M-EPLI talk ‘Pecuniary Damages – Measuring the Economic Value of Contracts’, Johannes Flume, 23 September 2015

This academic year’s first M-EPLI talk will be delivered by dr. Johannes Flume of the University of Tübingen on ‘Pecuniary Damages – Measuring the Economic Value of Contracts’, 23 September 2015, 12.30-13.30, ‘Statenzaal’, Faculty of Law (Boullionstraat 1-3, Maastricht).

The aim of M-EPLI talks is bringing M-EPLI fellows together to discuss our research – as well as the research of invited speakers – and this remains one of the most, if not the(!) most, important activities M-EPLI undertakes. It allows us to know what others are doing and provides the perfect opportunity to help them with their research. M-EPLI talks are about research in progress: many M-EPLI talks lead to a M-EPLI Working Paper in our working paper series. Working papers, by their nature, are work in progress. The format of the M-EPLI talks is therefore 15-20 minutes of presentation and 45-40 minutes of discussion.

In this talk dr. Flume will suggest a new way to understand the foundations of pecuniary damages in the case of breach of contract by connecting contract law with basic capital market economics. He argues that the amount necessary to compensate the aggrieved is equal to the hedge effected by locking in the price with respect to the market value at the time of the breach. Payoff measurements used for linear financial products prove to be very helpful in the field of contract law. He proposes that the value of a positive payoff measure of linear derivatives is tantamount to pecuniary damages. The so-called market price rule is the epitomization of that idea. The legal reality is, however, different.

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Social Justice for Investors: what about complex financial products?

Over the weekend I saw an interview with Dutch journalist Joris Luyendijk who, in the past two years, has been working for the Guardian in London seeking to uncover the workings of ‘The City’ the financial heart of Londen. For a while therefore Luyendijk published on the BankingBlog and now published some of his findings in a book with the illustrative title “This cannot be true” (‘Dit kan niet waar zijn’ in Dutch, soon to be translated into English). In the past years Luyendijk has been seeking to City employees and former employees about their work, their experiences and their own fears. In the television programme (in Dutch) to promote his book, Luyendijk gave a few anecdotes to illustrate what we are talking about. This concerned illustrations of ‘the bubble’ in which some people in the financial world are trapped that removes them from reality.

A very interesting anecdote in this respect concerned a man completely focused on profiting from the market effects after 9/11 only to realize at the end of the business day he actually knew a lot of people in the World Trade Centre in New York City. However another Luyendijk story sparked my interested:

He explained that in his book he distinguishes various types of people, one of which he calls the cool frog (‘koele kikker’). One of these, in conversation with him, stated that all that she did was completely legal and to get off her back for asking poignant questions about it. Luyendijk then continued to explain that in the financial services word there are products made by specialists that are so complex that, although the makers understand what they are doing (most of the time), the client that purchases these products, i.e. investors, do not have a clue. These can be very profitable products, but in cases of losses the losses are for the investor and not for the bank. Luyendijk actually warns for the complexity of these products and foresees some of these to go wrong in the future in such a way as to cause another financial crisis.

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Pilot Program on International Commercial Mediation

BoomPremiUM, in collaboration with MEPLI, is currently searching for motivated Master students with an interest in mediation (or ADR in general) to take part in a pilot program on International Commercial Mediation*. This program will run from January 2015 – June 2015 (approximately 150 hours of commitment in total) and should be considered as an extracurricular activity that can be managed in addition to the student’s regular course work.

With regards to content, this program will offer students the opportunity to gain market-oriented skills through workshops taught by international experts on mediation along. The students will also have the chance to take part in mediation simulations, where they will receive hands-on coaching and in-depth feedback on their performance.

If you are interested, please apply by sending an email to: catalina.goanta@maastrichtuniversity.nl AND mark.kawakami@maastrichtuniversity.nl prior to the deadline (3 December 2014 at 5:00pm). Your email should contain the following items in the attachment:

  • Your current CV,
  • A motivation letter indicating why you are interested in the program, and
  • Your answer to the following question: “If you could have three items while being stranded on a deserted island, what would they be?”

The motivation letter and the answer to the short question combined must not exceed one A4 (single-sided).

We look forward to seeing your applications and working together with you as we attempt to develop a practical mediation program here at Maastricht University. We are in the process of organising a Kick-Off Meeting on 5 December 2014, where the selected members will be invited for a meet-and-greet, where further information will be provided.

* Please note that no ECTS points will be available for this activity at this time. However, as the program will be part of the PremiUM Experience, certificates will be issued upon the completion of the course, not to mention the significant benefits that come with participating in PremiUM

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New publications: Lars van Vliet on Dutch Company Law

 

 

Lars van Vliet, The Netherlands – New Developments in Dutch Company Law: The “Flexible” Close Corporation, 7 J. Civ. L. Stud. (2014)

Available at: http://digitalcommons.law.lsu.edu/jcls/vol7/iss1/8

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#crossposting: Larry Catá Backer’s contribution to the MEPLI/HiiL workshop on CSR enforcement (Maastricht, 17 October)

I was fortunate enough to participate On October 17 in a “Workshop on research by the UM-HiiL-Chair on the Internationalisation of Law, the theme of which was “Enforcing Corporate Social Responsibility: Transforming voluntary corporate codes into private law obligations?”, held at the Theater aan het Vrijthof, Vrijthof 47, Maastricht, Netherlands under the sponsorship of the University of Maastricht, the Hague Institute for the Internationalisation of Law, and their UM-HiiL Chair.  The workshop description and program follow below. I spoke to the “Implications for the effective regulation of companies.”  My remarks, “A Lex Mercatoria for Corporate Social Responsibility Codes without the State?: On the Regulatory Character of Private Corporate Codes” also follows.
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Enforcing Corporate Social Responsibility: Transforming voluntary corporate codes into private law obligations? – 17 October (Maastricht)

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Workshop on research by the UM-HiiL-Chair on the Internationalisation of Law – Friday 17 October (Theater aan het Vrijthof, Vrijthof 47, Maastricht)

Corporate codes are voluntary policies that companies frequently develop in order to show the public their commitment to respect human rights, to improve workplace standards, and to protect the environment in their global operations. The research conducted by the UM- HiiL-Visiting Chair on the Internationalisation of Law has focussed in one of its research projects on these codes. As one of the core outcomes, the argument has been developed that such voluntary corporate codes, in order to be successful in the long run, would need to be transformed into private law obligations. This result has been reached by engaging in an interdisciplinary socio-legal analysis, which suggests treating the codes as unilateral declarations that reveal a serious effort of companies to regulate public interest matters in the absence of global government. It is this specific character that private law is accordingly called upon to support by enforcing these codes.

This workshop aims to discuss and critically evaluate the outcome of this research in general and this core suggestion in particular. The first part of the conference seeks to analyse the implications that a suggested enforcement of initially voluntary corporate commitments on CSR will have on specific areas of law.

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