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FUNCTIONS OF SUNSET CLAUSES AND EXPERIMENTAL LEGISLATION
Both sunset clauses and experimental legislation are multifunctional legislative instruments that serve a number of purposes. Although these legislative instruments are often used to tackle temporary or uncertain problems, about which little is known, this subsection evidences that the versatility of sunset clauses and experimental legislation goes beyond the need to gather information about social or economic problems or their regulation.
To Tackle Uncertainty, Lack of Information and Prognosis Problems
‘Information is the lifeblood of regulatory policy’ but lawmakers and regulators will often be unable to gather accurate information from private actors as to the risks and costs of their activities. In the United States, in the area of environmental and occupational safety regulation, agencies have often encouraged firms to participate in pilot programmes so that information about their management practices is revealed. However, this is not put in practice on a systematic basis through experimental rules.
Regulating without the necessary information can be risky since regulators and lawmakers should be able to understand the nature of the underlying problems in order to enact effective regulations. Lawmakers and regulators have often legislated and regulated with reduced information but concluding as to the success or failure of a regulation without scientific testing is, as Posner describes, a ‘mere impression’ with ‘no verified knowledge’. Experimenting with alternatives, by proposing testable hypotheses, should be able to produce useful information and reflect the effectiveness of the rules being tested.
In the case of innovative products and services, regulators will face not only the problem of information asymmetries caused by the reluctance of firms to disclose relevant information but also the absence of information regarding the best regulatory approaches to them. It is difficult to compel firms to produce information but the required information can be more easily provided over time through repeated interaction. This ‘repeated interaction’ is notably enabled by sunset clauses and experimental legislation: due to the temporary character and periodic evaluations of these instruments, lawmakers can easily incorporate the information obtained either through observing the effects of the laws in question, by acknowledging the results of the participation of stakeholders or by taking into account the evaluation reports. Zachary Gubler claims that regulators would be able to deliver regulation based on more accurate information if they would divide the decision-making process into different stages. As more information is produced in the first experimental phase, they could then adapt regulations accordingly.
The regulation of innovative products and services is not only characterized by the lack of information but also by emergent risks and uncertainty that may be difficult to tackle. Gersen suggests the employment of temporary legislation (a concept that also includes sunset clauses and experimental legislation) as a means to tackle social, legal or economic problems or situations characterized by uncertainty. This uncertainty can refer to the duration, complexity or effects of the problems. When little is known about these type of situations, a temporary legislative measure can be a safer option which provides an immediate remedy for a problem without putting the whole population at stake, and which, at the same time, can easily be extinguished. Sunset clauses and experimental legislation offer the required flexibility to deal with temporary problems or problems characterized by acute uncertainty, or to enact policies about which little is known and the risk of error is high.
In addition, where experimental regulations are enacted in parts of the territory or smaller jurisdictions in the case of federalism, the risk inherent to the enactment of novel policies and laws can be limited and more time can be granted to the legislator to gather information as to their effects.
In a similar context, Ginsburg, Masur and McAdams also argue that sunset clauses and experimental laws and regulations have the advantage of improving the efficiency gains of legislation since they are based on superior information. Even if the enactment of a law is preceded by ex ante studies, there is still uncertainty as to its effects and the best legislative or regulatory approach to the problem in question. Only after the law has been in place for a reasonable period can lawmakers observe and evaluate these effects: laws that are ineffective can be discontinued after the sunset; and improvements can be added to an experimental law. Lawmakers can therefore use sunset clauses and experimental legislation to gather information, and given this informational advantage, proceed to the correction of errors.
In Germany, Horn argues that experimental legislation can be particularly suitable to regulate novelties carrying certain dangers or risks, or when it is difficult to fully estimate the side-effects of a new law. Rebecca Kysar, despite her critical position toward temporary legislation, acknowledges that sunset clauses have been used in the United States as an instrument to assess the risks and effects of a new policy, as well as to obtain more information about it during the interim period between the enactment and the sunset. Sunset clauses are expected to prevail in policy contexts characterized by uncertainty, scarce or unreliable information, and the existence of a number of risks.
As described in the German literature, sunset clauses and, particularly, experimental legislation can be regarded as the ‘highest form of testing [the effectiveness] of laws’, which can be particularly important when legislators have insufficient information regarding the effects of laws. A similar perspective can be identified in Germany, where experimental legislation has typically been described as an instrument for gathering information, solving the so-called Prognose problems due to information asymmetries and minimizing risks.
In the Netherlands, it has been suggested in the literature that sunset clauses can contribute to the reduction of uncertainty, especially when the latter results from potential risks (for example, latent harms to the environment, food safety, public health and other scenarios typically connected with the precautionary principle). This ‘precautionary’ use of sunset clauses would mean that a novelty representing potential (but scientifically unproven) harms for the environment or society could be temporarily authorized and during this period the alleged risks could be further examined. This would be an alternative to an all-or-nothing approach.
This ‘information gathering’ side of experimental legislation can be used not only for the regulation of innovative fields but also for the general improvement of the administration of justice. The latter was the subject of a study conducted in 1981 by the US Federal Judicial Center on the virtues of experimentation in law. In question was not only experimental legislation but also the use of programme experiments and random assignment of laws. According to this report, a justice system can more easily attain its goals if it is flexible, willing to try out new methods of achieving justice and evaluate their effectiveness and compare these results with the existing alternatives. As underlined by the Federal Judicial Center in the mentioned report, experimentation with innovations in law can resolve the uncertainties ‘about whether the innovation in question, although promising in theory, will in fact produce the desired improvements without undesirable consequences’.
The above described informational function of experimental legislation is, according to Hoffmann-Riem, one of the main features of this legislative instrument: the possibility to extract lessons from the experiment and use them to revise or revoke laws on the grounds of new and more effective ideas or legal instruments. After having experimented with new rules, legislators will be able to make a more informed future choice between the existing rules and the ones tried on an experimental basis.
Notwithstanding the advantages mentioned above, the ‘research’ or ‘information gathering’ function of sunset clauses and experimental legislation has been criticized in the Netherlands. In the 2001 Bill regarding ‘distance voting’ (Experimentenwet Kiezen op Afstand), the Dutch Council of State inquired whether there was not an alternative method which could avoid using a statute as ‘a research instrument’. This institution refused to accept an abstract formulation of objectives
referring to the ‘acquisition of experience or knowledge’: if the experiment in question was to be used to learn about distance voting, it would be important to define beforehand exactly what type of ‘experience’, knowledge or information one aims to acquire from it. The paradox between the minimum amount of information required to design an experiment and the need to experiment in order to gather the missing details is visible in this example.
In conclusion, experimental legislation and sunset clauses are not only meant to resolve uncertainties connected with difficult prognostics in innovative fields, but they can also and primarily be employed to gather information and ensure that legislators make decisions based on evi- dence. It is important to question whether the enactment of these legislative instruments contributes to the improvement of the quality of legislation.