Early in my career, I worked as a research fellow on family law topics at the Centre for Socio-Legal Studies in Oxford. As in any good research group, members inevitably picked up quite a lot about each other’s projects. The director had a particular interest in the law of contract. He had raised some money for a comparative study of English and French approaches, through invited workshops. We hosted the first, which revealed a fascinating gap in thinking between lawyers in the two countries.
Very simply, a contract is an agreement between two parties – individuals or organizations – where A agrees to do something for B in return for a payment from B. Let us make this more concrete: B needs 50,000 widgets on 1 July and A enters into a contract to make these at a cost of £1 per widget and to deliver them to B on that date. Fine. But then C comes along and also wants A to make 50,000 widgets for delivery on 1 July. C is willing to pay £1.50 per widget. Under English law, A can break the contract with B, provided they pay compensation, sharing the extra profit they get from selling to C instead. The exact share will depend upon how much notice they can give B, what other suppliers are available, etc. From an economic point of view, this is more efficient. If C is willing to pay a higher price than B, then then the widgets are going to be put to a more productive use. Our French visitors, however, were morally outraged. As far they were concerned, a contract had something of the character of a sacred promise. There might be circumstances in which it could not be kept – a simple desire to make more money was not one of them. Whatever the economists might say, A was committed to supplying B.
You might think this contributes to the notoriously sluggish performance of the French economy but that is not the key point of this post. It is, rather, to draw attention to the similar cultural gap between UK and EU politicians and negotiators approaching Brexit.
The UK side appear to be convinced that everything is negotiable now that they have decided that the contract with the EU is no longer seen to serve a national interest – just like A finding they can get a better price for widgets from C than from B.
The EU team, on the other hand, are clearly signalling that fundamental principles are sacred and not open to variation. They do not come with a price tag attached. At various times, UK politicians have talked about the economic interests of German car makers or French and Italian wine-growers as examples of pressures on their governments to be flexible in negotiation. Economic interest, however, is not the driving force in Europe that it is in the UK. Car makers and wine growers share the same values as the French lawyers who came to a workshop in Oxford in the early 1980s.
English common law is almost infinitely malleable because of the space for judges to adjust its substance to changing social and economic conditions. European civil law is a more rigid framework. Each has its virtue – the flexibility of English law comes at some cost in terms of the predictability and stability of its application to any particular case. The parties to a contract accept a greater risk that bargains will not be kept, which can be hedged by various kinds of insurance. In France, and other civil code countries, the parties are more certain that the contract will be fulfilled.
EU membership is a particular kind of contract. The cultural gap partly explains why EU leaders initially met the result of the 2016 referendum with some disbelief. For the 27 other states, membership was an enduring commitment, through good times and bad. It was not a bargain for temporary advantage, to be torn up as soon as it did not fully satisfy one party. Having accepted the serious intent of the UK government, although not necessarily the UK people as a whole, the EU negotiators have established a clear position based on the defense of their core principles. This leaves very little space for the kind of pragmatic deal-making that the UK negotiators hope for. The results are likely to be catastrophic for the UK. If there is no deal, the UK stops being a member and the barriers to movement of goods, services and people kick in on the next day. 30 mile tailbacks at the border anyone?
How has this misunderstanding come about? In part, the UK government is struggling because of the disaffection of its professional class. The department dealing with Brexit has failed to recruit up to its targets and is full of inexperienced civil servants who have been assigned there because they have no choice. Negotiation experts from outside have set a high price on their skills reflecting their shortage and the reputational risks of being associated with the project. Having trashed expertise during the referendum campaign, the pro-Leave faction is facing its own Atlas Shrugged moment – except that it is showing where Ayn Rand got it wrong. In modern states, Atlas is not a buccaneering capitalist but an experienced member of a service profession. The Trump administration seems to be making the same discovery: if the professional class walks away, effective government comes to a halt.
Negotiation 101 – understand where your counterpart is coming from. If you do not understand for yourself, then you need the kind of social science expert who does – and you need to listen to them. Brexit is likely to show the high costs of locking yourself into an echo chamber.