Course:Law3020/2014WT1/Group M/Separation Thesis

Separation Thesis, Hart and Fuller

The separation thesis by H.L.A Hart builds on previous discussions by legal positivists that the law and morality are separate systems. Although the two may at times run parallel, they are distinct and a law need not be moral to be obeyed. Instead, Hart asserts that valid laws are rooted in the rule of recognition and must be supported by an enforcing system. This rule requires that in order to be recognized as valid, a law must be followed and obeyed by a group for reasons other than fear of punishment. This theory can certainly be applied to the case of Hodgkinson v Simms as the established rules surrounding fiduciary duties and regulation of stock brokers would be considered valid laws in Hart’s opinion. The rule of recognition can be upheld as a majority of practicing stock brokers choose to follow the regulations and may do so for reasons such as personal integrity, societal benefit or economic benefit. Although the fear of punishment (losing one’s license) may be a factor in considering to obey the regulations, it is not the only motivating factor and thus the rule is upheld.

Role of Judges

Within the separation theory, Hart also discusses the role of judges. He divides law into two areas: a settled core of meaning and the "penumbra". The settled core is established law and undisputed. The penumbra however is the area of ambiguity, and thus the area where judges are most useful. We see the penumbra at play in Hodgkinson v Simms, as the court attempts to decide whether the principles of fiduciary duty should be extended to cover this broker client relationship. Within the penumbra, judges must use the principles of justice to determine whether new applications of law should be recognized as to reflect changes in society. In Hodgkinson v Simms, the majority of the court looked at prior applications of fiduciary duties and determines that for policy reasons the relationship should be extended to brokers and clients. In this case the broker had trust over a vast amount of money and there was a clear power dependency relationship. Imposing a duty would be consistent with the norms of loyalty in professional codes and self-regulatory bodies and thus the judicial interpretation would be in line with societal values.

Another scholar, Lon Fuller, critiques Hart’s theory as impractical and simply wrong when viewed against the backdrop of WWII. He attacks Hart’s theory with four distinct arguments: social acceptance is grounded in morality and that is what produces good order; second, law itself has an inner morality; third immoral laws cannot be explained by the separation thesis; and fourth that the core/penumbra theory is flawed. The most relevant of Fuller’s points to Hodgkinson v Simms is the fourth, namely that there can be no settled core of law and that all law can be ambiguous, depending on context. Fuller asserts that it is actually the judges that make the law what it ought to be through collaborative interpretation. This idea is consistent with Hodgkinson v Simms as the appeal arose from the fiduciary duty issue and whether it should be extended or not. The dissent argues that it should not and cites that historically courts have not extended fiduciary duties to these types of relationships. As the Supreme Court ultimately split 4:3 in favor of establishing a duty based on public policy reasons, this tends to support Fuller’s argument that there is no established core without context.