Course:Law3020/2014WT1/Group M/Natural Law



Hodgkinson v Simms

According to the natural law theory as expressed by Thomas Aquinas, four elements are required for a law to be valid:

1. The law must be directed to the common good

In the case of Hodgkinson v Simms, the purpose of the law is to protect vulnerable parties entering into commercial transaction relationship, and to promote honesty in dependent business relationships

Thomas Aquinas might argue that the recognition of fiduciary relationships promotes the common good by protecting vulnerable parties in contracts, thereby preventing the unjust enrichment of stronger parties who take advantage of the power imbalance in the relationship. (by in this case failing to disclose a conflict of interest)

2. Must follow practical reason (reasonable steps leading to the common good)

In Hodgkinson v Simms, the court awarded damages to an injured party for the purpose of compensating his losses and to deter dishonest conduct in reliance business relationships. This is rationally connected to the goal of protecting vulnerable parties, as it assures people in commercial transactions that accountants will be required to follow predetermined professional standards including the obligation to report conflicts of interest. This protects the interests of anyone engaging the services of accountants or employing financial professionals.

3. Must be made by valid lawmaker (ruler within community, who hold this position by reason of the natural order)

The fiduciary duty recognized by the court in Hodgkinson v Simms is based not on written law, but on an equitable common law principle. Natural law according to Thomas Aquinas would not agree with this decision because the court is expanding and redefining what a fiduciary relationship is in this situation. Despite the court's motivation to further the common good, Aquinas would be skeptical of the court's ability to achieve this objective using these means. Aquinas might say that the courts were influenced by sympathy for the plaintiff after he lost money in a bad investment. Aquinas would like to share the court’s underlying objective but would prefer pre-exisiting written rules created by “valid law makers”. Aquinas did not see judges as valid lawmakers.

4. Must be promulgated

Hodgkinson v Simms expanded a common law principle beyond its previous dimensions. Aquinas believed that the law should be predetermined and certain. The common law is, by definition, ambiguous and uncertain until clarified in a given factual context. Aquinas would not have seen the dynamic and changeable nature of common law to be properly promulgated in advance. Furthermore, Aquinas felt that the law should be accessible to the average person, and it could be argued that the Supreme Court's 100-page judgment in Hodgkinson v Simms is obscure and difficult for the average person to understand.

Conclusion
The rule articulated in Hodgkinson v Simms is in accordance with steps #1 and #2 of Aquinas' natural law theory, as it is directed towards the common good and rationally connected to that objective. However, Aquinas would likely have doubts about the law's legitimacy on the grounds that it was made by judges after the fact, as opposed to clearly articulated by legislators in advance.