Abstratct: This paper examines the problem of deterrence failure under incomplete law and analyses how this problem may be addressed by different lawmaking and law enforcement institutions. We demonstrate that when law is incomplete, i.e. when the law fails to unambiguously state that a particular action will give rise to liability, a legal regime that relies exclusively on courts may su¤er from deterrence failure. The reason is that courts are desigend to be reactive law enforcers and take action only after others have brought a case before them, typically ex post. We explain the emergence of regulators with the greater demand for proactive enforcement agents who may themselves initiate law enforcement activities even before harm has been done. Regulators'ability to proactively enforce the law helps mitigate the problem of deterrence failure. However, under certain conditions regulators may suffer from regulatory failure. Evidence drawn from UK and US case law and regulatory enforcement activities is provided.
Enforcement Failure under Incomplete Law.pdf
