On October 23-24, 2015, Washington and Lee law professors Kish Parella and Victoria Sahani presented their latest works-in-progress at the American Society of International Law (ASIL) 2015 Research Forum hosted by American University’s Washington College of Law in Washington, DC. Professor Parella presented her latest draft of “The Value of Failed Treaties” and Professor Sahani presented her latest draft of “Reshaping Third-Party Funding.” They are among 70 participants selected for presentation based on a blind review process involving nearly 200 submissions worldwide.
From Prof. Parella’s abstract:
The scale of international agreements under negotiation, their controversial provisions and increasing opposition to them increases the risks that these potential treaties may fail. This Article seeks to lower the stakes by illustrating the beneficial effects of even failed treaties. Specifically, when treaties target the behavior of corporations and other business enterprises, international and national industry groups and corporate actors may improve the quantity and quality of their self-regulation through private standard-setting, monitoring and compliance activities. It is these “spillover effects” on industry self-regulation that changes corporate behavior and that may occur even in the absence of a treaty that enters into force.
This Article illustrates this new approach to treaty governance with a case study of another treaty that may likely fail: the international treaty on business and human rights. Drawing upon corporate reports, statements, industry manuals and guidelines, press releases and interviews, this Article illustrates the positive effects of failed or failing treaties on the industry self-regulation of business and human rights performed by the International Chamber of Commerce, International Organization of Employers, United States Council on International Business and other industry actors.
From Prof. Sahani’s abstract:
Third-party funding is an arrangement whereby an outside entity finances the legal representation of a party involved in litigation or arbitration. The outside entity – called a “third-party funder” – could be a bank, hedge fund, insurance company, or some other entity or individual that finances the party’s legal representation in return for a profit. Third-party funding is a controversial, dynamic, and evolving phenomenon. The structure of the third-party funding transaction often is depicted as a triangle shape connecting the funder, attorney, and client. This Article challenges the paradigmatic triangular or V-shaped representation of the third-party funding transaction between the funder, client, and attorney. It proposes other transaction structures that would be better suited to addressing potential problems, such as conflicts of interest, evidentiary privileges, and the funder’s exercise of control over the process. The Article argues that the uncertainty surrounding the effect of those and other potential problems creates risks for the funder, client, and attorney. Those risks in turn inflate the price of third-party funding capital. Reshaping the structure of the third-party funding transaction to mitigate those risks will reduce the price of third-party funding capital. This will give potential clients wider access to third-party funding and more bargaining power to keep a larger share of their winnings while still benefiting from third-party funding capital.
In addition, reshaping the third-party funding transaction will help guide legislative choices by better defining the funder’s role and the legal relationships that the laws aim to regulate and encourage. Furthermore, reshaping the transaction will give guidance to funders regarding appropriate transactional structures and will give attorneys a clearer sense of their obligations under their professional ethics rules. Moreover, clients will be better informed regarding the baseline structural choices that they should make when deciding whether to hire a particular funder. Finally, exploring multiple transaction structures for third-party funding will allow for flexibility in creating bespoke third-party funding arrangements and will better protect less sophisticated clients and parties.
Professor Kish Parella’s new manuscript, Procedural Fairness by the Corporation, places in the Top Ten lists for new papers in Contracts, International Economic Law, International Trade , Dispute Resolution, Public International Law: Organizations, Corporate Governance, and CSR Enforcement, among other subject areas.
From the abstract:
Global governance has not yet caught up with the globalization of business. As a result, our headlines provide daily accounts of the extent and consequences of these “governance gaps.” The ability of corporations to evade state control has also contributed to an unusual development: corporations are governing like states. Some public governance functions traditionally delivered by state actors are now increasingly undertaken by transnational corporate actors. One area that is experiencing this substitution is dispute resolution of human rights. Corporations and other business enterprises, individually or collectively, are creating a variety of grievance mechanisms to address human rights and other conflicts associated – even caused – by their business activities.
When these roles are fulfilled by state actors, we rely on procedural fairness to guide, even discipline, decision-makers. Procedural fairness improves our faith in decision-makers and their institutions even if we might disagree with the outcomes reached. What does procedural fairness mean when it is undertaken by a corporation performing quasi-public governance? What factors might improve its disciplining potential on corporations and increase the likelihood that the watching public, local and global, might accept the outcomes reached? This Article addresses this challenge by developing a framework for procedural fairness that is based upon human rights research and contract law. The result is a strategy for trust-building that can improve the quality of governance performed by the transnational business sector.
On January 7 and 8, the Frances Lewis Law Center at Washington and Lee School of Law hosted its second Juniors Works-in-Progress Roundtable for International Business.
Over two days, five international business scholars presented works-in-progress and shared feedback on a variety of global issues that confront businesses that operate across borders. Here are their names and topics:
- Julian Arato, Columbia Law School: “Corporations as Lawmakers”
- Pammela Saunders, Drexel University School of Law: “Insuring Corporate Social Responsibility”
- Kish Parella, Washington and Lee University School of Law: “Transcommercial Institutional Legitimacy”
- Sarah Dadush, Rutgers School of Law, “The Social Stock Exchange as Regulator”
- Timothy Meyer, University of Georgia School of Law: “Local Discrimination and Global Public Goods”
On Friday, January 16, Professor Parella will present her work in progress, “Institutional Legitimacy in the Global Value Chain,” at a faculty workshop at Indiana University Maurer School of Law in Bloomington, IN.
From the abstract:
Over the past few decades, we have witnessed the growth of private standard-setting and monitoring as a means to control environmental and labor conditions in international production. Enforcing private standards introduces a historically unfamiliar problem for the transnational business sector: institutional legitimacy. Institutional legitimacy is usually associated with public administration but its need also emerges at the edges of the global marketplace where businesses now undertake private governance. Legitimacy is important to the project of private governance because businesses confront a diverse and expanding audience of stakeholders who often have conflicting interests: consumers, shareholders, suppliers, suppliers’ subcontractors and workers, local and foreign government officials, media, international and local NGOs, international and local unions, and community groups. Businesses need to develop strategies whereby these different stakeholders accept outcomes even if their interests do not ultimately prevail. This is the pluralist challenge from the public arena that has now been replicated within the global marketplace.
Washington and Lee law professors Susan Franck and Kish Parella will present this week at the American Society of International Law 2014 Biennial Research Conference. The conference will be held Thursday, November 13, 2014 through Saturday, November 15, 2014. It is sponsored by the American Society of International Law’s International Economic Law Interest Group in partnership with the University of Denver Sturm College of Law. The theme is “Reassessing International Economic Law and Development: New Challenges for Law and Policy.”
Professor Franck will moderate a panel discussion on investment with panelists Thomas Innes (Stepoe & Johnson LLP), Amokura Kawharu (U. Auckland), Jarrod Wong (U. Pacific) and Gabriele Gagliani (U. Palermo). Professor Franck will also participate as a panelist in a session, “Empirical & Social Scientific Approaches to IEL” with Jason Yackee (U. Wisconsin) and Jide Nzelibe (Northwestern U.). Her talk is entitled “Conflating Politics & Development? Examining Investment Treaty Arbitration Outcomes”
Professor Parella will present her work in progress, Transcommercial Institutional Legitimacy, as part of a panel on voluntary standards and regulating business for development with Sarah Dadush (Rutgers U.), Andrew Woods (U. Kentucky) and Ofer Eldar (Yale U.). Her presentation focuses on the legitimacy of private governance of international production. She examines dispute resolution between different actors in global value chains and suggests ways to improve stakeholder engagement regarding the design of these dispute resolution mechanisms. This research is part of her broader examination of global governance performed by the transnational business sector.
On November 8, Professor Kish Parella will present her work in progress, Transcommercial Institutional Legitimacy, to a group of international law scholars at the annual Research Forum of the American Society of International Law. This paper was recently awarded the Lewis Prize for Excellence in Legal Scholarship by the Francis Lewis Center at Washington and Lee School of Law.
Parella’s research focuses on the legitimacy of private governance of international production. She examines dispute resolution between different actors in global value chains and suggests ways to improve stakeholder engagement regarding the design of these dispute resolution mechanisms. This research is part of her broader examination of global governance performed by the transnational business sector.
Parella will present her research as part of a panel on regulation of international economic activity. Her co-panelists are Professors Stavros Gadinis (Berkeley Law) and Odette Lienau (Cornell Law). Professor Jose Alvarez from New York University School of Law will serve as discussant for the panel. More information on the ASIL Research Forum is available here: http://www.asil.org/midyearmeeting.
On Thursday and Friday, January 9 and 10, the Frances Lewis Law Center at Washington and Lee School of Law is hosting a Juniors Works-in-Progress Roundtable for International Business. The theme of the workshop is “Transnational governance solutions to international business challenges.”
Over the next two days, seven international business scholars will present works-in-progress and share feedback on a variety of issues that confront businesses that operate across borders. Here are their names and topics:
- Andy Spalding, University of Richmond School of Law: “Rethinking Extraterritorial Deterrence”
- Kish Vinayagamoorthy, Washington and Lee University School of Law: “Outsourcing Responsibility”
- Timothy Webster, Case Western University School of Law: “Does the Federal Government Oppose Asian Investment?”
- Timothy Meyer, University of Georgia School of Law: “From Contract to Legislation: The Logic of Modern International Lawmaking”
- Pammela Saunders, Drexel University School of Law: “The Regulatory Impact of Individual Versus Institutional Liability Threats in International Human Rights Litigation”
- Melissa Durkee, University of Washington School of Law: “Corporate Chaos Theory”
- Sarah Dadush, Rutgers School of Law, “Regulating the Market for Social Impact”