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06

Aug

2019

Information overload in the legal sphere

Written by: Will Walker & Wendy Wagner

 
information overload
 

TMI (“too much information”), TLDR (“too long; didn’t read”), and DNC (“does not compute”).  These acronyms offer painful reminders of our contemporary relationship with information.   Many of us, particularly those in the legal field, face a steady stream of abstruse and over-complicated information: from convoluted contracts to wordy and confusing statutes and regulations.

A superficial diagnosis of this state of the affairs chalks up the problem to 21st century life.  We tacitly assume that ever-improving computing and internet capabilities are producing an “information overload,” which cannot be completely avoided, even with the best search engines and filters

But is TMI actually just an inescapable part of our technological destiny? In our forthcoming book, Incomprehensible, we argue that at least part of the problem is self-inflicted and results from clumsy legal design. Over the last century, the law has become so obsessed with ensuring “transparency” and “complete information” that it has neglected its vital complement, “comprehensibility.”

Drawing together evidence from cutting edge work in diverse fields such as consumer protection, financial regulation, patents, chemical control, and administrative and legislative process, we identify a number of important legal programs that are afflicted with the same design flaw.  They are built on a foundational assumption that, when it comes to information, “more is better” and that the problem of usefulness will take care of itself.

Disclosure requirements, as one example, are intended to ensure that various audiences are not misled. But most mandated disclosures stop short of ensuring that the resulting information is actually comprehensible to its intended audience. A firm eager to manipulate its consumers to gain an edge in the market need apply only a little creativity to devise a way around a required disclosure, while still complying with the letter of the law.

This same story is replayed in other important legal environments. After more than forty years of regulating chemical manufacturers, we still know next to nothing about the toxicity of most chemicals. The spectacular failure of this regulatory design is explained, in part, by the fact that manufacturers bear almost no responsibility for understanding or communicating the hazards of their chemicals. Instead, manufacturers’ legal incentives are pointed in the opposite direction, encouraging the production of subtly-biased research and deliberate obfuscation of product hazards.

Even institutional processes intended to ensure rigorous democratic deliberation are designed in ways that miss the key step of encouraging comprehensibility from decision-makers. Congress has developed intricate procedures, rules, and practices governing how it can pass laws. But none of these institutional controls requires that a bill be comprehensible to other members of Congress. Indeed, for some controversial laws, a powerful sponsor may be able to garner more support by crafting incomprehensible legislation in order to rush the bill through the process so quickly that it cannot be analyzed by members who might disagree with it.

The social costs from these mis-designed systems are substantial. Consumers are regularly “phished” and “phooled” in markets where firms compete — not over quality or price — but over exploitive tactics that take advantage of the consumers’ limitations. Financial entities find ways to turn a profit by creating ever more complex and risky structures that, as we saw in 2008, can sometimes fail precisely because they escape scrutiny from regulators and market investors. Inventors of weak inventions face better odds of obtaining a patent when they play information games with the patent examiners, including drafting convoluted applications that tax the examiner’s limited time and energy. Agencies and legislators both learn that the legal system is sometimes kindest to their work when their public rules and laws are incomprehensible. Critics drop away because they lack the time and resources needed to make sense of the legal proposals, while lawmakers and regulators gain credit for at least taking some action, even though nobody may really understand what that action is.

Nobel prize-winning economist Herbert Simon warned way back in the 1940’s that if we did not get ahead of the constant flood of information and figure out a way to manage it, we would find ourselves swept away and unable to make sense of anything.  Incomprehensible attempts to move Simon’s warning higher up in our list of priorities for reformed institutional design.  At its core, reform must turn the focus of legal architects from disclosing all relevant information in a transaction to ensuring that the information which is disclosed is packaged and presented in a way that its target audience can reasonably understand.  Until speakers are held accountable for communicating meaningfully, perverse incentives and exploitation of disadvantaged audiences will be simply too tempting (and profitable) to resist.

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About the Author: Will Walker

 

About the Author: Wendy Wagner

 

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