THE UNIVERSITY OF BRITISH COLUMBIA

DEPARTMENT OF ECONOMICS

LAW AND ECONOMICS

Professor: Robert G. Gateman Course: Economics 367

Office: Rm 903 Buchanan Tower Semester: JAN 2011
Contact: Voicemail 604-822-5088; Mobile Office Hours; Office Hours; Vmail on Vista

SYLLABUS

Introduction

In this course you will investigate the application of economic thinking to judicial reasoning.
Fundamentally, you will learn how the legal principles governing property, tort, contract, antitrust
and the Charter impose implicit prices and, therefore, how the consequences of these principles can
be analyzed using the tools of microeconomic theory. Many scholars concur with the observation
that the economic analysis of the law is the most important development in the field of law in the
last fifty years. On the other side of the ledger, economics has much to gain from the adoption of
legal reasoning, particularly argument by analogy and inductive logic.

The law is a set of rules, enforced by the courts, which governs equitable behaviour between
individuals, and between an individual and the state. Economics on the other hand strives to attain
an efficient allocation of society’s resources. Economic goals can be a major component in the
definition of “equity” and the resolution of disputes amongst members of the community. These
economic objectives can accompany and supplement the moral precepts, ethical concepts and
political philosophies that compose the core of legal reasoning and “justice”.

The objective of the course is to familiarize you with economic analysis of the law of property, tort,
contract, antitrust and the Charter, and to encourage a long-lasting interest in the application of
economic principles to legal reasoning and legal reasoning to economic analysis. To such ends, a
great deal of emphasis will be placed on current applications and cases, Canadian public policy, and
deciphering current newspaper reports.

The goal of the course on the other hand is to encourage critical thinking, to assist you in
developing some techniques to analyze, synthesize, and evaluate in a creative and yet effective
manner. You may find the thinking approaches used in this class somewhat foreign at first, but
hopefully you will acquire some comfort with the new methodologies as your course progresses.

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Prerequisites

Although the calendar requires intermediate economics as a prerequisite for this course, in fact you
can do very well and enjoy the course with introductory microeconomics. In other words, you are
welcome in the class if you have a working knowledge of introductory microeconomics. The course
will revisit your economic principles from a foundational approach, possibly grasping the essence of
the concepts for the first time, using elementary algebra and geometry. You can succeed in the
course without a knowledge of calculus.

University Closures

Study Break Feb. 14 – Feb. 18

Religious Holidays 22 and 25 April

Textbooks

1. * Gateman, Law and Economics January 2011, Discount Textbooks, UBC Village
2. Cooter, R. and Ulen, T., Law and Economics, HarperCollins, USA, 1988
3. Posner, R.A., Economic Analysis of Law, 1986
4. Goetz, C., Law and Economics, 1984
5. Hirsch, W.Z., Law and Economics, 1979

* denotes highly recommended text.

Course Organization

The final grade in this course will be determined according to the following weighting:

Mid-term 20%
Factum and Appeal 30% (20% for factum; 10% for court appeal)
Final Examination 50%
TOTAL 100%

The final will be cumulative, covering all the material studied in the course. The dates and times for
all quizzes, mid-terms, papers and exams will be preset and cannot be changed or rescheduled
without medical or compassionate exemption from the Arts Advisory Office.

Lecture sessions are scheduled three times a week MWF, for 13 weeks, commencing on 4 January
2011.

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Factum and Appeal

You will divide yourselves into groups of six, three taking the position of the Appellant and the
other three taking the position of the Respondent. After choosing a case that is either presently
under appeal or could be (submitted 31 January), each side will then prepare a written 6 page
submission, emphasizing economic analysis of the issue(s), and submit this factum by the start of
class, Friday, March 11, 2010. You will then present your appeal before a moot Court of Appeal of
UBC in the downtown courthouse, 800 Hornby Street, in the last or second last week of the course.
The courthouse is being tentatively booked for “sometime” during the week of 21 March. Time
and date have not been set yet. Each counsel in the group of three will receive the same grade for
the factum (out of 20%) and the same mark for the appeal (out of 10%). It’s a group thing with Free
Rider problems.

Professor Contact

It is difficult to establish office hours to suit everyone’s schedule; therefore, students are encouraged
to consult with the professor in any one of the following manners:

1. “Mobile Office Hours” – after class.

2. Voicemail at my number 604-822-5088
3. Vista Mail for urgent matters
4. Prof office hours, MWF 1200 – 1245.

Lecture Notes

As an added BONUS, Professor Gateman’s draft text will be available at Discount Textbooks. The
Gateman Text (gBook) is sold ONLY at DISCOUNT TEXTBOOKS, #206 – 5728 University
Boulevard (UBC Village above McDonald’s) Tel: 604-221-1822.

Course Outline

Every effort will be made to present the course in a manner that follows as closely as possible the
structure established in the text. Of course, class needs and preferences may dictate amendments to
the following course outline; consequently, the professor reserves the right to alter this outline.
The course can be over-simplified into the following SIX theoretical subsections:

I Microeconomic Theory
II The Legal Environment
III Tort Law
IV Property Law
V Contract Law
VI Antitrust Law

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LECTURE SCHEDULE

Lecture Week Topic

1 Introduction to Law and Economics

2 Review of Microeconomics

3 The Legal Landscape

4 The Legal Landscape

5 Economic Theory of Tort Law

6 Topics in Tort Law

Midterm Examination Wednesday February 9
Groups Chosen and Submitted January 31
7 Economic Theory of Property Law

8 Topics in Property Law

9 Economic Theory of Contract Law

Case Submitted February 11
10 Topics in Contract Law

11 Economic Theory of Antitrust

12 Topics in Antitrust Law

13 Appeal Court of UBC sits

Factum Submitted March 11
Appeal TBA
FINAL EXAMINATION in Exam Period
April 11 to 28 inclusive – please keep free!

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DATES TO REMEMBER

4 January Start of Lectures

17 January No W Withdrawal

31 January Group Members submitted

9 February Midterm

11 February No F Withrawal
Case submitted
14– 18 February Study Break lol

7 March Prof :G’s Birthday

11 March Factum Due by start of class (Minus 5% for every hour late)

End of March Court Date, tentatively the week of 21 March.

22 and 25 April Religious Holidays

7 April End of Lectures

14 April to 28 April Final Examination Period