, an important follow-up question looks at whether the information is verifiable, observable, or whether it has none of these properties.

These two steps prepare us for the final one: guidelines for state action in the face of uncertainty. Basically, the law has two options: diminishing the amount of uncertainty, or coming to a decision in substance, the remaining uncertainty notwithstanding. No different from other actors, legal officers can search for unknown information, and they can follow the precepts of game theory and mechanism design in order to overcome information asymmetries. The difference lies in the institutional framework. Is the institutional design of law making and law application well-prepared for an information search? Do information problems justify the transfer of jurisdiction to organisations or procedures that are more appropriate, like expert committees? Does the rule of law and the constitutional guarantee of democratic legitimation allow a government to use whatever tool it deems fit for the acquisition or generation of information?

This leads to a theory of legal action under uncertainty. On the part of the legislature, the project will critically analyse the existing doctrine of the margin of appreciation (Einschätzungsprärogative) as it has been established by the German Constitutional Court (Bundesverfassungsgericht). Another element of such a theory can be taken from constitutional rules that allow the legislator to generalise, provided atypical cases are treated differently by the administration or the courts, or that do not receive compensation. The law will also have to face insights from sociology and from political science. Uncertainty is socially perceived and construed, and it is part of the political process to highlight certain risks and to divert attention away from others.

The project will develop its general insights and test them against selected fields of law. At this juncture, it is linked to the work on waste management undertaken by the project group. A few examples taken from this field may serve as an illustration of the general hypotheses laid out above.

Waste management law proves to be a field which touches upon all relevant questions in regard to regulation under uncertainty. This field of law not only offers a view on various kinds of uncertainty (factual ignorance about possible reactions of the environment to certain substances and waste; sociological ignorance regarding the reaction of and interaction between consumers and producers in response to regulation) and a view on specific scenarios (e.g. increased uncertainty by allowing a mixture and combination of substances in waste; uncertainty about border-crossing effects; uncertainty on the combined actions of international institutions), it also allows the actual decision structure of the legislature and the executive to be scrutinised in the face of uncertainty, e.g. it allows the extensive use of open terminology (unbestimmter Rechtsbegriff) to be defined by the executive and the courts. In this regard one need only take the differentiation between disposal and utilisation (Beseitigung – Verwertung); the generalisation of dangers; the inclusion of interest groups prior to legislation and the encouragement of self-regulation of the involved parties by enabling and furthering the establishment of the German dual system (Duales System Deutschland – grüner Punkt).