All clear? Sorry that last instalment was so long; hopefully this will come out a bit shorter.
Here’s a passage from Hillel Steiner’s contribution to A debate over rights which stopped me in my tracks when I read it: I had to put the book down to work out what was going on, which involved staring into space for most of the next half hour.
Suppose you and I conclude a contract which imposes a duty on you to make a payment to my brother: he is the third-party beneficiary of our agreement. According to the Will Theory, I am the only right-holder involved in this arrangement. … According to the Interest Theory, however, not only am I definitely a beneficiary but also my brother, as another beneficiary, is also a right-holder in respect of your duty. …
One apparent difficulty raised by this view is the danger of a proliferation of right-holders. For if my brother proposes to use that payment to purchse something, then it looks like his vendor is a fourth-party beneficiary of my contract with you. …
Bentham suggests that a person is properly included in the set of a duty’s beneficiaries only if the breach of that duty would be a sufficient condition of that person’s interests being damaged. This test obviously does supply the requisite surgical remedy by cutting my brother’s vendor (and her successive beneficiaries) out of that set.
But (Steiner continues) can Bentham’s ‘sufficient condition’ test be defended in its own right, setting aside the fact that it is useful for anyone who wants to uphold an Interest Theory of rights?
If I supply you with the security codes for a bank vault, I supply a necessary but insufficient condition of your robbing that vault. Our ordinary understanding of ‘interests’, it seems to me, is such that my action would none the less count as detrimental to whatever interests persons have in that vault’s not being robbed. And if that’s so, your failure to pay my brother does count as detrimental to the interests of his vendor, whatever Bentham may say to the contrary.
If our ordinary understanding of ‘interests’ is such that supplying you with the security codes for a bank vault counts as detrimental to whatever interests persons have in that vault’s not being robbed, then your failure to pay my brother does count as detrimental to the interests of his vendor. Ow. You may now stare into space.
Steiner’s responding to Kramer, who sets out Bentham’s test in the course of his exposition of the (or an) interest theory of rights. The set-up is essentially the same, but it’s worth paying attention to the way Kramer phrases it:
Suppose that X has contracted with Y for the payment of several thousand dollars by Y to Z. Suppose further that Z plans to spend all of her newly obtained money on some furniture from W‘s shop. In this scenario, W of course will have profited from Y‘s fulfilment of the contractual obligation. Now, given that the Interest Theory ascribes a right to Z – a right that is probably not enforceable and perhaps not waivable by Z – must it also ascribe a right to W?
Kramer describes Bentham’s test in these terms:
any person Z holds a right under a contract or norm if and only if a violation of a duty under the contract or norm can be established by simply showing that the duty-bearer has withheld a benefit from Z or has imposed some harm upon him. Proof of the duty-bearer’s withholding of a desirable thing from Z, or proof of the duty-bearer’s infliction of an undesirable state of affairs on Z, must in itself be a sufficient demonstration that the duty-bearer has not lived up to the demands of some requirement.
So, what about X and Y?
Bentham’s test will work very smoothly when applied to the scenario of the third-party-beneficiary contract. To prove that Y has breached his contractual duty to X, one need only show that Y has inexcusably failed to make the required payment to Z. In other words, one need only show that Z has undergone an unexcused detriment at the hands of Y. Establishing that fact is sufficient for a successful demonstration of Y‘s breach of duty. Hence, Y‘s duty to X under the contract is conjoined with a duty owed by Y to Z; Z, in turn, holds a right to be paid by Y. …
While a demonstration of Y‘s inexcusable withholding of the requisite payment from Z is sufficient to prove Y‘s breach of contract, the same cannot be said about a demonstration of Z‘s failure to buy furniture from W‘s shop. Z‘s abstention from any purchases cannot by itself be adduced as sufficient grounds for concluding that Y has declined to fulfil his contract with X.
Now that is clear.
Steiner’s suggestion that Kramer doesn’t justify Bentham’s test independently of its utility for the Interest Theory seems ungenerous at best; Kramer’s position, as in the third-party-beneficiary example, is that when it’s applied to a problem in interpreting rights, Bentham’s test works – which is to say, it gives legally unproblematic, logically defensible and intuitively plausible answers. Steiner also appears to have got Bentham’s test backwards – the point is not that “the breach of [the] duty would be a sufficient condition of that person’s interests being damaged”, but that damage to that person’s interest is sufficient to demonstrate breach of a duty. If effect B (e.g. damage to interests) is sufficient to demonstrate cause A (e.g. breach of duty), cause A is a necessary condition of effect B; it may or may not be a sufficient condition.
Setting this aside, let’s compare Steiner’s two scenarios. In one, I make a contract with Bertram to pay money to Charlotte; I renege on the contract, leaving Charlotte out of pocket and unable to buy goods from David. In the other, I am employed by Bertha as a security guard. I break my contract of employment, enabling a burglar (Eric) to rob Charles’s bank vault; this is to the detriment of both Charles and his depositors, including Dawn. Intuitively, Steiner argues, we would say that David does not have a case against me, but Dawn has. However, the interest theory (as qualified by Bentham’s test) would disqualify Dawn as well as David; this, for Steiner, suggests that either the test or the interest theory itself is flawed.
There are three main possibilities in interpreting these two scenarios, depending on how we read Steiner’s two claims: that they both involve an indirect victim who would be disqualified from any rightful claim according to Bentham’s test; and that the second of them involves a victim who should not be disqualified. The possible readings are:
- The two scenarios are comparable; the indirect victim should be disqualified in one case but not the other
- The indirect victim should be disqualified in one case but not the other, but Steiner is wrong to say that the two scenarios are comparable
- The two scenarios are comparable, but Steiner is wrong to say that the indirect victim should not be disqualified in the second case; in fact the indirect victim should be disqualified in both cases
If either reading 2 or reading 3 is sustained, Bentham’s test survives unscathed.
Let’s consider reading 2: that there are significant differences between the two scenarios. Is this the case? Certainly, where parties C and D are concerned, we’re dealing with a loss in one case and failure to achieve a gain in the other – and there’s a criminal offence in one case but not the other – but their positions as third and fourth parties are the same.
A second complicating factor is my degree of responsibility for the loss. As we have seen, Steiner suggested that in betraying the security codes I furnished Eric with “a necessary but insufficient condition” of robbing the vault. Steiner’s formulation is terse and potentially misleading – it is unlikely to be the case that my misappropriation of the codes is the only possible route to robbing the vault. The thinking here seems to be that the capacity to enter the vault undetected is a necessary condition of robbing it, and my giving Eric the codes is a sufficient condition for him to acquire that capacity. This is more elaborate than “A contracts with B to pay money to C”, but I’m not sure it’s much more elaborate. The only significant difference is that it requires the intervention of (yet) another party, in the form of Eric – and since his function is to commit a criminal offence rather than to do anything legitimate, his agency can be bracketed out. To clarify this point, suppose that I let Eric get in by leaving a skylight open, and he made off with some bolts of fine and expensive fabric. Now suppose that Eric decided not to go out that night because it was raining – and the rain got in through the open skylight and spoiled the fabric. Unless the wording of my contract as a security guard was unusually precise, nothing would change significantly between the two scenarios as regards my responsibilities, or my relationship with Bertha, Charles and Dawn.
Another complication – although in this case it’s a complication that positively helps Steiner’s case – is my indirect relationship with the bank. If I were employed directly by Charles, it would be arguable that the third-party beneficiaries of the contract were, precisely, Charles’s clients, meaning that the two scenarios were not comparable. I think this would be a confused line of reasoning; if I work in security for a bank, the benefit accrues directly to the bank and only indirectly to its clients. Indeed, it could be argued that the bank is its own third-party beneficiary: as a bank guard I contract with the deposit-holding wing of the bank to keep those deposits secure, the benefit accruing to the trading wing of the bank. In any case, assuming that I work for Bertha’s security company removes this asymmetry.
In short, reading 2 can’t be made to work; the two scenarios, although superficially very different, seem to be directly comparable. But is Steiner right to suggest that my actions in the second case were detrimental to the interests of Dawn, the indirect victim – and that this casts doubt on the utility of Bentham’s test? I’m not convinced that he is. What, after all, is Dawn’s case against the bank? Something turns, perhaps surprisingly, on the nature of Dawn’s loss. If Dawn is simply a depositor, it’s not clear that she has sustained any loss at all. Banks don’t hold our account balances in the form of stacks of notes – which is just as well, seeing that they don’t go into the bank in that form, by and large. Money is supremely fungible. To say that I have a balance of £X is to say that the bank undertakes to pay me up to £X without asking for anything back; the bottom line of a bank statement is effectively a promissory note, a promise “to pay the bearer on demand”. It may conceivably be that Dawn urgently needs a sum of cash the day after the burglary, and that Eric has emptied the vault to the point where the bank is unable to make the payment, but this is a second-order problem relating to the relationship between Charles and Dawn; Dawn’s interests as an owner of property, some of it in the form of bank deposits, are not affected by the removal of folding money from the vault. Not only are the two scenarios are directly comparable, it seems; the relations between third and fourth parties (Charlotte and David, Charles and Dawn) are also directly comparable, and equally disconnected from the relationship between me, Bertram/Bertha and Charles/Charlotte. Whether Charles is able to carry on business as usual with Dawn is not determined by my breach of contract with Bertha, any more than whether Charlotte is able to spend money with David is determined by my breach of contract with Bertram.
It could be argued that this whole line of argument is misdirected, however. Steiner refers, not to bank depositors in general (whose interest in bank vaults not being robbed seems to be surprisingly limited), but to “whatever interests persons have in that vault’s not being robbed”. Let’s suppose, then, that Dawn does have an interest in the vault not being robbed, in the sense that it holds personal items which would be hard or impossible to replace. I stop carrying out my duty to Bertha, to benefit Charles by securing his premises, with the result that Dawn suffers a permanent loss (from Eric or possibly from bad weather). Surely this is a case of a genuine fourth-party beneficiary (or victim)? I don’t believe it is. The loss in this case is not in fact to Charles but, directly, to Dawn (or, at most, to both Charles and Dawn): I have permitted the removal or spoilage of Dawn’s property, giving my actions just as direct a relationship with Dawn’s interests as if the burglary had taken place at her house. Dawn has a claim against me to the extent that I have undertaken, explicitly or implicitly, to protect her property as well as Charles’s. And, I would argue, if I am placed in the position of protecting premises whose contents are both vulnerable and irreplaceable, I (or my employers) have made just such an undertaking and thereby acquired a liability to the property’s owners. To the extent that the third-party beneficiary of my contract with Bertha is Charles and not his depositors, it seems to me, it must be open to Charles to keep his depositors out of the picture as regards the relationship between him and Bertha (and, by extension, me). If it is not possible, Dawn and other depositors cease to be fourth parties and become third-party beneficiaries in their own right.
My reading may be challengeable, but it seems to me that Steiner’s attempted disproof of Bentham’s test has led us instead to a demonstration and restatement of the test. In a contract with a third-party beneficiary, fourth-party beneficiaries are those who have no right under the contract, as a detriment to them does not suffice to prove breach of the contract. If detriment does prove breach of the contract, the supposed fourth party is in fact an unanalysed third party.
As I said at the outset, I’m keeping an open mind about the Interest Theory of rights, at least in Kramer’s form; my temperamental inclination is more towards some form of Will Theory. But, to the extent that an Interest Theory requires to be delimited by Bentham’s test in some form, and to the extent that Steiner’s argument aimed to undermine Bentham’s test, I’d say that the Interest Theory is looking pretty good so far.
Next: some thoughts on two brief passages by John Gardner (one on tort and torture, the other on road markings and the minimum morality of law). After that I shall probably have to get back to work.