News at Smith

Book from Maryland Smith Fills Gap in Business Law

Oct 18, 2018
World Class Faculty & Research

Comments

T. Leigh Anenson

Professor T. Leigh Anenson Makes the Case for Equity

COLLEGE PARK, Md. (Oct. 18, 2018) — Strict enforcement of the law sometimes rewards dirty-dealing and hypocrisy, which bothered T. Leigh Anenson as a business litigator. Her new book, Judging Equity: The Fusion of Unclean Hands in U.S. Law, explores a safety valve in the legal system designed to correct injustice.

“I do not like the abuse of power, and the abuse of the law is very similar,” says Anenson, who now works as a business law professor at the University of Maryland’s Robert H. Smith School of Business. “If you are going to exploit the right that you have in a way that is not intended, I just do not think people should get away with that.”

Courts allow for equitable defenses, which invite judges to set aside legal requirements and apply moral principles in cases where the law might not deliver a fair resolution. But Anenson searched as an attorney for guidance on the doctrines of equity and found almost nothing.

Now that she has transitioned to academia, she is filling the gap. “I am writing the book that I wanted to have when I was a lawyer,” she says.

Pre-orders for her book, more than 10 years in the making, are now available from Cambridge University Press. Publication is planned for November 2018.

Unclean hands, the book’s focus, refers to cases in which a person shares blame in a situation but sues for damages anyway. “You are involved in it,” Anenson says. “Or it could be that you committed the same wrong as the person you are now suing.”

Examples abound in business law. A technology firm might have unclean hands if it uses deceit to secure a patent, and then sues a competitor for infringing on the patent. A startup company might have unclean hands if it disregards the noncompete clauses of a rival firm — and poaches talent anyway — but then requires its new recruits to sign the same type of contract.

Judging Equity: The Fusion of Unclean Hands in U.S. Law

Anenson says bank and insurance executives had unclean hands when they steered the world into a financial crisis in 2008 — triggering massive bailouts that benefited their firms at taxpayer expense — and then demanded strict enforcement of executive contracts that promised lucrative bonuses to themselves.

“Unclean hands would apply to those situations where the executives have behaved recklessly,” she says. “Yet they are still reaping the benefits through these bonuses.”

The law might be on their side, but equitable doctrines give judges leeway to restore fairness to the situation. Such discretion requires a delicate balance between equity and law.

“Equity is going to have a bright side because it is flexible,” Anenson says. “But there can be a dark side. It can be too subjective. Judges can have too much discretion. There might not be constraints within the doctrines or principles they are applying.”

Anenson’s book lays out the underlying principles and rules, which have evolved over centuries. “One of the ideas of equity dates back to Aristotle,” she says. “The law, because of its generality, can’t possibly be fair in every single situation. There are unexpected things that lawmakers can’t anticipate, so they would want the law to be tailored just a little bit differently. Equity provides that tailoring.”

Tags: 

About the University of Maryland's Robert H. Smith School of Business

The Robert H. Smith School of Business is an internationally recognized leader in management education and research. One of 12 colleges and schools at the University of Maryland, College Park, the Smith School offers undergraduate, full-time and part-time MBA, executive MBA, online MBA, specialty master's, PhD and executive education programs, as well as outreach services to the corporate community. The school offers its degree, custom and certification programs in learning locations in North America and Asia.