Changes, Anticipations, and Reparations

Abstract

Conventional views of legal change emphasize the values of certainty and reliance, and are therefore hostile to explicitly retroactive laws. Contemporary scholarship, however, allows that a policy of aggressive legal change, with no compensation for "new losers," can encourage socially useful steps in anticipation of change. Professor Levmore argues that the anticipation-oriented approach logically extends to embrace anticipation by "new winners" and governments as well as new losers. If all parties' anticipatory incentives are considered, familiar rules, ranging from statutes of limitations to retroactivity and to compensatory payments for government takings, seem quite sensible. And if these rules are drawn correctly, few parties should find it worthwhile to stand against progress. Professor Levmore then considers reparations. He argues that these payments by governments are made when the potential anticipation effects normally associated with retroactive compensation are absent. The transfers are then redistributive and best understood through interest group analysis.