TJ in Commercial Areas of Law

A common question asked in relation to therapeutic jurisprudence is whether it has any application to commercial areas of the law such as corporate law and taxation. Therapeutic jurisprudence purports to apply to the whole range of the law, legal processes and legal actors in the diverse social contexts in which they operate. TJ sees them as potentially affecting the wellbeing of those who come into contact with them.

The most visible application of therapeutic jurisprudence has been in the context of problem-solving courts, which are courts directed at addressing issues underlying the legal problem – whether it be criminal behaviour or an inability of parents to properly care for their children. These are issues intimately connected with wellbeing, such as substance abuse, mental health issues or family violence. Drug courts, mental health courts, family violence courts and community courts therefore have an obvious connection to wellbeing.

Yet even in the hard nosed world of business and commercial law, wellbeing is an issue. This is because behind the corporate façade – and sometimes it is a complex façade – there are human beings at work. As the Chief Justice of Western Australia, Wayne Martin observed in his address to the Third International Conference on Therapeutic Jurisprudence in Perth, Western Australia in 2006:

Civil lawyers are inclined to forget that corporations are really a legal fiction, and just a means of organising people. There are always human beings at the heart of every corporation, and even corporations need therapy at times - AWB and James Hardie being two that jump to mind - and the insurance company HIH, whose demise I helped investigate, had a corporate culture which could have usefully occupied a team of therapists.

The Chief Justice gives examples of Australian companies whose actions adversely affected people within the company and the community. In some cases, these actions were made possible by the actions of their lawyers. For example, James Hardies’ lawyers assisted with a corporate restructure that left its liabilities for pending or potential asbestos related negligence claims in a subsidiary that did not have adequate resources to meet damages likely to be awarded against it while the governing entity was able to relocate to The Netherlands. Thus the law can permit the use of strategies to enable corporations to minimize or escape liability and directly affect the wellbeing of actual or potential plaintiffs.

There are other areas of commercial law worthy of investigation through a TJ lens. For example: does a corporate legal structure facilitate ethical decision-making? Does it disempower shareholders creating shareholder distrust of the company? Does it promote openness and accountability in relation to problems that arise that affect the wellbeing of employees, executives and customers?

Corporations are commonly involved in activities that intersect with other areas of the law – such as workers compensation, workplace safety, the environment and contract – some of which have already been the subject of study through a TJ lens.

Even in the area of taxation law, TJ may have a role to play. One issue that comes to mind is how taxation authorities administer the tax law and interact with taxpayers. Procedural justice principles may well assist tax authorities in promoting greater respect for the tax law and for the authorities, simply by giving taxpayers voice, validation and respect in their dealings with them. There may also be the scope for promoting the therapeutic principle of self-determination by engaging with taxpayers in the event of a dispute to see whether through collaborative means a satisfactory outcome can be reached for all concerned.

Another obvious area is where tax authorities decide to change their approach to particular tax avoidance schemes. Simply announcing that a scheme is no longer recognized as valid by the tax authorities may well have significant adverse aspects not only on economic but also psychological wellbeing of affected tax payers – such as, for example, retirees or those approaching retirement who heavily rely on such schemes for their income and support.

Some work has been done relating TJ to commercial related areas, such as bankruptcy (an article by Michael Stines in St Thomas Law Review in 2005) and a study of law students applying TJ in a business practice clinic that prepares them for practice in business law (see an article by Leslie Larkin Cooney in 2007-2008, 96 Kentucky Law Journal).

Anyway, these are just some thoughts that come to mind about the use of TJ in hitherto (for TJ) largely unchartered territory. That territory deserves to be explored in a more considered and extensive way than can be attempted in this blog.