Law of Reasonable Expectations: Corporations can be proactive and move with the times — or have the times forced upon them
Published in Lexpert Magazine / June 2017 Issue
WE LIVE IN A TIME of thin political markets, when governments appear less capable of tackling long-term systemic policy issues. This is, in part, because of the short-term incentives that motivate political processes. One consequence is that the tension between public expectations and legislative/regulatory responsiveness becomes more severe, and a growing role emerges for our courts to use the open-ended concept of “reasonable expectations” to create and modify legal standards and forge new, often radical legal pathways.
Protecting reasonable expectations is a central organizing principle for most legal rules in common law systems. The standard is applied unevenly, though; private law generally emphasizes the more subjective aspect of expectations (i.e., the expectations of particular stakeholders), while public law tends to focus on more objective “reasonableness” viewed from the perspective of society as a whole.
That said, the doctrine has been used to achieve objectives that are remarkably consistent. The first is to require powerful public and private actors to treat others fairly. The second is to uphold the integrity of legal regimes and, through them, social institutions.