Seminar with Joseph Spooner (LSE Law School)

Organized by Prof Bertram Lomfeld’s ERC-funded RE:SOLVENCY project in cooperation with the Freie Universität Empirical Legal Studies Center (FUELS)

The RE:SOLVENCY project seeks to explore how debt can be reimagined as a more sustainable socio-economic medium—one that enables democratic deliberation of corporate, consumer and sovereign debt relations.

Dr Joseph Spooner, Associate Professor at LSE Law School, researches issues of law, policy, and politics relating to household debt, over-indebtedness, and financialisation. As part of his visit to the RE:SOLVENCY team, he will present his article “Contract’s Symbolic Power in Constituting Creditor-Debtor Relations: Looking Back to Post-Crisis Ireland”:

Contract law establishes ground rules that shape markets in material ways, facilitating or prohibiting market practices that allocate resources and risks between sides of markets. A second role of contract law in constituting markets lies in its symbolic quality, and the manner in which ‘contractualist’ or ‘contractarian’ ideology legitimises extant market relations and allocations, and justifies the alignment of public power with the distributions between private parties produced by markets. Contractarian ideology tells us that we must live with markets' generation of unequal outcomes, because this is what we have chosen. 

These effects might be particularly significant in the debtor-creditor relations that comprise credit markets. Debt is a topic of wide interdisciplinary study, yet such discussions often tend to treat debt, and contracts more broadly, as abstractions locked within a legal black box. In contrast, certain contract law scholars have long shown that doctrine is replete with contestation, contingency, indeterminacy and policy choice. This article explores these tensions by revisiting episodes in which the legal system encountered the crisis of household debt that engulfed Ireland in the late 2000s. Drawing on examples ranging from a court challenge to the persisting institution of imprisonment for debt, to self-represented litigants’ arguments against irresponsible lending, the paper explores the contractualist ideology permeating legal responses to failures in consumer finance markets. The article then considers the potential destabilisation of this ideology when policymakers belatedly accepted, years after the crisis, mortgage debt relief measures which challenged contractual sanctity.