The Cost of Inter-jurisdictional Inconsistency of Law and its Application: A Way Forward

Abstract

This paper discusses the cost to business of inconsistent laws and inconsistent application of equivalent laws between jurisdictions. It suggests that the ‘real’ cost to business, and the flow-on economic cost, of these inconsistencies is perhaps more significant than currently acknowledged. This is particularly the case as markets become more globalized, more businesses become multi-jurisdictional and the impact of inconsistencies in law and its application increase. The inconsistencies create costs and uncertainty for business which inhibit and discourage inter-jurisdictional investment. It is particularly concerning to the extent that these inconsistencies undermine attempts to reduce trade barriers and create free trading zones, or exist within federations. Given the size of this issue, it would be helpful for there to be an economic analysis as to which inconsistencies have the greatest detrimental impact on investment and competition, and therefore pose the greatest economic constraint. These may be inconsistent applications of law, not just inconsistent law per se. There may be some which are a greater threat to business models than others. There is much work to be done, but also much to be gained from removing some of these inconsistencies.